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Earnings Analysis: 
Federated Boosts Profits
Author: George Shopov
123jump.com



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Federated Department Stores Inc. said Wednesday that its quarterly profits climbed 10% from a year ago, driven by strong October sales. Results surpassed Wall Street's estimates.

 
Federated Department Stores, Inc. (FD: chart) posted before market open Wednesday a 10% growth in its quarterly earnings, as strong October sales helped offset the negative impact of Florida hurricanes on sales in September. The upscale department store retailer said that it earned $74 million, or 42 cents a share, in the third quarter of fiscal 2004, up from earnings of $67 million, or 36 cents a share, generated a year ago. The results outpaced the consensus analysts’ estimate for a profit of 39 cents per share. For the quarter ended October 30, sales were up 0.2% to $3.491 billion, compared with sales of $3.486 billion, for the 2003 equivalent. Comparable-store sales inched up 0.4% from last year. Cincinnati, Ohio-based Federated delivered income of $249 million, or $1.38 per share, for the first three quarters of the year, against income of $233 million, or $1.25 per share, for the same period in 2003.

Looking ahead, the company reiterated its previous guidance for fourth-quarter earnings in the range of $2.45 to $2.55 per share.

Federated shares gained 5 cents on Wednesday to $53.85.

D.R. Horton, Inc. (DHI: chart) reported Wednesday that its quarterly profits soared 52% from last year, driven by strong housing demand. The Arlington, Texas-based homebuilder rolled out net income of $349.6 million, or $1.47 a share, for its fourth quarter, in contrast to net income of $230.7 million, or 98 cents a share, for the prior-year period. The average analysts’ forecast was for earnings of $1.23 a share. Quarterly revenue leapt 23% to $3.46 billion from $2.81 billion, a year earlier. For all of 2004, D.R. Horton announced a net profit of $975.1 million, or $4.11 a share, compared with $626 million, or $2.73 a share, for fiscal year 2003. Annual revenue increased 25% to $10.66 billion.

The stock was up 4 cents to $31.80 at market close Wednesday. Company shares dropped a penny to $31.79 in after-market trade.

Starbucks Corporation (SBUX: chart) of Seattle, Washington, on Wednesday turned in net earnings of $103.4 million, or 25 cents per share, for its fiscal fourth quarter, a 47% surge from net earnings of $69.6 million, or 17 cents per share, last year. The specialty coffee retailer cited its aggressive global store expansion and strong sales of new products as main factors for the improvement. Sales in the quarter jumped 34% to $1.45 billion. The company said it also benefited from an extra week in the fourth quarter of fiscal 2004.

Company shares closed Wednesday at $55.29, up 47 cents, or 0.86%. The stock dipped 3.15% to $53.55 in the extended session.

AnnTaylor Stores Corporation (ANN: chart) said Wednesday that its third-quarter income plummeted to $14.2 million, or 20 cents a share, from prior-year income of $30.3 million, or 42 cents a share. The New York-based women's clothing retailer blamed the results on higher promotion costs and weak performance at its flagship stores. Net sales for the quarter climbed 16% from a year ago to $460.4 million. Comparable-store sales at Ann Taylor stores dipped 4.2%, while at its cheaper Ann Taylor Loft stores they edged up 9.2%.

The stock rose 3.01% to close Wednesday at $24.26. Company shares shed 41 cents to $23.85 in after-hours trading.

Whole Foods Market, Inc. (WFMI: chart) announced Wednesday a 27% jump in its quarterly profits, driven by higher sales. The Austin, Texas-based world’s No.1 natural foods chain reported a fourth-quarter profit of $30.2 million, or 46 cents per share, against a profit of $23.8 million, or 38 cents per share, for the 2003 equivalent. Results were in line with analysts’ expectations. Quarterly sales advanced 24% to $927.3 million, due to rising demand for organic and natural foods.

Company shares dropped 76 cents to $86.15 at market close Wednesday. The stock rose 0.99% to $87.00 in after-market trade.

The Pep Boys - Manny, Moe & Jack (PBY: chart) of Philadelphia, Pennsylvania, posted Wednesday quarterly earnings that tumbled 48% from a year ago, hurt by weak results at the company’s service center operations. The auto parts retailer announced income of $7.65 million, or 13 cents per share, for its third quarter, compared with income of $14.7 million, or 26 cents per share, for the 2003 corresponding period. Sales in the quarter climbed 4% to $559.2 million.

The stock gained 53 cents on Wednesday to $15.18. Company shares plummeted 10.41% to $13.60 in extended-hours trading.

Cyberonics, Inc. (CYBX: chart) reported Wednesday a net loss of $2 million, or 8 cents per share, for its fiscal second quarter, in contrast to a net profit of $3.8 million, or 15 cents per share, for the year-ago period. The Houston, Texas-based medical device maker said the turnaround was due to weaker sales and expenditures related to its implantable nerve stimulator. The mean analysts’ forecast was for a loss of 14 cent per share. Quarterly sales declined to $25.4 million from $29.3 million, last year.

Company shares soared 5.29% to close Wednesday at $20.09. The stock dropped 89 cents to $19.20 in after-market trade.

Revlon, Inc. (REV: chart) said Wednesday that its quarterly loss widened from a year ago, hurt by decreasing sales and debt refinancing costs. The New York-based cosmetics company posted a third-quarter loss of $91.6 million, or 25 cents per share, which compares to a year-earlier loss of $54.7 million, or 78 cents per share. Analysts were looking for a loss of 8 cents a share. The company recorded sales of $294.4 million in the third quarter, down from $316.5 million, in 2003.

The stock closed Wednesday down 17 cents, or 7.17%, at $2.20.
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