Sysco profit rises 11% in its fiscal third quarter

AutoNation net doubles

Safeco earnings up 42%

April 29, 2003

Sysco Corp., the largest North American distributor of food to restaurants, hospitals and schools, said yesterday that fiscal third-quarter profit rose 11 percent, bolstered by cutting costs and by revenue from acquisitions.

Net income climbed to $168.4 million, or 26 cents a share, from $151.4 million, or 23 cents, in the quarter a year earlier. Sales in the three months that ended March 29 climbed 14 percent to $6.4 billion.

Sysco bought four companies in the past year, including food distributor Asian Foods Inc. and Colorado Boxed Beef Co., a meat-cutting business, adding 7.3 percent to sales in the quarter. Sysco also limited costs through a delivery routing system that reduced inaccurate orders.

The company has avoided accounting scandals facing rival U.S. Foodservice, the Columbia-based unit of Royal Ahold NV that improperly accounted for payments received from suppliers to promote products.

AutoNation Inc.

The largest U.S. retailer of new and used cars said first-quarter earnings more than doubled as the company benefited from a settlement with the Internal Revenue Service.

Net income rose to $185 million, or 63 cents a share, from $91.7 million, or 28 cents, in the corresponding quarter of 2002. Revenue declined 6.1 percent to $4.46 billion as car-buyers cut back on spending in Atlanta, Houston, Denver and San Francisco because of the weak U.S. economy and concerns about the war in Iraq, the company said.

Earnings in the quarter were boosted by $127.5 million, or 43 cents a share, from a settlement with the IRS related to the tax treatment of some employee benefits over the past 6 years.

In February, AutoNation forecast first-quarter profit of 28 cents to 30 cents a share. Excluding the benefits from the IRS settlement, the company earned $84.4 million, or 29 cents a share. The company bought back about 5 percent of its shares for $204.6 million.

Safeco Corp.

First-quarter earnings rose 42 percent as the insurer earned money from underwriting property and casualty policies for the first time in more than four years.

Net income increased to $90 million, or 65 cents a share, from $63.6 million, or 50 cents, in the year-ago quarter, Safeco said in a statement. Revenue rose 2.9 percent to $1.76 billion.

Profit excluding realized investment losses was $122.4 million, or 88 cents a share, higher than the 61-cent average estimate from analysts surveyed by Thomson First Call.

Safeco said property-casualty income excluding investment losses rose more than sevenfold to $133.8 million, before taxes. The company narrowed its underwriting loss in car insurance, its biggest product line, to $1.5 million from $20.3 million in the corresponding quarter of 2002. Homeowners' insurance swung to an underwriting profit of $19.5 million, compared with a loss of $18.2 million a year ago, as the company benefited from lower-than-expected weather and catastrophic losses.

Humana Inc.

One of the biggest operators of health plans said profit fell by a third in the first quarter because of costs from cutting jobs.

Net income dropped to $31.2 million, or 19 cents a share, from $46.8 million, or 28 cents, a year ago. Revenue rose 7.3 percent to $2.93 billion.

Humana is cutting personnel and medical costs after dropping some coverage to focus on more-profitable businesses such as plans it runs for the government and large U.S. employers. The company said in December that it will cut 2,300 jobs, or 17 percent of its work force.

Humana had one-time costs of $30.8 million in the first quarter, including a write-down for the value of buildings and equipment. Excluding these, the company said, profit would have been 31 cents a share, matching the average estimate of analysts.

Membership in Humana's health plans grew to 6.6 million people from 6.5 million in the comparable period of the previous year, when it had revenue of $2.9 billion, up from $2.72 billion.

Rohm & Haas Co.

The maker of Morton Salt and chemicals used in paint had a first-quarter profit of $74 million as sales of house paint and road salt rose.

Net income was 33 cents a share, compared with a loss of $694 million, or $3.13 a share, in the first three months of last year. Sales rose 17 percent to $1.61 billion from $1.38 billion.

Acquisitions and higher sales in all business segments boosted revenue, Rohm & Haas said. Increases in pension and health care costs and rising prices for natural gas and other materials used in making Rohm & Haas' chemical products held back profit, the company said.

In last year's first quarter, Rohm & Haas had accounting costs of $773 million, or $3.49 a share, for changes in the value of some assets. Excluding those costs, profit would have been $79 million, or 36 cents a share.

Bloomberg News and the Associated Press contributed to this article.

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