Earnings Reports for Nov. 2

ABC News

January 6, 2006, 1:18 AM ET

31 min read

— -- Priceline Reports Loss, Cuts Jobs

Priceline.com, the Internet-based,name-your-own-price system for travel and other services, today reported a third-quarter loss of a penny per share andannounced it was cutting 87 positions from its 535-member workforce.

The company also announced that its chief financial officer,former Citigroup CFO Heidi G. Miller, was leaving the company afterjust over eight months on the job.

Priceline reported a net loss of $2 million, compared with a proforma loss of $12 million, or 8 cents per share, in the samequarter last year.

Revenues for the quarter were $341 million, up from $152 millionin the year-ago quarter.

Priceline warned last month that it expected to report the loss,contrary to analyst expectations for a break-even quarter.

In the warning, company President Daniel H. Schulman pointed toincreased fuel charges by airlines, problems with canceled flightsand special sale fares offered by airlines themselves.

At the same time, a Priceline promotion drove down averageticket offers but failed to generate the anticipated increase involume.

“While we are disappointed in our airline ticket sales revenuefor the 3rd quarter, we believe that the business made solidprogress on several fronts,” said Priceline President DanielSchulman. “Our total customer base grew to 8 million. Repeat usagealso grew, with slightly more than half of all purchase offerscoming from repeat customers.”

Schulman said the company was beginning several initiatives toimprove customer satisfaction including changes to its Web site and“educational initiatives” to demonstrate the value of theservice.

Priceline said the layoffs and other changes would result in afourth-quarter charge of about $9 million. It said it was revampingits compensation program for remaining employees, mostly throughstock options, which would also result in an unspecifiedfourth-quarter charge.

Priceline said Miller was leaving to “pursue opportunities andapply her talents in a more established business environment.” BobMylod, the senior vice president-finance, will replace her.

After starting out two years ago offering name-your-own priceairline tickets, Priceline expanded into other areas, includingrental cars, home mortgages, telecommunications services, gas andgroceries.

The company’s name-your-price business model was initiallyhailed by analysts as an ingenious use of the Internet that couldrevolutionize retail pricing.

But Priceline has been beset by problems in recent months. Lastmonth its grocery and gasoline licensee, WebHouse Club, announcedit was shutting down. Priceline’s shares plunged 38 percent the dayof the announcement.

After the company went public in March 1999, its stock soared toas high as $165 per share.

In the last year it sold for as much as $104.25 per share. Butit has traded between $5 and $6 per share. It closed at $6.85 pershare Thursday but was down to $5.25 per share in after-hourstrading.

Martha Stewart Doubles Earnings

Media and entertainment companyMartha Stewart Living Omnimedia posted today a more than 100 percent jump in third-quarter earnings, easily beatinganalysts’ expectations, and said it is comfortable with thehigh end of estimates for the fourth quarter and expects toexceed them for the year.

The New York-based company run by media icon Martha Stewartsaid net income for the third quarter surged to $3.82 million,or 8 cents a share, from $1.88 million, or 4 cents a share, inthe year-ago period.

Wall Street analysts on average were expecting the companyto post a profit of 1 cent per share, according to researchfirm First Call/Thomson Financial. Revenue rose 24 percent to$61.9 million from $49.8 million in the third quarter of 1999.

Steward, the chairman and chief executive, said in astatement she expects the company will exceed analysts’consensus estimate of 34 cents a share for fiscal 2000 withearnings expected to come in at about 41 cents a share. Thecompany also said it is comfortable with the “high end” ofearnings estimates of 10 per share for the fourth quarter.

In 2001, the company expects double-digit growth inrevenues and earnings before interest, tax, depreciation andamortization (EBITDA) in the publishing and merchandisingsegment, while television EBITDA is expected to be flat. TheInternet and direct commerce segment expects revenue growth inthe double-digits and an EBITDA loss of between $16 million to$18 million.BACK TO TOP

Cigna’s Q3 Operating Net Rises

Cigna, the No. 3 U.S. health insurer, said todaythird-quarter earnings rose 20 percent on a per-share basis, handily beating Wall Street expectations on the strength ofmembership growth and premium rate increases in the health care segment.

The Philadelphia-based company, which ranks behind managed care industry leader Aetna and No. 2 UnitedHealth Group, reported third-quarter operating income from continuing operations of $281 million, or $1.76 per share, compared with $1.47 per sharein the year-earlier quarter, excluding certain nonrecurring charges.

The results beat analysts’ consensus forecast of $1.68 a share, as compiled by research firm First Call/Thomson Financial.

Cigna shares finished off $1.95 at $120 on the New York Stock Exchange Wednesday, near a 52-week high of $123. The stock has a 52-week low of $60.75.

Cigna, which also sells life insurance, annuities and pension products, said total revenues rose 7 percent to $5.03 billion from $4.69 billion. The increase wasprimarily due to growth in its Employee Health Care, Life and Disability Benefits segment, which includes health maintenance organisation (HMO) and indemnityinsurance operations, the company said.

Earlier this month Nextel warned that its U.S. subscribergrowth would fall short of Wall Street estimates of550,000-575,000. Nextel had averaged 550,000 net subscriberadditions in the first two quarter of the year.

Nextel’s slow subscriber growth follows similar warnings byother wireless carriers. Sprint PCS Group said its subscribergrowth would be slower-than-expected due to increasedcompetition and its decision to cancel some unprofitablecustomers. Dobson Communications, meanwhile warned thathigher-than-expected customer turnover would dampen itsgrowth.

Internationally, Nextel’s subscriber growth remainedstrong. The company added 141,000 new subscribersinternationally during the third quarter, bringing its totalsubscriber base to 6.9 million.

Operating cash flow, or earnings before interest, taxes,depreciation and amortization, more than doubled to $359million in the third quarter. Total domestic minutes of use onits network grew 73 percent, to 8.5 billion.

Third-quarter capital expenditures were $806 million,including $666 million for domestic operations and $140 millionfor international operations.

Nextel had been in talks to merge with AT&T Corp.’swireless telephone arm, AT&T Wireless Group Inc., butnegotiations ended due to disagreements over price andmanagement control, sources familiar with the situation toldReuters.BACK TO TOP

TheStreet.com Posts Wider Loss

Online financial informationcompany TheStreet.com today reported a wider netloss in the third quarter, but still beat estimates assubscription, advertising and electronic commerce revenuesrose.

Excluding certain nonrecurring items, the company posted aloss of $8.9 million, or 34 cents per share, compared to a lossof $7.2 million or 29 cents per share in the year-ago quarter.The company reported a net loss of $9.6 million, or 37 centsper share, compared with $7.8 million, or 32 cents per shareincluding one-time items in both periods.

Analysts on average predicted New York-based TheStreet.com,whose stock has fallen 90 percent since last May, to lose 37cents per share, according to First Call/Thomson Financial.

The company, which shifted to a free model from asubscription-based model earlier this year, said newsdistribution deals were slower to implement than it hadexpected. Consolidated advertising and e-commerce revenues forthe third quarter totalled $3.7 million — up 74 percent fromthe third quarter of 1999.

In September, the company said revenues would come inlower-than-expected amid a slowdown in advertising sales anddelays in implementing distribution deals. Shares of thecompany closed at $3-1/4 on the Nasdaq on Wednesday, off theyear-high of $22 and up from a 52-week low of $2-5/8.

Reebok Runs By Wall Street

Reebok reported today an increase in its third-quarter earnings, noting a risein U.S. footwear sales, but saying its worldwide sales figures werehurt by the weakness of the euro and British pound.

The company reported income of $32.3 million, or 56 cents pershare, compared with net income of $3.2 million, or 6 cents pershare, in the same period a year earlier.

The company said that in the third quarter of 1999, earnings hadbeen affected by a special after-tax charge of $24.3 million, or 43cents per share, for corporate restructuring.

The earnings beat expectations. Analysts surveyed by FirstCall/Thomson Financial were expecting earnings of 51 cents pershare.

Net income for the first nine months of the year was $74.7million, or $1.30 per share, compared with net income of $25.7million, or 45 cents per share, in the same period a year earlier.

One bright spot was U.S. sales of Reebok footwear, which were$233.3 million, a 4.4 percent increase from sales of $223.5 millionin the same period a year earlier.

Overall, however, sales for the third quarter were $787.8million, down from sales of $793.9 million in the same period ayear earlier.

When the numbers were adjusted to account for the impact ofcurrency fluctuations, sales for the third quarter were actuallyup, the company said.

The company said sales were increasing in terms of localcurrencies in most major markets around the world.

“We’re definitely improving our execution of the corefundamentals of our businesses,” said Paul Fireman, the companychairman and chief executive.

U.S. Reebok apparel sales, including sales of the Greg NormanCollection, were down, dropping to $58.8 million, compared with$69.9 million in the same period a year earlier.BACK TO TOP

Strong Cereal Sales Help Kellogg

Continued strong U.S. cereal salespropelled Kellogg to a third-quarter net-earnings increase of6.5 percent, excluding charges.

The Battle Creek-based company reported today net earningsof $181.9 million, or 45 cents per share, during the July-Septemberperiod. During last year’s third quarter, Kellogg reported netearnings of $170.8 million, or 42 cents per share.

Analysts surveyed by First Call/Thomson Financial had predictedearnings of 45 cents per share for the quarter.

Net sales fell 1.2 percent to $1.85 billion, compared with $1.87billion during the year-ago period. Excluding acquisitions,divestitures and the negative impact of foreign-exchange rates,sales were up 1.1 percent.

“Despite several unusual challenges in the third quarter, wewere able to post our sixth-consecutive quarterly EPSincrease,” said Carlos M. Gutierrez,Kellogg’s chairman and chief executive.

Kellogg increased its share of the U.S. cereal market during thequarter despite “a substantial increase in promotional activity”by its competitors, he said.

Kellogg officials have declined to comment on recent reportsthat the company is interested in buying Keebler Foods. ButGutierrez said that Kellogg plans to “enhance our growththrough acquisitions.”

For the first nine months of 2000, excluding charges, Kellogg’searnings per share were $1.26, up 8.6 percent from last year’s$1.16, and net earnings were $509.2 million, up 8.5 percent fromlast year’s $469.4 million.

Net sales for the nine months were even with 1999 at $5.4billion. Excluding acquisitions, divestitures and the impact offoreign-exchange rates, nine-months sales were up 2 percent.

Kellogg is the world’s leading cereal producer and a leadingmaker of convenience foods.BACK TO TOP

Global Sales Raise Purina

Pet food maker Ralston Purina said today its fiscalfourth-quarter earnings from continuing operations were higher than pro-forma results a year earlier, as internationalpet food sales rose and costs dropped.

The St. Louis-based maker of Puppy Chow and Cat Chow said its earnings in the fourth quarter ended Sept. 30, excluding one-time items, rose to $79.8million, or 28 cents per share, compared with $73.6 million, or 24 cents pro forma, in the year-earlier period. Pro-forma results reflect the spinoff ofRalston’s battery products unit in April.

Analysts on average had expected the company to earn 27 cents a share, according to First Call/Thomson Financial, which tracks earnings data.

Fourth-quarter net sales fell to $675.9 million from $682.9 million a year ago.

Sales of pet foods in North America fell 5 percent in the quarter. Sales declined on lower volumes due to a competitive environment and the elimination oflower-margin products, the company said.

Profitability in the North American pet food segment rose 8 percent as lower advertising and promotion expenses helped to offset the sales decline.

International pet food sales increased 13 percent in the fourth quarter. Volumes rose significantly and helped offset unfavourable foreign exchange rates,the company said.

Profitability in the International segment rose 4 percent.BACK TO TOP

T. Rowe Price Meets Expectations

T. Rowe Price Associates said today third-quarter profits rose 11 percent,meeting expectations, as assets under management increased.

T. Rowe, which manages U.S. mutual funds with about $115billion in assets, said it earned $69.2 million, or 53 cents ashare, in the quarter. That compared with a net profit of $62.2million, or 48 cents a share, in the year-ago period.

The results met analysts’ average expectation of 53 centsper share, according to market research firm First Call/ThomsonFinancial.

T. Rowe Price revenues rose to 303.7 million in thequarter, up from $259.9 million. T. Rowe’s total assets undermanagement stood at $179.6 billion at the quarter’s end, upfrom $157.4 billion a year ago.

Analysts on average had expected the company to earn 27 cents a share, according to First Call/Thomson Financial, which tracks earnings data.

Fourth-quarter net sales fell to $675.9 million from $682.9 million a year ago.

Sales of pet foods in North America fell 5 percent in the quarter. Sales declined on lower volumes due to a competitive environment and the elimination oflower-margin products, the company said.

Profitability in the North American pet food segment rose 8 percent as lower advertising and promotion expenses helped to offset the sales decline.

International pet food sales increased 13 percent in the fourth quarter. Volumes rose significantly and helped offset unfavourable foreign exchange rates,the company said.

Profitability in the International segment rose 4 percent.BACK TO TOP

T. Rowe Price Meets Expectations

T. Rowe Price Associates said today third-quarter profits rose 11 percent,meeting expectations, as assets under management increased.

The results met analysts’ average expectation of 53 centsper share, according to market research firm First Call/ThomsonFinancial.

PG&E will have to write off those losses unless state regulatorsreverse their previous rulings and allow PG&E to retroactively billmillions of Northern California customers for the costs. If thecompany has to absorb the electricity losses, PG&E’s stock probablywould be ravaged.

The California Public Utilities Commission last week providedPG&E with a reprieve by agreeing to reconsider the issue. PG&E andanother major utility, Southern California Edison Co., are expectedto provide further details about their proposed solution indocuments scheduled to be filed with the PUC on Wednesday.

Consumer activists argue that PG&E should have to foot theentire bill for the higher electricity prices because the companyhas made billions of dollars by selling off assets as part ofCalifornia’s energy deregulation. PG&E said consumer groups aremisinterpreting the company’s finances.

In a conference call today, PG&E executives sought to strike aconciliatory tone to reassure both anxious customers and investors.

On the one hand, the company said, it would continue toessentially finance its customers’ bills. PG&E said it has borrowedbetween $700 million and $800 million to buy electricity fromwholesalers so far and has applied for approval to raise its creditlimit by an additional $2 billion.

On the other hand, PG&E executives stressed they are workingfuriously with state and federal regulators to devise a plan thatwill ease the company’s financial burden. In the conference call,the executives indicated they hoped some sort of action might betaken before the end of the year.

“We believe the immediate and long-term solutions are cominginto focus,” PG&E Chairman Robert Glynn said. “In summary, theright people are working on the right solutions.”

Through the first nine months of the year, PG&E earned $753million, or $2.09 per share, up from $538 million, or $1.46 pershare, in the comparable 1999 period.

Sluggish Sales Cost HasbroHasbro, the No. 2U.S. toy maker, reported today that its profits fell 84percent due to sluggish sales and mounting losses in itsinteractive operations.

Hasbro said net income fell to $13.8 million, or 8 cents adiluted share, compared with $85.2 million, or 43 cents, forthe same quarter a year ago.

Analysts lowered their expectations to 7 cents a share forthe quarter, according to market research firm FirstCall/Thomson Financial. Hasbro warned last week that itsperformance would fall well short of previous estimates largelybecause of a sharp slowdown in sales of Pokemon and Star Warsproducts. It also said it was slashing its work force by about5 percent.

Worldwide net revenues dropped to $1.07 billion from $1.10billion in the year-ago period.

“Even with challenging comparisons against last year’srecord results, I’m not pleased with our third-quarterperformance,” Hasbro Chairman Alan Hassenfeld said in astatement.

Hasbro’s most recent outlook for full-year 2000 earningsper share was 40 cents to 50 cents, before $140 million to $170million in pretax charges.

Hassenfeld said the company was evaluating the fourthquarter before providing a revenue and earnings outlook for2001.

Earnings in the third-quarter included a pretax loss of $6million from Internet games operation Games.com. Itsinteractive division did not live up to already-reducedexpectations, and Hasbro said last week it was exploringstrategic alternatives for the business.

Pokemon toy demand in the U.S. was soft, but stronginternationally, the company said. Revenues from Star Warstoys are expected to be minimal in 2000.

U.S. Bancorp Meets Estimates

Regional bank U.S. Bancorpsaid today its third-quarter operating earningsrose 0.5 percent, in line with expectations, as loan volumeincreased but expenses did too.

Minneapolis-based U.S. Bancorp, which this month announcedit was being bought by rival Firstar Corp. in a stock dealworth almost $20 billion, earned $410.9 million, or 55 cents adiluted share, in the third quarter, excluding one-time mergercharges and profits from securities sales. That compares with$409 million, or 56 cents a share, in the year-earlier period.

Results met Wall Street forecasts of 55 cents a share,according to market research firm First Call/ThomsonFinancial.

The bank’s net profits, including $9.6 million in mergercharges and one-time securities transactions, rose to $401.3million, or 54 cents per share, from $396.4 million, also 54cents per share.

U.S. Bancorp’s provision for loan losses in the thirdquarter rose 22 percent to $173 million. Net interest income,which includes the profit the bank makes from loans, rose 4.5percent to $883 million as loan volume continued to growdespite higher interest rates.

Quaker Oats Q3 Profit Up 16%

Quaker Oats, maker of hotand cold cereals, said today its third-quarter earningsrose 16 percent, beating the average analyst forecast, oncontinued robust demand for its Gatorade sports drink.

The company also said it expects full-year 2000 earnings pershare growth before items in the range of 20 percent or slightlybetter.

The Chicago-based food company, whose stable of productsincludes breakfast bars, Rice-A-Roni side dishes and Aunt Jemimapancake mixes and syrup, said earnings rose to $159.2 million,or $1.15 per diluted share, in the quarter. That compares with$137.3 million, or $1.01 a diluted share, excluding unusualitems in the same period a year ago.

Analysts on average had expected the company to earn $1.11 ashare, according to First Call/Thomson Financial, which tracksearnings data.

Third-quarter net sales rose to $1.48 billion from $1.38billion a year ago.

Gillette’s Profits Fall; Names New CEO

Gillette today reportedits third-quarter earnings fell 1 percent, meeting WallStreet’s estimates, as currency problems plagued the consumerproducts giant.

The Boston-based maker of razors and blades, Oral Btoothbrushes and Duracell batteries, also said Chairman andChief Executive Michael Hawley was retiring immediately. EdwardDegraan was named acting chief executive and Richard Pivirottowas named non-executive chairman of the board.

Gillette posted third-quarter earnings of $350 million, or33 cents a share, from continuing operations, compared withearnings of $355 million, or 32 cents per diluted share for thesame period in 1999.

Analysts surveyed by First Call/Thomson Financial hadestimated Gillette would earn 33 cents a share in the thirdquarter.

The company has had a string of disappointing earningsreports dating back to 1999, blaming a combination of foreignexchange rates and proper inventory stocking.

AHP’s Profits Rise 18% Before Charge

American Home Products posted today a steep rise in quarterly operating profits,matching analyst expectations, but the No. 5 U.S. drug makersaid it would have to set aside additional funds for its dietdrug settlement for which it has already paid billions in the“fen-phen” case.

The Madison, N.J.-based maker of Advil, Robitussin and theoestrogen replacement drug Premarin reported net income of $762million, or 58 cents per share, in the third quarter vs. a netloss of $2.87 billion, or $2.20 cents, in the year-ago period.

The year-ago loss mainly reflected a $4.75 billionlitigation charge for a settlement related to the diet drugsRedux and Pondimin. Excluding this charge from the 1999third-quarter results, income from continuing operations in thelatest quarter increased 18 percent to $762 million from $645million.

Analysts on average had estimated that the company, whoseWyeth-Ayerst unit will pay the U.S. government $30 million forviolations at two plants, would post earnings of 58 cents pershare, according to research firm First Call/ThomsonFinancial.

Looking forward, AHP said it expects additional reserveswill be required in the diet drug settlement. It said thatthough it is still unclear how much that will amount to, AHPexpects it to be lower than the $4.75 billion recorded in the1999 third quarter.

A spokesman for the company declined to specify a range ofthe amount of reserves that would be used.

Patients typically combined either Pondimin or Redux withanother diet suppressant called phentermine to make the“fen-phen” diet cocktail. AHP recalled Pondimin and Redux in1997 after some of the 6 million Americans who had takenfen-phen developed heart problems, including leaky valves.

Overall net sales increased 13 percent from the samequarter last year.

Worldwide pharmaceutical sales increased 14 percent for thequarter, sparked by higher revenues from recently approvedpneumococcal vaccine Prevnar, meningitis treatment Meningitic,arthritis treatment Enbrel and ulcer medicine Protonix. Salesof Effexor XR, for which American Home Products received anexpanded indication, also showed strong growth.

Excluding the negative impact of foreign exchange rates,worldwide pharmaceutical sales increased 17 percent for the2000 third quarter.

Global consumer health care sales increased 7 percent forthe quarter, as sales of the Centrum family of vitamin productsrose. However, the company experienced a sales slowdown forcold, cough and allergy products, as well as for pain relieverAnacin.

Excluding the effect of weak foreign currencies, worldwideconsumer health care sales increased 8 percent for thequarter.

“The double-digit sales and earnings growth through thefirst three quarters of 2000 have been driven by increaseddemand for franchise products and enhanced by an impressivenumber of new products introduced into the marketplace,” saidChairman and Chief Executive Officer John Stafford in astatement.BACK TO TOP

Raytheon Meets Expectations

Raytheon’s third-quarter earningsmet Wall Street’s expectations, reversing a loss from the year-agoperiod, helped by an increase in aircraft deliveries.

For the three months ended Sept. 30, Raytheon earned $105million, or 31 cents per share, up from a loss of $163 million, or48 cents per share in the year-ago period.

Earnings from continuing operations were $133 million, or 39cents per share, in line with a consensus estimate from analystssurveyed by First Call/Thomson Financial.

The Lexington, Mass.-based aerospace and defense company lost $89 million, or 26 cents pershare, from continuing operations in the year-ago period, in partdue to charges of $464 million, or 84 cents per share.

Revenue rose to $4.16 billion, up from $4.12 billion a year ago.

Sales in most divisions were similar to a year ago. TheElectronic Systems division reported sales of $1.9 billion, downfrom $2.0 billion.

Raytheon Aircraft Company, a division the company is reportedlytrying to sell to reduce its debt burden, recorded sales of $749million, up 6 percent from a year ago due to higher aircraftdeliveries.

For the nine months ending Oct. 1, Raytheon recorded net salesof $12.56 billion, down 4 percent from $13.02 billion over the sameperiod last year. Raytheon has a net loss for the first nine monthsof the year of $23 million, compared with earnings of $332 millionin the year-ago period.

Mattel’s Profits Fall

Mattel, in the midst of arestructuring and under new leadership, said its profit fell 22percent in the third quarter because of declining sales.

The company said today it earned $174.3 million, or 41 centsper share, from continuing operations in the quarter ended Sept. 30as compared with profits of $222.2 million, or 52 cents per sharein the same period last year.

The results were in line with estimates of analysts surveyed byFirst Call/Thomson Financial.

Sales increased by 2 percent in the United States, but fell 5percent in international markets, the company reported. Sales ofthe company’s two largest brands — Barbie and Fisher-Price —increased during the quarter.

Mattel reported its earnings the day after the sale of itsmoney-losing interactive toy division, The Learning Co.

Mattel took a one-time charge of $441 million as the result ofthe sale, but said the sale would save it $1 million a day inoperating losses.

The company’s disastrous experience with The Learning Co. costformer chief executive Jill Barad her job. Barad was replaced inMay by chief executive Robert A. Eckert.

The company also took a restructuring charge of $74 million, or18 cents per share. Including one-time charges, the company lost$336.8 million, or 79 cents per share, in the quarter.

U.S. Airways Loses $30 Million in Q3

U.S. Airways, the No.6 U.S. airline, said today it lost $30 million in thethird quarter, more than expected, amid tough competition andfuel costs 75 percent higher than a year earlier.

Arlington, Va.-based US Airways, which has agreed to bebought by United Airlines parent UAL for $4.3 billion,said it lost 45 cents a share, compared with a loss of $85million, or $1.19 a share, in the period a year earlier, whenthe carrier suffered from a high degree of cancellationsbecause of bad weather and a slowdown by mechanics.

Analysts had on average forecast that US Airways would lose19 cents a share in the recent quarter, according to FirstCall/Thomson Financial.

Revenues rose 13 percent, to $2.38 billion from $2.10billion a year earlier.

US Airways shares closed at $32-1/4 on Tuesday, down 9/16,despite the $60 a share offer price in the UAL deal, amidwidespread doubts that regulators will allow the deal to closeas envisioned.

Wachovia Will Cut JobsSoutheast U.S. regional bankWachovia reported today a 20 percent drop inthird-quarter net income because of merger costs and chargesrelated to a sweeping restructuring plan, but operating resultsmet Wall Street expectations.

Excluding merger costs and restructuring charges, theWinston-Salem, N.C.-based bank’s earnings were up about 4percent to $270.2 million, or $1.32 a share. Including thecharges, Wachovia earned $205.3 million, or $1.00 a dilutedshare, in the third quarter. That compares with reported netincome of $257.5 million, or $1.25 a share, a year ago.

Wall Street was expecting the company to post operatingearnings of $1.32 a share, according to market research firmFirst Call/Thomson Financial. Wachovia, which is the process ofcutting 1,800 jobs as it revamps its operations, said pre-taxrestructuring charges and merger-related costs totalled $99.8million in the third quarter. The bank said the rest of therestructuring charges, about $30 million, will be taken in thenext two quarters.

Wachovia’s provision for loan losses in the third quarterwas $124 million, up from $76.8 million during the same periodlast year. Net interest income, after the provision for loanlosses, fell 6 percent to $506.8 million.

The bank holding company in June warned investors thatrising interest rates would hurt second-quarter and full-yearprofits. In September it said its president and chief operatingofficer, G. Joseph Prendergast, would retire after the end ofthis year.

Visteon Earnings Fall

Third-quarter earnings at auto parts supplierVisteon Corp. fell 69 percent due to price and production cuts byits former parent, Ford Motor Co.

Visteon said its earnings totaled $48 million, or 37cents a share, for the three months ended Sept. 30, compared with$155 million, or $1.19 a share, in the year-ago period.

The results equaled Wall Street expectations that Visteon hadlowered in August, according to analysts surveyed by FirstCall/Thomson Financial.

Revenues fell 4 percent, from $4.6 billion to $4.4 billion.

Visteon attributed the earnings decline to a 5 percent price cutgiven to Ford before being spun off as a separately traded company.Ford accounted for 83 percent of Visteon’s business in the thirdquarter, Visteon’s first full quarter on its own since the spinoffin June.

Visteon also was hurt by the shutdown at three Ford factories toshift tires from new cars to replacing 6.5 million recalledFirestone tires. The parts maker also said the weakness of the euroagainst the dollar dragged on profits as well.

A spokesman for the company declined to specify a range ofthe amount of reserves that would be used.

Overall net sales increased 13 percent from the samequarter last year.

Excluding the negative impact of foreign exchange rates,worldwide pharmaceutical sales increased 17 percent for the2000 third quarter.

Excluding the effect of weak foreign currencies, worldwideconsumer health care sales increased 8 percent for thequarter.

Raytheon Meets Expectations

Raytheon’s third-quarter earningsmet Wall Street’s expectations, reversing a loss from the year-agoperiod, helped by an increase in aircraft deliveries.

For the three months ended Sept. 30, Raytheon earned $105million, or 31 cents per share, up from a loss of $163 million, or48 cents per share in the year-ago period.

Earnings from continuing operations were $133 million, or 39cents per share, in line with a consensus estimate from analystssurveyed by First Call/Thomson Financial.

Revenue rose to $4.16 billion, up from $4.12 billion a year ago.

Sales in most divisions were similar to a year ago. TheElectronic Systems division reported sales of $1.9 billion, downfrom $2.0 billion.

Raytheon Aircraft Company, a division the company is reportedlytrying to sell to reduce its debt burden, recorded sales of $749million, up 6 percent from a year ago due to higher aircraftdeliveries.

Mattel’s Profits Fall

Mattel, in the midst of arestructuring and under new leadership, said its profit fell 22percent in the third quarter because of declining sales.

The results were in line with estimates of analysts surveyed byFirst Call/Thomson Financial.

Mattel reported its earnings the day after the sale of itsmoney-losing interactive toy division, The Learning Co.

Mattel took a one-time charge of $441 million as the result ofthe sale, but said the sale would save it $1 million a day inoperating losses.

The company’s disastrous experience with The Learning Co. costformer chief executive Jill Barad her job. Barad was replaced inMay by chief executive Robert A. Eckert.

The company also took a restructuring charge of $74 million, or18 cents per share. Including one-time charges, the company lost$336.8 million, or 79 cents per share, in the quarter.

U.S. Airways Loses $30 Million in Q3

U.S. Airways, the No.6 U.S. airline, said today it lost $30 million in thethird quarter, more than expected, amid tough competition andfuel costs 75 percent higher than a year earlier.

Analysts had on average forecast that US Airways would lose19 cents a share in the recent quarter, according to FirstCall/Thomson Financial.

Revenues rose 13 percent, to $2.38 billion from $2.10billion a year earlier.

US Airways shares closed at $32-1/4 on Tuesday, down 9/16,despite the $60 a share offer price in the UAL deal, amidwidespread doubts that regulators will allow the deal to closeas envisioned.

Visteon Earnings Fall

Third-quarter earnings at auto parts supplierVisteon Corp. fell 69 percent due to price and production cuts byits former parent, Ford Motor Co.

Visteon said its earnings totaled $48 million, or 37cents a share, for the three months ended Sept. 30, compared with$155 million, or $1.19 a share, in the year-ago period.

The results equaled Wall Street expectations that Visteon hadlowered in August, according to analysts surveyed by FirstCall/Thomson Financial.

Revenues fell 4 percent, from $4.6 billion to $4.4 billion.

Visteon said its earnings totaled $48 million, or 37cents a share, for the three months ended Sept. 30, compared with$155 million, or $1.19 a share, in the year-ago period.

The results equaled Wall Street expectations that Visteon hadlowered in August, according to analysts surveyed by FirstCall/Thomson Financial.

Revenues fell 4 percent, from $4.6 billion to $4.4 billion.

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Earnings Reports for Nov. 2