More Profit Bombs Fall on Shareholders
Earnings trackers on Wall Street say there’s still no reason to think third-quarter corporate results overall will be anything but stellar, but you wouldn’t know it from the number of bombs dropping.
Oil field services giant Halliburton Co. saw its shares plunge $5.25 to $34.50 on Tuesday on the New York Stock Exchange after the company warned late Monday that earnings will be in the range of 11 to 13 cents a share in the quarter, down from analysts’ consensus estimate of about 19 cents.
Despite higher oil prices, demand for Halliburton’s drilling-related equipment and services hasn’t risen as expected, analysts said.
Two other warnings also resulted in deeply depressed stocks:
* Shares of Concur Technologies Inc., a maker of software to manage corporate personnel and business records, plunged $20.06 to $12.81 on Nasdaq after the firm said fiscal fourth-quarter revenue could fall 30% short of estimates.
Concur, whose shares hit $59.25 this year, blamed unexpected delays in closing some orders in the quarter ended Sept. 30. It now expects total revenue of $8.6 million to $9.2 million. Analysts were expecting revenue of at least $12.3 million.
Concur, based not far from software titan Microsoft in Redmond, Wash., is suffering because its existing software products aren’t being upgraded fast enough, analysts said. In addition, its purchase of closely held Seeker Software has given it new products to sell, but that is apparently slowing clients’ purchase decisions.
* Westlake Village-based athletic shoe and clothing company K-Swiss Inc. didn’t have a third-quarter earnings warning Tuesday. In fact, just the opposite: The firm said it expects record earnings of between 70 and 80 cents a share in the quarter ended Sept. 30.
But K-Swiss also said its order rates from retailers are declining. Though orders for the fourth quarter are up 44%, those for the following quarter are down 21%, it said.
That drove its formerly high-flying stock down $7.81 to $18.75 on Nasdaq.
U.S. retailers have been cautious about adding shoe inventory since Just For Feet Inc., the No. 2 athletic-shoe seller, said it’s cutting prices and returning orders to get rid of more than $50 million in excess products.
As a result, demand for K-Swiss’ new training shoe and other footwear has been lower than expected, analysts said.
“Retailers right now are gun-shy,” said analyst John Shanley at First Security Van Kasper. “Retailers aren’t getting into this [K-Swiss training] line until it has had some exposure.”
Analyst Margaret Mager at Goldman, Sachs & Co. lowered her rating on K-Swiss to “market outperform” from “trading buy.”
“They’re still doing really strong business in the top athletic-shoe” stores, said Allison Boswell, the publisher of the Boswell Report, which tracks shoe sales.
However, the company also faces more difficult comparisons against its high sales-growth rates in the last year, she said.
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Losing Its Footing
Shares of athletic shoemaker K-Swiss were hammered Tuesday on news of slower orders. The stock had reached nearly $60 in May as sales soared. Weekly closes and latest on Nasdaq: Tuesday: $18.75, down $7.81
