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Earnings Analysis: 
Campbell Posts Profit Drop
Author: George Shopov
123jump.com



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Campbell Soup Company, the largest soup maker in the world, reported Monday that its quarterly profits declined 20%, as higher spending on marketing and one-time charges weighed on results.

 
Campbell Soup Company (CPB: chart) announced before market open Monday a 20% drop in its quarterly earnings, hurt by higher marketing costs and a restructuring charge. The world’s largest soup maker reported net income of $59 million, or 14 cents a share, for the fiscal fourth quarter of 2004, down from net income of $74 million, or 18 cents a share, a year ago. Excluding items, earnings came in at 17 cents a share, a penny a share shy of Wall Street’s consensus estimate. For the quarter ended August 1, sales slipped 2% to $1.43 billion from $1.46 billion, for the year-earlier period, when the quarter included an extra week. Camden, New Jersey-based Campbell said that increased promotional spending reduced sales by 2%. Analysts had projected sales of $1.46 billion in the quarter. For all of 2004, net earnings were $647 million, or $1.57 per share, compared with $626 million, or $1.52 per share, in 2003.

CKE Restaurants, Inc. (CKR: chart) reported before the bell Monday that it swung to a quarterly loss from a year-earlier profit, dragged by one-time charges for lawsuits and debt retirement. The Carpinteria, California-based operator of quick-service food chains posted a net loss of $11.4 million, or 20 cents per share, for its fiscal 2005 second quarter, in contrast to a profit of $6.3 million, or 11 cents per share, for the prior-year equivalent. Excluding extraordinary items, the company said that it had earnings of $10.8 million, or 17 cents per share, in the quarter ended August 9. The results fell 3 cents a share short of the average analysts’ estimate. Quarterly revenue climbed 6% to $353.7 million, beating the mean analysts’ forecast of $347.3 million. Same-store sales at company-operated Carl's Jr. and Hardee's restaurants rose 8.1% and 6.2%, respectively.

Alpha Technologies Group, Inc. (ATGI: chart) of Los Angeles, California, posted Monday a loss of $213,000, or 3 cents per share, for its third quarter, against a loss of $13.8 million, or $1.95 per share, a year ago, when results were weighed by one-time charges. The maker of thermal management products recorded revenue of $14.5 million in the quarter, a 25% jump from $11.6 million, last year. Third-quarter gross margin improved to 13% from 10%, in 2003.

Take-Two Interactive Software, Inc. (TTWO: chart) announced after the bell Thursday that it swung to a quarterly loss from a prior-year profit, hurt by higher costs. The New York-based video game maker reported a third-quarter loss of $14.4 million, or 32 cents per share, against a profit of $5.7 million, or 13 cents per share, for the 2003 comparable period. The mean analysts’ forecast was for a loss of 30 cents per share in the quarter. Quarterly net sales climbed 6% to $160.9 million.

The stock shed 45 cents to close Thursday at $32.00. Company shares rose 2.81% to $32.90 in after-market trade.

Quiksilver, Inc. (ZQK: chart) of Huntington Beach, California, said Thursday that its third-quarter net income surged 64% to $19.5 million, or 32 cents per share, from net income of $11.9 million, or 21 cents per share, for the 2003 equivalent. The earnings of the clothing company outpaced the average analysts’ estimate of 29 cents per share. Quiksilver attributed the results to higher sales, which jumped 34% in the quarter to $337.9 million from $251.5 million, a year ago.

Company shares dropped 67 cents to $22.63 at market close Thursday. The stock was up 4.46% to $23.64 in the extended session.

Aber Diamond Corporation (ABER: chart) posted after market close Thursday a profit of $12.3 million, or 21 cents per share, for its fiscal second quarter, up from $5.8 million, or 11 cents per share, generated in the year-earlier period. The Toronto, Canada-based diamond miner cited improved quantity and quality of diamond production, as well as strong sales at its jewellery retailer Harry Winston, as main factors for the results. Sales for the second quarter totaled $84.5 million, compared with $52.3 million for the preceding quarter.

The stock closed Thursday up 86 cents, or 2.62%, at $33.71.

Empire Company Limited ((EMPA.TO)) reported Thursday higher quarterly profits, aided by solid gains at its supermarket chain, Sobeys Inc. The Stellarton, Nova Scotia-based owner of Canada’s second-largest grocery chain turned in net income of C$44.3 million ($34.5 million), or 67 Canadian cents a share, for its 2005 first quarter. For the year-ago period, net income was C$42.3 million, or 64 Canadian cents a share. Quarterly revenues advanced 9.2% to C$3.07 billion, driven by higher sales at Sobeys.

Empire shares inched down 2 Canadian cents to close Thursday at $26.33 on the Toronto Stock Exchange.

Alcoa Inc. (AA: chart) said Thursday that its third-quarter earnings will miss Wall Street’s expectations, due to plant closings and restructuring costs. The Pittsburgh, Pennsylvania-based world's No.1 aluminum producer projected a profit of 30 cents to 35 cents per share for its fiscal third quarter. Analysts were looking for earnings of 50 cents per share, on average. Alcoa added that weakness in the automotive, packaging and European end markets will also have a negative impact on profits.

The stock edged up 39 cents on Thursday to $33.29. Alcoa shares plunged 6.43% to $31.15 in after-hours trading.

Nucor Corporation (NUE: chart) of Charlotte, North Carolina, increased Thursday its quarterly earnings guidance, boosted by rising steel prices. The steelmaker forecast earnings of $4.40 to $4.60 per share for its third quarter, compared with an earlier outlook of $3.20 to $3.40 per share. The consensus forecast of analysts was for a third-quarter profit of $3.75 per share.

Nucor shares rose 7.45% to $88.43 at market close Thursday. The stock dropped 23 cents to $88.20 in extended trade.

Nokia Corporation (NOK: chart) on Thursday raised its third-quarter profit target to a range of 11 euro cents to 13 euro cents per share (13-16 U.S. cents), from a previous forecast of 8 euro cents to 10 euro cents per share (10-12 U.S. cents). The Finland-based world’s top maker of cell phones attributed the revised outlook to stronger market demand. Third-quarter revenue is expected to be between €6.8 billion and €6.9 billion ($8.3 billion to $8.4 billion).

The stock closed Thursday at $13.77, up $1.06, or 8.34%. Nokia shares gained 13 cents to $13.90 in after-market trade.
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