Xerox posts 1Q loss of 9 cents a share

WellPoint's profit jumps

Goodyear hurt by costs

Sara Lee is up 6.6%

April 25, 2002|By BLOOMBERG NEWS

Xerox Corp., whose sales have dropped eight quarters in a row, had a first-quarter loss because of costs to depart the inkjet printer business, job cuts and a decline in demand for color copiers.

The loss was $64 million, or 9 cents a share, compared with net income of $202 million, or 25 cents, a year earlier. Xerox said the figures are preliminary because it's restating results for the past five years as part of a settlement of allegations that it inflated revenue to bolster earnings. Sales dropped 12 percent to $3.7 billion, said spokeswoman Christa Carone.

Excluding certain costs, including those related to job cuts and currency losses, Xerox said profit would have been $53 million, or 7 cents. On that basis, analysts surveyed by Thomson Financial/First Call expected a loss of 1 cent a share.

The world's largest copier maker cut its work force by 4,300 employees, or 5.4 percent, in the first quarter.

Xerox agreed two weeks ago to pay a record $10 million fine to the Securities and Exchange Commission to settle allegations that it prematurely recorded $3 billion in revenue and $1.5 billion in pretax earnings.

WellPoint Health Networks

Wellpoint, the California insurer that has offered to buy Owings Mills-based CareFirst BlueCross BlueShield for $1.3 billion, said first-quarter profit rose 46 percent, beating estimates, as the company added customers.

Net income rose to $141.1 million, or 97 cents a share, from $96.5 million, or 74 cents, a year earlier, the company said. Revenue rose 51 percent to $3.94 billion from $2.62 billion as acquisitions brought the company new customers.

The health insurer had 13 million customers at the end of the quarter, up from 10.1 million a year earlier, as WellPoint added members in California and bought St. Louis-based Right- Choice Managed Care Inc.

Goodyear Tire & Rubber

North America's largest tire maker said its first-quarter loss widened because of costs related to production cutbacks and the closing of a large retail customer. The loss rose to $63.2 million, or 39 cents a share, from $46.7 million, or 30 cents, a year earlier. Sales fell 3 percent to $3.31 billion from $3.41 billion, Goodyear said.

The loss comes as Goodyear loses market share to Cooper Tire & Rubber Co., whose first-quarter profit and sales rose more than expected as automakers made more vehicles. Goodyear was hurt by the closure of Penske Automotive Centers and costs to scale back production as sales fell for the fourth time in five quarters.

"After three years of restructuring, they should be showing more progress than this," said Susan Cross, an analyst with Wilmington Trust Corp., which manages about $25 billion and has sold its Goodyear shares. "Operationally they need more work."

The company was expected to have a loss of 32 cents, the average estimate of analysts surveyed by Thomson Financial/First Call. Goodyear has had losses in three of the past five quarters.

Sara Lee Corp.

Sara Lee said fiscal third-quarter earnings rose 6.6 percent as sales of its pies, breads and cakes rose and an accounting change reduced acquisition-related costs. The company lowered its full-year forecast. Net income at the maker of Hanes underwear and Jimmy Dean meats met estimates, rising to $257 million, or 31 cents a share, from $241 million, or 28 cents, a year earlier. Sales in the quarter ended March 31 rose 3.9 percent to $4.2 billion from $4.04 billion, the company said in a statement.

Blockbuster Inc.

The largest video-store chain reported a $1.75 billion first-quarter loss because of investment declines. Revenue increased 1.4 percent on increased sales of used DVDs, VHS tapes and games.

The loss, $9.72 a share, compared with net income of $4.7 million, or 3 cents, a year earlier. Sales rose to $1.33 billion from $1.31 billion, the Dallas-based company said in a statement.

A new accounting rule forces companies to periodically review the value of acquisitions and record expenses if they've fallen. That resulted in $1.82 billion in costs in the recent quarter, Blockbuster said.

Excluding those costs, the company said, it would have earned $66 million, or 37 cents a share, more than analysts' forecasts.

Knight Ridder Inc.

The second-biggest U.S. newspaper publisher reports that its first-quarter profit rose 27 percent as it used lower labor and newsprint costs to compensate for a decline in advertising.

Net income rose to $51.8 million, or 60 cents a share, from $40.7 million, or 47 cents, a year earlier, the company said. Sales slipped 7.8 percent to $678.2 million.

Operating costs fell 10 percent because of cheaper newsprint, job cuts and a change in the way the company accounts for acquisition-related expenses. Ad sales dropped 9.3 percent, though that was an improvement from the fourth quarter's 17 percent decline.

Norfolk Southern Corp.

The fourth-largest U.S. railroad's first-quarter profit rose a less-than-expected 16 percent.

Net income climbed to $86 million, or 22 cents a share, from $74 million, or 19 cents, in the last year's first quarter, a spokeswoman said.

The earlier period included a gain of $13 million, or 3 cents, related to the 1998 sale of moving company North American Van Lines. Sales fell 2.7 percent to $1.5 billion from $1.54 billion.

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