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Earnings Analysis: 
MCI Posts a Net Profit Despite 10% Revenue Drop
Author: Albena Toncheva
123jump.com
Last Update: 10:14 AM ET August 09 2005


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MCI Inc. reported it swung to a profit in the second quarter despite a 10% decline in revenue, as the company’s cost-reducing measures paid off. Analysts had expected the telecommunications company, which is being acquired by Verizon Communications Inc., to report a net loss of 1 cent a share for the latest quarter.

 
EchoStar Communications Corp. (DISH: chart), the No. 2 U.S. satellite television operator, on Tuesday said 2Q profit soared tenfold as it added 225,000 more subscribers and recorded a hefty one-time tax benefit.

Net earnings climbed to $855.5 million, or $1.79 per share, from $85.3 million, or 18 cents per share, last year. Excluding the non-cash tax benefit of about $593 million, or $1.22 per basic share, profit was 57 cents a share. Revenue jumped 18% to $2.1 billion vs. $1.78 billion.

Analysts were expecting profit of 46 cents a share on revenue of $2.17 billion.

Average revenue per customer advanced to $58.46 vs. $55.59 a year ago. Subscriber acquisitions costs amounted to $432 per subscriber, up vs. $431 last year.

Clear Channel Communications Inc., the country's largest radio station owner, said Tuesday its 2Q earnings dropped 13% due to lower revenue as the media conglomerate prepares to split off some of its businesses.

Quarterly income slid to $220.7 million, or 40 cents per share, vs. $253.8 million, or 41 cents per share, a year earlier.

Revenue shed 1% to $2.46 billion vs. $2.49 billion a year earlier, as radio broadcasting revenue declined 7% to $931.9 million.

Outdoor advertising revenue grew 7% to $684.5 million, while live entertainment revenue declined 1% to $729.4 million. The company plans to spin off its live-entertainment division and launch an initial public offering of the outdoor advertising business by the end of the year.

Analysts expected 2Q profit of 41 cents per share on sales of $2.47 billion.

Royal KPN NV said Tuesday its 2Q profit declined 40%, due mainly to higher taxes and one-time charges. The Dutch telecom company also announced a new share buyback program and said its outlook for this year has improved.

Profit dropped to 239 million euro ($294 million) vs. 398 million euro in the same quarter last year. The bottom line was hurt by a charge of 64 million euro ($78.7 million) at the company’s German mobile telecom operations and a 60 million euro ($73.8 million) tax charge at BASE in Belgium.

KPN said it was issuing an interim dividend of 13 euro cents ($16 cents), up from 5 euro cents, and announced a 250 million euro ($308 million) share buyback program.

Sales jumped 1.4% to 2.95 billion euro ($3.6 billion) vs. 2.91 billion euro, as the mobile unit offset a drop in the wire-line division.

Fixed-line business improved as KPN ended the quarter with 1.6 million high-speed internet subscribers, versus 1.1 million a year ago.

KPN shares added 3.4% to 7.30 euro ($9.02) in Amsterdam trading.

Bradford & Bingley, U.K. mortgage lender, reported that first-half pre-tax profit increased 17 pence a share, compared to the same period last year, while underlying pre-tax profit was up to 150 million pounds, beating analysts' expectations of 145.7 million pounds.

Beiersdorf, the maker of Nivea hand cream, announced that its 2Q net income increased to 87 million euros, with sales up to 1.26 billion euros. It held to 2005 sales and margin forecasts.

Scottish & Newcastle, breweries operator, reported that first-half pre-tax profit rose 6.5% on 4.5% revenue growth, matching analyst estimate. The company will lift its dividend by 2.5% to 7.04 pounds a share.

Retalix, front- and back-office software provider, posted 2Q net income of 20 cents per share vs. 8 cents per share last year, beating market estimate of 17 cents per share for the quarter. 2Q revenue climbed 76.5% vs. 2Q last year.

NDS, provider of smart cards and set-top box software, reported 4Q net income of 38 cents per share vs. breakeven last year, beating analysts’ estimate of 22 cents per share.
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