Earnings Reports for Aug. 17

Agilent Increases Growth Forecasts

Agilent Technologies, spun off from Hewlett-Packard earlier this year, reported higher third-quarter earnings and sales today. It also increased its forecasts for sales growth next year.

The maker of test and measurement equipment earned $155 million, or 34 cents per share, or 33 cents per share on an unaudited pro forma basis. In the year-ago period, before it went public, it earned $135 million.

The earnings surpassed the forecasts of most analysts, who expected 20 cents per share.

Revenues increased to $2.67 billion from $2.09 billion last year.

Agilent also said it was increasing its forecasts for 2001, and now expects revenue growth of “at least” 20 percent, compared with an earlier forecast of 15 percent. It sees 2001 net earnings approaching 8 percent of net revenue.


Fiber Optics Fuel CIENA’s Profits Telecommunications equipment maker CIENA posted better-than-expected third-quarter profits today as its customer base expanded and demand for fiber-optic networking products soared.

CIENA earned $28.2 million, or 19 cents a share, in its third fiscal quarter ending July 31, compared with a loss of $5.6 million, or 4 cents a share a year ago.

The results beat Wall Street expectations of 17 cents a share, according to research firm First Call/Thomson Financial, which tracks analysts’ expectations. Ciena’s revenues rose 80 percent to $233.3 million, compared with $128.8 million a year ago.

CIENA makes equipment that boosts the capacity of fiber-optic networks and products that direct traffic along communications networks. Sales of industry-leading optical networking products contributed to revenue growth and the company said it expects continued robust sales of its long-distance optical transport products.

Shares of CIENA have jumped about 200 percent so far this year. The company on Tuesday announced a two-for-one stock split.


Seagram Reports Narrow Loss

Entertainment giant, Seagram, riding a revenue boost from its music unit as well as box-office hits Erin Brockovich and Gladiator, reported a fourth-quarter net loss today that was less than Wall Street had expected.

The company, which is in the process of merging with French utilities group Vivendi, said its net loss widened to $128 million or 29 cents per share compared with $53 million or 32 cents, excluding an additional gain on the 1998 USA Networks transactions. Including this gain, the company posted a net loss of $53 million or 13 cents per share last year. But Wall Street analysts polled by First Call/Thomson Financial had called on average for a fourth-quarter loss of 35 cents per share this year.

The Montreal-based company that owns Universal Studios and Universal Music Group, said revenues rose to $3.7 billion in the quarter from $3.5 billion a year ago and said music division earnings before interest, taxes, depreciation and amortization (EBITDA) surged 56 percent to $217 million in the quarter. Universal Music Group’s EBITDA for the year exceeded $1 billion for the first time, the company said.

The movie sector returned to profitability, earning $5 million of EBITDA this quarter compared with last year’s EBITDA loss of $69 million. The improved performance was due to the theatrical success of the Julia Roberts film Erin Brockovich, as well as Gladiator and the submarine thriller U-571.

Seagram plans to create Vivendi Universal in a merger with media giants Vivendi and its cable TV unit Canal Plus. Last week, the European Commission asked for more information on the proposed $34 billion deal between before completing its regulatory scrutiny. Vivendi and Canal Plus say they are confident the EU will rule in favour of the tie-up with Seagram before the end of September.


Limited’s Sales Up 20 Percent

The Limited reported today its second quarter earnings were up 20 percent partly because of strong sales in the Victoria’s Secret and Express clothing brands.

Profits for the quarter that ended July 29 were $77.6 million, or 17 cents per share, compared with $64.6 million, or 14 cents per share, in the second quarter of 1999.

Through the first half of the company’s fiscal year, the company earned $140.5 million, or 31 cents per share, an increase of 29 percent versus the $109.2 million, or 23 cents per share, in the first half of its last fiscal year.

The company matched industry projections for the quarter, said Jennifer Black, executive vice president and senior analyst for First Security Van Kasper.

Results were adjusted to exclude a one-time charge of $13.1 million, or 2 cents per share, for the August 1999 spinoff of TOO, which operated as the Limited Too girls’ clothing chain.

The company posted a 4 percent overall sales increase and a 6 percent increase in comparable store sales during the quarter. Net sales were $2.26 billion for the second quarter and nearly $4.4 billion through the first half of the fiscal year.

The Limited operates 2,833 stores under the names Express, Lerner New York, Lane Bryant, Limited Stores, Structure and Henri Bendel. It also owns 84 percent of Intimate Brands, which includes Victoria’s Secret, Bath & Body Works and White Barn Candle Co. brands.


Barnes & Noble Loses $8.6 Million

Bookstore retailer Barnes & Noble posted a second-quarter loss, in part due to greater-than-expected weakness in its video game and entertainment divisions. The company also suffered a loss in its investment activities.

For the three months ended July 30, the New York-based company lost $8.6 million, or 13 cents per share, compared with earnings of $23 million, or 33 cents per share, in the year-ago period. Revenue rose to $924.3 million, up from $727.2 million, the company said today.

Analysts surveyed by First Call/Thomson Financial were expecting a loss of 4 cents per share.

Shares of Barnes & Noble fell 75 cents to $17.25 in trading on the New York Stock Exchange.

Barnes & Noble, the nation’s largest bookseller, said sales at superstores open more than a year increased 6.6 percent from last year’s second quarter, helped by strong sales in the children’s category and what the company called “unprecedented success” of the latest Harry Potter book.

Harry Potter and the Goblet of Fire has sold more than 500,000 copies through Barnes & Noble stores, the company said.

While video game and entertainment sales through its Babbage’s Etc. and Funco software and electronics games stores were higher than expected at $127 million, gross margin dropped, in part due to lower than anticipated sales of accessories.

The company’s investment activities, which includes formation of Barnes & Noble.com, resulted in a pro forma loss of 18 cents per share.

For the six months ended July 29, Barnes & Noble lost $12.7 million, or 20 cents per share, versus earnings of $17.6 million, or 25 cents per share, in the year-ago period. Sales rose to $1.82 billion from $1.44 billion.

BACK TO TOP Staples’ European business saw sales at stores open at least one year grow 18 percent. In addition, the company opened six new stores during the quarter, bringing the total number in Europe to 149. It plans on opening about 20 European stores this year.

In the United States, Staples said it has 943 stores and has oversight for the 162 Staples stores in Canada.


J.C. Penney Profits Fall 90 Percent

Department store giant J.C. Penney said today its operating profits fell 90 percent in the second quarter and warned that results for the balance of the year would be hurt if slow sales at its department stores continued.

Penney, the No. 5 U.S. retailer, said income excluding unusual items fell to $11 million, or 1 cent per diluted share, from $112 million, or 40 cents a share, in the year-ago quarter.

Analysts had expected Penney to break even for the quarter, according to First Call/Thomson Financial.

Quarterly revenues rose to $7.43 billion from $7.31 billion a year ago.

Penney, which operates about 1,100 department stores and 2,600 Eckerd drugstores, also said the initial public offering of an Eckerd tracking stock would not occur this year as previously announced.


Target Nails Estimates

Target, the No. 4 U.S. retailer, reported today a 13 percent increase in second quarter operating income, meeting Wall Street expectations, as results were helped by sales at its upscale discount Target stores.

Target said net income before items in the second quarter ended July 29 rose to $257 million, or 28 cents a diluted share, compared with $228 million, or 24 cents a diluted share. Year-ago figures reflect a two-for-one stock split on July 19.

Analysts polled by research firm First Call/Thomson Financial had expected Minneapolis-based Target to report a profit of 28 cents a share.

“We are pleased with our financial performance in the second quarter,” Bob Ulrich, chairman and chief executive officer of Target, said in a statement. “In addition, we remain comfortable that we will deliver full-year results consistent with our stated goal of 15 percent average annual earnings per share growth.”

Total revenues in the quarter rose to $8.25 billion, compared with $7.69 billion in the year-ago quarter. Sales in its upscale discount Target Stores unit rose 9.9 percent to $6.5 billion.


Ralph Lauren Posts Better Bottom Line

Polo Ralph Lauren, the clothing designer and retailer, said today that its first-quarter earnings per share rose by one penny, beating analysts’ expectations, though net income slipped.

Polo said its earnings in the three months ended July 1 were $24.0 million, or 25 cents per diluted share, versus $24.1 million, or 24 cents per share, in the year-earlier period, which included a $3,967,000 or 4 cent per share change from the cumulative effect of an accounting change. Average shares outstanding dipped to 97.1 million in the current year period from 99.5 million a year before.

Analysts had been expecting a profit of 24 cents per share, according to research firm First Call/Thomson Financial.

Net revenue rose 12 percent to $487.3 million from $434.4 million a year before. Licensing revenue rose to $52.4 million from $47.9 million in the first quarter of fiscal 2000, driven by the acquisition of its European licensee, increased sales in the full-price Polo retail stores and strong demand in the women’s and children’s licensing businesses.


United Loses $50 Million Over Labor Woes

United Airlines — which has canceled thousands of flights because of labor woes, bad weather and air traffic control system problems — said today that crew-related disruptions cost the world’s largest airline $50 million in the second quarter.

The company, whose parent is UAL, is trying to mitigate the impact by reducing its flight schedule by about 2 percent through September, according to UAL’s quarterly report filed with the Securities and Exchange Commission.

United canceled 614 flights over the weekend and had many hundreds more delayed. It will cancel 3 percent of its flights, or about 2,000 of them, in September. BACK TO TOP

Applied Materials’ Income Doubles

Applied Materials, the No. 1 maker of semiconductor manufacturing equipment, reported fiscal third-quarter profits today that breezed past expectations, paced by an 83-percent surge in sales.

For the period ended July 30, Applied said that net income more than doubled to $603.8 million, or 70 cents a share, from profit from operations of $256.1 million, or 31 cents a share, a year ago. Sales rose to $2.73 billion from $1.49 billion. There were no one-time items in the just-completed quarter.

On that basis, the results topped the consensus analyst forecast of 68 cents a share, according to First Call/Thomson Financial, which tracks such figures.

“Our record results reflect customers’ investments in expanded capacity to meet increasing semiconductor demand and in advanced technologies to provide more powerful, portable and affordable semiconductors,” said James Morgan, chairman and chief executive officer in a statement.

In the year-ago period, including one-time items, Applied had net income of $238.3 million, or 29 cents a share. There were special adjustments for its flat-panel business and its acquisition of E-Tek during that quarter.


The Associated Press and Reuters contributed to this report.