3Com, Nike Report 2Q Earnings
Joe Bousquin
12/18/97 - 08:37 PM EST
Japan's Nikkei 225 has skidded more than 3% in early Friday trading. On these shores, there's a mixed bag of post-close news (earnings estimates from First Call): 3Com (COMS Quote) ruffled only a few feathers Thursday evening as it reported quarterly numbers that matched the warning it made earlier this month. The networker posted second-quarter revenue of $1.22 billion, off from the year-earlier $1.42 billion (calculated on a pro-forma basis). Profits were $15.1 million, or 4 cents per share, compared with the year-ago $176.3 million, or 50 cents. The results matched the 30-analyst consensus estimate. Shares of 3Com nosed slightly southward after hours; according to Reuters Instinet, a light-volume trade moved at 32 1/2 (compared with the closing price of 33 1/8) slightly before 6 p.m. EST. "Some optimists might have hoped for additional bullish prospects," said Bear Stearns analyst Eric Blachno after listening to the company's conference call. The report was "nothing earth-shattering," and Blachno does not expect to alter his current estimates or long-term buy rating on the stock. Blachno said that in mid-November he recommended that the company take its "strong medicine" and slow shipments to reduce bloated inventories. 3Com announced such a strategy two weeks later, nearly erasing profits, and is still trying to repair the problem. Bear Stearns has no underwriting relationship with 3Com. -- Kevin Petrie Nike (NKE Quote) reported second-quarter earnings of 48 cents per share, 7 cents short of the 18-analyst estimate and down from the year-ago 60 cents. The company also set a buyback of up to $1 billion worth of its shares. Nike is no stranger to earnings struggles, as TheStreet.com reported in a Sept. 17 story and a Sept. 19 follow-up. A Food and Drug Administration panel voted against approval of Chiron's (CHIR Quote) Depocyte drug for neoplastic meningitis. The drug was developed by DepoTech (DEPO Quote). Western Staff Services (WSTF Quote) reported fourth-quarter earnings of 50 cents per share, 5 cents higher than the four-analyst projection and up from the year-ago 40 cents. Manugistics (MANU Quote) reported third-quarter earnings of 15 cents per share, 2 cents better than the 10-analyst outlook and up from the year-ago 8 cents. Adobe Systems (ADBE Quote) reported fourth-quarter operating earnings of 56 cents per share, a penny ahead of the 15-analyst expectation and up from the year-ago 49 cents. Hartford Financial Services Group (HIG Quote) set a buyback of up to $1 billion worth of its shares. Autodesk (ADSK Quote) upped its share-buyback authorization by 9 million shares to a total of 11 million shares over the next two years. Bechtel Jacobs, a joint venture of Jacobs Engineering Group (JEC Quote) and Bechtel National, said it received a 5 1/2-year, $2.5 billion environmental-restoration contract from the Energy Department. Cylink (CYLK Quote) said it became the first hardware vendor approved by the Commerce Department to export 168-bit encryption without key recovery to Europe, specifically to European central banks. Great Plains Software (GPSI Quote) reported second-quarter earnings of 15 cents per share, 2 cents better than the two-analyst outlook and up from the year-ago 7 cents. Briggs & Stratton (BGG Quote) said it expects to report second-quarter earnings short of the four-analyst expectation of 67 cents per share. The company earned 58 cents a year earlier. Briggs & Stratton cited the impact of the strong U.S. dollar on sales in the European Union and a shift in the mix of engines it shipped in the second quarter. Universal Forest Products (UFPI Quote) said it expects to break even in the fourth quarter, missing the four-analyst estimate of 12 cents. That would have matched the year-ago figure. The company cited margin pressure in the manufactured housing truss business and declining lumber prices. Reptron (REPT Quote) said it expects to report fourth-quarter earnings of 6 cents to 10 cents per share, not the 29 cents called for in the four-analyst forecast. The company, which earned 36 cents a year earlier, cited an industry slowdown that restricted distribution sales growth. Ultrak (ULTK Quote) said it expects to report fourth-quarter operating earnings of 3 cents to 5 cents per share, missing the one-analyst estimate of 15 cents and the year-ago 19 cents. The company cited softer-than-expected sales and higher-than-expected expenses. Periphonics (PERI Quote) reported second-quarter earnings of 7 cents per share, 4 cents shy of the three-analyst view and down from the year-ago 22 cents. The company said it expects an improved growth rate in the second half of its fiscal year. Cherry (CHERA Quote) reported third-quarter earnings of 50 cents per share, 3 cents better than the lone analyst's expectation but down from the year-ago 58 cents. Gibraltar Steel (ROCK Quote) backed a fourth-quarter estimate range of 26 cents to 29 cents per share, compared with the five-analyst prediction of 28 cents versus the year-ago 33 cents. The company also backed the full-year 1998 estimate of $1.62. Merchant bank Castle Harlan agreed to buy the Tidewater Compression unit of Tidewater (TDW Quote) for $360 million. IBM (IBM Quote) and Storage Technology (STK Quote) said they reached an agreement with the Justice Department that ends an 18-month investigation and allows the companies to continue working together on disk storage products. Sherwin-Williams (SHW Quote) backed the 11-analyst fourth-quarter estimate of 26 cents per share versus the year-earlier 23 cents. Physicians Resource Group (PRG Quote) is facing a shareholder lawsuit that accuses the company of artificially inflating its stock price through misleading statements. CVB Financial (CVB Quote) set a 3-for-2 stock split. Penford (PENX Quote) said it would delay the spinoff of its Penwest Pharmaceuticals unit, citing market conditions.
