Business briefs for April 28, 2004

Wednesday, April 28, 2004 | 10:43 a.m.

Insurer sees rise in profit, customers

INDIANAPOLIS -- Anthem Inc., which is buying WellPoint Health Networks Inc. to become the biggest U.S. health insurer, said today first-quarter profit rose 54 percent as it added customers and controlled rising medical costs.

Net income increased to $295.6 million, or $2.08 a share, from $191.7 million, or $1.36, a year earlier, the Indianapolis- based company said in a statement. Revenue rose 12 percent to $4.57 billion from $4.10 billion.

In the West region, which includes Nevada and Colorado, net income rose 15 percent to $29.9 million from $25.9 million a year ago. Revenue for the two West region states rose 12 percent in the first quarter to $283.2 million from $253 million.

Anthem had about 12.5 million members on March 31, up from 11.5 million a year earlier and a gain of almost 600,000 during the first quarter. In the West region, Anthem had 1.1 million members at the end of the first quarter, up 9 percent from 889,000 a year earlier.

"Nevada is a state where we're very interested in growth," Anthem spokeswoman Sally Vogler said. "We want to be there and we want to be there in a big way."

Energy prices drive income

OKLAHOMA CITY -- Kerr-McGee Corp., a U.S. oil and natural-gas producer, said today first-quarter profit more than doubled as energy prices climbed.

Net income rose to $152.2 million, or $1.41 a share, from $69.9 million, or 68 cents, in the first quarter of 2003, the Oklahoma City-based company said in a statement. Sales were little changed at $1.1 billion.

Kerr-McGee was paid an average of $5.35 per thousand cubic feet of gas during the quarter, up 14 percent from a year earlier. The company's average oil price rose 1.2 percent to $27.30 a barrel.

Fast-food leader posts higher profit

CHICAGO -- McDonald's Corp. posted a 56 percent increase in first-quarter earnings Tuesday, extending an impressive yearlong comeback for a company that was jolted last week by the sudden death of its CEO.

Chief Executive Jim Cantalupo, who died of a heart attack while in Florida for a McDonald's convention, was replaced by the fast-food chain's 43-year-old president and chief operating officer, Charlie Bell.

Net income for the first three months of the year was $511.5 million, or 40 cents per share, compared with $327.4 million, or 26 cents per share, for the same period a year ago. That matched the consensus estimate of analysts surveyed by Thomson First Call.

Revenue was $4.4 billion, up 16 percent from $3.8 billion a year earlier.

Earnings jump 32 percent

HOUSTON -- Continued strong oil prices, lower production costs and better refining margins helped propel ConocoPhillips to a first quarter profit of $1.6 billion, a 32 percent increase from a year ago.

The nation's third-largest oil major said today it earned $2.33 per share, ahead of the $1.99 forecast by analysts surveyed by Thomson First Call.

ConocoPhillips made $1.2 billion, or $1.79 per share, in the year-ago quarter. Revenue was $30.2 billion, up 11 percent from $27.1 billion in the January-March period of 2003.

Income jumps 48 percent

ARLINGTON, Texas -- D.R. Horton Inc., the second-largest U.S. home builder by stock market value, raised its profit forecast after fiscal second-quarter earnings increased 48 percent as low mortgage rates spurred sales.

Net income rose to $188.6 million, or 80 cents a share, for the three months ended March 31, from $127.8 million, or 57 cents, a year earlier, the Arlington, Texas-based company said in a statement last week. D.R. Horton lifted its forecast to $3.45 to $3.55 from $3.30 to $3.40 for fiscal 2004 ending Sept. 30.

Brewer's earnings hop 13.4 percent

ST. LOUIS -- Growth in each of its operating segments helped lift Anheuser-Busch earnings by 13.4 percent in the first quarter, the company said today.

The world's largest brewer earned $550 million, or 67 cents per share, in the quarter ending March 31, up from earnings of $485 million, or 57 cents per share, a year earlier.

Employee buyouts lower earnings

NEW YORK -- Verizon Communications Inc.'s earnings dropped 50 percent in the first quarter from a year ago as employee buyouts increased expenses for the country's largest phone company.

Verizon said Tuesday it earned $1.2 billion, or 43 cents a share, for the January-March period, down from $2.4 billion, or 87 cents a share, a year ago.

One-time expenses cost 15 cents a share, most of which went toward early retirement packages for some of the 21,000 employees who left the company's payroll in the fourth quarter of 2003.

The packages cost $447 million in the first quarter and Verizon expects to spend about $250 million more on them before the year ends, chief financial officer Doreen Toben said.

Excluding one-time items, the company would have earned 58 cents a share, beating by a penny the average estimate by analysts surveyed by Thomson First Call.

Profit doubles on increased travel

ORLANDO, Fla. -- Low-cost airline AirTran Holdings Inc. said first-quarter profit more than doubled as it added flights and carried more passengers.

Net income rose to $4.11 million, or 5 cents a share, from $2.04 million, or 3 cents, a year earlier, the Orlando, Fla.-based parent of AirTran Airways said in a statement. Sales increased 16 percent to $241.4 million from $208 million.

AirTran posted its eighth consecutive quarterly profit as larger rivals such as Delta Air Lines Inc. reported narrower losses. AirTran and other discount carriers such as Southwest Airlines Co. have used lower costs to remain profitable even as competition and lower demand pushed down fares.

Merck spin-off increases sales

FRANKLIN LAKES, N.J. -- Medco Health Solutions Inc., the pharmacy-benefit manager spun off from Merck & Co., said first- quarter profit rose 1.6 percent on higher mail-order sales.

Net income rose to $103.6 million, or 38 cents a share, from $102 million, or 38 cents, a year earlier, the Franklin Lakes, N.J.-based company said in a statement. Sales increased 7 percent to $8.91 billion from $8.33 billion.

Medco is switching clients to mail order and selling more generic copies of brand-name medicines to lift profit. The company Monday announced a settlement with 20 states that will cost it 5 cents a share this quarter and require Medco to better inform patients about the costs and medical effects of switching drugs.

Nevada is to receive $235,537 from the Medco settlement, Nevada Deputy Attorney General John McGlamery said.

Chemical maker benefits from sales

WILMINGTON, Del. -- DuPont Co., the second-biggest U.S. chemical maker, said profit rose 25 percent in the first quarter as the company raised prices and benefited from higher sales of synthetic fibers and materials used in laptops and cell phones.

Net income was $668 million, or 66 cents a share, compared with $535 million, or 53 cents, a year earlier, the Wilmington, Del.-based company said in a statement. Revenue increased 15 percent to $8.07 billion from $7 billion.

Chief Executive Charles Holliday boosted prices as demand rose with a strengthening economy, allowing DuPont to pass on higher raw material costs, said Wilmington Trust fund manager Gene Pisasale.

Profit is first in five quarters

PITTSBURGH -- U.S. Steel Corp. swung to a profit in the first quarter, its financial performance rising in tandem with steel prices. It was its first profit in five quarters.

The Pittsburgh-based steelmaker also announced that Chairman and Chief Executive Thomas Usher would be stepping down as CEO at the end of September. The company had mentioned Usher's plans to retire in a proxy statement last year as part of its long-range plans.

Chief Operating Officer John Surma, 49, was elected to succeed Usher as CEO, effective Oct. 1. Usher, 61, will remain as chairman until April 2007.

Defense spending spurs income

BETHESDA, Md. -- Lockheed Martin Corp., the biggest U.S. military contractor, said first-quarter profit climbed 16 percent, buoyed by spending on Patriot missiles used in Iraq and funding to develop new jets. The company raised its 2004 forecasts.

Net income rose to $291 million, or 65 cents a share, from $250 million, or 55 cents, a year earlier, the Bethesda, Md.-based company said in a statement. Sales rose 18 percent to $8.35 billion from $7.06 billion.

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