Guess Posts 78% Profit Decline, Issues Warning
Clothing designer and marketer Guess Inc. reported a 78% drop in second-quarter earnings Tuesday, as expected, and warned that third-quarter and full-year results will trail Wall Street estimates as slow sales continue to dog the fashion house.
Los Angeles-based Guess reported net income of $1.5 million, or 3 cents a diluted share, compared with $6.8 million, or 16 cents, a year earlier.
Revenue in its wholesale division fell 29% to $59.9 million from a year earlier, and retail sales declined 1.9% to $83.2 million.
The results were in line with the company’s previously announced expectations of 2 cents to 4 cents a share. Analysts expected a 3-cent per-share profit.
Guess forecast that its third- quarter and full-year earnings may be lower on slower sales. Third-quarter per-share profit will be 9 cents to 11 cents a share. Earnings for the year will be 39 cents to 43 cents.
Analysts’ estimates for the third quarter ranged from 11 cents to 19 cents a share. For the full-year 2001, estimates ranged from 40 cents to 56 cents.
Guess shares fell 14 cents to close at $8.33 on the New York Stock Exchange. Earnings were released after markets closed.
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Fluor Corp., the largest publicly traded engineering and construction company, reported flat earnings for the second quarter and warned third-quarter earnings will miss analysts’ estimates, partly because of slackened demand from telecommunications companies.
The Aliso Viejo company reported earnings of $36.1 million, or 45 cents a share, excluding the effect of compensation charges tied to stock prices. Net income was $34.2 million, or 43 cents a share.
Because of a change in the company’s calendar year, Fluor said, the closest period for comparison is the quarter ended July 31, 2000, when earnings were $33.3 million, or 44 cents a share. Analysts had estimated earnings of 45 cents.
Third-quarter earnings will be about 50 cents a share, spokesman Keith Karpe said. Analysts expected Fluor to earn 56 cents a share.
Fluor’s projects include building base stations for wireless phone networks and laying fiber-optic cable for telecommunications companies. Demand for fiber-optic cable has dropped this year because of overdevelopment.
Fluor said it plans to focus on more attractive markets, such as energy.
For the year, Fluor said it expects earnings of $1.85 to $1.90 a share, excluding stock-based pay, down from the company’s earlier forecast of $2 a share.
Fluor shares were up 74 cents, closing at $39.53 on the New York Stock Exchange.
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Musical instrument retailer Guitar Center Inc. reported second-quarter net income of $4.1 million, or 18 cents a share, even with the same quarter last year.
The Westlake Village-based company said sales rose 19.5% to $213.4 million.
Its results reflected the effect of one-time costs of 1 cent to 2 cents a share because of issues in consolidating some warehouse operations, the company said.
Guitar Center also said it expects third-quarter net income of 14 cents to 16 cents a share--in line with analysts’ estimates.
Shares of Guitar Center, with 91 U.S. stores, fell 32 cents to close at $15.78 on Nasdaq. Its earnings were released after markets closed.
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