Oakley Profit Disappoints Analysts; Stock Takes Dive

Oakley Inc.’s stock fell by $1 a share to $11 on Thursday in New York Stock Exchange trading following word that its first-quarter net profit had fallen below analysts’ estimates.

The upscale eyeglass manufacturer reported $500,000 in net income, or 1 cent per share, compared with $11 million, or 15 cents per share a year ago. Analysts had anticipated that the sunglass manufacturer would generate a profit of at least 3 cents per share.

First-quarter sales for the Irvine-based company tumbled to $34.4 million, down from $48.7 million in last year’s first three months.

Company officials blamed soft domestic sales for the noticeable drop. As reported earlier, Oakley’s sales in recent quarters have been hurt by flagging demand at Sunglass Hut, the company’s dominant retailer. Oakley began reducing shipments to Sunglass Hut late in 1996.

Link Newcomb, Oakley’s chief operating officer, described the quarter as “disappointing,” but said that sales are expected to return to healthier levels later in the year when the company revs up shipments of its new X Metal line, which the company started to produce recently.

Oakley also expects to enjoy a sales boost from new lines being developed to woo younger consumers and women.