Tuesday, July 27, 2004 | 11:02 a.m.
Discounts trim quarter's results
PLEASANTON, Calif. -- Safeway Inc., the No. 3 U.S. supermarket chain and owner of Vons stores in Las Vegas, said today second-quarter profit fell 3.6 percent after the company cut prices to win back customers lost during a 20-week strike in Southern California.
Net income dropped to $155.6 million, or 35 cents a share, from $161 million, or 36 cents, a year earlier. Aftereffects of the strike reduced net income by $50 million, or 11 cents, Pleasanton, Calif.-based Safeway said in a statement. Sales in the period ended June 19 rose 1.4 percent to $8.36 billion.
Chief Executive Steven Burd increased promotions at 289 Vons and Pavilion stores in Southern California after Safeway and larger rivals Kroger Co. and Albertsons Inc. came to terms with their 70,000 workers in February. Sales in the region are still lower than before the strike amid competition from discounters such as Wal-Mart Stores Inc. and natural-foods grocers.
Profit beats expectations
FRANKLIN LAKES, N.J. -- Medco Health Solutions, the country's largest prescription benefit manager, posted a 21 percent increase in second-quarter profit, mainly because of increases in generic and mail-order prescriptions. The results exceeded Wall Street's expectations.
The Franklin Lakes-based company, which was spun off from pharmaceutical giant Merck & Co. last August, today reported net income of $127.3 million, or 46 cents per share, for the quarter ended June 26. A year earlier, Medco reported net income of $105.2 million, or 39 cents per share.
Excluding a charge of 10 cents per share, or $45 million, for amortization of intangible assets, second-quarter earnings per share were 56 cents. The 56 cents per share beat by 2 cents the consensus forecast of analysts surveyed by Thomson First Call.
Restructuring hurts results
WILMINGTON, Del. -- DuPont's net income dropped 25 percent in the second quarter, reflecting the costs of an ongoing $900 million restructuring plan, the company said today.
Net income for the quarter totaled $503 million, or 50 cents per share, down from $675 million, or 67 cents per share, in the second quarter of 2003, the Wilmington-based chemical company said.
Before one-time items, second quarter earnings totaled 80 cents per share, up from 62 cents per share last year but falling just short of the mean estimate of 81 cents per share by analysts surveyed by Thomson First Call.
The results overshadowed DuPont's announcement that it was increasing its earnings forecast for the year from between $2.10 and $2.30 per share to between $2.25 and $2.35 per share, excluding special items.
Profit doubles
ARLINGTON, Va. -- US Airways Group Inc., which is trying to avoid another bankruptcy filing, said second-quarter profit more than doubled as sales rose 10 percent and labor costs declined. The company's shares gained as much as 16 percent.
Net income increased to $34 million, or 59 cents a share, from $13 million, or 25 cents, a year earlier that included U.S. government aid for security expenses, the Arlington, Virginia- based company said in a statement. Sales rose to $1.96 billion from $1.78 billion.
US Airways is seeking more concessions from its employees and wants agreements by September to reduce costs and help the airline recover from losses in the three previous quarters. Labor costs at the airline, which got earlier concessions before exiting bankruptcy last year, fell 13 percent to $627 million.
Fuel costs deflate results
NEW YORK -- JetBlue Airways Corp., a low-fare carrier that has increased capacity this year, said second-quarter net income fell 43 percent from a year earlier, when government aid boosted profit.
Net income declined to $21.5 million, or 19 cents a share, from $38 million, or 36 cents, the airline said in a statement. Revenue rose 31 percent to $319.7 million. The New York-based airline was expected to earn 21 cents a share, the average of analysts surveyed by Thomson Financial.
Expenses rose 38 percent to $274.6 million led by a 77 percent increase in fuel costs as the price of a gallon of jet fuel for immediate delivery in New York harbor rose 38 percent.
Forecast slashed
NEWTON, Iowa -- Maytag Corp., the No. 3 U.S. appliance maker, had a second-quarter loss and cut its annual profit forecast because of restructuring costs and higher steel prices.
The net loss was $41.1 million, or 52 cents a share, compared with net income of $25.2 million, or 32 cents, a year earlier, Newton, Iowa-based Maytag said in a statement. The company expects net income this year to fall to as little as 20 cents a share, from $1.53 in 2003.
Steel prices more than doubled in June as Chief Executive Ralph Hake announced that 1,100 positions would be eliminated. Sales fell 1 percent to $1.15 billion as demand for Hoover vacuums and Maytag washers was less than the company expected.
Profit doubles on lower costs
STAMFORD, Conn. -- Xerox Corp., the largest seller of copiers in the U.S., said second-quarter profit more than doubled on lower costs and higher sales of more-profitable products such as color copiers and printers. The company raised its 2004 forecast.
Net income rose to $208 million, or 21 cents a share, from $86 million, or 9 cents, a year earlier. Revenue fell 1.7 percent to $3.85 billion, the company said in a statement. Equipment sales rose 3.7 percent to $1.76 billion.
About two-thirds of equipment sales in the quarter came from products introduced in the past two years, the company said. Chief Executive Officer Anne Mulcahy's cost cutting allowed the company to sell new products at lower prices, such as the Phaser 6100 office color printer that starts at $699. That helps Xerox compete with Canon Inc., Ricoh Co. and Hewlett-Packard Co. for the more lucrative sales of ink, paper and services.
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