Business Briefs - Tuesday
TECHNOLOGY
GigaMedia beats, lower outlook
The Taiwan-based maker of gaming software tripled its Q1 profit to 15 cents a share ex items, beating views by a penny. Revenue rose 95% to $36.1 mil. Despite a sharp rise of profit, GigaMedia () warned of sequentially lower revenue growth in the current quarter from its gaming software business. It said seasonal factors, a downturn in online gaming during the summer, and increased competition in its markets would negatively affect revenue. Shares fell 6.8% to 14.88.
Global Sources sees weak sales
The maker of marketing Web sites in China said its Q1 earnings rose 50% to 15 cents a share, 4 cents ahead of expectations. Global Sources () revenue increased 16% to $35 mil, just topping views. But the company forecasted Q2 revenue of $52 mil-$53 mil, below the $54.1 mil expected, and earnings of 13-15 cents, vs views of 14 cents. Shares tumbled 8.7% to 18.36.
Imation, () a maker of data storage products, said it lowered ‘07 EPS outlook to $1.41-$1.54, below views of $2.23. It said its earnings would be diluted by issuance of shares for buying some operations of Tokyo-based TDK. But it raised ‘07 revenue outlook to $2 bil, above views. Shares rose 2.2% to 38.91.
Cisco Systems, () the networking company, said it will buy BroadWare Technologies to expand its video surveillance equipment unit. The terms of the deal were not disclosed. Shares dipped 0.1% to 26.37.
IBM () expects to raise its head count in mainland China by at least 10% annually for the next few years. It currently has 10,000 workers under contract, said its China division head. It dipped 0.3% to 106.70.
Google () has invested $3.9 mil in 23andMe, a biotech that was co-founded by the wife of Google founder Sergey Brin. Google said the company allows consumers to learn about their genomic makeup.
RETAIL
BJ’s Wholesale meets Q1 views
The wholesale club said earnings were flat at 20 cents a share ex items, in line with expectations. BJ’s Wholesale Club said sales rose 8% to $2 bil, matching expectations. The company’s net income fell 11% but improved from the Q4 77% dive that resulted in its CEO’s dismissal. BJ’s was encouraged by signs from early turnaround steps. Shares rose 1.8% to 36.13.
Staples meets, lowers outlook
The office supply retailer raised Q1 profit 16% to 29 cents a share, matching views. Revenue rose 8% to $4.59 bil. Staples () said pressure to cut costs could slow already sluggish U.S. sales. Same-store sales fell 3%, while rival OfficeMax () recently reported a 0.5% increase. Staples expects Q2 earnings at the low end of its forecasts. It said it acquired American Identity, a distributor of corporate-branded machines, from Republic Financial. Shares slid 2.4% to 25.05.
CBRL misses, sees dip in diners
CBRL, () the operator of Cracker Barrel Old Country Store restaurants said Q3 earnings fell 21% to 44 cents a share ex items, a penny below forecasts. Its revenue increased 3% to $549.1 mil, missing guidance. Its same-store sales were flat, and a 1.4% higher check sales offset the 1.4% decline in guest traffic. Shares slipped 2.6% to 44.70.
The Children’s Place, () which sells clothing and owns 328 Disney stores, said Q1 net income was $14.7 mil ex items, above views. No EPS figures were released, due to an ongoing accounting probe. Revenue rose 12.3% to $478.9 mil, below views. Shares climbed 3.7% to 54.29.
American Eagle, () a trendy apparel retailer, said Q1 earnings rose 25% to 35 cents a share, in line with views. Sales rose 17% to $612 mil, below forecasts. It guided Q2 below views. Shares fell 4.3% to 28.06.
ENERGY
Tsakos Energy cruises past views
The operator of a fleet of oil tankers said it raised Q1 profit 4.1% to $2.28 a share, including a gain, beating views by 74 cents. Revenue rose 20% to $115.3 mil, above views. Tsakos Energy Navigation () said it sailed more vessels to overcome softer charter rates, which fell 4.5% vs. a year ago. Shares surged nearly 95 to 64.25.
Mideast now Halliburton’s focus
CEO Dave Lesar said the company is shifting its focus and investment away from North America toward the Middle East. Halliburton () said it would expand its Mideast operations as it targets $80 bil in new business over the next 5 years. The company is seeking Arab investors and a share listing on Dubai’s new exchange, Lesar said.
BP shuts down Alaskan oil line
The oil company will shut down 100,000 barrels, or 25%, of its Alaska oil production following the discovery of a water pipeline leak. BP said the leak is in a 12-inch pipe that collects water from separated oil and gas. The company denied allegations that cutbacks were to blame for the corroded pipes. Shares slid 1.8% to 68.18.
LABOR
Union leader Hoffa visits China
Teamsters President James Hoffa and other U.S. union leaders were in Shanghai, China, to discuss U.S. companies’ opposition to a proposed labor law in Beijing. The law would require employers to consult more with workers and make mass firings more difficult. U.S. companies that traditionally shun unions, like Wal-Mart, () have been forced to allow workers in China to join its communist-tied labor unions.
BEVERAGES
Bud rises as beer sales rebound
Anheuser-Busch () climbed nearly 3% to 51.07 after it said beer sales rebounded in May after a weak April, and projected that increasing demand for imported beers like Bass and Stella Artois and reduced discounting of domestic brands would boost ‘07 earnings. The St. Louis-based brewer also told an investor meeting that it was optimistic about this year’s summer selling season.
MEDIA
XM Satellite knocked off the air
The satellite radio experienced a second day of outages after software problems disrupted radio transmissions with one of its four satellites, the company said. XM, () which has agreed to be acquired by rival Sirius Satellite Radio, () has more than 8 mil subscribers who pay about $13 a month for sports, news, music and talk channels. XM and Sirius each edged up less than 0.4%.
CBS Corp. () said it will buy Wallstrip.com, a site that produces whimsical stock related videos, for an undisclosed amount. CBS dipped 2 cents to 32.82.
