Columbia's Mixed Bag

The first quarter is strong but the second quarter looks weak.
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Columbia Sportswear

(COLM) - Get Report

beat first-quarter targets Thursday but warned of weakening results in Europe.

The Portland, Ore., parka company made $19.5 million, or 52 cents a share, compared with the year-ago $21.3 million, or 52 cents a share. Sales rose to $260 million from $246 million a year earlier. Analysts were looking for a 44-cent profit on $249 million in sales.

"Improved gross margins of fall closeout products in the U.S. favorably impacted global gross margins, but contracting European margins and the unfavorable impact of recording the Montrail inventory at fair value in purchase accounting more than offset the domestic gross margin increase," said CEO Tim Boyle. "Gross margins in Europe decreased due to a challenging competitive environment, foreign currency hedge rates and costs associated with certain promotional campaigns."

The company said backlog rose 12% from a year ago but warned that it expects second-quarter earnings of just 3 cents a share, after 5 cents in stock compensation expense. Analysts were looking for a 12-cent profit.

The company said it expects to make $3.18 a share for the year, after 20 cents a share in stock compensation expense, in line with the $3.35 Thomson view.