Oakley Posts 17% Drop in Quarterly Net Income

Sunglass designer Oakley Inc. said Wednesday its third-quarter net income fell 17% and warned that its fourth-quarter results will be below expectations as it struggles with a drop in orders from a major customer.

Oakley posted net income of $14.4 million, or 21 cents a share, down more than 17% from $17.4 million, or 25 cents a share, a year earlier. Sales rose 6.5% to $114 million.

In August, Oakley cut its earnings forecast to a range of 21 cents to 23 cents a share from 31 cents, after the Foothill Ranch company’s largest single customer, Sunglass Hut, slashed orders. Sunglass Hut was bought in April by Ray-Ban maker Luxottica Group SpA , which decided to stock the chain with its own products.

Oakley has moved to increase its products with other retailers.

Oakley’s stock fell 16.5%, or $2.31 a share, to $11.80, on the New York Stock Exchange. While Oakley said it believes it is making progress in replacing the lost Sunglass Hut business, the weakening worldwide economy prompted the company to warn that fourth-quarter earnings will be 9 cents a share, well below analysts’ expectations of 14 cents a share.