Earnings Reports for Feb. 1

ABC News

January 6, 2006, 1:23 AM ET

15 min read

— -- Colgate-Palmolive Q4 Net Profit Climbs 12 Percent

Colgate-Palmolive, maker oftoothpaste, soap, pet food and a host of other householdproducts, said today net income per share rose 12 percentin the fourth quarter, topping Wall Street estimates by apenny.

Net income was 46 cents a share for the quarter, comparedwith 41 cents a year ago, the maker of Colgate toothpaste,Hill's Science Diet pet foods and Ajax dishwashing liquidsaid.

Analysts on average had forecast earnings of 45 cents ashare, according to market research firm First Call/ThomsonFinancial.

Global sales rose 8 percent in the quarter to $2.4 billion,excluding currency effects.

Reebok Turns A Profit, Sales Essentially Flat

Reebok International, theworld's No. 2 shoemaker, said today it turned a profit inthe fourth quarter, reversing a year-ago loss, even thoughsales were essentially flat.

Canton, Mass.-based Reebok, whose brands include Rockportand Ralph Lauren, said it earned $6.2 million, or 11 cents ashare, during the fourth quarter. That compares with a net lossof $14.7, or 26 cents a share, in the year-ago quarter, whichincluded a $15.1 million charge for settling a lawsuit andrestructuring.

Analysts, on average, were looking for Reebok to earn 7cents a share, according to research firm First Call/ThomsonFinancial.

Reebok's fourth-quarter sales remained about even at $622.5million, compared with $622.8 million in the year-ago quarter.BACK TO TOP

Sales of Gatorade Push Up Quaker Oats

Cereal and Gatorade sports drinkmaker Quaker Oats said today that fourth-quarteroperating income rose 23 percent as strong sales of Gatoradehelped boost results.

The Chicago-based company, which agreed to be bought by No. 2U.S. soft drink maker PepsiCo in December, said ithad operating income of $102.0 million in the quarter versus $82.6million one year ago.

Fourth-quarter earnings per share before unusual items were 37cents compared to 33 cents one year ago. The results matched therecent poll of analysts by First Call/Thomson Financial, whichtracks earnings estimates.

Net sales rose to $995.9 million compared to $949.1 millionone year ago.BACK TO TOP

Verizon Meets Estimates

Verizon Communications, the No.1 U.S. local telephone company, reported todayfourth-quarter profits in line with Wall Street forecasts asdata and wireless sales surged and its long-distance subscriberbase grew.

The company also repeated its outlook for 2001 earnings.

"Our solid operating performance in 2000 confirms both thevalidity of our business model and our ability to execute onit," said Verizon Chairman and Co-Chief Executive Charles Lee.

Verizon, formed through last year's merger of Bell Atlanticand GTE , said profits rose to $1.9 billion, or 77cents a share, compared with $1.7 billion, or 63 cents a share,a year ago.

The results were in line with company and Wall Streetforecasts per share, according to research firm FirstCall/Thomson Financial.

The company said its fourth-quarter results were70 cents per diluted share, on net income of $1.9 billion, an11.1 percent rise from 63 cents, or $1.7 billion, in the sameperiod the year before.

Verizon said fourth-quarter revenues rose to $16.9 billionfrom $15.8 billion for the year-ago period. The reportedresults for all periods incorporate the net after-tax effect ofgains, charges and other adjustments.

Shares of Verizon have gained about 21 percent in the pastthree months. They have outperformed the Standard & Poors500-stock index by about 34 percent.

Total adjusted U.S. telecom revenues grew 3.3 percent forthe fourth quarter, to $10.9 billion.

Verizon said it expected its 2001 earnings to be in therange of $3.13 to $3.17 a share. The company made a similarforecast in December.

Verizon said it added 190,000 digital subscriber lines inthe fourth, 46 percent more than in the third quarter. Thelines allow high-speed Internet access through regulartelephone wires.

The 540,000 lines in service at the end of the yearrepresent an increase of more than 500 percent over the numberin service at the end of 1999.

The company said it was "well positioned in 2001 to furthertransform our growth profile and move into our target ranges of8-10 percent revenue growth and $3.13-$3.17 earnings pershare."

The company made a similar earnings forecast in December.

Verizon's long-distance unit ended the year with 4.9million customers nationwide, 44 percent more than the yearbefore. Verizon is the fourth-biggest U.S. provider of

long-distance services.

Verizon Wireless added 1.2 million net new customers duringthe fourth quarter, 5.9 percent more net additions than infourth-quarter 1999. The total number of customers grew 15.6percent year-over-year to 27.5 million.

Wireless revenues for the quarter grew to $4.1 billion, up16.7 percent from fourth-quarter 1999.

Verizon said it added 190,000 digital subscriber lines inthe fourth quarter, 46 percent more than in the third quarter.The lines allow high-speed Internet access through regulartelephone wires.

"As demand fell, we maintained our commitment to keep ourproduction in line with customer orders, which negativelyimpacted overall sales," he said. "While many of these factorsare continuing into the opening months of 2001, the steps weare taking will lead to a stronger International Paper for thelong term."

International Paper said it has nearly completed itspreviously announced plan to adjust capacity as the woodproducts industry continues to battle lower demand and higherenergy costs.

The company has closed its Mobile, Ala. and Camden, Ark.mills, and completed the downsizing of the Courtland, Ala.mill. The closure of the Lockhaven, Pa. mill is proceeding onschedule, IP said.

It also said asset sales are progressing rapidly asInternational Paper focuses on its three core businesses —paper, packaging and forest products. The company has increasedits asset sales target to $5 billion, including timberlands, tobe completed by the end of 2001.

It said it aims to reduce capital spending to $1.2 billionin the year 2001, which is about 60 percent of depreciation andamortization. The capital expenditure program in 2001 is 20percent below the $1.4 billion spent in the year 2000, itsaid.

International Paper makes paper, packaging and wood andbuilding products, as well as being the largest private forestlandowner in the world. It has operations in nearly 50countries, employs more than 117,000 people and exports itsproducts to more than 130 nations.BACK TO TOP

Mad Cow Takes a Bite out of McDonald's

Fast food giant McDonald's said today its fourth-quarter earnings fell 7percent as an outbreak of mad cow disease in Europe pushed theregion's sales down 10 percent and threatened to weaken thecompany's first quarter results.

Net income at the Oak Brook, Ill.-based hamburger maker,the largest restaurant company in the world, fell to $452 million,or 34 cents a share, from $486.2 million, or 35 cents a share, ayear earlier. McDonald's was expected to earn 35 cents a share,according to a recent poll of analysts by First Call/ThomsonFinancial.

McDonald's, which operates nearly 5,500 restaurants in Europe,its second-largest market behind the United States, has sinceNovember seen sales erode amid an outbreak of mad cow disease, orbovine spongiform encephalopathy, on the continent.

BSE is a chronic degenerative disease affecting the centralnervous system of cattle and is believed to be contracted throughfeed containing animal by-products. It has been linked to asimilar brain-wasting disease in humans.

CEO Jack Greenberg said in a statement that he expects adifficult first quarter of 2001 due to continued mad cow concerns,tough comparisons from last year, and an extra trading day in2000.

"We expect the first quarter to be very challenging, due tooutstanding results and an extra trading day in 2000, andcontinuing consumer confidence issues about European beef," hesaid.

The company has been battling public fears with stepped upadvertising and greater promotion of non-beef products.

Sales to Europe, the company's second-largest market behindthe U.S., fell 10 percent in the quarter to $2.21 billion from$2.45 billion one year ago. Operating income fell 17 percent to$267.3 million from $322.2 million.

"Europe got hit pretty hard," said Bear Stearns analyst JoeBuckley, who in June lowered his rating on McDonald's shares toneutral due to broader international concerns, includingfluctuations in the euro. "The problem with mad cow is that it isan unknown. No one knows how long these concerns last."

Systemwide sales, which include sales from restaurants ownedby franchises and those owned by the company, rose to $9.92billion from $9.75 billion a year ago.

Sales in the United States, McDonald's largest market, rose 3 percentto $4.82 billion, from $4.68 billion one year ago. Operatingincome rose 14 percent to $385.3 million from $338.9 million.Sales in Asia Pacific, McDonald's third-largest market, rose 3percent to $1.75 billion from $1.70 billion a year ago.

"Despite a number of operating challenges, our worldwidecomparable sales were positive and systemwide sales increasedseven percent in constant currencies for the year," Greenbergsaid.

The company plans to add about 1,700 restaurants in 2001, hesaid. The company said that 2001 per share earnings were expectedto grow between 10 percent to 13 percent, excluding the impact of foreigncurrency translation.

In the year, it plans to buy back about $1.2 billion in stock,the remainder of a three-year $4.5 billion plan. In 2000, itpurchased $2.0 billion worth.BACK TO TOP

Qwest Tops Wall Street

Telephone and data servicesprovider Qwest Communications todayposted a better-than-expected 44 percent jump in fourth-quarterprofits, propelled by robust growth in Internet, data andwireless telephone revenues.

Qwest, which acquired regional phone company U S West Inc.last year in a $36 billion deal, said in a statement it was ontrack to meet its targets for 2001 revenues and earnings beforeinterest, taxes, depreciation and amortization, or EBITDA, akey measure of a company's performance.

Andrew Hamerling, an analyst with Banc of America, calledthe results "terrific."

"Everything is as expected," he said. "Overall I'd say it'sa great quarter."

The Denver-based company said pro forma profits excludingone-time items rose to $270 million, or 16 cents a dilutedshare, compared with $188 million, or 11 cents a share, a yearago.

The results beat Wall Street expectations of 14 cents ashare, according to research firm First Call/ThomsonFinancial.

"With the initial integration of the [U S West] mergersuccessfully completed, we are on track to meet our expectedgrowth rates," Chairman and Chief Executive Joseph Nacchio saidin a statement.

Qwest said revenues rose 9.9 percent to $5.02 billion. Theincrease was driven by growth of almost 40 percent in Internetand data services.

Wireless revenues rose 90 percent to almost $150 million.The number of wireless customers increased to more than805,000, above the company's target of 800,000 for the end of2000.

Fourth-quarter EBITDA was up 19.7 percent, to $1.99billion.

Shares of Qwest have fallen about 10 percent amid sharpdeclines throughout the telecom sector over the past year. Itsstock has underperformed the Standard & Poor's 500 index byabout 4 percent.

The company also said it expected to double the number ofcustomers for its digital subscriber line (DSL) service, whichprovides high-speed Internet access over conventional phonelines, to 500,000 by the end of the year.

Qwest said it ended 2000 with more than 255,000 DSLcustomers, above its target of 250,000.

It also said it expected to file with the FederalCommunications Commission to enter long-distance service inseveral states by the end of 2001.

It expects to apply to reenter long-distance business inone of the states in its local service area by the summer.

Tavis McCourt, an analyst with Morgan Keegan & Co. Inc. inMemphis, Tenn., said entry into long-distance markets was vitalfor Qwest's growth.

"Certainly they are going to be as aggressive as possibleto make that a reality," he said.

Qwest reiterated that it expected 2001 revenues to be inthe range of $21.3 billion to $21.7 billion and EBITDA to be$8.5 billion to $8.7 billion.

Hamerling, the Banc of America analyst, said the biggestchallenge facing Qwest was to meet its target of 20 percentlong-term EBITDA growth.

Whirlpool Reiterates Job Cuts

Appliance maker Whirlpool metWall Street's lowered fourth-quarter earnings expectations andaffirmed its global restructuring plan will mean up to 6,000 jobscut in the coming year.

The company said today it expects to trim more than 2,000jobs worldwide as part of the restructuring's first phase, withmore details to be announced within two weeks.

All told, the company shake-up — which will pare 10 percent ofWhirlpool's 60,000-member work force — will result in pre-taxcharges of $300 million to $350 million, with annualized savings of$225 million to $250 million, the company said.

"This will be a year of challenge and opportunity," David R.Whitwam, Whirlpool's chairman and chief executive, said in astatement. "We believe that our strong brands, global platform,innovative products and consumer focus — combined with ourrestructuring efforts and the associated lower cost structure —will produce a strong operational performance and solid financialresults in 2001."

Whirlpool said its fourth-quarter net earnings were $67 million,or $1 per share, compared with $113 million, or $1.51 per share,during the year-ago period.

Analysts surveyed by First Call/Thomson Financial were expecting99 cents per share, having lowered their estimate from $1.42 ashare after Whirlpool issued an earnings warning last month. At thetime, Whirlpool blamed intensified price competition, risingmaterial costs, and slowing or declining demand.

The company said sales during the three months ended Dec. 31were $2.58 billion, down 4 percent from $2.69 billion in theyear-ago period.

It added that it expects its first-quarter performance,excluding charges, to be in line with fourth-quarter earnings of $1per share. Analysts surveyed by First Call/Thomson Financial hadbeen expecting $1.02 per share.

The North American appliance industry has been expected to bedown 7 percent to 8 percent in the fourth quarter versus the sameperiod in 1999, Whirlpool said last month. Earlier companyestimates forecast a fourth-quarter decline in industry shipmentsof 2 percent to 3 percent.

Whirlpool has said its restructuring involves a reduction andreconfiguration of global operations, including the closure of someplants.

For the year, Whirlpool earned $367 million, or $5.20 per share,on sales of $10.33 billion. In the previous year, the companyearned $347 million, or $4.56 per share, on sales of $10.51billion.

Whirlpool is the world's largest manufacturer and marketer ofmajor home appliances. It sells products under 11 brand names inmore than 170 countries. The Benton Harbor-based company has majoroperations in seven states — Arkansas, Indiana, Michigan,Mississippi, Ohio, Oklahoma and Tennessee — and 12 countries,including Canada and Mexico.