Thursday, Oct. 17, 2002 | 11:26 a.m.
SUN STAFF AND WIRE REPORTS
Southwest Airlines of Dallas, the No. 1 carrier in Las Vegas, today reported a $75 million third-quarter profit but said it might not be profitable during the final three months of the year.
Southwest earned 9 cents per share in the July-September period, down from $151 million, or 9 cents per share, a year earlier.
Revenue was $1.39 billion, compared to $1.34 billion in the same quarter last year, which included the Sept. 11 terror attacks and brief shutdown of the U.S. aviation system.
Excluding a one-time gain of $48 million related to the government's industrywide bailout, Southwest said it earned $50.5 million, or 6 cents per share. On that basis, analysts surveyed by Thomson First Call had expected the low-fare carrier to earn 5 cents per share.
Executives said Southwest also faces higher insurance and security costs and the uncertain effects of a possible war against Iraq.
"Based on these cost pressures and the uncertain revenue outlook, it is impossible to predict whether we will earn a profit in (the) fourth quarter," the company said.
America West Holdings
The parent company of the Tempe, Ariz.-based airline, the No. 2 carrier of gamblers to Southern Nevada, lost $31 million in the third quarter.
America West lost 92 cents per share in the quarter that ended Sept. 30. That compared with a loss of $31.7 million, or 94 cents per share, a year earlier.
Analysts survyed by Thomson First Call expected a loss of $1.01 per share from the country's eighth-largest airline.
Third-quarter revenue rose 6 percent to $520 million, compared wtih $491 million a year ago.
Douglas Parker, America West Holdings Corp.'s chief executive officer, said he was encouraged by the company's improvement over last year and he believes America West will be among the first airlines to return to profitability.
"The fact remains, however, that our industry is struggling through an unprecedented financial crisis, and our continued losses are a clear indication that America West is not immune to the industry environment," he said in a written statement.
Pushed to the brink of bankruptcy shortly after the Sept. 11 terrorist attacks, America West secured a $429 million loan guarantee from the federal government.
Northwest Airlines
The Eagan, Minn.-based Northwest reported a $46 million net loss for the third quarter.
The loss was equivalent to 55 cents a share, which compares with a gain of $19 million, or 20 cents per share, a year earlier. Analysts surveyed by Thomson First Call anticipated a loss of 82 cents per share.
Revenue dropped slightly to $2.56 billion, from $2.59 billion a year earlier.
"While we cannot forecast when the airline will return to profitability in this difficult period, the performance of Northwest relative to that of other network carriers compares favorably," said Chief Executive Richard Anderson.
The company's profit a year earlier included a one-time gain of $158 million, part of the federal government's industrywide bailout.
American Airlines
AMR Corp., parent company of American Airlines, reported a third-quarter loss on Wednesday that was more than double its loss in the same period a year ago. The company's dire financial numbers are expected to be among the worst for the airline industry this week, as the biggest carriers report earnings.
AMR said it would defer deliveries of aircraft from Boeing, temporarily park some planes and continue working to cut costs to try to compete with low-cost carriers -- efforts that appeared naive to some analysts.
The company reported a loss of $924 million, or $5.93 a share, significantly more than the $414 million loss, or $2.68 a share, in the third quarter last year.
Excluding special gains and losses, which included downgrading the value of aircraft, AMR had a loss of $475 million, or $3.05 a share. The amount is virtually the same as analysts' consensus estimate of $3.06 a share, as reported by Thomson First Call.
AMR had revenues of $4.49 billion in the quarter, down almost 7 percent from the same time a year ago.
IBM
IBM reported third-quarter earnings and revenues Wednesday that slightly surpassed Wall Street's expectations. The results provide another sign that the company's emphasis on services and software is enabling it to withstand the continuing slump in technology spending better than most of its rivals.
The encouraging results from IBM, the world's largest computer company, came one day after Intel, the largest computer chip maker, reported disappointing quarterly figures, which contributed to the decline in technology shares and stock market averages Wednesday.
IBM executives did not interpret the results as a sign that technology investment is picking up. They also cautioned that the continuing weakness in the stock market may prompt it to lower its assumptions for the investment returns on its big pension fund, requiring contributions from its treasury to keep it fully funded.
That shift in pension-fund returns, they noted, could reduce earnings by $700 million next year. But John Joyce, IBM's chief financial officer, said those losses should be more than offset by an additional $900 million in cost savings the company should be able to achieve. "We believe the pension fund changes will not be an issue for us," Joyce said.
For an $80 billion-a-year company, IBM has also responded nimbly to the deteriorating conditions in the industry over the year. It has trimmed its work force by 5 percent, sold off lagging operations and fine-tuned its struggling semiconductor business. Its microelectronics unit, for example, lost $140 million in the previous three months, but in the quarter that ended in September, that loss was narrowed to $17 million.
"This is a solid quarter," said A.M. Sacconaghi, an analyst at Sanford C. Bernstein & Co. "The IBM story has been consistency of earnings even in tough times. These results certainly confirm that theme."
IBM reported earnings from continuing operations of 99 cents a share, or $1.69 billion, slightly ahead of the Wall Street consensus estimate of 96 cents, and 1 cent better than in the year-earlier quarter.
Revenue from continuing operations of $19.8 billion was flat compared with the third quarter of 2001, and modestly above Wall Street estimates.
Apple Computer
Fighting off a deepening technology recession, Apple Computer on Wednesday reported essentially flat revenue for its fourth quarter of 2002. But a one-time write-down of investments resulted in a net loss for the quarter.
Apple told the financial community that it expected only a slight increase in revenue for its next quarter, which includes the holiday sales season.
"There's uncertainty in the economy and the PC industry and the possibility of war," said Fred Anderson, the company's chief executive officer. "I don't see there is any point in being optimistic at the moment. We're planning for the worst and hopefully things will be better."
Based on a series of one-time charges, Apple reported a net loss of $45 million or 13 cents per share for the quarter. But excluding the nonrecurring charges, the company achieved earnings or $7 million or 2 cents per share, which was generally in line with Wall Street analysts' expectations. For the same quarter in 2001 Apple reported net profit of $66 million or 19 cents a share.
The company said that it had shipped 734,000 computers during the quarter, down 14 percent from the same quarter a year ago.
Coca-Cola
Coca-Cola Co.'s earnings rose 8.5 percent in the third quarter but the world's biggest beverage maker said its results for the year may come in slightly below Wall Street expectations. But its shares sank.
Coca-Cola said it earned $1.16 billion, or 47 cents per share, in the July-September period, up from $1.07 billion, or 43 cents per share in the same quarter last year.
Excluding a 1 cent a share charge, the latest results were in line with the consensus forecast of 48 cents a share by analysts surveyed by Thomson First Call.
Revenue rose to $5.32 billion in the quarter from $4.70 billion a year ago.
Douglas Daft, Coca-Cola's chairman and chief executive, said the company may fall a penny or two short of annual earnings estimates of $1.78 per share.
Caterpillar
Caterpillar Inc., the world's largest maker of earthmoving equipment, said its third-quarter profit rose 3.9 percent because of a lower tax rate.
Net income rose to $213 million, or 61 cents a share, from $205 million, or 59 cents, a year earlier, the company said in a statement. Sales increased less than 1 percent to $5.08 billion from $5.06 billion.
Profit was helped as income taxes declined 24 percent to $71 million from $94 million. Demand for power generators, coal mining equipment and construction machines fell, and the company expects sales of truck and bus engines, its other large business, to drop in the fourth quarter.
Sears
Sears, Roebuck and Co. reported a 26 percent decline in third-quarter profit, falling far short of Wall Street's expectations, and reduced its earnings estimate for the rest of the year because of uncollectible credit-card debt.
Net earnings were $189 million, or 59 cents a share, down from $262 million, or 80 cents a share, in the third quarter of 2001. Revenues were $9.67 billion, down from $9.73 billion the previous year.
Based on guidance provided by the company on Oct. 7, analysts had expected earnings of 82 cents a share.
But the retail giant announced it had decided to increase the amount set aside for uncollectible accounts after reviewing its credit business since then, which affected third- and fourth-quarter earnings.
California Federal Bank
Golden State Bancorp Inc., which is being bought by Citigroup Inc., today said third-quarter profit increased 24 percent.
Net income rose to $128 million, or 88 cents a share, from $103.3 million, or 72 cents, in the year earlier period, the lender said.
Third-quarter earnings this year were boosted by $13.7 million because the company stopped paying goodwill for acquisitions, San Francisco-based Golden State said.
Golden State is the parent company of California Federal Bank, a player in the Las Vegas market and the second-biggest thrift in the United States after Washington Mutual Inc. New York-based Citigroup is buying Golden State to almost double U.S. branches in its biggest expansion in U.S. consumer banking.
archive
