CALIFORNIA EARNINGS
Times Staff and Wire Reports
Trendy shoemaker Skechers USA Inc. on Thursday reported a sharp decline in third-quarter earnings and warned of flat sales through the first half of next year. The news sent Skechers stock tumbling 14%.
“We’re planning total sales flat for the first half of 2002,” Michael Greenberg, president of the Manhattan Beach-based shoemaker, told analysts in a conference call. He also said he expects the fourth quarter to be hurt by the slowdown in consumer spending.
Skechers shares dropped $1.75 to close at $10.50, on the New York Stock Exchange.
The stock is off about 32% for the year, compared with an 11.6% decline in shares of industry leader Nike Inc .
Skechers declined to give guidance on future earnings. But when one analyst asked if $1.62 a share for 2002 was achievable, Greenberg said yes.
The consensus forecast of analysts surveyed by Thomson Financial/First Call is $1.73. But estimates are expected to be cut.
“We will be lowering our estimates for both the fourth quarter and next year,” said Tucker Anthony analyst Steve Richter. “It’s a pretty tough environment out there for all brands, and Skechers is no exception.”
To help it weather the economic slowdown, Skechers plans to cut its work force of 1,700 by 5%, scale back production, reduce advertising and open only eight stores in 2002, down from 28 this year.
Taken together, the cost-cutting steps are expected to reduce expenses by at least $25 million.
For the third quarter, Skechers reported net income of $11.4 million, or 30 cents a share, down 25% from $15.3 million, or 40 cents a share, in the year-ago period, even though sales jumped 40% to $288 million.
At a Glance:
Other California company earnings, excluding one-time gains and charges unless noted:
* Corinthian Colleges Inc. the Santa Ana operator of 56 private colleges, said its first-quarter net income jumped 48% to $6.5 million, or 29 cents a share, from $4.4 million, or 21 cents a share a year earlier. Revenue advanced 42% to a record $73.7 million.
* Deckers Outdoor Corp. reported a net operating loss of $822,000, or 9 cents a share, contrasted with a loss of $395,000, or 4 cents a share, in the same period last year. Sales for the Goleta-based footwear manufacturer of such brands as Teva and Ugg were $14 million, down 27% from $19.2 million a year ago.
* Edwards Lifesciences Corp., an Irvine maker of products and technologies to treat advanced cardiovascular disease, said third-quarter net income rose 5% to $14.5 million, or 24 cents a share, from $13.8 million, or 23 cents a share, for the year-earlier period. Sales were down 20% to $147.8 million.
* First American Corp., a Santa Ana provider of business information and related products and services, said operating net income for the third quarter rose 86% to $45.5 million, or 60 cents a share, from $24.4 million, or 37 cents a share, for the same quarter of 2000. Revenue advanced 31% to $983 million from $750.3 million.
* Franklin Resources Inc. reported fourth-quarter net income of $83.9 million, or 32 cents a share, down from $140.8 million, or 58 cents, a year earlier. Revenue for the San Mateo mutual fund company rose 2% to $603.9 million.
* Gilead Sciences Inc. reported its net loss widened to $25.2 million, or 26 cents a share, from $17.4 million, or 19 cents, a year earlier. Revenue at the Foster City-based biotechnology company was $50.9 million, up 13% from $45.2 million a year ago.
