Earnings Release – 22 Jan 2014

With the collaboration of Junior Associates

Edited by Vani Rao

Netflix reports higher profit on new US subscribers

Netflix (NASDAQ:NFLX) reported higher profit for the fourth quarter as the company added 2.3 million customers to its TV and movie streaming service in the US. The company reported net income of $48 million for the quarter, up from $8 million in the year-ago period. Earnings per-share were at 79 cents, Netflix said in a statement. The company had previously forecast that it would add between 1.6 million and 2.4 million new US streaming customers, a closely watched barometer of the company’s growth. In the international markets, Netflix added 1.7 million members. It ended 2013 with more than 44 million customers worldwide.

eBay profit rises

eBay Inc. (NASDAQ:EBAY) reported encouraging results for the fourth quarter with net income of $1.05 billion, or 66 cents per share, compared to $927 million, or 57 cents per share, in the year-ago period. Revenue was at $4.55 billion, up 14.1%, from $3.99 billion reported in the last quarter of 2012. Excluding items, earnings per share was at 80 cents compared with 70 cents in the year-ago period. The two factors that may have had a positive impact on revenue growth were that the holiday season was six days shorter in 2013 compared to 2012, and eBay may have benefited from more shoppers moving online.

Abbott revenue misses on weaker sales

Abbott Laboratories (NYSE:ABT) reported weaker-than-expected fourth quarter revenue, hurt by disappointing sales of its generic medicines and the lingering impact of an overseas recall of its baby formulas last summer. The company reported fourth-quarter earnings from continuing operations of $589 million, or 37 cents per share. Excluding special items, Abbott earned 58 cents per share. Global sales rose 0.4% to $5.66 billion, below Wall Street expectations of $5.72 billion. Sales of products that are sold overseas fell 4.3% to $1.29 billion. Abbott said it expects earnings this year, excluding special items, of $2.16 to $2.26 per share.

United Technologies profit tops estimates; revenues miss

United Technologies (NYSE:UTX) reported a rise in fourth-quarter profit that topped estimates, helped by a delay in shipping a helicopter order. The manufacturer said it did not ship eight helicopters under a Canadian contract, as expected, which actually benefited its profit because they are sold at a loss, helping the profit top estimates. However, revenue fell by about $400 million. The company said that total revenue rose 1.9 % to $16.76 billion. That was about $330 million short of analysts’ expectations. Earnings from continuing operations soared 53% to $1.45 billion, or $1.58 per share. On a net basis, income fell 29% to $1.46 billion due to a big year-earlier gain from the sale of several industrial businesses.

Coach reports disappointing results

The Coach Inc. (NYSE:COH) reported disappointing results as it failed to meet expectations for the second quarter. Revenues decreased 5.63% to $1.42 billion, as compared to $1.50 in the year-ago period. Product sales, at $1.42 billion, accounted for a major part of revenues and Q2 earnings of $297 million, or $1.06 per share, down from $353 million, or $1.23 per share, in the year-ago period. This was mainly because total sales fell slightly on a constant currency basis during the holiday quarter. The company did not mention its next dividend payment since the company decided to declare its next 33.75% quarterly dividend in February 2014.

Motorola rise on government spending; disappoints on forecast

Motorola Solutions (NYSE:MSI) reported a 2% rise in net profit due to government contracts (increase in the US public safety funding) at the end of fourth quarter. This resulted in an increase in net income to $343 million from $336 million in the year-ago period. Although the company reported a rise in revenue, the share prices were down by 8% to $61.55 before the start of Wednesday’s session. Revenue increased by 3% to $2.5 billion from $2.44 billion, net profit by 12%, and quarterly earnings per share at $1.57 were higher than estimates of $1.50. For the forthcoming quarter, Motorola expects earnings to be between 46 cents to 52 cents per share; however, analysts estimated 77 cents on an average. Further, the company expects a decline in its sales of up to 6% in the forthcoming quarter.

Coming up in next 24 hours

Microsoft (NASDAQ:MSFT) is expected to report higher second-quarter sales, but a dip in profit as Windows 8, the Surface tablet and the new Xbox console had an unspectacular holiday shopping season. Investors will hope to hear more on the company’s ongoing search for a new chief executive, which most had expected to be completed by now, after Steve Ballmer’s retirement plan was announced in August.

Investors are not expecting much good news when McDonald (NYSE:MCD) reports fourth-quarter results before the market opens. The fast-food giant’s sales are virtually stuck in neutral as recent menu introductions such as Mighty Wings have fallen flat and service times have slowed due to the broad array of offerings on its menu.

Starbucks (NASDAQ:SBUX) reports first-quarter results after market close. After two quarters of strong sales and traffic momentum, there are concerns that the coffee chain’s new and improved pastries are slowing service because baristas are taking time to warm them up.

Lockheed Martin (NYSE:LMT) is expected to report higher fourth-quarter earnings despite a drop in revenue. Lockheed’s biggest program, the F-35 fighter, appears to have survived the 2014 budget process. However, company officials will face questions about the Littoral Combat Ship amid reports that the Pentagon could scale back total orders.

Southwest Airlines (NYSE:LUV) is expected to report higher fourth-quarter results. The discount airline raised luggage fees at its AirTran unit and launched new fees tied to certain boarding positions at the gate to raise revenue. The carrier recently bought gates at New York’s LaGuardia Airport.

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