Quiksilver's Net Loss Narrows

Continuing operations ran a net loss of more than $13 million, but pro forma income beat consensus estimate.
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reported on Dec. 18, 2008, that its net loss narrowed during fourth-quarter fiscal 2008, gaining from the sale of its discontinued operations and higher sales.

Net loss fell to $955,000 or 1 cent per share from $110.93 million or 85 cents per share a year earlier. However, net loss from continuing operations stood at $13.82 million or 11 cents a share compared to a profit of $43.93 million or 34 cents a share in the last year's quarter, hurt by goodwill impairment charges of $55.40 million related to the company's business in the Asia/Pacific region. Pro forma income from continuing operations was $41.58 million or 32 cents a share, which beat the consensus estimate of 25 cents a share.

Quiksilver's revenue for fourth-quarter 2008 grew 3.3% to $606.90 million from $587.27 million a year ago, driven by a growth in the Americas and Asia/Pacific regions. Segment-wise, revenue from the Americas and Asia-Pacific increased 9.7% and 1.8% to $306.88 million and $82.57 million, respectively. However, Europe revenue dropped 3.7% to $216.35 million from $224.70 million.

In November 2008, Quicksilver completed the sale of the Rossignol Group and expects to recognize a noncash loss of around $150 million in first-quarter 2009. Meanwhile, it is also discussing with its European and Asia-Pacific banks to refinance its short-term debt, including uncommitted debt of $167 million, and a $72 million facility maturing in March 2009.

Revenue during 2008 gained 10.6% to $2.26 billion from $2.05 billion in 2007. However, the company reported a higher net loss of $226.27 million or $1.75 per share from $121.12 million or 93 cents per share, hurt by goodwill impairment charge and loss from discontinued operations.

Looking forward to first-quarter 2009, Quiksilver expects a loss of up to 10 cents per share, and anticipates sales decline to be in the low double-digits. For 2009, the company expects revenue to decline in the high single- to low double-digit range. Moreover, it reduced its FY09 capital expenditure budget to $60 million from $94 million in 2008.