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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, (HOT), 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), 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), 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), 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), 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), 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), 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), 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), 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), 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), 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), 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), 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), 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), 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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