Ralph Lauren lowers full-year sales view, second-quarter results fall

NEW YORK, Fri Nov 2, 2012 – Ralph Lauren Corp. on Friday reported lower quarterly earnings and reduced its full-year sales forecast because of its ongoing closures of locations in China and the discontinuation of its American Living brand, warning that the global economy is still threatening demand for its fashion items.

Ralph Lauren’s sales have been hurt by its phasing out of stores and boutiques operated by local partners in China. It plans to replace the stores over time with company-run shops in what it has said will be better spots that elevate its image.

The company’s sales have also been hit by the phase-out of its American Living brand, which was dropped by low-price department store J.C. Penney Co. Inc. earlier this year.

Ralph Lauren COO Roger Farah said in a statement that global economic conditions “lead us to be incrementally more cautious on near-term demand.”

The company now expects revenue to be up 2 percent to 3 percent for the year ending in March, compared with a previous forecast for mid-single-digit percentage growth.

Ralph Lauren shares were down 2.5 percent at $155 in morning trading.

Employment costs up modestly in second quarter

WASHINGTON, Tue Jul 31, 2012 – Labor costs rose moderately in the second quarter, according to government data on Tuesday that underscored benign wage inflation against the backdrop of a weak jobs market.
The Employment Cost Index, which measures total employer compensation costs, increased 0.5 percent after rising 0.4 percent in the first three months of the year, the Labor Department said.
The increase was in line with economists’ expectations. Over 12 months, compensation costs rose a moderate 1.7 percent, slowing from a 1.9 percent rise in the 12 months through March.
During periods of strong economic growth, the Federal Reserve closely monitors the index for signs of wage inflation. Labor market weakness, marked by an 8.2 percent unemployment rate, is keeping wage inflation subdued.
Wages and salaries for civilians, which account for 70 percent of employment costs, rose 0.4 percent in the second quarter. They had increased 0.5 percent in the prior period.
Compared to the second quarter of 2011, wages and salaries increased 1.7 percent.
Benefits rose 0.6 percent from April to June and were up 2.1 percent compared to the same period last year.
Employment costs for private sector workers increased 0.5 percent during the quarter. Employer costs for health benefits increased 2.4 percent compared to the same period a year ago.

DuPont profit beats Wall Street estimates, helped by price hikes

NEW YORK, Thu Apr 19, 2012 – DuPont’s first-quarter profit beat Wall Street expectations, helped by price hikes and strong sales of insecticides and genetically modified seeds.

The company reaffirmed its 2012 earnings target, with Chief Executive Ellen Kullman saying DuPont will prioritize research and development spending on food, energy and security products.

Results from DuPont often serve as a barometer for the global economy since its materials are used to produce a range of items, from cars and homes to televisions and smartphones.

Shares of DuPont rose 0.7 percent to $53.65 in premarket trading.

First-quarter sales in Europe rose 14 percent, largely due to DuPont’s 2011 buyout of Danish food ingredients maker Danisco. The buyout reflected Kullman’s desire to stabilize earnings and grow DuPont’s presence in the expanding food market.

Sales in Asia were flat, in part because of soft demand for titanium dioxide paint pigment from automobile manufacturers.

Sales in the United States and Latin America both spiked.

The company on Thursday posted net income of $1.49 billion, or $1.57 per share, compared with $1.43 billion, or $1.52 per share, a year earlier.

Excluding a $50 million payment to customers of DuPont’s Imprelis herbicide, which damaged certain customers’ trees, the company earned $1.61 per share. By that measure, analysts expected $1.55, according to Thomson Reuters I/B/E/S.

Exxon Mobil narrowly beats Wall Street forecasts, shares fall

IRVING, Texas – Exxon Mobil Corp’s. fourth-quarter profit narrowly beat Wall Street’s expectations as rising crude oil prices offset falling margins for chemicals, engine lubricants and fuel.

The company posted net income of $9.4 billion, or $1.97 per share, compared with $9.25 billion, or $1.85 per share, in the year-ago period.

Analysts expected earnings of $1.96 per share, according to Thomson Reuters I/B/E/S.

Total revenue rose 16 percent to $121.61 billion. Analysts expected $119.7 billion in revenue.

Oil companies around the world benefited from a jump in oil prices. Crude futures traded in New York jumped about 25 percent to end the fourth quarter at $98.83 per barrel. Brent prices gained 5 percent during the quarter.

Shares of Exxon Mobil fell 1 percent to $84.60 in premarket trading.

GE revenue lower than expected; expects a volatile year ahead

FAIRFIELD, Conn. ― General Electric Co’s. fourth-quarter revenue fell short of Wall Street expectations because of slower-than-expected growth in Europe, sending its shares down 2.5 percent in premarket trading.

The largest U.S. conglomerate expects a volatile year but it plans to build up its emerging-market presence and restructure its European operations.

Its profit came in 1 cent per share above Wall Street’s forecasts.

“We’re concerned about the revenue miss,” said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York. “That’s really what we’re focused on this earnings season. We’re not so concerned about being a penny above or below expectations, because that can be handled with accounting.”

The world’s biggest maker of jet engines and electric turbines said net income from continuing operations rose 0.6 percent to $3.93 billion, or 37 cents per share, compared with $3.90 billion, or 36 cents per share, a year ago.

Factoring out one-time items, profit came to 39 cents per share, above the 38 cents analysts had forecast, according to Thomson Reuters I/B/E/S.

Total revenue came to $37.97 billion, down from $41.23 billion and below the $40.03 billion analysts had expected. Factoring out the effects of last year’s sale of a majority stake in NBC Universal revenue would have been up 4 percent.

“We expect continued volatility in 2012 and have prepared for it by investing in new products and technology, expanding our growth-market footprint and taking important steps to strengthen risk management,” said CEO Jeff Immelt, in a statement. “We are restructuring our business in Europe to reflect market conditions.”

Navistar fourth quarter profit beats Wall Street forecast

CHICAGO ― Navistar International Corp. posted a better-than-expected quarterly profit, helped by higher demand for its trucks in North America.

The truck and engine maker’s fourth-quarter net income jumped to $255 million, or $3.48 a share, from $44 million, or 61 cents a share, a year ago. Excluding items, the company earned $3.37 a share.

Sales rose 28 percent to $4.32 billion.

Analysts, on average, had expected earnings of $3.08 a share, on revenue of $4.44 billion, according to Thomson Reuters I/B/E/S.

Billionaire investor Carl Icahn, who has amassed a 10 percent stake in Navistar, wants the company to merge with rival Oshkosh Corp.

However, another big investor Jeffrey Altman has questioned the proposal, and pressed company executives to demonstrate the value of any such deal.

Navistar shares closed at $36.54 on Monday on the New York Stock Exchange.

JPMorgan’s investment bank revenue ‘flat,’ chief Dimon says

NEW YORK ― JPMorgan Chase & Co., the largest U.S. lender by assets, will have “essentially flat” investment bank revenue this quarter excluding certain accounting adjustments, CEO Jamie Dimon wrote in an investor presentation.

The comparison is to this year’s third quarter, said Jennifer Zuccarelli, a spokeswoman for the bank. That period was the worst for trading and investment banking revenue at the biggest Wall Street firms since the depths of the financial crisis in 2008, excluding accounting gains.

The remarks show U.S. investment banks still face headwinds as corporations put off capital raises and investors sell riskier assets on concern the U.S. economy is weakening and Europe’s debt crisis may spread. New York-based JPMorgan’s private equity unit also expects to post a “modest loss” in this year’s fourth quarter, according to the presentation.

The company’s investment bank generated about $4.5 billion in revenue during the third quarter after backing out a $1.9 billion gain in debt-valuation adjustments. Dimon excluded that accounting effect in forecasting the unit’s revenue in a slide show to be delivered today at a conference hosted by Goldman Sachs Group Inc. in New York. A copy of the document was posted on JPMorgan’s website.

Revenue at the investment-banking unit has slid this year from $8.2 billion in the first quarter as concern that Greece would default and U.S. lawmakers would fail to raise the debt ceiling escalated in the third quarter. The firm told investors in October that the division will face similar market conditions for the rest of the year.

GM profit beats Wall Street estimates; cuts Europe outlook

DETROIT ― General Motors Co. posted a stronger-than-expected quarterly profit as it gained market share in North American and Asian markets, but backed away from its full-year break-even target in Europe due to deteriorating conditions there.

Shares in GM fell 4.2 percent in premarket trading.

GM executives said the No. 1 automaker has work to do to boost its profit margins.

“GM delivered a solid quarter … but solid isn’t good enough; even in a tough global economy,” CEO Dan Akerson said in a statement.

Akerson said GM still needs to improve its profit margins, which were 6 percent in the third quarter compared with 6.7 percent last year.

GM emerged from bankruptcy in 2009 after a $52 billion taxpayer-funded bailout. The U.S. Treasury owns 32 percent of GM’s common shares, and how it unwinds that stakes remains an unanswered question.

As GM’s share price has slipped well below last fall’s $33 initial public offering price, Treasury officials have maintained they will not rush to sell the government’s stake.

Coming out of bankruptcy, Akerson and other executives said the company stripped out enough costs to make the business recession proof so it could thrive even in a weak auto market. They have repeatedly pointed to the company’s “fortress balance sheet.”

On Wednesday, GM said it expects its fourth-quarter adjusted earnings before interest and taxes to be similar to the same quarter last year.

However, it backed away from its full-year target for Europe, saying it no longer expected to break even in Europe before restructuring costs due to deteriorating conditions there despite achieving that level through the first nine months. On Monday, GM announced it would change top executive in Europe.

“We obviously have significant macroeconomic challenges to address,” Chief Financial Officer Dan Ammann told reporters . “We’re not relying on the big pickup in volume in the industry to bail us out if you like and we’re very much focused on getting the break even point down further so we can get to a point where we’re sustainably profitable.”

GM’s net income in the third quarter fell to $1.7 billion, or $1.03 a share, compared with $2 billion, or $1.20 a share, in the year earlier period.

Analysts had expected 96 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose to $36.7 billion from $34.1 billion last year. That was in line with analysts’ expectations.

The No. 1 U.S. automaker also said the underfunded status on its U.S. pensions stood at $8.7 billion at the end of September, down from $10.8 billion at the end of June. However, that was according to the valuation set at the end of 2010 and will be revalued at the end of this year.

GM’s shares fell 4.2 percent to $24 a share in premarket trading from Tuesday’s closing price on the New York Stock Exchange. Its shares are down 39 percent from this year’s high reached in January, and down 27 percent since its IPO price of $33 a year ago.

Sara Lee reports better quarterly earnings but cuts 2012 sales view

CHICAGO ― U.S. food maker Sara Lee Corp. reported slightly better-than-expected quarterly earnings, but cut its full-year sales forecast due partly to unfavorable currency exchange rates.

On a net basis, the company on Thursday reported a loss of $217 million, or 37 cents per share, in the first quarter of its fiscal year 2012 that ended on Oct. 1, compared with a year-earlier net profit of $192 million, or 29 cents per share.

Excluding items, Sara Lee reported a profit of 18 cents per share, topping analysts’ average expectation by a penny, according to Thomson Reuters I/B/E/S.

Sales rose to $1.94 billion from $1.73 billion a year earlier. Analysts on average were expecting sales of $1.98 billion.

Sara Lee, based in a suburb of Chicago, is planning to split into two companies — one focused on North American meat brands including Jimmy Dean sausages and Ball Park frankfurters, and one focused on international coffee and teas, with brands such as Douwe Egberts and Pickwick.

The company said it still expects adjusted earnings of 89 cents to 95 cents per share in fiscal 2012. But it lowered its sales forecast to a range of $7.9 billion to $8.15 billion, from a prior forecast of $8.5 billion to $8.75 billion, due to currency exchange rates and the reclassification of its North American food-service beverage business as a discontinued operation.

CVS Caremark’s higher quarterly profit tops expectations

WOONSOCKET, RI. ― CVS Caremark Corp. posted a higher quarterly profit on Thursday as business improved at its pharmacy benefits management unit, and said this year’s profit should come in toward the higher end of its prior forecast.

Net income attributable to CVS Caremark rose to $868 million, or 65 cents per share, from $809 million, or 59 cents per share, a year earlier.

Adjusted earnings per share from continuing operations attributable to CVS Caremark rose to 70 cents from 64 cents, topping the company’s forecast of 66 to 68 cents and analysts’ average forecast of 68 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 12.5 percent to $26.67 billion, while analysts were looking for $26.75 billion.

Revenue in the drugstore unit, which operates more than 7,300 stores and accounts for roughly half of total revenue, rose 3.8 percent to $14.7 billion. Sales at stores open at least a year, or same-store sales, rose 2.3 percent.

Revenue in the pharmacy services business jumped 25.8 percent to $14.8 billion, due largely to the addition of a previously announced major contract with Aetna Inc. and the acquisition Universal American Corp’s. Medicare prescription drug business.

CVS now expects to post adjusted earnings from continuing operations of $2.77 to $2.81 per share this year, trimming 2 cents off of the low end of the range it gave in August. Analysts’ average 2011 forecast is $2.78 per share.