NBC and GE Capital Boost Profit at GE
General Electric on Thursday said fourth-quarter profit rose 14% as the ratings dominance of its NBC broadcasting unit continued to produce strong advertising revenue and a flurry of acquisitions by its GE Capital finance unit helped boost returns.
Net income at the New York-based company rose to a quarterly record of $2.35 billion, or 72 cents a basic share, from $2.07 billion, or 63 cents, in the year-ago quarter. Revenue rose 16% to $26.69 billion from $22.99 billion.
(U.S. companies now report earnings two ways: diluted, which reflects options, warrants and other securities convertible into common stock, and basic, which excludes them.)
GE, which posted a $1.5-billion after-tax gain from the sale of Lockheed Martin preferred stock, was expected to earn 71 cents a basic share.
GE shares fell 38 cents to close at $75.19 on the New York Stock Exchange.
Fourth-quarter profit was led by GE Capital, the NBC broadcasting unit and GE Aircraft Engines. NBC helped lead profit because popular shows like “ER” and “Friends” attracted the young audiences that advertisers pay the most to reach.
Oil: Chevron and Texaco reported big earnings increases while Amoco posted a 10% decline. Lower sales for all three companies left investors worried that continued price softness would affect first-quarter earnings this year.
San Francisco-based Chevron earned $929 million, or $1.41 per diluted share, in the fourth quarter, doubling the $464 million, or 71 cents per diluted share, it earned in the same quarter in 1996. Earnings included a gain of $122 million.
Also managing a strong earnings increase despite lower oil prices was Texaco. The White Plains, N.Y.-based company earned $623 million, or $1.12 per diluted share, a 22% increase over the $509 million, or 93 cents, it earned a year ago.
Chicago-based Amoco, meanwhile, said its fourth-quarter earnings fell 10%, hurt by the drop in crude oil prices and volatile Asian markets. For the three months ended Dec. 31, net income fell to $789 million, or $1.62 a diluted share, from $871 million, or $1.73, a year ago.
Oil services provider Schlumberger said its fourth-quarter net income rose 46% to $373 million, or 72 cents a diluted share, compared with $255 million, or 50 cents, a year ago.
At a Glance:
Bristol-Myers Squibb said fourth-quarter profit rose 12% as sales increased for several of its drugs, including ones that treat cancer, reduce cholesterol and lower high blood pressure. Net income rose to $802 million, or 78 cents a diluted share, from $716 million, or 70 cents, a year earlier. The company was expected to earn 80 cents a diluted share.
Amgen said fourth-quarter earnings rose 1% as a cut in Medicare payments for one of its two major drugs reduced sales in the U.S., and the dollar’s appreciation hurt overseas sales. Net income rose to $179.7 million, or 67 cents a diluted share, from $178 million, or 64 cents, a year earlier.
Genentech said fourth-quarter earnings rose fivefold, beating estimates, as the company signed licensing alliances with two drug companies. Net income rose to $41.5 million, or 33 cents a diluted share, from $7.5 million, or 6 cents, a year earlier.
Union Pacific reported a fourth-quarter loss that was far worse than expected as it continued to wrestle with the biggest U.S. rail logjam in more than 25 years, causing rising costs and lost business. The Dallas-based parent of the nation’s largest railroad had a loss before charges of $99 million, or 41 cents a diluted share, compared with net income of $229 million, or 93 cents, in the year-ago period.
Southwest Airlines fourth-quarter profit almost tripled because of higher fares and cheaper jet fuel. The Dallas-based airline said net income rose to $80.6 million, or 35 cents a diluted share, from $28.2 million, or 13 cents, in the year-earlier period. Per-share earnings beat the average estimate of 27 cents from analysts. Southwest is the latest U.S. airline to report better-than-expected earnings, as the industry finishes its third year of record profits.
Sears, Roebuck said fourth-quarter earnings dropped and warned that fiscal first-quarter profit will decline substantially, because more customers are falling behind on credit card payments. Earnings before a gain fell 9.7% to $512 million, or $1.29 a diluted share, from $567 million, or $1.42, a year ago. The per-share results were in line with expectations, according to analysts. Sears said its basic earnings fell to $1.37 a share from $1.44. Chairman Arthur Martinez said Sears’ credit card problems will linger throughout 1998, limiting earnings growth to the mid-single digits.
Bankers Trust New York said fourth-quarter earnings rose 13%, beating estimates, as net income from loans and investment banking outpaced a decline in trading. The nation’s seventh-largest bank said net income rose to $207 million, or $1.82 a diluted share, from $184 million, or $1.59, a year ago. Analysts expected the bank to earn $1.72 a diluted share.
Advanta fourth-quarter earnings fell 3.5% as the company charged off more credit card loans and increased the amount of money it set aside for bad loans. The lender said net income fell to $43.6 million, or 95 cents a diluted share, from $45.2 million, or $1, a year ago.
UnionBanCal fourth-quarter earnings rose 55% to $92.4 million, or $1.58 a diluted share, from $59.8 million, or 97 cents, a year earlier.
Sara Lee said its fiscal second-quarter profit rose 9.1% before a restructuring charge that resulted in a loss of $1.28 billion. Profit before the charge rose to $346 million, or 69 cents a diluted share, from $317 million, or 62 cents, a year earlier.
Amazon.com said its fourth-quarter loss widened, though the online bookstore beat analysts’ expectations by 5 cents and its sales climbed. Amazon said it lost $9.3 million, or 39 cents a basic share, in the quarter, compared with $2.2 million, or 10 cents a share, a year earlier. . . . Excite said its fourth-quarter loss narrowed, beating analysts’ expectations, as the Internet directory increased its advertising revenue and broadened its audience. Its loss before charges narrowed to $3.65 million, or 22 cents a basic share, from a loss before charges of $8.26 million, or 69 cents, a year ago. . . . Mountain View-based Silicon Graphics reported a fiscal second-quarter loss of $31 million after taking a charge, or 17 cents per basic share, compared with a loss of $13 million, or 7 cents, a year ago.
McDonald’s fourth-quarter profit was little changed, meeting analysts’ expectations, as the world’s largest fast-food company confronted troubled economies overseas and competition at home. McDonald’s net income rose to $410.9 million, or 58 cents a diluted share, from $410 million, or 57 cents, in the year-earlier quarter. McDonald’s basic earnings rose to 59 cents from 58 cents in the year-ago period.
Kroger said fourth-quarter profit rose 17% to $147.1 million before a charge, or 56 cents a diluted share, from $125.5 million, or 48 cents a year ago.
BellSouth said fourth-quarter profit rose 13% before gains and charges, to $715 million, or 72 cents a diluted share, from $633 million, or 64 cents, a year ago.
USX-US Steel Group said fourth-quarter profit rose 11%, exceeding estimates, to $141 million, or $1.52 a diluted share, compared with $127 million, or $1.36, a year ago.
United Technologies said fourth-quarter profit rose 21% to $244 million, or 97 cents a diluted share, up from profit of $202 million, or 78 cents, in the year-ago period, excluding an accounting charge.
Clorox said fiscal second-quarter profit rose almost 13% on increased revenue from its Brita water filters and home cleaning products. Net income rose to $49.5 million, or 47 cents a diluted share, for the quarter ended Dec. 31., from $43.9 million, or 42 cents, a year ago.
Case’s fourth-quarter earnings rose 21%, topping expectations, to $123 million, or $1.56 a diluted share after payment of preferred dividends, from $102 million, or $1.29 a share, a year ago.
North Face reported fourth-quarter net income of $2.1 million, or 18 cents per basic share, compared with $1.3 million, or 12 cents, a year ago.
R.R. Donnelly & Sons said its fourth-quarter profit rose 17% to $88 million, or 60 cents a basic share, from $75 million, or 51 cents, in the year-ago quarter.
