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Earnings Analysis: 
Starwood's Profit Hit by Tax
Author: Ivaylo Dagnev
123jump.com
Last Update: 9:39 AM EDT October 26 2005



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Starwood Hotels & Resorts Worldwide, hotel chain, announced that Q3 net profit dropped 64% compared with the year-ago period to 17 cents a share despite 11.9% revenue growth.

 
Starwood Hotels & Resorts Worldwide, (HOT: chart), said that excluding a tax expense on repatriating earnings and a tax expense related to its 1998 sale of ITT World Directories, earnings would have been 58 cents a share, topping analyst estimate of 52 cents a share. Same-store revenue per available room rose 13.2% in North America and 11.9% worldwide, the company stated. Starwood is looking for EPS before items of $2.27 for 2005 and $2.70 in 2006, with $6 billion in 2005 revenue.

Praxair Inc., (PX: chart), specialty gases and surface coatings manufacturer, posted Q3 net income of 33 cents a share, down from 53 cents in the same period last year. Earnings for Q3 incorporated a charge of 28 cents a share, largely related to Praxair's plan to repatriate $1.1 billion of foreign profits under the federal Jobs Creation Act of 2004. Adjusted earnings per share of 61 cents a share were in line with analysts’ forecasts of 60 cents. The company announced that hurricanes Katrina and Rita reduced earnings by about 3 cents a share. Sales in Q3 totaled $1.89 billion, up 13% from the prior year's $1.67 billion.

Boeing Co., (BA: chart), plane maker and aerospace company, posted Q3 net income of $1.26 a share, up from 56 cents a share in the same period last year despite revenue decline, beating analysts’ forecasts of 80 cents a share. The company announced the earnings incorporated a 62 cents a share tax benefit and that a strike by its machinists cut down results by 25 cents to 30 cents a share and led to 21 fewer plane deliveries.

EnCana Corp., (ECA: chart), natural gas producer, reported that Q3 net profit dropped 38% to 30 cents a share from the year- ago period. The company announced Q3 results incorporated a $604 million hedging hit and a $166 million gain from foreign exchange rates. Revenue net of royalties rose 33% to $3.09 billion.

Lear Corporation, (LEA: chart), automotive interior systems supplier, reported Q3 a net loss of $11.17 per share, down vs. a net income of $1.26 per share for the comparable period in 2004. Excluding the impairment and restructuring charges, Lear would have reported a net loss of 10 cents per share.

Agere Systems, (AGR: chart), chips for communications gear manufacturer, reported Q4 net income of $0.04 per share on a GAAP basis, up from a net loss of 74 cents per share in the same period last year despite revenue decline.

Diamond Offshore Drilling, Inc., (DO: chart), drilling company, reported Q3 net income of 60 cents per share, up from 2 cents per share in the same period a year ago on revenue growth. Q3 results of current quarter reflect the impact of hurricanes Katrina and Rita. The Company recorded a Q3 after-tax gain of 16 cents per share, related to insurance proceeds from the previously reported casualty loss of the 300-ft. jack-up Ocean Warwick.

Kerr-McGee Corp., (KMG: chart), oil and gas company, posted Q3 net income of $3.09 a share, up from 5 cents a share in the year-ago period on higher sales of oil and natural gas, beating analyst estimate of $2.64 a share. Excluding results from discontinued operations in the North Sea and elsewhere, earnings totaled $2.53 a share, up vs. 95 cents. Revenue advanced slightly to $1.208 billion from $1.202 billion.

Bausch & Lomb, (BOL: chart), healthcare products manufacturer, posted preliminary Q3 net income but announced it may postpone its final report beyond a Nov. 3 filing deadline because of a probe related to a Brazilian subsidiary. Net income dropped to 32 cents a share from 79 cents a share in the year-earlier period. Q3 sales advanced 7%. Excluding charges, earnings came in at $1.02 a share, topping on that basis analysts’ forecasts of 91 cents a share.

T. Rowe Price Group Inc., (TROW: chart), investment management firm, announced Q3 net income increased to 85 cents a share, up vs. 62 cents in the same period last year on revenue growth, beating analyst estimate of 82 cents a share.

Amerada Hess Corp., (AHS: chart), oil and gas exploration company, reported Q3 net income of $2.60 a share, up vs. $1.74 a share in the year-earlier period on revenue growth, missing analyst estimate of $3.31 a share. The company added that hurricane activity in the Gulf of Mexico reduced Q3 exploration and production earnings by around $25 million, and generated exceptional costs of $14 million, after tax.

Air Products, (APD: chart), gases, chemicals and equipment company, reported Q4 net income of 79 cents a share, up from 73 cents a share in the year-ago period on 5% revenue growth and improved pricing and energy costs pass-throughs, topping analysts’ expectations of 77 cents a share. The company added the impact of recent hurricanes cut earnings by 6 cents a share.

Cardinal Health Inc., (CAH: chart), health care industry company, posted Q3 net income of 53 cents a share, up from 49 cents a share in the same period last year on 9% revenue growth, missing analyst estimate of 72 cents a share. Earnings from continuing operations came in at 54 cents a share, up vs. 51 cents a share.

Sprint Nextel Corp., (S: chart), communication products and solutions provider, posted Q3 earnings of 23 cents a share, up from a loss of $1.32 a share in the year-ago period on 35% revenue growth, on a consolidated basis. On an adjusted basis, if not for certain items, the company gained 29 cents a share, topping its year-ago equivalent profit of 25 cents a share. On a pro forma basis, the company posted adjusted earnings of 25 cents a share.

WellPoint Inc., (WLP: chart), health insurer, announced net income advanced to $1.02 per share, up from 85 cents per share in the same period last year, beating analyst estimate, excluding special items, by a penny.
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