Earnings roundup: IBM beats estimates; Gannett doubles dividend, Halliburton rides surge in energy
IBM raised its income guidance for the year on Monday as earnings in the latest quarter increased 8 percent because of growth in all three of its major product categories.
SAN FRANCISCO — IBM raised its income guidance for the year on Monday as earnings in the latest quarter increased 8 percent because of growth in all three of its major product categories.
The results show the strength of the 100-year-old company's efforts to link its mainframes and other computing hardware with its newer businesses, software and services. Those two categories bring in the bulk of IBM's income.
Signings of new contracts for services increased — a welcome sign for Wall Street after a decline last quarter.
But the company faces questions about whether its profit increases are sustainable. Some analysts worry about increased competition, specifically in outsourcing, the biggest part of IBM's services business.
Net income was $3.66 billion, or $3 per share, in the second quarter compared with $3.39 billion, or $2.61 per share, a year ago. Excluding one-time items, IBM earned $3.09 per share, ahead of the $3.02 per share analysts expected.
Revenue increased 12 percent to $26.7 billion, ahead of the $25.4 billion analyst estimate.
Guidance for 2011 calls for at least $13.25 per share, excluding items, up from the previous estimate of $13.15 per share.
Gannett profit drops,
Increases in digital and broadcast revenue were not enough to make up for the ongoing decline in Gannett's newspaper business, leading the publisher of USA Today to report a more than 22 percent drop in its second-quarter net income.
Still, the nation's largest newspaper publisher, with more than 80 dailies, said its results are showing improvement. To show confidence in its business prospects, Gannett said Monday that it is resuming share buybacks and doubled its quarterly dividend to 8 cents from 4 cents. The company had cut its dividend sharply — and for the first time ever — from 40 cents in early 2009.
Gannett said that its net income fell to $151.5 million, or 62 cents per share, in the quarter ended June 26. That's down from $195.5 million, or 81 cents per share, at the same time last year.
Excluding one-time items, Gannett earned 58 cents per share. On this basis analysts polled by FactSet had expected adjusted earnings of 57 cents a share.
Revenue slipped 2 percent to $1.33 billion, close to the $1.34 billion that analysts were expecting.
Gannett said its companywide digital revenue rose nearly 13 percent compared with a year earlier, to $276.2 million. But its publishing division's advertising revenue, which counts both print and digital and makes up about half of the company's total, fell nearly 7 percent to $646.9 million. Print advertising revenue has been shrinking at most major newspaper publishers as advertisers turn to free or cheaper alternatives online.
surge in energy
Halliburton is making the most out of a boom in North American oil and natural-gas drilling. Its profit rose 54 percent in the second quarter, and revenue set a company record for the period.
The oil-services company on Monday reported net income of $739 million, or 80 cents per share, for the three months ended June 30. That compares with $480 million, or 53 cents per share, for the same part of 2010. Revenue increased 35.2 percent to $5.94 billion.
Oil prices hit three-year highs in May and oil companies scoured the planet for untapped fields. Many focused on North America's vast underground rock formations, which are rich in oil and gas. Halliburton specializes in tapping those formations, and the surge in activity has boosted its financial results so far this year.
help boost Hasbro
Talking cars aren't just big hits in movie theaters this summer, but in toy aisles as well.
Strong demand for merchandise from "Transformers" Dark of the Moon" helped boost Hasbro second quarter revenue up 23 percent, the toy maker said Monday. The news comes after Hasbro's chief rival Mattel said Friday that it's "Cars 2" toys were big sellers.
Toys tied into movies tend to do well for toy makers since they benefit from movie-studio promotion and sales to collectors. This summer has seen a bumper crop of movies that have strong tie ins.
In addition to sales of Transformers, other toys in Hasbro's boys division, such as Beyblade, a popular spinning top game, were strong. Sales of boys' toys rose 96 percent to $460.4 million. Girls' toys were weaker, down 11 percent to $119.1 million.
Overall, Hasbro's net income for the three months ending June 26 rose to $58.1 million, or 42 cents per share, from $43.6 million, or 29 cents per share, a year ago.
Revenue rose 23 percent to $908.5 million from $737.8 million. That beat Wall Street expectations of $848.8 million.
Wynn Resorts says stronger gambling business in both Las Vegas and Asia helped more than double its second-quarter net income.
The casino operator said after the market closed Monday that it earned $122 million, or 97 cents per share, for the quarter. That's up from $52.4 million, or 42 cents per share, in the same quarter last year. Wynn's revenue rose from $1.03 billion to $1.37 billion.
After adjusting for a charitable contribution and other one-time items, the company earned $1.60 per share versus 52 cents per share last year. That's much higher than analysts' average forecast for adjusted earnings of $1.02 per share on revenue of $1.26 billion.
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