Business briefs 1/25/07
Thursday, January 25, 2007
Netflix profit beats expectations
SAN FRANCISCO -- Netflix Inc.'s fourth-quarter profit surpassed analyst expectations as 654,000 more subscribers signed up for its online DVD rental service, but the customer growth lagged Blockbuster Inc.'s -- a development that underscores the intensifying competition between the rivals. Los Gatos-based Netflix said Wednesday that it earned $14.9 million, or 21 cents per share, during the final three months of 2006. That was down 61 percent from net income of $38.2 million, or 57 cents per share, in the prior year, but those results were pumped up by a $35 million windfall from taxes. The most recent quarter's profit easily exceeded the average estimate of 15 cents per share among analysts polled by Thomson Financial.
Holiday sales pump up eBay profits
SAN FRANCISCO -- EBay Inc. reported Wednesday that fourth-quarter profit increased 24 percent from the same period last year, trouncing Wall Street estimates and prompting executives to raise estimates for the current quarter. Thanks to scorching holiday sales -- particularly in eBay's traditional strongholds of the United States, United Kingdom and Germany -- the San Jose-based online auction company earned $349 million, or 25 cents per share, for the three months ended Dec. 31. It earned $279 million, or 20 cents per share in the year-ago period. EBay shares increased $1.38, or nearly 5 percent, to close Wednesday at $30 on the Nasdaq Stock Market before the earnings report was released. It jumped to $33.05, up an additional 10.2 percent, in after-market trading. Fourth-quarter revenue totaled $1.72 billion, up 29 percent from $1.33 billion in the year-ago period.
ConocoPhillips profits drop in fourth quarter
HOUSTON -- ConocoPhillips, the nation's third-largest oil company, said Wednesday its fourth-quarter profit fell 13 percent largely due to lower gas prices and reduced margins at its refining operations. The company -- the first of the major oil players to report fourth-quarter and full-year earnings -- also said it expects oil and gas production to be down slightly in the first quarter from the October-December period. Net income in the most-recent quarter dropped to $3.2 billion, or $1.91 per share, from $3.68 billion, or $2.61 per share, in the year-ago quarter. The recent quarter includes impairment charges of 17 cents per share. On average, analysts polled by Thomson Financial forecast earnings of $1.95 per share. Revenue declined 19 percent to $42.54 billion from $52.17 billion in the prior-year period.
Home Depot exec may earn $8.9 million
ATLANTA -- The Home Depot Inc.'s new chief executive could earn as much as $8.9 million in total compensation this year, the world's largest home improvement store chain said in a regulatory filing Wednesday. Frank Blake's compensation is smaller than the roughly $25.7 million a year on average that former chief executive Bob Nardelli was earning excluding stock options. Nardelli resigned earlier this month after six years at the helm of the Atlanta-based company amid a furor over his hefty pay and Home Depot's lagging stock price. He was replaced by Blake, who was Home Depot's vice chairman. Nardelli left with a severance package worth about $210 million. Home Depot said Wednesday that Blake's compensation arrangement does not provide for payment of severance upon termination. According to Wednesday's filing with the Securities and Exchange Commission, Blake will earn a base salary this year of $975,000.
Profits for McDonald's more than double
CHICAGO -- McDonald's Corp., the world's largest fast-food chain, said Wednesday that its fourth-quarter profit more than doubled, thanks in large part to the spinoff of a burrito chain and strong sales in Europe. The earnings were in line with preliminary results released last week but the stock slipped after some analysts said operating profits were below their expectations. The restaurant company earned $1.2 billion, or $1 a share, in the quarter ending Dec. 31. That was up from $608.5 million, or 48 cents a share, during the same period last year. McDonald's revenue climbed 11 percent to $5.6 billion, from $5.01 billion during the year-ago period. Even without the gain from the spinoff of its Chipotle chain, McDonald's said income from continuing operations climbed to $761.2 million, a 26 percent increase from $604.8 million last year.
Wage legislation stalls in Senate
WASHINGTON -- Democrats' promise of a quick increase in the minimum wage ran aground Wednesday in the Senate, where lawmakers are insisting it include new tax breaks for restaurants and other businesses that rely on low-pay workers. On a 54-43 vote, Democrats lost an effort to advance a House-passed bill that would lift the pay floor from $5.15 to $7.25 an hour without any accompanying tax cut. Opponents of the tax cut needed 60 votes to prevail. The vote sent a message to House Democrats and liberals in the Senate that only a hybrid tax and minimum wage package could succeed in the Senate. But any tax breaks in the bill would put the Senate on a collision course with the House, which is required by the Constitution to initiate tax measures.
-- From wire reports