Earnings Reports for Oct. 30

ABC News

January 6, 2006, 1:18 AM ET

34 min read

— -- Union Carbide Slumps on Energy Costs

Union Carbide,which is being acquired by Dow Chemical, said today itsthird-quarter profits fell 62 percent, hurt by rising costs ofenergy and raw materials, but it still beat revised earningsexpectations.

Union Carbide said net income fell to $29 million, or 22cents per diluted share for the quarter ending Sept. 30,compared with $77 million, or 58 cents a share in the yearearlier period. The year-ago period included a gain of 21 centsper share from a litigation settlement.

The company warned earlier this month that its earningswould be in the range of 20 cents a share, while analysts hadat the time been expecting 57 cents a share for the company.Since then, analysts on average have lowered their estimates to20 cents a share, according to First Call/Thomson Financial.

Revenues rose to $1.64 billion for the third-quarter ofthis year, up 9.2 percent from $1.50 billion a year ago.

Union Carbide, along with other chemical companies, hasbeen hard hit by rising prices for crude oil and natural gas,key raw materials in the chemicals industry.

Lower selling prices for polyethylene and ethylene glycolcompared with prior quarters also hurt profit margins andearnings, Union Carbide said. Those products are used inplastic manufacturing.

Union Carbide Chairman and Chief Executive William Joycesaid in a statement that he was confident that capacityadditions and infrastructure improvements made during the pastfive years would add to future earnings and the success of thecombined companies following completion of the planned DowChemical/Union Carbide merger.BACK TO TOP

Strike Hits Verizon’s Bottom Line

Verizon Communications, theNo. 1 U.S. local telephone company, said today third-quarter profits were flat as costs of an 18-day laborstrike offset growth in sales of data and wireless services.

Verizon, the company formed by the merger of Bell Atlantic and GTE , said profits, excluding one-time items,were $2 billion, or 73 cents a share, compared with $2billion, or 72 cents a share a year ago. The results met WallStreet’s expectations of 73 cents a share, according toresearch firm First Call/Thomson Financial.

Including gains on assets sales and other adjustments,profits rose almost 40 percent to $3.5 billion, or $1.27 ashare, compared with $2.5 billion, or 91 cents a share, in thethird quarter 1999.

The New York-based company said revenues rose 7.2 percentto $16.5 billion from $15.4 billion in the third quarter 1999.Without the labor strike, revenue growth would have been about7.4 percent.

Verizon in August cut its profit outlook for 2000 and 2001.It confirmed today it expects to generate “solid revenuegrowth” and earn 76-78 cents in the fourth quarter, in linewith Wall Street expectations. It expects revenue growth toaccelerate to 8-10 percent in 2001. It aims to post annualearnings per share growth in the mid-teens by 2003.BACK TO TOP

Pharmacia’s Profits Rise 61 Percent

U.S.-Swedish drug makerPharmacia reported today a 61 percent rise inadjusted third-quarter profits, matching Wall Street estimates,citing potent sales of its arthritis and glaucoma medicines.

The Peapack, N.J.-based maker of the blockbuster arthritisdrug Celebrex and anti-anxiety medicine Xanax, posted adjustedearnings from continuing operations of $427 million, or 33cents per share, up from $265 million, or 21 cents per share,in the year-ago period. Adjusted results exclude items relatedto the April acquisition of Monsanto Co.

Analysts on average had predicted Pharmacia, which isdeveloping drugs to treat breast cancer and colorectal cancer,would earn 33 cents per share, according to research firm FirstCall/Thomson Financial.

The company reported a 15 percent jump in sales, to $4.3billion. Sales of Celebrex reached $687 million, and sales ofthe glaucoma treatment Xalatan rose 36 percent to $185million.

In response to new accounting guidance for revenuerecognition and its decision to retain exclusive marketingrights to its recently filed COX-2 compound, pain-killerparecoxib, the company adjusted its outlook and now expectsfull-year earnings per share to grow about 30 percent in 2000,and 20 percent-25 percent in 2001, after the dilutive impact ofthe recent initial public offering of the Monsanto agriculturalbusiness.

Parecoxib, which Pharmacia submitted for approval to theU.S. Food and Drug Administration today, is a secondgeneration COX-2 drug intended to be the follow-up drug toCelebrex. COX-2 inhibitors are a new class of arthritis drugsthat work by selectively blocking the COX-2 enzyme, which hasbeen linked to inflammation.

The company said reported results for the third quarterinclude a charge of $154 million after taxes, or 12 cents pershare, in merger and restructuring costs.

Pharmacia reported a 15 percent increase in net sales to$4.3 billion, led by a 20 percent jump in pharmaceutical salesto $3.28 billion. U.S. pharmaceutical sales rose 34 percent.

Agricultural sales, as represented by the Monsanto unit,were up 2 percent. Monsanto had a net loss of $45 million inthe quarter, excluding certain one-time charges. That is a $38million narrower loss than in the 1999 third quarter.

Sales of colorectal cancer medicine Campostar soared 65percent to $134 million. Detrol/Detrusitol, a therapy for anoveractive bladder, had sales of $125 million.

Sales of insomnia drug Ambien rose 81 percent to $233million.

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.

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 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.

Atlanta-based Coca-Cola Enterprises earned $130 million, or 30 cents a share, in the third quarter of 2000, which included a $20-million gain from aninsurance recovery related to a product recall from the 1999 contamination scare in Europe.

Excluding the gain, Coca-Cola Enterprises earned 27 cents a share in the third quarter, compared to a profit of $103 million, or 24 cents a share, in thesame period last year.

Analysts had on average expected Coca-Cola Enterprises to earn 26 cents a share in the third quarter, according to First Call/Thomson Financial,which tracks consensus data.

The bottler said unit consolidated physical case bottle and can volume, a key measure of health in the soft drink bottling industry, fell 1.5 percent on acomparable basis in the quarter. Volumes dipped 1.5 percent in the company’s North American and European markets.

Philip Morris Meets Expectations

Tobacco and food giant Philip Morris reported today a 6.8 percent rise in underlying third-quarter earnings, meeting analysts’ expectations, despite the negative impact of overseas currencies, particularly the euro.

New York-based Philip Morris, the world’s largest cigarette maker with the top-selling Marlboro brand, said profits rose to $2.24 billion, or 99 centsper diluted share, from $2.10 billion, or 87 cents, a year ago.

“Philip Morris’ business outlook remains robust,” Chairman and Chief Executive Officer Geoffrey Bible said in a statement. “Despite the currentadverse rates of foreign exchange, principally the euro, we project that underlying earnings per share for the full year 2000 will be $3.71, up 12.4percent versus 1999.”

Underlying earnings exclude unusual items. Analysts on average expected the company, which also operates Kraft Foods Inc. and the Miller BrewingCo., to earn 99 cents per share, according to First Call/Thomson Financial. Analysts expect Philip Morris to earn $3.71 for the full year.

Third-quarter underlying operating revenues rose 1.1 percent to $20.03 billion from $19.81 billion a year earlier, despite a negative currency impact of$630 million, Philip Morris said. Its U.S. cigarette shipment volume in the second quarter slipped 1.3 percent to 54 billion cigarettes versus anindustrywide decline of 3.5 percent to 107.2 billion cigarettes, Philip Morris said.

Schwab’s Net Earnings Down

Charles Schwab, the No. 1 U.S. discountand Internet broker, said today its third-quarter revenue jumped 30 percent but that profits fell slightly due toacquisition related charges and a seasonal slowdown in stock trading volumes.

San Francisco-based Schwab, which has 7.4 million brokerage accounts and more than $1 trillion in assets, reported a net income of $142.3 million, or10 cents per share, in the third quarter compared with a proforma profit of $144.2 million, or 11 cents, in the same period last year. Revenue rose 30percent to $1.32 billion.

Excluding $23 million in acquisition and other charges, Schwab’s quarterly profit rose 15 percent to $165.7 million, or 12 cents per diluted share.

The operating results matched Wall Street’s lowered expectations calling for the company to earn 12 cents per share, according to data compiled bymarket research firm First Call/Thomson Financial.

Schwab added $41 billion in assets during the quarter, up from $25 billion last year, propelling the brokerage’s total client assets past the $1 trillionmark. The firm said it opened 281,000 new accounts during the quarter, about the same as the 282,000 it opened last year but down from 400,000 inthe second quarter.

Revenues at FleetBoston Up 59 Percent

FleetBoston Financial, theNo. 8 U.S. bank holding company, posted today a 10 percentrise in third-quarter operating earnings, meeting Wall Streetestimates, due to a rise in capital markets revenues.

Fleet, which has operations ranging from consumer bankingto share dealing, has been buying banking and securities firmsto expand its business offerings and keep up with a recent waveof consolidation in the financial services sector. Revenuesfrom capital markets operations grew 59 percent to fuel itsprofit gain.

Fleet, which owns brokerage firm Quick & Reilly, reportedoperating earnings of $782 million, or 84 cents a dilutedshare. That compares with profits of $711 million, or 74 centsa share, a year ago.

Including the gains related to the sales of certaindeposits, loans and merger-related expenses, the company postednet income of $841 million, or 90 cents a share. Operatingearnings were in line with consensus analyst estimates of 84cents a share, according to market research firm FirstCall/Thomson Financial.

“Our overall franchise is very well-positioned, given thegrowth nature of our underlying businesses, coupled with astrong balance sheet,” president Chad Gifford said in astatement.

Fleet’s noninterest income, excluding one-time gains, grew17 percent to $2.0 billion, driven by the 59 percent growth incapital markets revenues. Revenues from capital marketsactivities increased to $749 million, while investment servicesrevenue increased 10 percent to $399 million.

Noninterest revenues made up 55 percent of total revenues,up from 50 percent of total revenues a year ago. Fleet’soperations range from buying and selling shares on stockexchanges to its Robertson Stephens investment banking arm.

Net interest income, which include revenues fromtraditional banking practices like lending, slipped nearly 6percent to $1.6 billion. Fleet blamed the decline on the lossof business stemming from the sales of deposits and loans. Itsold about $5 billion of deposits and $2 billion of loans inthe third quarter.

Nonperforming assets as of Sept. 30 were $1.0 billion, or0.92 percent of total loans, compared with $950 million, or0.84 percent of loans as of June 30. The provision for creditlosses grew to $300 million, up from $228 million in theyear-ago quarter.

Fleet on Oct. 2 agreed to buy regional bank Summit Bancorpin a deal that would create New Jersey’s largest bank andexpand its reach in the U.S. Northeast. In July Fleet agreed tobuy New York Stock Exchange specialist firm M.J. Meehan & Co.LLC, which would expand its market-making capabilities to thecommon stock of 433 companies.

Caterpillar’s Flat Third-Quarter

Caterpillar, the world’s largest maker of earth-moving equipment, said today it expected slight rises in revenue in 2000 and 2001 and reported its third-quarter per shareprofit narrowly beat recently lowered estimates after softness in key markets, higher costs and unfavorable currency translations took their toll.

Peoria, Ill.-based Caterpillar, which warned analysts two weeks ago that it would not meet third-quarter profit forecasts at the time, said it earned $216million, or 62 cents per share, on revenue of $4.78 billion in the latest quarter. That compares with $219 million, or 61 cents, on revenue of $4.72 billion inthe year-ago period.

According to a First Call/Thomson Financial survey, the mean estimate was for a 58 cent profit per share. Analysts trimmed their estimates by 10 centsafter the company issued its warning last month.

In addition to weakness in some of its key markets, Caterpillar said its performance also was undermined by unfavorable currency impact and costsrelated to selling, general and administrative, and research and development. The favorable impacts of a tax adjustment, improved price realization (excluding currency) and higher sales volume largely offset the unfavorable items.

In a statement, Caterpillar’s chairman and chief executive Glen Barton said, “In response to these conditions, we have redoubled efforts to reduce costs toensure we deliver acceptable results for the full year.”

For 2000, analysts on average were forecasting a profit of $2.88 per share, up from $2.63 per share in 1999.

Barton added, “...Our geographic and product diversity is a major strength, and we continue to benefit from the unprecedented demand for electric powerand energy development applications.”

For 2000, analysts on average were forecasting a profit of $2.88 per share, up from $2.63 per share in 1999.

Barton added, “...Our geographic and product diversity is a major strength, and we continue to benefit from the unprecedented demand for electric powerand energy development applications.”

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Earnings Reports for Oct. 30