Earnings Reports for Jan. 11

— -- Gateway’s Earnings Fall Far Short of Forecasts

Gateway Inc., the No. 2 direct seller of personal computers, reported fourth-quarter results today that badly missed diminishedexpectations, and also forecast 2001 sales growth of just 3percent, prompting it to trim its workforce by 10 percent andrecord a charge.

The surprise earnings report, which came a week earlier thanscheduled, is the latest sign of just how precipitously theworldwide PC market has slowed amid flagging economic growth inthe United States and across the globe.

Gateway said that excluding a previously announced $187million pretax charge for a write-down on the company'sinvestments, it had fourth-quarter earnings of $37.6 million,or 12 cents a share. By comparison, in the year-ago periodGateway had net income $126 million, or 38 cents.

On that basis, the results were far below the 37 cents ashare consensus forecast analysts had expected, according toFirst Call.

Sales fell 6.9 percent to $2.37 billion from $2.55 billion.Gateway had already warned of the sales and earnings shortfallon Nov. 29.

BACK TO TOP

After starting as a search engine in the mid-1990s, Yahoo! grewinto a full-service information and shopping portal whose Web pagesare visited more than 900 million times a day.

In hopes of remaining a rare Internet success story in thisweakening economy and beyond, Santa Clara-based Yahoo! has beencoming up with new ways to make money beyond charging foradvertising, which is estimated to account for 90 percent of thecompany’s revenue.

Yahoo! said it has 3,700 advertisers, up from 3,450 in the thirdquarter, and is getting more ads from traditional companies,including 55 of the Fortune 100 businesses.

Dependence on online advertising has become increasingly riskyas dot-coms and other high-tech companies have slammed the brakeson their spending, and Yahoo’s outlook seems to indicate worriesabout this.

Many analysts have applauded Yahoo!’s recent moves to newrevenue sources, such as licensing branded corporate intranetsites.

Yahoo! said this week it has lined up 18 customers for thehigh-margin sites, including McDonald’s Corp. and the Germanpharmaceutical giant Bayer AG.

Yahoo also began charging fees today to people who use thesite to auction things. The fees range from 20 cents to $1.50 — lower than the 25 cents to $2 charged by rival eBay Inc. Yahoo!still will not charge commissions on successful auctions, whicheBay and Amazon.com do.

BACK TO TOP

Wal-Mart Profits Up 5.8 Percent

Wal-Mart Stores, the world’s largest retailer, reported today a modest 5.8 percent increase in third-quarter profits thatmatched Wall Street forecasts, but a slowdown in consumerspending hurt the discounter’s earnings growth.

Wal-Mart said net income in the quarter ended Oct. 31 roseto $1.37 billion, or 31 cents per diluted share, from $1.29billion, or 29 cents a share, in the same period a yearearlier.

Analysts polled by research firm First Call/ThomsonFinancial had expected the retail giant to report a profit of31 cents a share.

In the year-ago third quarter, Wal-Mart’s profits grew 29percent, but this year the once red-hot U.S. economy has cooledsomewhat and fuel prices are higher, resulting in fewer dollarsspent on retail purchases.

“We are pleased that in a difficult quarter we were able toachieve record sales and earnings,” Lee Scott, Wal-Mart’spresident and chief executive, said in a statement. “We gainedmarket share and generated good earnings growth in achallenging retail environment.”

Sales in the quarter rose to $45.68 billion from $40.9billion a year ago. Total sales at stores open at least a year,or same-store sales, increased 4.9 percent. Same-store sales atthe Wal-Mart discount stores rose 4.5 percent while same-storesales at Sam’s Clubs rose 6.6 percent.

For the third quarter the Wal-Mart Stores segment,including Supercenters, had operating profit of $2.249 billioncompared to $1.993 billion in the same period last year, a 12.8percent increase. Sam’s Club stores had an operating profit forthe quarter of $219 million vs. $194 million a year ago.

The company’s international unit reported an operatingprofit of $241 million for the quarter, a 25.5 percent increasefrom a year ago.

Wal-Mart shares closed at $45-5/16 on Monday, not far fromtheir 52-week low of $41-1/2. The stock’s 52-week high is$70-1/4.

As of Oct. 31, Wal-Mart had 1,723 Wal-Mart stores, 866Supercenters, 469 Sam’s Clubs, and 15 Neighborhood Markets inthe United States. The retailer also has stores in South America, Europe,Korea and Mexico.

BACK TO TOP

Sluggish Sales Continue to Hurt Gap

The Gap, hurt by sluggish sales in its Gap, OldNavy and Banana Republic divisions, reported a 41 percent drop inthird-quarter profits, but still met Wall Street expectations.

The San Francisco-based company said today it earned $186.3million, or 21 cents per share, in the three months ended Oct. 28.That was down from $315.0 million, or 35 cents per share, duringthe year-ago quarter.

The results were in line with estimates from analysts surveyedby First Call/Thomson Financial.

Revenue increased 12 percent to $3.41 billion in the thirdquarter, from $3.05 billion from the year-ago period.

Sales at stores open at least a year were down 8 percent,compared to a 5 percent increase a year ago.

“Third quarter was very challenging,” said Millard Drexler,Gap’s president and chief executive officer. “We’re moving quicklyto fix our problems and make sure we execute more consistently.”

For the nine months ended Oct. 28, Gap earned $605.7 million, or69 cents per share, on revenue of $9.09 billion. In the year-agoperiod, Gap earned $713.2 million, or 79 cents per share, onrevenue of $7.78 billion.BACK TO TOP

Kmart Disappoints the Street

Kmart, the No. 3 U.S.retailer, reported today a third-quarter loss that wasworse than Wall Street forecasts, as results were hurt byinventory liquidation, which cut into regular sales.

Kmart said it had a loss of $67 million, or 14 cents adiluted share, compared with a profit of $27 million, or 5cents a diluted share in the same quarter a year-ago.

Analysts polled by First Call/Thomson Financial hadexpected the discount retailer to report a loss of 10 cents ashare.

Sales in the quarter rose 3 percent to $8.20 billion,compared to a year ago.

Kmart, battling fierce competition from other discounterslike Wal-Mart Stores Inc., said in July it would close 72stores and take a $740 million pretax charge to cover theclosures and make inventory adjustments. At that time, thecompany warned earnings for the year would fall belowexpectations.BACK TO TOP

-->

The Associated Press and Reuters contributed to this report.

BACK TO TOP

Wal-Mart Profits Up 5.8 Percent

Wal-Mart Stores, the world’s largest retailer, reported today a modest 5.8 percent increase in third-quarter profits thatmatched Wall Street forecasts, but a slowdown in consumerspending hurt the discounter’s earnings growth.

Wal-Mart said net income in the quarter ended Oct. 31 roseto $1.37 billion, or 31 cents per diluted share, from $1.29billion, or 29 cents a share, in the same period a yearearlier.

Analysts polled by research firm First Call/ThomsonFinancial had expected the retail giant to report a profit of31 cents a share.

In the year-ago third quarter, Wal-Mart’s profits grew 29percent, but this year the once red-hot U.S. economy has cooledsomewhat and fuel prices are higher, resulting in fewer dollarsspent on retail purchases.

“We are pleased that in a difficult quarter we were able toachieve record sales and earnings,” Lee Scott, Wal-Mart’spresident and chief executive, said in a statement. “We gainedmarket share and generated good earnings growth in achallenging retail environment.”

Sales in the quarter rose to $45.68 billion from $40.9billion a year ago. Total sales at stores open at least a year,or same-store sales, increased 4.9 percent. Same-store sales atthe Wal-Mart discount stores rose 4.5 percent while same-storesales at Sam’s Clubs rose 6.6 percent.

For the third quarter the Wal-Mart Stores segment,including Supercenters, had operating profit of $2.249 billioncompared to $1.993 billion in the same period last year, a 12.8percent increase. Sam’s Club stores had an operating profit forthe quarter of $219 million vs. $194 million a year ago.

The company’s international unit reported an operatingprofit of $241 million for the quarter, a 25.5 percent increasefrom a year ago.

Wal-Mart shares closed at $45-5/16 on Monday, not far fromtheir 52-week low of $41-1/2. The stock’s 52-week high is$70-1/4.

As of Oct. 31, Wal-Mart had 1,723 Wal-Mart stores, 866Supercenters, 469 Sam’s Clubs, and 15 Neighborhood Markets inthe United States. The retailer also has stores in South America, Europe,Korea and Mexico.

BACK TO TOP

Sluggish Sales Continue to Hurt Gap

The Gap, hurt by sluggish sales in its Gap, OldNavy and Banana Republic divisions, reported a 41 percent drop inthird-quarter profits, but still met Wall Street expectations.

The San Francisco-based company said today it earned $186.3million, or 21 cents per share, in the three months ended Oct. 28.That was down from $315.0 million, or 35 cents per share, duringthe year-ago quarter.

The results were in line with estimates from analysts surveyedby First Call/Thomson Financial.

Revenue increased 12 percent to $3.41 billion in the thirdquarter, from $3.05 billion from the year-ago period.

Sales at stores open at least a year were down 8 percent,compared to a 5 percent increase a year ago.

“Third quarter was very challenging,” said Millard Drexler,Gap’s president and chief executive officer. “We’re moving quicklyto fix our problems and make sure we execute more consistently.”

For the nine months ended Oct. 28, Gap earned $605.7 million, or69 cents per share, on revenue of $9.09 billion. In the year-agoperiod, Gap earned $713.2 million, or 79 cents per share, onrevenue of $7.78 billion.BACK TO TOP

Kmart Disappoints the Street

Kmart, the No. 3 U.S.retailer, reported today a third-quarter loss that wasworse than Wall Street forecasts, as results were hurt byinventory liquidation, which cut into regular sales.

Kmart said it had a loss of $67 million, or 14 cents adiluted share, compared with a profit of $27 million, or 5cents a diluted share in the same quarter a year-ago.

Analysts polled by First Call/Thomson Financial hadexpected the discount retailer to report a loss of 10 cents ashare.

Sales in the quarter rose 3 percent to $8.20 billion,compared to a year ago.

Kmart, battling fierce competition from other discounterslike Wal-Mart Stores Inc., said in July it would close 72stores and take a $740 million pretax charge to cover theclosures and make inventory adjustments. At that time, thecompany warned earnings for the year would fall belowexpectations.BACK TO TOP

-->

The Associated Press and Reuters contributed to this report.

The company’s international unit reported an operatingprofit of $241 million for the quarter, a 25.5 percent increasefrom a year ago.

Wal-Mart shares closed at $45-5/16 on Monday, not far fromtheir 52-week low of $41-1/2. The stock’s 52-week high is$70-1/4.

As of Oct. 31, Wal-Mart had 1,723 Wal-Mart stores, 866Supercenters, 469 Sam’s Clubs, and 15 Neighborhood Markets inthe United States. The retailer also has stores in South America, Europe,Korea and Mexico.

BACK TO TOP

Sluggish Sales Continue to Hurt Gap

The Gap, hurt by sluggish sales in its Gap, OldNavy and Banana Republic divisions, reported a 41 percent drop inthird-quarter profits, but still met Wall Street expectations.

The San Francisco-based company said today it earned $186.3million, or 21 cents per share, in the three months ended Oct. 28.That was down from $315.0 million, or 35 cents per share, duringthe year-ago quarter.

The results were in line with estimates from analysts surveyedby First Call/Thomson Financial.

Revenue increased 12 percent to $3.41 billion in the thirdquarter, from $3.05 billion from the year-ago period.

Sales at stores open at least a year were down 8 percent,compared to a 5 percent increase a year ago.

“Third quarter was very challenging,” said Millard Drexler,Gap’s president and chief executive officer. “We’re moving quicklyto fix our problems and make sure we execute more consistently.”

For the nine months ended Oct. 28, Gap earned $605.7 million, or69 cents per share, on revenue of $9.09 billion. In the year-agoperiod, Gap earned $713.2 million, or 79 cents per share, onrevenue of $7.78 billion.BACK TO TOP

Kmart Disappoints the Street

Kmart, the No. 3 U.S.retailer, reported today a third-quarter loss that wasworse than Wall Street forecasts, as results were hurt byinventory liquidation, which cut into regular sales.

Kmart said it had a loss of $67 million, or 14 cents adiluted share, compared with a profit of $27 million, or 5cents a diluted share in the same quarter a year-ago.

Analysts polled by First Call/Thomson Financial hadexpected the discount retailer to report a loss of 10 cents ashare.

Sales in the quarter rose 3 percent to $8.20 billion,compared to a year ago.

Kmart, battling fierce competition from other discounterslike Wal-Mart Stores Inc., said in July it would close 72stores and take a $740 million pretax charge to cover theclosures and make inventory adjustments. At that time, thecompany warned earnings for the year would fall belowexpectations.BACK TO TOP

-->

The Associated Press and Reuters contributed to this report.

For the nine months ended Oct. 28, Gap earned $605.7 million, or69 cents per share, on revenue of $9.09 billion. In the year-agoperiod, Gap earned $713.2 million, or 79 cents per share, onrevenue of $7.78 billion.BACK TO TOP

Kmart Disappoints the Street

Kmart, the No. 3 U.S.retailer, reported today a third-quarter loss that wasworse than Wall Street forecasts, as results were hurt byinventory liquidation, which cut into regular sales.

Kmart said it had a loss of $67 million, or 14 cents adiluted share, compared with a profit of $27 million, or 5cents a diluted share in the same quarter a year-ago.

Analysts polled by First Call/Thomson Financial hadexpected the discount retailer to report a loss of 10 cents ashare.

Sales in the quarter rose 3 percent to $8.20 billion,compared to a year ago.

Kmart, battling fierce competition from other discounterslike Wal-Mart Stores Inc., said in July it would close 72stores and take a $740 million pretax charge to cover theclosures and make inventory adjustments. At that time, thecompany warned earnings for the year would fall belowexpectations.BACK TO TOP

-->

The Associated Press and Reuters contributed to this report.