Mattel Reports Higher Q4 EPS - Update [MAT]
1/31/2005 6:41:43 AM Early Monday, Mattel, Inc. (MAT), a toy company, announced its fourth quarter financial results, reporting earnings that rose from last year, on higher revenues.
The El Segundo, California-based Mattel reported net income for the fourth quarter of $284.3 million or $0.68 per share, a 33% rise from $213.9 million or $0.50 per share in the same quarter last year. On average, 12 analysts polled by First Call/Thomson Financial expected earnings of $0.48 per share for the fourth quarter.
In the fourth quarter, Mattel reached a settlement with the Internal Revenue Service ("IRS") regarding the examination of its U.S. federal income tax returns for the years 1998 through 2001. The settlement resulted in a non-recurring benefit to net income of about $65 million for the fourth quarter and the full year.
Net sales for the quarter climbed 6% to $1.85 billion from $1.74 billion in the comparable quarter prior year. Seven analysts had consensus revenue estimate of $1.76 billion for the fourth quarter. Cost of sales rose 9% to $954.4 million from $876 million in the same quarter a year-ago.
Mattel noted that its domestic gross sales and international gross sales rose 10% and 3%, respectively, from the prior year same quarter. The international gross sales included a benefit from changes in currency exchange rates of 5 percentage points.
For the quarter, the company's gross margin decreased 130 basis points of net sales, while operating income as a percentage of net sales were 17.0%, down 50 basis points from prior year same quarter.
For the full year, the company posted net income of $572.7 million or $1.35 per share, a 7% rise from $537.6 million or $1.22 per share in the same period last year. On average, 12 analysts estimated earnings of $1.12 per share for the full year.
Net sales for the period rose 3% to $5.10 billion from $4.96 billion in the corresponding period prior year. Nine analysts had consensus revenue estimate of $5.02 billion for the full year.
MAT closed Friday's regular trading session at $18.35, down 42 cents.
United Defense (UDI) revealed that it has been awarded a $6 million contract to produce seven additional Opposing Forces Surrogate Training System - Main Battle Tank vehicles for the U.S. Army, in addition to a December 2004 contract alteration for the production of 43 Main Battle Tank vehicles and associated Systems Technical Support.
Monday morning, W-H Energy Services, Inc. (WHQ) announced financial results for the fourth quarter, reporting earnings that rose from last year and beat analysts' estimates, on higher revenues.
For the quarter, the company reported income from continuing operations of $7.5 million or $0.26 per share, compared to $3.2 million or $0.11 per share in the same period last year. On average, 10 analysts polled by First Call / Thomson Financial expected earnings of $0.23 per share for the quarter.
Quarterly revenues were $131.0 million, in comparison with $94.6 million in the corresponding period prior year.
For the full year, the company posted income from continuing operations of $22.0 million or $0.78 per share, compared to $19.2 million or $0.69 per share reported last year. Ten analysts expected earnings of $0.74 per share for the full year.
The full year 2004 earnings excluded $1.9 million after tax write-off of non-cash financing costs related to the new credit facility entered into on June 30, 2004.
Revenues for the full year rose 26% to $462.4 million from $367.2 million recorded last year.
The company noted that it has concluded its exit from the maintenance and safety segment of its business having sold Charles Holston, Inc. in December. The exit from this segment resulted in an after-tax loss from discontinued operations for the year ended December 31, 2004 of about $2.1 million or $0.07 per share.
Looking ahead, the company expects earnings per share for the first quarter of 2005 in the range of $0.24 - $0.28. Six analysts expect the company to earn $0.24 per share for the quarter.
The first quarter 2005 estimate provides for about $0.01 - $0.02 per share related to the company's early adoption of Statement of Financial Accounting Standards 123R, under which non-cash expense related to the issuance of stock options is recorded in the income statement.
WHQ closed Friday's trading session at $22.20.
Jan. 31 (Bloomberg) -- SBC Communications Inc., the second- biggest U.S. telephone company, agreed to buy AT&T Corp. for about $16 billion in stock and cash, marking the end of the 130-year-old company that brought phones into American homes.
AT&T investors will receive SBC stock worth $18.41 a share and a special dividend of $1.30 a share, the companies said today in a Business Wire statement. The total of $19.71 a share matches AT&T's Jan. 28 closing price. SBC Chief Executive Officer Edward Whitacre, 63, will be CEO of the combined entity.
San Antonio-based SBC is buying a global phone network with business customers such as Lockheed Martin Corp. Bedminster, New Jersey-based AT&T's revenue has dropped for 20 straight quarters as so-called Baby Bells such as SBC siphon away business. AT&T customers also have been abandoning home phone lines in favor of Internet-based service or wireless handsets.
``AT&T's customer base is a valuable customer base and certainly their name is well known,'' said Ivan Feinseth, a New York-based analyst for Matrix USA LLC. Still, ``AT&T has struggled and destroyed so much of their value.'' He has a ``buy'' rating on AT&T and doesn't own shares.
AT&T will have three seats on the combined company's board. AT&T shares traded at the equivalent of $19.61 at 10:42 a.m. in Germany, down 10 cents from the Jan. 28 closing price on the New York Stock Exchange. The stock has tumbled from a high of $102 in 1999. SBC shares traded at the equivalent of $24.09 in Germany, up 47 cents from the Jan. 28 closing price of $23.62.
Expansion
SBC has grown from the smallest of seven local-phone providers spun off in the 1984 breakup of AT&T to become a company with more than 50 million local-calling customers. Under Whitacre's 15-year reign, SBC bought local-phone companies Ameritech Corp. and Pacific Telesis Group.
SBC expects $15 billion in savings from the deal, which will boost cash flow from 2006 and earnings per share from 2008.
``There's logic, long-term strategic value in SBC and AT&T merging,'' said New York-based Sanford Bernstein & Co. analyst Jeffrey Halpern. ``The enterprise market is going to drive over half the growth in the overall telecom industry over the next five years. AT&T brings to the table a very strong incumbent position in that market, and it's a market that is a very tough nut to crack.''
AT&T's market value, which peaked at about $180 billion in 1999, has fallen to about $15.7 billion, as revenue plunged and it sold wireless and cable-television businesses. SBC's market capitalization has grown to $80 billion.
Other Targets
SBC's agreement to buy AT&T may make MCI Inc., AT&T's top rival, a target of another local-phone company such as Verizon Communications Inc., said Jeffrey Kagan, an independent telecommunications analyst in Atlanta. The deal comes amid an increase in telecommunications mergers, including Sprint Corp.'s purchase of Nextel Communications Inc. and Cingular Wireless LLC's acquisition of AT&T Wireless Services Inc.
``Acquisition opportunities in the telecom arena are limited,'' said Igor Volshteyn, an investment banker at Tejas Securities Group Inc. in Austin, Texas, who follows the telecom industry and doesn't count SBC or AT&T as clients or own their shares. ``Whitacre realizes that if he doesn't move first, someone else will, and he doesn't want to be on the short end of that stick.''
Dorman, who took the helm at AT&T two years ago, inherited a company that under his predecessor, C. Michael Armstrong, racked up $65 billion in debt after spending $100 billion on acquisitions. Dorman, 51, has spent two years slashing debt and jobs to make up for declining sales. Revenue fell 12 percent to $30.5 billion last year, the lowest level since before the breakup. AT&T said today it has $6 billion in net debt.
Faced with a loss of long-distance customers to SBC and the other regional phone companies, as well as increased use of cell phones instead of traditional phone lines, Dorman has reduced AT&T's workforce, which once stood at 1 million, to less than 50,000. He has eliminated more than 20,000 positions in two years.
Regulatory Hurdles
Approval of the transaction by the Justice Department, Federal Communications Commission and state regulators may take as many as 20 months and require the sale of assets such as AT&T's consumer long-distance business, said Blair Levin, a Washington- based analyst at Legg Mason Wood Walker Inc. and former chief of staff of the FCC.
Whitacre, a 6-foot, 4-inch Texan who joined SBC in 1963, built the company into the biggest local phone provider in 13 states, including California and Texas. Buying AT&T would enable SBC to offer a complete package of services to global corporations for the first time.
Business Customers
``He's been an acquisitive guy,'' said Greg Gorbatenko, an analyst at Chicago-based Marquis Investment Research. ``He's been doing a bit of empire building and wants to leave a legacy.''
Since SBC began winning approval to sell long-distance services in the past five years, it has had success winning orders from small businesses and more difficulty making inroads with the largest corporate clients, according to Lehman Brothers Holdings Inc. analyst Blake Bath.
AT&T will continue to lose small-business clients to SBC and the other regional providers, Bath estimated in a research report this month. That would drive down AT&T's share of the overall market for business communications to 23.8 percent this year from 24.9 percent in 2004, he said.
SBC is already the owner on the nation's largest cell phone carrier after its mobile-phone joint venture, Cingular, in October paid $41.3 billion for AT&T Wireless. That deal helped prompt Sprint's December agreement to buy Nextel for $35 billion.
Wyeth (WYE) reported fourth quarter EPS of $0.64, which fell short of the consensus estimate of $0.67. Revenues increased to $4.6 billion, from the $4.3 billion reported last year. Full year 2005 EPS is expected to come in between $2.70 and $2.80.
Wyeth climbed to the upside in the first 45 minutes of Friday's session and closed higher by 0.31 at $42.98. The stock rebounded off of support, following a one-week pull back from the highs of the year
Eastman Kodak Signs Definitive Deal To Acquire Creo; Reaffirms FY05 EPS In Line With Consensus - Update [EK]
1/31/2005 8:03:34 AM Monday morning, Eastman Kodak Company (EK), a provider of traditional and digital imaging products, revealed that it has signed a definitive agreement to acquire Creo Inc. (CREO), (CRE.TO), a supplier of prepress systems used by commercial printers.
As per the terms of the agreement, Kodak would pay about $980 million in cash, or $16.50 per share, for all the outstanding shares of Creo.
The transaction, which has been approved by Kodak's and Creo's respective boards of directors, is to be carried out by statutory plan of arrangement under Canadian law and is subject to regulatory approvals, the approval of Creo's shareholders and court approval.
Through this acquisition Kodak strengthens its Graphic Communications Group (GCG) providing customers with all the products and services they need to be successful in a blended production environment, where digital, traditional and hybrid print jobs are converging.
Creo would provide Kodak with an innovative digital pre-press product portfolio and established relationships in the commercial printing segment, the largest market opportunity within the graphic communications industry.
Upon the closing of the transaction and the completion of the organizational structure of Kodak's Graphic Communications Group (GCG), Creo's operations would be a part of the Graphics Solutions & Services operating unit of GCG.
Though the transaction would lead to some earnings dilution for the remainder of 2005, Kodak still sees 2005 operational earnings guidance in the range of $2.60 to $2.90 per share. On average, 11 analysts polled by First Call/Thomson Financial expect 2005 earnings of $2.62 per share.
For 2006, Kodak expects this acquisition to add at least 5 cents per-share to operational earnings, driven by cost savings and revenue growth available to the combined entity. The company anticipates meeting or exceeding its operational earnings guidance of $3.00 per share in 2006. On average, 5 analysts expect $2.67 per share for 2006.
In 2006, Kodak also expects about $700 million of incremental revenue from Creo, whose sales in the 2004 fiscal year totaled $636 million and whose gross margins exceed 40%.
The proposed acquisition follows the announcement on January 12 that Kodak has entered into an agreement to become the sole owner of Kodak Polychrome Graphics (KPG), its joint venture with Sun Chemical Corp.
The Rochester, New York-based Kodak expects the transaction to be accretive by around 8 cents to the company's 2005 operational earnings and add around 14 cents to its 2006 operational earnings. These expectations have already been included in Kodak's 2006 operational earnings outlook of $3 per share. On a GAAP basis, the company expects an accretion of 5 cents to its 2005 earnings per share and 14 cents to its 2006 earnings per share.
Earlier this month, Eastman Kodak announced an agreement to acquire OREX Computed Radiography Ltd., a provider of compact robust computed radiography systems for about $50.5 million in cash.
Kodak expects OREX to add about $32 million to its 2005 revenues, reflecting about 10 months of Kodak ownership. The company anticipates the acquisition would be earnings neutral in 2005 and accretive thereafter.
EK closed Friday's regular trading session at $32.70, up 41 cents.Shares of CREO ended Friday's regular trading session at $14.36, up 46 cents, while CRE.TO ended at C$30.85, up 37 cents.
Wyeth Reports Higher Adj. EPS On Increased Revenue, Co.`s 2005 EPS Projection Fall Short Of Estimates - Update [WYE]
1/31/2005 8:03:37 AM Monday before the bell, Wyeth (WYE), pharmaceutical and healthcare company, announced higher adjusted net income for the fourth quarter on increased revenue. The company projects 2005 earnings of $2.70-$2.80 per share, excluding charges, for 2005, which fell short of the analysts expectation of $2.89 per share.
The Madison, New Jersey-based company reported net income, excluding special items, of $856.7 million or $0.63 per share compared with $762.4 million or $0.57 per share in the year-ago quarter. On average, 25 analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.67 per share.
However, including the special items, Wyeth revealed a net loss of $1.76 billion or $1.32 per share compared with net income of $335.3 million or $0.25 per share in the previous year quarter.
For the quarter, net revenue rose 7% to $4.65 billion from $4.33 billion in the prior year quarter. Seventeen analysts had a consensus revenue estimate of $4.66 billion.
Wyeth attributed the rise in revenue to healthy performances from key products and favorable foreign exchange rates.
The company said that its worldwide pharmaceuticals net revenue registered 8% growth in the fourth quarter, whereas its consumer healthcare net revenue rose 6% during the same period.
The company disclosed that its R&D expenses shot up to $645.2 million from $576.4 million, while its SGA expenses increased to $1.6 billion from $1.5 billion in the corresponding period of 2003.
Wyeth stated that FDA has granted priority review for its global registration dossier submitted for Tygacil, an innovative, injectable, broad-spectrum antibiotic for serious and complicated infections.
The company said that it has made progress in finalization of seventh amendment to nationwide Diet Drug Cass Action settlement. For this, it has set recorded $4.5 billion towards Diet Drug Litigation charges during the quarter.
Wyeth revealed that FDA has granted pediatric exclusivity to Rapamune in the fourth quarter.
For the full year, Wyeth reported net income, excluding special items, of $3.43 billion or $2.54 per share compared to $3.03 billion or $2.27 per share in 2003. Twenty-four analysts consensus EPS remained at $2.68. Including special items, the company revealed net income of $1.23 billion or $0.91 per share, down from $2.05 billion or $1.54 per share in the previous year.
Net revenue increased to $17.36 billion from $15.85 billion in the prior year. Twenty-three analysts projected the company to post revenue of $17.35 billion.
R&D expenses shot up to $2.46 billion from $2.09 billion, whereas SGA expenses rose to $5.8 billion from $5.47 billion in the prior year.
WYE closed Friday's regular trading at $42.98.
Lehman Brothers upgraded shares of Altera Corp. (ALTR) Monday morning from an "Equal Weight" to an "Overweight." The stock is now up 0.51 on 5K shares on Instinet.
Altera Corp. fell to the downside around mid-morning on Friday and closed lower by 0.12 at $18.49. The stock finished near the middle of a 3-week range.
Harte-Hanks Q4 EPS Beats Estimates By A Penny; Raises Quarterly Dividend By 25% - Quick Facts [HHS]
1/31/2005 8:15:03 AM Harte-Hanks Inc. (HHS) reported fourth quarter net income of $27.5 million or $0.32 per share, compared to $24.9 million or $0.28 per share in the year-ago quarter. On average, 8 analysts polled by First Call/ Thomson Financial estimated earnings for the quarter at $0.31 per share.
Revenues for the quarter climbed to $277.5 million from $255.7 million in the comparable quarter last year.
The company has also raised its quarterly dividend to $0.05 per share that is payable on March 15, 2005 to shareholders of record on March 1, 2005.
Monday before the bell, Lannett Co Inc. (LCI) said that that it has filed 2 Abbreviated New Drug Applications with the U.S. Food and Drug Administration. The company further said that it has in-licensed 4 additional product candidates. The company also said that 2 Abbreviated New Drug Applications have been licensed and expects to file site change applications with the FDA by the beginning of the second quarter.
LCI closed Friday's trade at $9.84, down 6 cents.
Exxon Mobil Corp. (XOM) announced its financial results for the fourth quarter, reporting earnings that rose from last year, helped by higher prices for oil and natural gas. Excluding items, net income for the quarter was $8.42 billion, or $1.30 per share, compared to $4.42 billion, or $0.68 per share, in the prior year quarter.
Revenues for the quarter was $83.36 billion compared to $65.95 billion in the same period last year.
First Call/Thomson Financial analysts expected the company to report earnings of $1.07 per share for the quarter.
Net income for the quarter was $8.4 billion, or $1.30 per share, compared to $6.65 billion, or $1.01 per share, in the prior year quarter.
Upstream earnings for the quarter were $4.49 billion, an increase of $1,618 million from year ago quarter results reflecting higher average crude and natural gas prices.
Downstream earnings were $2.34 billion, an increase of $1,608 million from last year's fourth quarter due to strong refining margins and improved marketing results.
Chemical earnings were $1.25 billion, an increase of $772 million from fourth quarter 2003 results reflecting strong worldwide demand.
During the current quarter, the company said it purchased 61 million shares at a gross cost of $3.04 billion to offset the dilution associated with benefit plans and to reduce common stock offering.
Shares outstanding were reduced from 6.45 billion at the end of the third quarter of 2004 to 6.4 billion at the end of the fourth quarter.
Capital and exploration expenditures of $4,233 million in the fourth quarter of 2004 were down $127 million compared with last year, the company said.
Full Year
For the year, the company posted net income of $25.33 billion or $3.89 per share, up $3.8 billion from 2003.
Earnings excluding an accounting change in 2003 and special items in 2003 and 2004 were $25,880 million or $3.97 per share, up $8,850 million from 2003 reflecting record performance in all segments of the business, the company noted.
The company noted that strong operational performance in all areas of business helped ExxonMobil capture the benefits of favorable market conditions in 2004.
During 2004, Exxon Mobil said it purchased 218 million shares of its common stock for the treasury at a gross cost of $9.95 billion. These purchases were to offset shares issued in conjunction with company benefit plans and programs and to reduce the number of shares outstanding, the company said.
XOM ended Friday's regular trading session at $51.27.
Allegheny Technologies Posts Profit In Q4 Vs Loss Last Year - Update [ATI]
1/31/2005 9:20:11 AM Monday morning, Allegheny Technologies (ATI), a diversified producer of specialty materials, announced financial results for its fourth quarter, reporting a profit compared to a loss last year, on higher revenues.
The company reported net income for the quarter of $35.0 million or $0.35 per share, compared to a loss of $232.7 million or $2.89 per share, in the same quarter last year.
On average, 9 Analysts polled by First Call/Thomson Financial expected the company to earn $0.34 per share for the quarter.
Quarterly revenues recorded by the company increased 61% to $778.1 million from $484.4 million in the comparable quarter prior year. WallStreet analysts had revenues consensus of $775.3 million for the quarter.
Flat-Rolled Products Segment Sales up 75% to $469.6 million primarily due to improved demand, higher base-selling prices, higher raw material surcharges, and higher shipments resulting from the Midland, PA and Louisville, OH facilities acquired in June 2004.
High Performance Metals Segment sales increased 52% to $230.4 million, while Engineered Products Segment Sales improved 22% to $78.1 million.
For the full year, the company posted net income of $19.8 million or $0.22 per share, compared to a loss of $314.6 million or $3.89 per share last year. On average, 8 Analysts polled by First Call/Thomson Financial expected the company to incur loss of $0.30 per share for the quarter.
Revenues for the full year grew 41% to $2.7 billion from $1.9 billion in the previous year, the company noted. WallStreet analysts had revenues consensus of $2.69 billion for the quarter.
ATI closed Friday's trade unchanged at $22.24.
Allegheny Technologies (ATI), a diversified producer of specialty materials, announced financial results for its fourth quarter, reporting a profit compared to a loss last year, on higher revenues.
The company reported net income for the quarter of $35.0 million or $0.35 per share, compared to a loss of $232.7 million or $2.89 per share, in the same quarter last year.
On average, 9 Analysts polled by First Call/Thomson Financial expected the company to earn $0.34 per share for the quarter.
Quarterly revenues recorded by the company increased 61% to $778.1 million from $484.4 million in the comparable quarter prior year. WallStreet analysts had revenues consensus of $775.3 million for the quarter.
Flat-Rolled Products Segment Sales up 75% to $469.6 million primarily due to improved demand, higher base-selling prices, higher raw material surcharges, and higher shipments resulting from the Midland, PA and Louisville, OH facilities acquired in June 2004.
High Performance Metals Segment sales increased 52% to $230.4 million, while Engineered Products Segment Sales improved 22% to $78.1 million.
For the full year, the company posted net income of $19.8 million or $0.22 per share, compared to a loss of $314.6 million or $3.89 per share last year. On average, 8 Analysts polled by First Call/Thomson Financial expected the company to incur loss of $0.30 per share for the quarter.
Revenues for the full year grew 41% to $2.7 billion from $1.9 billion in the previous year, the company noted. WallStreet analysts had revenues consensus of $2.69 billion for the quarter.
ATI closed Friday's trade unchanged at $22.24.
CORRECTION: Analogic Q1 Swings To Profit From Loss Last Year; Restates Q4 Results - Quick Facts [ALOGE]
1/31/2005 9:19:13 AM CORRECTION: In the earlier version of the story, 'Analogic q4 swings to profit' in the title should be read as 'Analogic q1 swings to profit'. The corrected version of the story is as follows:
Analogic q1 swings to profit from loss last year; restates q4 results - quick facts
Analogic Corp. (ALOGE) posted its first quarter net income of $165 thousand or $0.01 per share, compared to a loss of $1.60 million or $0.12 per share in the corresponding quarter last year. Analysts expected a loss of $0.01 per share.
First quarter revenues grew to $84.09 million from $71.71 million in the year-ago quarter.
Separately the company restated its fourth quarter net income of $3.90 million or $0.29 per share, compared to $1.67 million or $0.11 per share in the same quarter last year.
Restated quarterly revenues increased to $102.23 million from $81.65 million in the same prior year quarter.