Oakley Sees 42% Decline in Earnings

Oakley Inc., the maker of sunglasses worn perhaps most famously by four-time Tour de France champion Lance Armstrong, said Wednesday that first-quarter earnings declined 42% as sales of sunglasses fell. But the company also said profit was better than expected, and shares rose as much as 15% on that news.

Net income for the first quarter fell to $3.21 million, or 5 cents a share, from $5.56 million, or 8 cents, a year earlier. Sales increased 1.5% to $111.2 million from $109.6 million, Oakley said.

Sales of sunglasses fell 11% in the period, as shoppers curbed spending because of snowstorms, concerns about the economy and the war with Iraq. The company also makes clothing, footwear and watches.

Foothill Ranch-based Oakley said first-quarter earnings were stronger than expected.

In February, the company said it wouldn’t reaffirm an earlier forecast for the first quarter, as results would depend on the success of a new line of sunglasses introduced last month. March usually accounts for 40% of the sales of sunglasses in the period.

The company now expects profit for the year to be at the high end of its previous forecast for 55 cents to 60 cents a share.

Shares of Oakley rose $1.38 to $9.91 on the New York Stock Exchange. They have declined 49% in the last year.