Earnings Reports for Aug. 1

— -- CVS Earnings Up 15%

CVS Corp. the biggest U.S. drug-store chain, said second-quarterearnings rose 15 percent, meeting analysts’ estimates, on strong sales of allergy medicines, new drugs and one-hour photo services.

Woonsocket, R.I.-based CVS said earnings rose to $186.5 million, or 46 cents a share, from $162.6 million, or 40 cents, in the year-ago quarter. Analysts surveyed byFirst Call/Thomson Financial on average had expected earnings of 46 cents a share.

‘‘It was a solid quarter,’’ said John Murphy, an analyst at CS First Boston. ‘‘The key is that operating cash flow improved in the quarter. That’s what CVS investorswere looking for.’’ CVS Chairman Tom Ryan said the company met its earnings goal, despite cool weather in the Northeast, which caused the the company’s inventory of summermerchandise to swell. Pharmacy sales were 62 percent of total sales. Sales in stores open at least a year increased 12 percent. CVS said it opened 33 new stores and relocated 55 others during the second quarter. As of July 1, it operated4,082 stores. Ryan said CVS’ recent agreement to buy Bergen Brunswig Corp.’s struggling speciality pharmacybusiness would prove a key factor in the company’s growth.

He said the integration of the new business into CVS’ ProCare division would help create a $3 billion enterprise in four years. ProCare was created to support complex andexpensive drug therapies for conditions such as HIV/AIDS, cancer and organ and bone-marrow transplants.

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Procter & Gamble Meets Expectations

Procter & Gamble Co. said fourth-quarter net earnings were up 25 percent, in line with WallStreet’s reduced expectations.

In the quarter ended June 30, the Cincinnati-based maker ofCrest toothpaste and Folger’s coffee earned $516 million, or 36cents a share, up from $414 million, or 29 cents per share, in theyear-ago quarter.

Excluding an after-tax restructuring charge of $261 million, thecompany earned $777 million, or 55 cents a share, off 3 percentfrom $799, or 58 cents per share the previous year. Analystssurveyed by First Call/Thomson Financial revised their estimatesdownward to 55 cents last month after the company, which initiallysaid fourth-quarter earnings would increase 15 percent to 17percent, said it would not meet those expectations.

Sales for the consumer products giant were up 2 percent to $9.66billion, compared with $9.45 billion a year ago.

The earnings report was the first from P&G since former topexecutive Durk I. Jager retired abruptly in June and John E. Pepperreturned as chairman and Alan G. Lafley took over as president andCEO.

“While core earnings were above a year ago, P&G is capable ofdelivering better profit results, and we will,” Lafley said. “Ourplan is to focus on big, leadership brands, big markets and bigcustomers; smarter, more effective and efficient commercializationof innovation; and better cost control and cash management.”

P&G sells about 300 brands of food, beverage, paper, beauty careand drug products. Some of its best-known brands include Tidedetergent, Charmin tissue and Pampers disposable diapers.

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Wendy’s Reports Earnings Growth

Wendy’s International Inc. reported a 2.3 percent increase in profits in the second quarterbecause of strong sales throughout the fast-food company,especially in its coffee-and-doughnut chain, Tim Hortons. The company, which operates the third-largest hamburger chain,reported net income of $50.7 million, or 43 cents per share, forthe quarter ended July 2 compared with $49.5 million, or 39 centsper share, for the same quarter last year.

Analysts had expected the company to report earnings of 42 centsper share, according to First Call/Thomson Financial.

Sales increased to $569.9 million from $528.6 million a yearago.

Sales for Wendy’s stores opened in the United States at least ayear grew 2.8 percent for the quarter, while same-store U.S. salesat Tim Hortons restaurants grew 11.8 percent.

The company has more than 5,500 Wendy’s restaurantsinternationally and 1,800 Tim Hortons.

For the six months ended July 2, the company earned $86.6million, or 73 cents per share, up from $81.5 million, or 64 centsper share, in the year-ago quarter. First-half sales rose 8 percentto $1.09 billion.BACK TO TOP

The Associated Press and Reuters contributed to this report.