Markets & Finance

IBM Profits Rise


IBM Corp. (IBM) posted $1.02 third-quarter earnings per share, vs. 99 cents, meeting analysts' average expectations. ago. Revenue at the world's largest computer maker rose 9% to $21.5 billion. Chairman and chief executive Sam Palmisano said he saw signs of economic stabilization and expects an pick-up in information-technology spending, though he stopped short of calling for a full rebound. He also said that IBM needed to fill about 10,000 new positions in several key skill areas in 2004.

Harley-Davidson (HDI) posted 62 cents, vs. 54 cents, third-quarter earnings per share despite flat revenue growth. The motorcycle maker raised expectations for Harley-Davidson Financial Services' operating income for 2003 to be about 55% higher than a year ago. Prudential downgraded to neutral from overweight. Raymond James says some are disappointed by the 2004 unit guidance, and reiterates strong buy.

CarMax (KMX) cut the 19 cents to 21 cents third-quarter earnings per share guidance to 16 cents to 18 cents on lower-than-expected comparison-store used unit sales growth of 0% to 2%. CarMax now sees fiscal 2004 earnings per share of $1.08 to $1.13.

Deutsche Bank initiates coverage on SCO Group (SCOX) with buy.

Data-storage products maker SanDisk (SNDK) posted 60 cents, vs. 16 cents, third-quarter earnings per share on a 99% total revenue rise. SanDisk sees 2003 total revenue exceeding $1 billion, up from the $950 million forecast in September.

Education stocks such as Corinthian Colleges (COCO) are seen lower on fears that as the economy strengthens, enrollment growth may decline. But S&P's Michael Jaffe still sees strong enrollment growth and rates Corinthian as buy.

St. Jude Medical (STJ) posted 46 cents, vs. 39 cents, third-quarter earnings per share on an 18% revenue rise. It sees 45 cents to 48 cents fourth-quarter earnings per share, and expects $1.77 to $1.80 2003 earnings per share. S&P keeps hold.

Carlisle Companies (CSL) posted 80 cents, vs. 65 cents, third-quarter earnings per share on a 10% revenue rise. Carlisle tightened the previous 2003 earnings per share guidance to $2.70 to $2.80. Baird upgraded to outperform from neutral. S&P reiterates accumulate.

Total System Services (TSS) posted 18 cents, vs. 17 cents, third-quarter earnings per share on an 11% revenue rise. Morgan Keegan downgraded to underperform from market perform on valuation.

Rowan (RDC) posted worse-than-expected 12 cents third-quarter earnings per share on a 5.3% rev. rise. Rowan says unanticipated downtime in the GoM fleet hindered drilling operations; manaufacturing and aviation results were less than expected. S&P keeps accumulate, and cut the 2003 estimate.

Teradyne (TER) posted a 28 cents third-quarter loss, vs. a 91 cents loss (GAAP) despite flat revenues. It sees $335 million to $340 million in fourth-quarter sales, and breakeven results on a pro forma and operating basis. CS First Boston says the third quarter tracks guidance, and rates the shares outperform.

Genzyme (GENZ) posted a 43 cents third-quarter loss, vs. 25 cents earnings per share, despite a 60% revenue rise. Excluding amortization and special items, Genzyme posted 37 cents earnings per share. The company expects to exceed its 2003 guidance; it sees 30 cents to 32 cents fourth-quarter GAAP earnings per share. S&P reiterates buy.

Intel (INTC) posted 25 cents, vs. 10 cents, third-quarter earnings per share on a 20% revenue rise, beating analysts' average estimates by 2 cents. The world's largest chipmaker sees $8.1 billion to $8.7 billion in fourth-quarter revenue. S&P and CIBC World raised their estimates.

Chip-equipment maker Novellus Systems (NVLS) posted 4 cents, vs. 3 cents, third-quarter earnings per share (excluding charges) despite a 4.1% sales decline.

Triad Hospitals (TRI) expects third-quarter results to reflect an increase of about $50 million pre-tax to estimated allowance for doubtful accounts, resulting in an after-tax impact of about 41 cents per share. Including the impact, Triad sees 9 cents to 14 cents third-quarter earnings per share.

General Motors (GM) posted 80 cents, vs. $1.24, third-quarter adjusted earnings per share (excluding items and the Hughes Electronics unit) on a 5.4% total sales rise. The results were better than analysts had expected. GM expects auto industry sales of about 16.9 million units in 2003. The company also sees $1.00 fourth-quarter earnings per share, and expects to exceed the $5.00 2003 earnings per share (both excluding items and the Hughes unit) target.

Host Marriott (HMT) posted a 35 cents third-quarter loss, vs. an 18 cents loss, on a 2.2% total revenue fall. Marriott posted 3 cents, vs. 14 cents, third-quarter funds from operations. The lodging operator sees 62 cents to cents 2003 funds from operations. Also, Marriott says it's unlikely to pay a fourth-quarter dividend due to limitations in senior notes indenture and a credit facility.

Chipmaker Exar (EXAR) posted 4 cents, vs. 4 cents, second-quarter earnings per share (non-GAAP) as higher gross profit offset a 15% revenue decline. Exar sees 3 cents to 4 cents third-quarter earnings per share on $16 million to $17 million in revenue.

Software maker Veritas (VTS) revised its previously announced fourth-quarter unaudited results due to an increase in deferred tax valuation allowance. The adjustment increases Veritas' reported net loss by 35 cents per share. Deutsche Bank reportedly downgraded to sell.

Tellabs (TLAB), a maker of communications equipment, posted a 16 cents third-quarter loss, vs. a 22 cents loss, on a 15% net sales rise.

Unisys (UIS) posted 17 cents, vs. 18 cents, third-quarter earnings per share on a 9% revenue rise. The information-technology services provider says it's on track to meet the 77 cents 2003 earnings per share target.

Coca-Cola Enterprises (CCE) posted 56 cents, vs. 42 cents, third-quarter earnings per share on a 9% sales rise. The bottler raised the 2003 earnings per share guidance to $1.31 to $.133 (including items).

FleetBoston Financial (FBF) posted 64 cents, vs. 55 cents, third-quarter earnings per share on a 2.7% revenue rise. Fleet notes improved credit quality, improved performance in several business lines, and expense control.

Boyd Gaming (BYD) will be added to the S&P MidCap 400 after the close of trading on Oct. 20, replacing Legato Systems (LGTO), which is being acquired.


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