Nike (NYSE: NKE) profit hit by costs, shares fall

Palm Beach, FL 6/29/12 (StreetBeat) -- Nike Inc (NYSE:NKE) missed quarterly profit estimates for the first time in at least two years as higher spending and increased costs of materials used in its shoes and T-shirts hurt margins, while demand eased in international markets.

The results sent shares of the world's largest sportswear maker down nearly 13 percent in extended trading on Thursday.

Orders of Nike branded shoes and clothes scheduled for delivery from June through November, a closely-watched metric of demand known as "futures orders" rose 7 percent. That is less than half of the rise of futures orders in the fiscal third quarter.

In the fourth quarter that ended May 31, futures orders rose only 5 percent in Greater China, down from a 24 percent increase a year earlier, a sign that even the popular Nike "swoosh" is not immune to slowing global economic growth.

Analysts and investors have been worried about a cooling in demand as footwear trends
typically last about two to three years. Nike has been hot in the running shoe market for almost two and a half years now, said Morningstar analyst Paul Swinand.

The company earned $549 million, or $1.17 cents a share, in its fourth quarter, compared with $594 million, or $1.24 a share, a year ago.

Analysts, on average, had been expecting the company to earn $1.37 share, according to Thomson Reuters I/B/E/S.

Revenue rose 12 percent to $6.5 billion.

Gross margins fell 1.5 percentage points in the fourth quarter and have been declining for more than a year.

"While we had expected some gross margins decline and some increase in spending with the Olympics and soccer championships, both are higher than expected," said Swinand.

Swinand also said the drop in the share price could be a chance for investors to buy shares of the company, as he did not think the company has any flaws in execution.

Matt Arnold, consumer discretionary analyst for Edward Jones, saw improvement ahead for Nike.

"Margins will eventually become better and they have already taken pricing actions, so in general we think it is a matter of time. Nike is a strong brand with a lot going right for it," said Arnold.

Nike's finance chief, Don Blair, said higher input costs were the primary reason for the profit drop in the quarter. Higher prices and lower air freight expenses helped mitigate the rising materials costs.

The company also said it had more inventory than desired in China and Western Europe, raising questions about how much it would have to discount in those regions to clear off merchandise.

"There's inventory that's been piling up for quite a few quarters ...that can take a few quarters," said Canaccord Genuity analyst Camilo Lyon.

Shares of Nike, based in Beaverton, Oregon, were down 12.9 percent at $84.40 in after-hours trading on Thursday after closing at $96.89 on the New York Stock Exchange.

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Tomahawk, WI 4/5/2012 (StreetBeat) -- Nike (NKE) scored when a judge rejected Reebok's bid to overturn his ban on Reebok's sale of New York Jets' Tim Tebow jerseys.



The federal judge in New York on Wednesday permanently halted Reebok, a unit of Germany's Adidas, from selling Tebow's No. 15.

Nike sued Reebok on March 27, saying it was authorized and licensed to use Tebow's name on football apparel and merchandise.

Delta Airlines (DAL) is considering a bid for ConocoPhillips' (COP) idled 185,000 barrel per day refinery in Trainer, Penn., Reuters reported.

The board of Delta has met twice to discuss a potential bid, Reuters said. The second largest U.S. air carrier is mulling the bid in an effort to hedge fuel costs.

Bed Bath & Beyond (BBBY), the specialty retailer, easily topped Wall Street's fourth-quarter earnings expectations.

Bed Bath & Beyond reported earnings of $351 million, or $1.48 a share, for the three months ended Feb. 25. Sales rose 9.1% to $2.73 billion. Same-store sales rose 6.8% in the quarter.

Analysts were expecting profit of $1.33 a share on sales of $2.66 billion.
The company also forecast earnings of 79 to 83 cents a share for the fiscal first quarter ending in May; analysts forecast 82 cents a share.

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Tomahawk, WI 3/23/2012 (StreetBeat) – Nike (NKE), the sneaker maker, posted third-quarter profit ahead of consensus estimates.

Beaverton, Ore.-based Nike earned of $560 million, or $1.20 a share, on revenue of $5.85 billion for the quarter ended Feb. 29, beating the average earnings estimate of analysts of $1.17 a share on revenue of $5.82 billion.

Gross margin came in at 43.8% for the quarter, down from 45.8% a year earlier.

"Our relentless focus on innovation delivered powerful new products and services for athletes and consumers, and continues to drive value to our shareholders," said Mark Parker, president and CEO, in a statement. "The environment remains volatile, but I'm optimistic about the future. We're starting a great season of major sports events and we have a pipeline full of innovation to fuel growth over the long term."

Shares were up 0.5% to $111.50 in premarket trading on Friday.

KB Home (KBH), the homebuilder, said revenue for the quarter ended Feb. 29 totaled $254.6 million, much lower than analysts' views of $337.7 million.

KB Home reported a quarterly loss of $45.8 million, or 59 cents a share; analysts were expecting a loss of 24 cents.

The announcement was a huge disappointment given that analysts were expecting the company to blow past expectations. The company posted a profit in the November-ended quarter after three straight quarterly losses, leading some to believe it had seen a turnaround along with the broader housing market.

Shares were plunging 6.6% to $10.50 in premarket trading.

Darden Restaurants (DRI), the parent of Red Lobster and Olive Garden, reported third-quarter earnings of $1.25 a share, up from $1.08 a year earlier, and slightly above analysts' expectations of $1.24 a share.

Sales were $2.16 billion, beating the forecast $2.14 billion.

The restaurant group said that sales grew 4.1% compared to the period a year earlier at Red Lobster, Olive Garden and LongHorn Steakhouse amid favorable weather conditions, underlying business strength and deceleration in food cost inflation over the year.

Darden also announced a quarterly cash dividend of 43 cents a share, payable on May 1.

Shares were rising 0.4% to $52.01 before the bell.

US Airways (LCC), seeking support for a possible American Airlines merger, is discussing a takeover plan with some creditors of the bankrupt carrier and their advisers, people with knowledge of the talks told Bloomberg.

Executives have laid out details of US Airways' proposal for a combined airline to some members of the unsecured creditors committee and gotten a positive reception, the people told Bloomberg. The goal would be to complete a merger before AMR, American's parent, exits Chapter 11.

US Airways shares were up 0.4% to $7.36.

Micron Technology (MU), the chipmaker, posted a fiscal second-quarter loss of $224 million, or 23 cents share, on revenue of $2.07 billion.

Analysts were looking for a loss of 19 cents a share on revenue of $2.02 billion.

The stock was falling more 4.3% to $8.34.

Bank of America (BAC) has begun a pilot program that will offer some of its mortgage customers facing foreclosure a chance to stay in their homes by becoming renters instead of owners.

Launched this week, the pilot program -- "Mortgage to Lease" -- will be offered to less than 1,000 Bank of America customers in test markets in Arizona, Nevada and New York.

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Tomahawk, WI 9/23/2011 (PennyPayDay) – San Jose, Calif.-based networking chipmaker Cavium lowered its revenue outlook, citing weak enterprise and software services demand.

The company now expects a sequential decline in revenue for its fiscal third quarter of 4% to 6% from its second-quarter total of $71.6 million. That implies revenue ranging from $67.3 million to $68.7 million for the three months ending in September. The current average estimate of analysts polled by Thomson Reuters is for revenue of $73.4 million.

Shares were plummeting 12.7% to $27.24.

Silvercorp Metals was plunging 7.3% to $6.32 in premarket trading Friday ahead of the silver miner's annual meeting at 1 p.m. EDT. Shares have been tumbling amid what the company said have been attacks by "a group of well-organized and well-planned illegal short-sellers trying to profit by manipulating Silvercorp's share price with false and selective statements, fabrications and rumors" over the last two weeks.

Silvercorp said it has appointed an independent committee of its board to investigate the allegations.

Separately on Thursday, the company said it repurchased about $35 million worth of shares.

Nike sprinted past Wall Street's profit expectations for its fiscal first quarter as revenue grew 18% year over year, thanks to robust global demand.

The Beaverton, Ore.-based maker of athletic footwear and apparel reported earnings of $645 million, or $1.36 a share, with revenue totaling $6.08 billion. The performance was well ahead of the average estimate of analysts polled by Thomson Reuters for earnings of $1.21 a share in the period on revenue of $5.75 billion.

Shares were gaining 4.7% to $88.15.

Mining giants Rio Tinto and BHP Billiton were falling in premarket trading as global iron ore prices threaten their first, four-year drop since 1982, as supplies mount.

Rio Tinto shares were tumbling 3.2% to $44.58 and BHP Billiton was slumping 2.4% to $65.64.

Tibco Software posted non-GAAP earnings of $39.4 million, or 23 cents a share, on revenue of $229 million for the fiscal third quarter. The average estimate of analysts polled by Thomson Reuters was for a profit of 21 cents a share in the quarter on revenue of $220 million.

Strong growth in licensing revenue led to the solid upside profit surprise in the company's third quarter.

Shares were adding 2.3% to $21.45.

After two days of rumor and speculation, Hewlett-Packard unveiled Meg Whitman, the former head of eBay, as the company's new CEO, ending Leo Apotheker's brief but turbulent spell in the company's hot seat.

The No. 1 PC maker confirmed Apotheker's ouster and Whitman's appointment in a statement released after markets closed on Thursday.

HP shares were down 1.5% to $22.45.

McDonald's said it is returning even more cash to shareholders, boosting its dividend by 15%. The Dow component said its board has approved lifting its quarterly payout to 70 cents a share from 61 cents, payable on Dec. 15 to shareholders of record on Dec. 1.

The higher dividend, which will total about $700 million per quarter, represents a forward annual yield of 3.2% based on Thursday's closing price of $85.99.

Shares were down 0.3% to $85.75.

Homebuilder KB Home reported a third-quarter loss of 13 cents a share vs. the average analyst estimate of loss of 19 cents a share. Shares were unchanged at $5.72.

Cintas, the maker of specialized products and services to all types of businesses, reported first-quarter profit of 52 cents a share vs. the average analyst estimate of 47 cents a share.

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