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Earnings Analysis: 
CA Flips to Profit
Author: George Shopov
123jump.com


Management software company Computer Associates International reported that it reversed course to a fourth-quarter profit from a year-ago loss, citing an increase in subscription revenue.

 
Computer Associates International, Inc. (CA: chart) announced after the bell Tuesday that it swung to a quarterly profit from a prior-year loss, bolstered by an increase in subscription revenue. The management software development company reported net income of $89 million, or 15 cents a share, for its fiscal 2004 fourth quarter ended March 31, a turnaround from a net loss of $106 million, or 18 cents a share, in the same period a year ago. Excluding special items, fourth-quarter earnings totaled 18 cents a share, up from 8 cents a share, a year earlier, and a penny a share ahead of the mean estimate of analysts. The Islandia, New York-based company said quarterly revenue climbed 10% to $850 million from $775 million, last year, on strength in its system management software and security products. For all of 2004, CA turned in net income of $25 million, or 4 cents a share, compared with a net loss of $267 million, or 46 cents a share, in fiscal 2003.

Looking ahead, CA said it expects first-quarter earnings in the range of 17 cents to 19 cents a share.

Company shares closed Tuesday unchanged at $25.70. The stock dipped 2.53% to $25.05 in the extended session.

H.J. Heinz Company (HNZ: chart) reported before market open Tuesday higher quarterly earnings, aided by the weak U.S. dollar and lower costs. The Pittsburgh, Pennsylvania-based food company rolled out a net profit of $196.5 million, or 55 cents a share, for the fourth quarter of fiscal 2004, up from $102.6 million, or 29 cents a share, generated in the prior-year quarter, when results included reorganization costs and the loss on the exit from nonstrategic businesses. Excluding items, Heinz posted earnings from continuing operations of 58 cents a share, for the quarter ended April 28, compared with 52 cents a share, in 2003. Results were in line with analysts’ expectations. Sales in the fourth quarter advanced 6% to $2.33 billion. For the year, Heinz said it had net earnings of $804.3 million, or $2.27 per share, against net earnings of $566.3 million, or $1.60 per share, in fiscal 2003.

Heinz shares closed Tuesday up 54 cents, or 1.46%, at $37.60.

TiVo Inc. (TIVO: chart) of Alviso, California, said Tuesday that its first-quarter net loss widened to $9.1 million, or 11 cents a share, from a year-ago net loss of $7.9 million, or 12 cents a share. The maker of digital video recorders blamed higher costs for the results. Analysts had forecast a first-quarter loss of 20 cents a share. Quarterly revenue rose to $34.5 million from $28.5 million, as the company added a record 264,000 subscriptions.

The stock rose 2.16% on Tuesday to $7.56. TiVo shares dropped 10 cents to $7.46 in after-hours trading.

Williams-Sonoma, Inc. (WSM: chart) announced Tuesday a profit of $21.4 million, or 18 cents per share, in its fiscal first quarter, a 60% rise from a profit of $13.4 million, or 11 cents per share, in the same period a year earlier. The San Francisco, California-based retailer beat the consensus analysts’ estimate by 2 cents a share. The company attributed the results to strong performance at its Pottery Barn stores as well as cost-cutting initiatives. Total sales in the quarter jumped 19.4% to $640.9 million.

Company shares gained 75 cents to $32.10 at market close Tuesday.

Jos. A. Bank Clothiers, Inc. (JOSB: chart) of Hampstead, Maryland, reported Tuesday that its quarterly income more than doubled, on the back of surging sales. The men’s clothing retailer posted earnings of $5.3 million, or 47 cents a share, for its fiscal first quarter, in contrast to earnings of $2.2 million, or 20 cents a share, last year. Quarterly sales soared 28.3% to $79.9 million, driven by new products and improved demand for suits.

The stock was up 4.39% on Tuesday to close at $31.38.

The Sports Authority, Inc. (TSA: chart) posted Tuesday a drop in its first-quarter profits, hurt by costs related to its merger with Gart Sports Company last year. The Englewood, Colorado-based retailer of sporting goods said that it had net income of $4.07 million, or 15 cents a share, in the first quarter, down from net income of $4.19 million, or 34 cents a share, in the prior-year equivalent. Excluding merger-related costs, earnings came in at $9.29 million, or 35 cents a share, against $2.29 million, or 18 cents a share, a year ago. Net sales in the quarter leapt to $572 million from $228.4 million, last year.

Company shares added $1.11 to close Tuesday at $35.42. The stock slid 4.29% to $33.90 in after-market trade.

La-Z-Boy Incorporated (LZB: chart) of Monroe, Michigan, reported Tuesday that it swung to a net loss of $42 million, or 80 cents per share, in the fourth quarter of fiscal 2004, from a year-earlier profit of $25.1 million, or 45 cents per share. The furniture retailer cited impairment charges as main factor for the loss. Fourth-quarter sales inched up to $544.2 million from $540.3 million, in the 2003 equivalent.

The stock shed 5 cents to $19.30 at market close Tuesday.

Krispy Kreme Doughnuts, Inc. (KKD: chart) announced Tuesday a quarterly loss, its first since going public in 2000, hurt by the popularity of low-carbohydrate diets. The Winston-Salem, North Carolina-based operator of doughnut shops posted a first-quarter net loss of $24.4 million, or 38 cents per share, in contrast to a profit of $13.1 million, or 22 cents per share, in the comparable period of fiscal 2004. Excluding one-time items, Krispy Kreme said it had a profit of 23 cents a share, meeting analysts’ projections.

Company shares inched up 3 cents on Tuesday to $19.88. The stock slipped 0.60% to $19.76 in the extended trading.

The Toro Company (TTC: chart) of Bloomington, Minnesota, said Tuesday that its quarterly profits increased from a year ago, due to strong demand for its products. The company, which makes lawn mowers and other products for professional and residential use, turned in net income of $52.2 million, or $2.00 a share, for the second quarter of 2004, compared with net income of $42.0 million, or $1.61 a share, in the corresponding period of 2003. Sales climbed to $548.0 million in the quarter from $495.8 million, last year.

The stock soared 7.70% to close Tuesday at $62.50.

Semtech Corporation (SMTC: chart) posted Tuesday first-quarter net earnings of $14.8 million, or 19 cents a share, up from net earnings of $8.3 million, or 11 cents a share, in the first quarter of fiscal 2004. Analysts had expected the chipmaker to earn 18 cents a share, on average. Camarillo, California-based Semtech said results were due to higher sales, which rose to $61.9 million from $44.0 million, a year ago.
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