Starbucks’ Profit Rises, Net Stakes Suffer

Starbucks Corp. said its operating earnings for the fiscal fourth quarter grew 35% to $43.8 million, or 22 cents a share, in line with forecasts, as revenue rose 22.5% to $582 million. But the gourmet coffee chain also racked up heavy losses in its Internet investments. The Seattle-based company took a $58.8-million pretax charge to write down Internet investments, making good on a warning that it could see further such losses when it wrote off $20.6 million from its stake in failed Living.com in August. Starbucks wrote down the majority of its stakes in Living.com, Kozmo.com, Cooking.com and online community developer Talk City Inc., whose stock price has fallen from a year high of $29 to just 50 cents. Including those losses, Starbucks’ profit was just 1 cent per share. Starbucks said it still expects to meet its earnings target of 90 to 92 cents a share for fiscal 2001. Shares in Seattle-based Starbucks fell $1.38 to $45.13 in after-hours trading.