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Utah-based CirTran, others post quarterly results

A shopper enters Staples in San Bruno, Calif. Staples Inc. said its third-quarter profit grew 14 percent but fell short of gains in other quarters.
A shopper enters Staples in San Bruno, Calif. Staples Inc. said its third-quarter profit grew 14 percent but fell short of gains in other quarters.
Paul Sakuma, Associated Press

Several companies, including a few with Utah ties, reported quarterly financial results on Tuesday.

CirTran

Salt Lake-based CirTran Corp., a contract manufacturer of information technology, consumer and consumer electronics products, reported record profits for the second consecutive quarter.

For the third quarter ended Sept. 30, CirTran reported a profit of $575,042, compared to a loss of $552,086 for the same period last year.

For the nine months ended Sept. 30, CirTran reported a net profit of $839,543, compared to a loss of $1,497,673 for the same period in fiscal 2004.

Net sales for this year's quarter were $4,291,762, a 63 percent jump over $2,626,770 for the third quarter of 2004.

"With the overall and overwhelming financial progress in our 10-Q filing, CirTran is moving closer to meeting the minimum listing requirements for The American Stock Exchange (Amex)," said Iehab J. Hawatmeh, the company's founder and CEO, in a prepared statement.

CirTran stock was essentially flat Tuesday at less than 3 cents per share. During the past year, the price has ranged from 0.4 cents to 5 cents.

IDI Global

Orem-based application service provider IDI Global Inc. reported net income of $196,298, or 1 cent per share, for the third quarter ended Sept. 30, compared to a net loss of $379,415, or 2 cents per share, for the same quarter last year.

Earnings for the nine-month period ended Sept. 30 reached $624,640, or 3 cents per share, compared to $202,063, or 1 cent per share for the same nine months of 2004.

Revenues for this year's first nine months hit $17.6 million, and revenues for the quarter ended Sept. 30 were $4.8 million, the company said.

IDI Global stock rose 2 cents Tuesday to close at 22 cents per share. During the past year, the price has ranged from 18 cents to 66 cents.

La-Z-Boy

Michigan-based La-Z-Boy Inc. reported a net loss of $6.4 million, or 12 cents per share, which includes a 10-cent-per-share restructuring charge, for the quarter ended Oct. 29. That compares with net income of $8.9 million, or 15 cents per share, which included a 1-cent restructuring charge, in the year-earlier period.

Sales totaled $454.6 million, down 13 percent from a year ago.

La-Z-Boy's president and CEO, Kurt Darrow, said production at an closing Ontario plant will shift to a pair of U.S. factories and those facilities, along with plants in California and Tremonton in Box Elder County, will service the product needs for the company's Canadian dealers.

La-Z-Boy stock fell 59 cents Tuesday to close at $11.61 per share. During the past year, the price has ranged from $10.13 to $16.40.

Staples

Staples Inc. said its third-quarter profit grew 14 percent as gains in the office products seller's delivery business and copying services offset slow sales overseas. But the profit increase fell short of Staples' gains in previous quarters.

Massachusetts-based Staples reported net income for the three-month period ending Oct. 29 of $237.8 million, or 32 cents per share, compared with $208.9 million, or 28 cents per share, in last year's third quarter. Sales rose 11 percent to $4.25 billion from $3.83 billion a year ago.

The most recent quarter's per-share profit matched the consensus forecast of analysts surveyed by Thomson Financial.

The 14 percent profit gain fell short of Staples' performances in recent years, including a string of 12 straight quarters ending with last year's fourth quarter in which it posted earnings increases of at least 20 percent.

The 65,000-employee company, whose chief domestic rivals are Office Depot Inc. and OfficeMax Inc., operates 1,748 retail stores and offers office products via catalog, online and contract sales.

Staples stock fell $1.06 Tuesday to close at $22.80. During the past year, the price has ranged from $18.64 to $24.14.

"Investors have been conditioned for Staples to beat earnings estimates and record pretty strong profit margins," said analyst Anthony Chukumba of Morningstar Inc.

Sales at North American retail stores open at least a year increased 3 percent, driven by growth in copying services that Staples pitched in a recent advertising campaign. Staples also cited growing sales of digital cameras and portable computers, and a strong startup in Chicago, one of several new markets.

Staples' North American delivery business grew 18 percent in the third quarter to nearly $1.29 billion, about a third of the company's revenue. The increase followed a 17 percent gain in the previous quarter's delivery business, an area in which Staples expects to invest further.

"It's still under-penetrated, with significant market expansion potential ahead," Ron Sargent, Staples' chairman and chief executive, told analysts in a conference call.

Staples reported a 2 percent decline in international sales in the most recent quarter, excluding benefits from acquisitions and a negative impact from fluctuating currency exchange rates.

Staples expects a fourth-quarter profit in line with analysts' expectations of 38 cents per share, or growth of 19 percent. Staples also reiterated its fiscal 2006 forecast for per-share earnings growth of 15 percent to 20 percent.

The company's estimate includes a 53rd week next fiscal year and stock option expenses, which companies must begin recording under a revised accounting rule. Analysts have forecast earnings of $1.26 per share for the year ending in January 2007.

Staples last month announced plans to buy back $1.5 billion of its common stock once an existing $1 billion repurchase program is finished later this year.

Home Depot

The Home Depot Inc., the nation's largest home improvement store chain, reported a nearly 17 percent jump in third-quarter earnings on strong sales, beating Wall Street expectations. The company boosted its earnings per share growth guidance for the year.

For the three months ending Oct. 30, Atlanta-based Home Depot said it earned $1.54 billion, or 72 cents a share, compared to a profit of $1.32 billion, or 60 cents a share, for the same period a year ago.

Analysts surveyed by Thomson Financial were expecting earnings of 68 cents a share in the third quarter.

Revenue in the three-month period rose 10.5 percent to $20.74 billion, compared to $18.77 billion recorded a year ago.

Shares of Home Depot fell 17 cents to $42.40 in New York Stock Exchange composite trading. They have fallen less than 1 percent this year, compared with an 11 percent gain for Lowe's Cos.

Home Depot ended the quarter with 1,972 stores in the United States, Canada and Mexico. The company, which has more than 325,000 employees, said product and operational flexibility helped it weather the active hurricane season during its third quarter.

Same-store sales — a measure that compares sales at stores open at least a year — rose 3.6 percent in the quarter. Home Depot's average sales ticket increased 6.1 percent in the quarter to $58.92.

Home Depot said it was lifting its earnings per share growth guidance for 2005 from 14 percent to 17 percent to 17 percent to 18 percent. It also increased its sales growth guidance for the year from 9 percent to 12 percent to 10 percent to 12 percent.

J.C. Penney

Department-store chain J.C. Penney Co. Inc. turned a small increase in sales into a 57 percent jump in third-quarter profit, helped by lower interest rate costs and a huge cut in its number of shares, which made the earnings on each share look better.

Company executives said they were optimistic about the crucial holiday season for retailers, but they conceded that consumers are weighed down by higher costs to heat their homes and fill their gas tanks.

Texas-based Penney, which is still riding the crest of a turnaround begun in 2001, said it earned $234 million, or 94 cents per share, in the three months ended Oct. 29. That compared to profit of $149 million, or 50 cents per share, a year earlier.

The recent quarter also topped the forecast of 92 cents per share from analysts surveyed by Thomson Financial.

Sales edged up 2 percent to $4.48 billion from $4.39 billion a year ago but fell short of analysts' forecast of $4.53 billion.

Penney's results were helped, however, by a 39 percent reduction in interest expense and a 20 percent decline in the number of average shares, which boosted earnings per share. The company bought back 23.8 million shares of its stock in the quarter and has spent about $2.2 billion to buy back about 44 million shares in the past nine months.

J.C. Penney shares fell $1.54, or 2.9 percent, to $52.21 in New York Stock Exchange composite trading.

The company made modest promises about the upcoming holiday season. It predicted sales at stores open at least a year, a key measurement in retailing, would grow by low single digits, and earnings per share from continuing operations would match analysts' forecasts — $1.58 per share in the fourth quarter and $3.51 per share for the year.

The retailer said clothing sales have suffered in the past six weeks due to mild weather. President Ken Hicks said executives were still "cautiously optimistic" for the rest of November and the holidays, but he admitted that retailers face threats including aggressive price-cutting by rivals and the rising costs consumers face for home heating and gasoline.

"Obviously it's a very challenging environment for the consumers," Hicks said. "They've got a lot of pressures on them."

Chairman and Chief Executive Myron Ullman said the holiday season is when consumers return to shopping malls, and Penney is the only mall anchor that has recorded better same-store sales and sales per square foot over the past four years, "so we feel we're well-positioned competitively."

"If mall traffic is down dramatically, obviously that would have an effect on us," Ullman said. "But we've told our people there are already plenty of (shoppers) there for us do business with. We just need to compete effectively with the other (stores) already in the mall."

Borders

Borders Group Inc., the second- largest U.S. bookstore chain, said its fiscal third-quarter loss widened to $14.1 million.

The net loss widened to 20 cents a share from a loss of $1.1 million, or 1 cent, a year earlier. Sales in the period ended Oct. 22 climbed to $840.9 million from $838.6 million, said the company, based in Ann Arbor, Mich.

Borders's shares dropped 64 cents, or 3.2 percent, to $19.70 in New York Stock Exchange composite trading. They have fallen 22 percent this year. Earnings were announced after regular U.S. trading.

American Eagle

Youth apparel retailer American Eagle Outfitters Inc. said its third-quarter profit climbed 27 percent on robust sales, beating its own outlook from earlier this month, but forecast fourth-quarter results shy of Wall Street's consensus. The company's shares tumbled more than 6 percent.

American Eagle reported income of $73.3 million, or 47 cents per share, compared with $57.9 million, or 38 cents per share, a year ago. Sales rose nearly 21 percent to $577.7 million from $479.6 million last year.

Wall Street had forecast earnings of 46 cents per share, the average estimate of 31 analysts surveyed by Thomson Financial, on sales of $570 million. The retailer on Nov. 2 had forecast earnings of 45 cents to 46 cents per share.

Shares of American Eagle fell $1.14, or 4.7 percent, to $23.21 in Nasdaq Stock Market composite trading. They had risen 11 percent in the past year before Tuesday.

Sales in stores open at least one year — a key measure known as same-store sales — rose 13.6 percent in the quarter, versus a 26.8 percent increase a year ago.

Looking ahead, the retailer projected fourth-quarter earnings from 73 cents to 75 cents per share, versus analysts' average view of 76 cents per share. Earnings from continuing operations totaled 70 cents per share in the prior-year period.

Abercrombie & Fitch

Abercrombie & Fitch Co., the casual clothing retailer that caters mainly to teenagers, said third-quarter profit rose on sales of fleece, T-shirts and jeans.

Net income increased to $71.6 million, or 79 cents a share, from $39.9 million, or 42 cents, a year earlier, the Ohio-based company, which owns the Hollister and Ruehl chains, said. Sales surged to $704.9 million.

The average of 28 analysts surveyed by Thomson Financial was 80 cents a share.

Shares of Abercrombie fell $2.64 Tuesday to $56.89 in New York Stock Exchange composite trading. Before Tuesday, they had gained 27 percent this year.


Contributing: Associated Press, Bloomberg News