Among other items: 3M reported a 16.3 percent increase in fourth-quarter profits yesterday, meeting the expectations of analysts; Wells Fargo said its fourth-quarter profit improved 10 percent despite a slowdown in its once-booming home-mortgage business; and Motorola rode strong sales of its 20 new cellphones to a 34 percent increase in fourth-quarter profits.
IBM topped fourth-quarter expectations by a healthy margin, with strong overseas sales and a weak dollar helping to generate a profit of $3.04 billion.
The profit, which amounted to $1.80 per share, was up sharply from a year ago, when IBM posted a net income of $2.71 billion or $1.55 a share for the final three months of 2003.
Fourth-quarter revenue rose 7 percent to $27.67 billion compared with the year-ago tally of $25.91 billion. About 4 percentage points of the gain were driven by the rising value of the euro and other currencies against the dollar — which makes U.S. products less expensive overseas and foreign sales more valuable when converted back to dollars.
Both the profit and revenue figures exceeded Wall Street forecasts. Analysts had expected a fourth-quarter profit of $1.76 per share with sales of $27.5 billion, according to a survey by Thomson Financial.
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Shares of IBM, one of the 30 Dow industrial stocks, rose 80 cents to $94.90 in advance of the report, which was released after the close of yesterday’s trading. In after-hours trading, the stock was up 15 cents.
Expectations are met both for quarter, year
3M, which makes consumer staples like Scotch tape as well as health-care products, reported a 16.3 percent increase in fourth-quarter profits yesterday, meeting the expectations of analysts.
3M said it earned $720 million, or 91 cents per share, for the three months ended Dec. 31, up from $619 million, or 77 cents a share, a year earlier.
The results met the forecasts of analysts surveyed by Thomson Financial, which had been lowered from 92 cents per share in October after 3M warned it would fall short.
Sales rose 7.9 percent to $5.1 billion, slightly better than analyst estimates. That’s up from $4.7 billion during the same quarter last year.
Shares of 3M, a Dow component, fell $1.95, or 2.3 percent, to close at $82.02 yesterday, up from a 52-week low of $73.31 in mid-October.
Bank of America
Post-acquisition earnings up sharply
Bank of America, the nation’s third biggest financial institution following its acquisition of FleetBoston, reported sharply higher earnings yesterday that matched Wall Street’s expectations for the fourth quarter.
Bank of America, based in Charlotte, N.C., said it earned $3.85 billion, or 94 cents a share, in the October-December period compared with net income of $2.73 billion, or 92 cents a share, in the same quarter in 2003.
Its revenue totaled $13.9 billion, up 42 percent from last year, as FleetBoston’s impact was buoyed by solid returns in Bank of America’s asset liability management business and consumer loan and deposit growth.
Its results matched expectations of analysts surveyed by Thomson Financial.
Shares in Bank of America rose 84 cents, or 1.9 percent, to close at $45.73 yesterday, approaching its 52-week high of $47.47 set in November.
10 percent increase despite slowdown
Wells Fargo said its fourth-quarter profit improved 10 percent despite a slowdown in its once-booming home-mortgage business. Its results narrowly missed expectations.
San Francisco-based Wells said its fourth-quarter profit rose to $1.79 billion, or $1.04 per share, in the October-December period compared with $1.62 billion, or 95 cents per share, a year earlier.
The latest earnings were 2 cents a share below the $1.06 estimate of industry analysts.
Still, investors and analysts gave Wells the benefit of the doubt. Its earnings were shaved 2 cents per share because the bank rewarded its employees for 2004’s gains by distributing $44 million in company stock to their 401(k) retirement accounts.
Wells Fargo shares rose 77 cents, or 1.3 percent, to close at $61.46 yesterday. Its shares hit a 52-week high of $64.04 in early December.
Boom in online ads fuels quarterly surge
Fourth-quarter profit of Internet giant Yahoo! nearly tripled and easily beat Wall Street expectations, reflecting a worldwide boom in online advertising and the addition of some 800,000 new paying customers.
The e-commerce giant, which operates the world’s most popular Internet destination, said yesterday it earned $373 million, or 25 cents per share, for the three months ended Dec. 31. Excluding profits from the sale of some investments, the company earned $187 million, or 13 cents per share, up 149 percent from $75 million or 5 cents per share in the same quarter of 2003.
Analysts expected the popular Internet portal to earn 11 cents per share.
Revenue for the fourth quarter totaled $1.078 billion, a 62 percent increase from 2003.
Yahoo earned $840 million, or 58 cents per share, for all of 2004. Excluding a windfall from selling stock in Google and other one-time profits, Yahoo earned $526 million, or 36 cents per share, compared to $238 million, or 18 cents per share in 2003.
Annual revenue was $3.575 billion, a 120 percent surge from 2003. After subtracting traffic acquisition costs, sales were $2.6 billion, a 77 percent increase from 2003.
Yahoo shares rose 48 cents to close yesterday at $37.18, and climbed another 60 cents in extended trading.
New cellphones push profits up 34 percent
Motorola rode strong sales of its 20 new cellphones to a 34 percent increase in fourth-quarter profits, capping a resurgent year.
Both earnings and sales reported yesterday by the world’s second-largest handset maker behind Nokia easily outpaced Wall Street’s expectations.
Excluding results from discontinued operations, earnings were 28 cents per share. That was 4 cents better than the consensus estimate of analysts surveyed by Thomson Financial.
Revenues rose 27 percent to $8.84 billion, easily topping the $8.46 billion predicted by analysts. A year earlier, revenues were $6.94 billion.
Motorola forecast first-quarter sales of $7.5 billion to $7.9 billion, up from $7.4 billion a year ago and in line with analysts’ estimate of $7.58 billion. It estimated earnings in the range of 17 cents to 20 cents per share; analysts have been expecting 20 cents.
For the full year, Motorola had a net profit of $1.54 billion, or 64 cents a share, up 72 percent from $893 million, or 38 cents a share, a year earlier. Revenues climbed 35 percent to $31.3 billion from $23.2 billion.
Motorola shares were down 3.3 percent in after-hours trading after closing up 40 cents, or 2.3 percent, at $17.43. The stock is slightly above the midpoint of its 52-week trading range.
Quarterly profit plummets 64 percent
Charles Schwab Corp.’s fourth-quarter profit dropped 64 percent, reflecting the toll of the latest reorganization aimed at reinvigorating the long-slumping stock brokerage.
The San Francisco-based company said yesterday that it earned $53 million, or 4 cents per share, during the three months ended in December. That contrasted with net income of $148 million, or 11 cents per share, during the same 2003 period.
Revenue for the period totaled $1.06 billion, unchanged from the prior year.
Schwab absorbed $111 million in restructuring charges during the quarter as the company continued to jettison workers to cuts costs so it can afford to lower its brokerage commissions and other fees.
If not for the fourth-quarter charges, Schwab said it would have earned 12 cents per share. That figure was a penny above the mean estimate among analysts surveyed by Thomson Financial.
Shares of Charles Schwab rose 27 cents, or 2.4 percent, to close at $11.39 yesterday.
Compiled from The Associated Press