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Earnings Analysis: 
Barclays Reports 2.4% Jump in Net on Strong Investment Banking
Author: Albena Toncheva
123jump.com
Last Update: 10:13 AM ET August 05 2005


The U.K. bank Barclays PLC announced Friday that its net profit climbed 2.4% in the first half of the year as a strong performance in its investment-banking and asset-management segments offset slowing growth in retail banking.

 
Barclays PLC (BCS: chart) said its net profit jumped 2.4% in the first half of the year as a sound performance in the company’s investment-banking and asset-management businesses offset slowing growth in retail banking.

Net profit at the U.K. bank climbed to 1.84 billion pounds ($3.26 billion) vs. 1.80 billion pounds in the first half of 2004. Profit in the company’s investment-banking unit, Barclays Capital, surged 20% to 703 million pounds vs. 588 million pounds, and balanced a 17% drop in credit-card profit to 379 million pounds.

Bad debts climbed 20% to 706 million pounds vs. 589 million pounds, in line with estimates.

Profit at the U.K. retail bank was 549 million pounds, down compared with 558 million pounds, but better than forecasted. Dropping profit at Barclaycard hit heavily the results.

Rising provisions and continued investment in the credit-card business were to blame for declining profits at Barclaycard, according to the company.

Barclays acquired a majority stake in one of South Africa's largest lenders, Absa Ltd., for about 33 billion rand ($5.13 billion) earlier this year.

Emeryville, California-based Pixar Animation Studios (PIXR: chart) posted a steep decline in second-quarter net income and revenue, blaming the weaker results on the tough comparisons with the year-ago strong performance of ‘Finding Nemo’ on home video. Pixar's earnings met the company's earlier projections, which were recently cut due to higher-than-anticipated returns of the home-video version of the company's most recent film ‘The Incredibles’.

After the closing bell Thursday, Pixar Animation Studios announced that net for the second quarter ended July 2 declined 66% to $12.7 million, or 10 cents a share, vs. $37.4 million, or 32 cents a share, a year ago. Revenue dropped 60% to $26.4 million.

Pixar's earnings met the company's earlier estimates, which were recently slashed amid higher-than-anticipated returns of the home-video version of the company’s most recents film ‘The Incredibles’. Retailers tend to increasingly return DVDs fast if they don't manage to sell within the first two weeks of their release.

According to Pixar, the home video of ‘The Incredibles’ performed well in the U.S., but fell short of the company's outlook in France and Japan.

Management said Pixar continues to hold discussion with Walt Disney Co. about a new distribution deal as Pixar wants to complete a new distribution deal with a movie-studio partner by the end of the year.

In after-hours trading Thursday Pixar’s shares traded at $41.10.

Goodyear Tire & Rubber Co.'s (GT: chart) 2Q net income more than doubled, offsetting climbing raw-material and energy costs with price increases and a shift toward selling more expensive lines of tires.

The tire maker notified dealers Tuesday that it was raising prices for car tires by between 5% and 8% starting next month, marking the company's third price increase so far this year.

Goodyear said that net income in the second quarter jumped to $69 million, or 34 cents a share, vs. $30 million, or 17 cents a share last year. The 2Q results included a total of $54 million in charges, most of it fees Goodyear paid to refinance debt, and gains of $38 million related to an earlier revealed environmental settlement.

Sales reached $5 billion, up 11% vs. a year earlier.

Thursday the company's shares were up 10 cents at $17.45.

British Airways PLC (BAB: chart) reported higher 1Q, fueled by surging premium-passenger traffic and fuel surcharges. The U.K. carrier boosted its full-year revenue guidance Friday.

Net profit, for the quarter ended June 30, more than doubled to 90 million pounds ($160.2 million) vs. 43 million pounds last year.

Total revenue added 8.3% to 2.06 billion pounds. Pretax profit climbed 65% to 124 million pounds, topping analysts' expectations for a 35% rise.

Passenger and cargo revenues advanced 3.7% to 1.8 billion pounds with other revenues climbing 58% to 251 million pounds.

 

 
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