Hits and Misses: Tuesday's Earnings Reports

Archer Daniels Midland 

Archer Daniels Midland (ADM) says its fiscal third-quarter profits rose 42% as the agricultural processor took advantage of a volatile commodities market.

ADM says earnings grew to $517 million, or 80 cents per share, from year-ago profit of $363 million, or 56 cents per share.

Revenue surged to $18.71 billion from $11.38 billion.

The results beat estimates of analysts surveyed by Thomson Reuters, who expected earnings of 70 cents per share on revenue of $13.45 billion. In premarket trading, ADM shares rose 2.4%, or $1.14, to $48.56.

The quarter's results were driven by an almost sevenfold increase in profits in ADM's Agricultural Services division, from $46 million to $366 million. The division includes the company's grain-trading, -transporting and -handling businesses.

The company credited highly volatile commodity market conditions. Corn prices, for example, set a new record high above $6 a bushel during the quarter.

"Volatility in commodity markets presented unprecedented opportunities," Chief Executive Officer Patricia Woertz said in a news release. "Once again, our team leveraged our financial flexibility and global asset base to capture those opportunities to deliver shareholder value."

Decatur, Ill.-based Archer Daniels Midland Co. also said operating profit from its oilseeds processing segment increased $52 million -- 28% -- to $185 million on strong overseas demand for cooking oil and protein.

Profit in the company's corn-processing business, including its ethanol production, fell 31.5% to $172 million. ADM blamed high corn prices and the increasing cost of the energy needed to process the crop, but said increased ethanol sales partially offset those increases. ADM is the country's second-largest producer of the fuel additive.

The company said profit in its other businesses, which include wheat and cocoa processing, increased 24.3% to $138 million.

However, income taxes increased $45 million for the quarter and $103 million for the nine months due principally to increased pretax earnings. That was partially offset by a lower effective tax rate for the quarter due to changes in the geographic mix of earnings.

MasterCard

MasterCard's (MA) profit more than doubled in the first quarter, the card processor said Tuesday, as more customers outside the United States used their credit and debit cards for purchases.

Cardholder spending within the United States rose, too, but at a more moderate pace, indicating that while Americans are increasingly turning to plastic in a weak economy, emerging markets are becoming especially lucrative for the industry.

The Purchase, N.Y.-based card company said Tuesday it earned $446.9 million, or $3.38 per share for the January to March period. That is up from $214.9 million, or $1.57 a share, in the same timeframe last year.

After excluding the effects of a gain from terminating a customer business agreement and another gain from selling shares in a Brazilian company, earnings per share totaled $2.59. That is above the average analyst estimate of $2 a share, according to Thomson Reuters.

Shares rose $23.50, or 9.7%, to $266 in pre-market trading.

MasterCard Inc. is like Visa Inc. (V), in that it processes card payments, but its member banks issue the credit.

And like Visa -- as well as American Express Co. (AXP) and Discover Financial Services LLC (DFS), which have also released their profit reports for early 2008 -- MasterCard has reported an increase U.S. cardholder spending.

Purchase volume with both credit cards and debit cards rose, driving MasterCard's U.S. gross dollar volume up 8.9% from a year ago to $259 billion, despite a decline in U.S. credit card advances.

Meanwhile, card use outside the United States surged even faster, with gross dollar volume soaring 30% to $352 billion.

"Regions outside the U.S., such as Latin America and South Asia, Middle East and Africa, are driving significant growth, and cross-border volumes remain healthy as cardholders continue to travel and prefer the use of electronic over paper-based forms of payment," said Robert W. Selander, MasterCard's president and chief executive officer, in a statement.

DreamWorks Animation SKG Inc. 

DreamWorks Animation SKG Inc. (DWA) said Tuesday its first-quarter net profit grew 69% from a year ago thanks to international box office revenue from "Bee Movie" and DVD sales of "Shrek the Third."

The company posted net earnings of $26.1 million, or 28 cents per share, up from $15.4 million a year ago.

Revenue rose 67% to $156.6 million from $93.7 million a year earlier.

The results beat the expectations of Wall Street analysts, who were looking for net profit of 22 cents per share on revenue of $127 million, according to Thomson Reuters.

Shares of Glendale, Calif.-based DreamWorks Animation jumped 5%, or $1.26, to $27.00 in after-hours trading following the announcement of the results.

"Bee" contributed $48.9 million in revenue during the quarter, and boosted its worldwide box office total to $287 million.

Even though 4.8 million DVD units of the movie have been sold in the U.S., chief executive Jeffrey Katzenberg said "Bee" would be barely profitable with no material impact on earnings going forward because of its high expense.

"Shrek the Third," released into DVD markets abroad, added $48.3 million in revenue during the quarter. So far, some 19.8 million units have been shipped.

The company expects its key earnings driver for the year to be its movie "Kung Fu Panda," which is set for release June 6.

In a conference call with analysts, Katzenberg warned that the failure of studios and theater chains to roll out more digital projectors with 3-D capabilities could hamper the earning power of "Monsters vs. Aliens," the company's first 3-D movie set for release next March.

Katzenberg has said each 3-D movie costs an extra $10 million to $15 million to make, but increased ticket prices for such effects are expected to more than offset the cost.

Slightly more than 1,000 screens are currently set up to show 3-D movies in the United States.

"When you hear me talk about my disappointment, it is in the context of really trying to achieve the 5,000-plus screens installed by the time of our release," Katzenberg said about screens in the U.S. "If these guys don't get their act together very quickly in the next 30 days, they are not going to be able to achieve that goal."

CBS Corp.

CBS Corp. (CBS) reported a 14% gain in first quarter profit Tuesday, aided by a new international TV syndication agreement for its "CSI" franchise.

The company, which also owns Simon & Schuster and a large radio broadcaster, earned $244.3 million in the first three months of the year, up from $213.5 million the year before.

Per-share earnings rose to 36 cents from 28 cents, ahead of analysts estimates of 33 cents, as compiled by Thomson Reuters. Per-share results were also boosted by a lower outstanding share count due to a stock repurchase program.

Revenues were essentially flat at $3.65 billion versus $3.66 billion a year ago.

TV revenues edged up 1%, as higher syndication sales of "CSI" and "Everybody Loves Raymond" were mainly offset by the absence of the Super Bowl, which CBS had last year, station sales and the unfavorable timing of the semifinals of the NCAA men's basketball tournament.

Those factors combined with the effects of the Hollywood writers' strike, which was settled in February, led to a 15% decline in TV advertising revenues, CBS said.

Profits from TV rose 13%, however, mainly on higher profits from the syndication sales and higher fees from its cable channels Showtime and the CBS College Sports Network.

CBS's radio business continued to struggle, with reported revenues falling 9% and profits falling 26%. The declines partly reflected the sale of some radio stations.

CBS said it expects to see growth in operating income before depreciation and amortization in the range of 3% to 5% in 2008.

Separately, the company also announced it was raising its dividend from 25 cents to 27 cents per share.

BP PLC

BP PLC (BP), Europe's second biggest oil producer, reported a 63% surge in first quarter net profit on Monday after crude oil prices soared to an all-time high and natural gas prices also rose.

BP posted net profit for the first quarter of 2008 of $7.6 billion (4.9 billion euros), compared with $4.4 billion in the first quarter of 2007.

The jump in net profit and accompanying 44% rise in revenue to $89.2 billion (57.1 billion euros) were well ahead of analysts' expectations.

Evolution Securities analyst Richard Griffith said the results showed that operational improvements BP Chief Executive Tony Hayward made his priority when he took the reins a year ago are well advanced.

Hargreaves Lansdown analyst Keith Bowman said BP had posted "an exceptional set of numbers."

"Although this should not come as a complete surprise, given historically high energy prices, management have been battling against a serious of operational difficulties and the results may indicate that challenges are being won," he added.

BP shares jumped 5.5% to 610 pence ($12.05).

Hayward, who replaced John Browne, has focused on bringing new production and refining capacity on line to improve earnings, which have lagged behind rivals such as Exxon Mobil Corp. and Royal Dutch Shell PLC.

BP's closely watched replacement cost profit rose 48% to $6.59 billion (4.34 billion euros), compared with $4.44 billion in the first quarter of 2007.

The replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance.

Crude oil reached hit a then-record $111.80 per barrel during the quarter in March, while gas jumped an average of 22% over the quarter. Crude reached an all-time record $119.93 on Monday.

BP said its total oil and gas production for the first quarter of this year was unchanged at 3.91 million barrels of oil equivalent a day due to the impact of lower entitlement in production sharing agreements. Adjusted for the impact of these agreements, BP said production was 5% higher than the first-quarter of 2007, reflecting the ramp up of new projects in the fourth quarter.

However, it added that it will take a smaller share of output from production-sharing agreements in some countries if the price remains over $100 in 2008, offsetting the underlying growth in production.

Refining margins were significantly weaker at $4.57 a barrel, compared with $9.45 a barrel a year ago. Margins improved in the second quarter of 2008, but still remain lower than last year, BP said.

Charles Stanley & Co. analyst Tony Shephard said the company's recovery still had some way to go.

"BP is still not firing on all cylinders but its operational turnaround looks to be on track with a strong second half recovery in prospect," he said.

The benefit from a recommissioning of refineries in Whiting, Ind. and Texas City, Texas, refineries would be more apparent in the second half, he said.

Under Armour Inc. 

Sports apparel maker Under Armour Inc. (UA) said Tuesday its first-quarter profit tumbled 71%, weighed down by increased marketing expenses, but beat Wall Street's expectations.

For the quarter ended March 31, the company reported income of $2.9 million, or 6 cents per share, compared with $9.9 million, or 20 cents per share, in the year-ago period.

Revenue rose 27% to $157.3 million from $124.3 million in the first quarter of 2007.

Analysts polled by Thomson Reuters, on average, estimated earnings of 3 cents per share on sales of $153.7 million.

Sales were boosted by a 25% increase in apparel revenue with strong growth across the men's, women's and youth segments, the company said. Footwear revenue increased 40% to $16.6 million.

Cost of goods sold rose 29% to $82.5 million, while selling, general and administrative expenses increased 58% to $70.5 million -- primarily because of higher marketing expenses, Under Armour said. The company previously said it would shift a substantial portion of its full-year marketing spending to the first half of the year.

Marketing expenses for the first quarter were 18% of revenue, compared with 11% in the prior-year quarter. Under Armour said it will continue to invest 12% to 13% of revenue in its marketing budget for the full year.

McGraw-Hill Cos.

McGraw-Hill Cos. (MHP), which publishes textbooks and owns credit ratings agency Standard & Poor's, said Tuesday its first-quarter profit tumbled 44% on a sharp decline in financial services revenue, and lowered its full-year forecast.

Net income for the three months ended March 31 fell to $81.1 million, or 25 cents per share, from $143.8 million, or 40 cents per share, a year ago, which included a $10.3 million gain on the sale of a mutual fund data business.

Revenue declined 6% to $1.22 billion from $1.3 billion, on a steep drop in structured finance revenue in Standard & Poor's Credit Market Services and lower school education sales.

Analysts surveyed by Thomson Reuters expected earnings per share of 23 cents on revenue of $1.22 billion.

McGraw-Hill's financial services revenue fell 12% to $644.3 million, with revenue for Standard & Poor's Credit Market Services declining 22% to $427.3 million as public bond issues dropped off amid global market turmoil.

The credit ratings industry, dominated by S&P, Moody's Investors Service and Fitch Ratings, has been sharply criticized for failing to accurately assess and warn investors about the risks that mortgage investments posed to financial markets.

The credit crisis has led to more than $200 billion in write downs taken by banks and financial firms over the last year. The outcry has been so great that senators last week suggested the government suspend credit rating agencies' government licenses if they consistently give ratings that turn out to be inaccurate.

In a statement, Chairman, President and Chief Executive Harold McGraw III said the quarter's 56% decline in transaction revenue for Credit Market Services reflects plunging new issue volume in the U.S. and European bond markets.

In the U.S., total new issue dollar volume declined 56%, with mortgage-backed securities off 94% and collateralized debt obligations (CDOs) falling 91%. McGraw-Hill also said revenue from ratings and services not directly linked to new public debt issues dropped 26% to $108.6 million due to much lower volume in bank loan and derivative products ratings.

The company's information and media segment generated revenue of $243.4 million, up 3% year-over-year, and sales in the B2B segment, which includes BusinessWeek, J.D. Power and Associates and Platts, edged up nearly 4% to $219.7 million.

But revenue for McGraw-Hill School Education Group declined 5% to $138.8 million.

"Revenue in the seasonally slow first quarter for the elementary-high school market depends more on purchases of fill-in copies and supplemental materials than on new business," said McGraw. "Last year, the McGraw-Hill School Education Group benefited from early ordering by North Carolina. Despite a good start in this year's 6-12 social studies and business education adoptions, our first-quarter results in North Carolina did not match last year's success."

The company said U.S. professional market revenue also decreased slightly as lower sales of older backlist titles was only partially offset by increased subscription revenue for digital products and the mid-March introduction of a new edition of "Harrison's Principles of Internal Medicine."

Looking ahead, McGraw-Hill said financial market uncertainty and a weakening economy present challenges for the company this year.

"If the steep drop we experienced in the first quarter in structured finance continues for the rest of the year, revenue at the Financial Services segment would decline 7% to 9%," McGraw added.

McGraw-Hill forecast full-year earnings per share in the $2.65 to $2.75 range, well below Wall Street's average estimate of $2.87 and less than the 3% to 5% growth it had predicted in January.

Avon Products Inc.

Cosmetics company Avon Products Inc. (AVP) said Tuesday its first-quarter profit rose 23% as international sales, particularly in Latin America, offset declining North American revenue.

The direct seller of beauty products said quarterly net income rose to $184.7 million, or 43 cents per share, from year-ago profit of $150 million, or 34 cents per share. Both periods included restructuring charges of 4 cents per share.

Total revenue grew 14% to $2.50 billion from $2.19 billion last year.

On average, analysts surveyed by Thomson Reuters expected earnings of 44 cents per share on revenue of $2.43 billion. Wall Street estimates usually excluding one-time charges and gains.

In premarket electronic trading, Avon shares rose $1.18, or 3%, to $41.26, having closed Monday at $40.08.

"We continued to benefit from our strength in developing and emerging markets around the globe to more than offset the unfavorable impact of economic softness and service problems in North America," said Andrea Jung, chairman and CEO, in a statement.

Latin American sales grew 32% to $864.3 million, while North American sales fell 6% to $593.6 million. The company said weak North American results were due to a difficult economy and service-related problems in filling representatives' orders.

Avon's total salesforce grew 14%, but rose just 2% in North America. Meanwhile units sold in North America fell 10%. Avon said it expects "weakness" in North America to continue in the second quarter, but not to the extent of the first quarter.

Elsewhere, sales were strong. Central and Eastern Europe sales rose 17% to $421.6 million. Western Europe, Middle East and Africa sales rose 17% to $317 million. Asia Pacific sales rose 9% to $217.4 million, while China sales rose 29% to $87.8 million.

Advertising expenses grew 14% to $82 million to support new products, including Anew Ultimate Age Repair Day Cream, and to recruit salespeople.

Avon reaffirmed it expects to earn $430 million annually once its turnaround program -- which involves job cuts, eliminating management layers, realigning manufacturing centers and outsourcing work to countries with cheaper labor costs -- is fully implemented by 2011 or 2012. It expects savings of $270 million in 2008 and $300 million in 2009.

Avon markets to women in more than 100 countries through 5.4 million independent sales representatives.

Savvis Inc.

Computer network service provider Savvis Inc. (SVVS) said Tuesday it swung to a first-quarter loss as revenue edged lower and the year-ago results were boosted by a hefty gain on a sale.

The company also gave a full-year revenue outlook below Wall Street's expectations, and shares tumbled in after-hours trading.

For the three months ended March 31, Savvis posted a loss of $4.2 million, or 8 cents per share, compared with a profit of $114.5 million, or $2.13 per share, in the corresponding period a year ago. The year-ago quarter's results included a gain of $125.2 million on the sale of the company's CDN assets.

Revenue slipped 1% to $203.3 million, from $205.2 million last year.

Analysts, on average, were expecting a loss of 13 cents per share, on sales of $207.7 million, according to a poll by Thomson Reuters.

The company said its network business declined slightly during the quarter.

Shares fell $2.88, or 15.4%, to $15.80 in after-hours electronic trading. The stock fell $1.35, or 6.7%, to close at $18.68 in the regular session.

Genesee & Wyoming Inc.

Genesee & Wyoming Inc. (GWR) said Tuesday its first-quarter profit slipped 27%, hurt by unfavorable winter weather, acquisition-related costs and a legal settlement.

The short-line and regional freight railroad operator reported net income dropped to $10.4 million, or 29 cents per share, from $14.3 million, or 34 cents per share, a year earlier.

Income from continuing operations fell to $11.2 million, or 31 cents per share, from $16.1 million, or 38 cents per share. Quarterly results were hurt by unfavorable winter weather in Canada and Illinois regions, acquisition-related costs of 2 cents per share and a legal settlement that lowered earnings by a penny per share.

Analysts polled by Thomson Reuters expected earnings of 38 cents per share.

For the period ended March 31, revenue grew 13% to $140.7 million from $125.1 million.

"Despite a tough start to the year and a weak North American economy, our outlook for the remainder of 2008 is positive. We expect to recover a portion of the lost winter shipments and we have new customers coming on-line in our Oregon, Southern and Rail Link Regions starting in the second quarter of 2008," said John C. Hellmann, chief executive.

Heidrick & Struggles International Inc.

Heidrick & Struggles International Inc. (HSII), an executive search and consulting firm, said Tuesday its first-quarter earnings fell 30% as employee expenses rose.

Net income for the quarter fell to $7.1 million, or 38 cents per share, from $10.1 million, or 53 cents per share, during the same period the previous year.

Analysts polled by Thomson Reuters, on average, forecast earnings of 60 cents per share for the quarter on revenue of $155.9 million.

Total revenue increased 7% to $153.1 million from the year-ago period. Much of the growth was the result of the weak dollar.

Revenue from operations in the Americas fell 7% to $77.3 million, mostly due to declines in revenue among the company's financial services industry group. That sector has seen thousands of jobs lost due to deterioration in the mortgage and credit markets.

Revenue generated from European operations increased 24% to $52.9 million, while Asia Pacific revenue grew 34% to $22.9 million.

Total expenses at Heidrick & Struggles rose 12% to $149.1 million from $133.2 million during the year-ago period.

The bulk of expense growth was due to rising salaries and employee benefits. That measure rose to $110.6 million, a 13% increase from the $98.4 million spent during the first quarter last year.

Guaranty Financial Group Inc.

Guaranty Financial Group Inc. (GFG) lost money in the first quarter, the company said Tuesday, as the bank's book of loans to property developers in California suffered from bad credit.

Guaranty Financial lost $10 million, or 28 cents per share, in the first quarter, compared with profit of $27 million in the first quarter last year. The bank did not break down the profit per share from last year's first quarter because the company's stock was not yet publicly traded.

Profit from lending climbed 3% to $98 million as the bank, which runs 160 branches in Texas and California, grew its commercial loan portfolio.

The profit margin from lending compressed to 2.49% from 2.56%.

Bad credit pinched the income from the bank's $10.1 billion loan portfolio. Guaranty Financial set aside $58 million to cover loans the bank does not expect to be repaid. The bank blamed its book of loans to homebuilders in California.

With real estate markets in that state suffering, many property developers are defaulting on their loans.

"Market conditions certainly continued to deteriorate in the first quarter," Chief Financial Officer Ron Murff said in a statement.

Murff said the reserve the bank has established to cover bad loans is sufficient based on the company's outlook for the housing market, which is that it will not recover soon.

The company also recorded $419 million in losses on a $4.9 billion portfolio of bonds backed by mortgages. Though the credit quality supporting these bonds is strong, the liquidity squeeze in the bond market has crimped the value of the investments, the bank said.

Penske Automotive Group Inc.

Penske Automotive Group Inc. (PAG) said Tuesday its first-quarter earnings more than doubled, compared with a year-ago period that was hurt by costs relating to the redemption of senior notes.

Penske said the quarter was also helped by margin improvements in its used vehicle and service and parts businesses.

The auto retailer earned $33.9 million, or 36 cents per share, compared with $14.6 million, or 15 cents per share, in the year-ago quarter. Adjusted to exclude $12.3 million, or 13 cents per share, in redemption costs for senior notes, the company earned $26.9 million, or 28 cents per share, in the 2007 first quarter.

Revenue rose 4% to $3.2 billion, from $3.08 billion in the prior-year period.

Analysts expected profit of 33 cents per share on revenue of $3.22 billion, according to a poll by Thomson Reuters.

Same-store sales fell 2.3% during the quarter, hurt by lower new vehicle sales at dealerships in the U.S.

Same-store sales, or sales at dealerships open at least a year, is a key indicator of retailer performance since it measures growth at existing locations rather than newly opened ones.

"While the new vehicle sales environment was difficult, particularly in the U.S., our business continued to perform well," Chairman Roger Penske said in a statement.

Olin Corp. 

Chemicals and ammunition maker Olin Corp. (OLN) said late Monday its first-quarter profit jumped 61%, aided by the recent purchase of rival Pioneer Cos. and pricing improvements.

For the quarter that ended March 31, Olin earned $37.3 million, or 50 cents per share, compared with $23.1 million, or 31 cents per share, in the year-ago quarter.

The company's sales rose year over year to $399.1 million from $255.5 million.

Analysts polled by Thomson Reuters expected, on average, earnings of 50 cents per share on $345.4 million in revenue.

Olin said its chlor alkali products revenue rose $133 million, or 86%, to $288.3 million, helped by the company's acquisition of Pioneer in the third quarter of 2007 and a 16% increase in chlorine and caustic soda prices.

Olin's chlor alkali products segment manufactures chlorine, caustic soda, bleach products and a variety of other chemicals.

Winchester revenue increased $10.6 million, or about 11%, to $110.8 million. Olin cited increased selling prices and sales volumes for the rise.

The company also noted that weather-related unplanned outages at its chlor alkali facilities resulted in a $2 million increase in operating costs.

Boyd Gaming Corp.

Boyd Gaming Corp. (BYD) on Tuesday reported to a first-quarter loss, hurt by a hefty impairment charge as well as revenue declines in Las Vegas and other markets.

Adjusted results managed to beat Wall Street's expectations.

The casino operator reported a loss of $32.6 million, or 37 cents per share for the period ended March 31, compared with a profit of $217.9 million, or $2.46 per share, a year earlier.

The results included an $84 million impairment charge related a write-off of the license rights to operate slot machines at Dania Jai-Alai in Dania Beach, Fla. The company completed the purchase of the property during the 2007 first quarter, but has indefinitely postponed redevelopment plans due to the opening of a nearby Native American casino, weak performance of other gaming venues in the area and concerns about additional casino gambling venues being added in Florida.

Excluding the charge, profit fell to $29.6 million, or 34 cents per share, from $44 million, or 50 cents per share, last year.

Analysts surveyed by Thomson Reuters, on average, expected earnings of 32 cents per share.

The year-ago period included a $285 million gain related to the sale of the former Barbary Coast Hotel & Casino in Las Vegas to Harrah's Entertainment.

Revenue fell 9% to $471.1 million, from $517 million last year, with declines across several markets, including casinos frequented by Las Vegas locals, the Midwest and the South.

Revenue missed Wall Street's expectations for $481.6 million.

"We experienced a challenging quarter, as consumers pulled back on discretionary spending," President and Chief Executive Keith Smith said.

The gaming sector, as well as many other industries, has been pressured as consumers curb spending due to the ongoing housing downturn, escalating food and fuel costs, eroding credit and recession worries.

Corning Inc.

Corning Inc. (GLW) said Tuesday its first-quarter profit more than tripled to more than $1 billion (euro640 million), exceeding Wall Street's expectations on soaring demand for glass used in flat-screen televisions and computers.

The specialty glass and ceramics maker also said it expects earnings in the current quarter to beat analyst forecasts.

Its earnings climbed to $1.029 billion (euro660 million), or 64 cents a share, in the January-to-March period, up from $327 million, or 20 cents a share, a year earlier.

Sales surged 24% to $1.62 billion (euro1.04 billion) from $1.307 billion, lifted by a 58% jump in the display technologies unit, its biggest business.

Excluding a non-cash credit of $327 million (euro209.24 million) in an asbestos litigation case, earnings came to 44 cents a share. Analysts polled by Thomson Reuters expected net profit of 42 cents a share on sales of $1.594 billion (euro1.02 billion).

Corning had predicted earnings in a range of 41 cents to 43 cents a share before special items, and sales ranging from $1.59 billion (euro1.02 billion) to $1.62 billion (euro1.04 billion).

The world's largest maker of liquid crystal display glass said its display technologies sales jumped to $829 million (euro530.46 million) from $524 million.

Sales in its telecommunications unit fell 4% to $421 million (euro269.39 million) from $439 million as strong optical fiber volume was offset by a slow start to several customer projects. Environmental technologies sales rose 10% to $197 million (euro126.06 million) from $179 million, fueled by its pollution-filter business.

The company expects profits in the second quarter to reach 47 cents to 50 cents a share before special items as year-over-year sales jump more than 20% to a range of $1.71 billion (euro1.09 billion) to $1.75 billion (euro1.12 billion). Analysts had predicted second-quarter profits of 43 cents a share on sales of $1.67 billion (euro1.07 billion).

Even while economic conditions have turned gloomier, Corning's outlook has been lifted by robust demand for LCD-TVs.

Analyst Paul Gagnon of DisplaySearch, a market research firm based in Austin, Texas, expects 104.5 million LCD-TVs will be shipped worldwide this year, up 32% from 79.3 million in 2007. In North America, shipments could grow almost 25% from 24.2 million to 30.2 million this year.

Despite the slowing U.S. economy, "there's still a lot of people who have second and third and even primary rooms that don't have LCD-TVs," Gagnon said. "As consumers start pulling back their spending ... they just don't buy as large a TV as they might have had in the past or they might desire to. They just shift their purchase downscale a little bit, but they still buy a TV."

Titan International Inc.

Titan International Inc. (TWI), which supplies wheels and tires for agricultural and construction machinery, said Tuesday it swung to a profit in the first quarter, boosted by strong demand in the agricultural market.

For the period ended March 31, the company reported income of $8.1 million, or 29 cents per share, compared with a loss of $2.5 million, or 12 cents per share, in the year-ago period.

Revenue rose 12% to $253.5 million from $226.3 million in the first quarter of 2007.

Sales from the company's agricultural segment rose 28% to $173.5 million.

Countrywide Financial 

Countrywide Financial (CFC) says it lost $893 million during the first quarter due to a sharp increase in its provision for loan losses.

The Calabasas, Calif.-based mortgage lender says it lost $893 million, or $1.60 per share, during the first quarter. Countrywide has said it earned $434 million, or 72 cents per share, during the year-ago period.

Thomson Reuters says analysts expected Countrywide Financial Corp. to earn 2 cents per share.

Countrywide says it set aside $1.5 billion to cover loan losses. Charge-offs -- loans written off as not being repaid -- totaled $606 million during the first quarter.

In January, Countrywide agreed to sell itself to Bank of America for about $4 billion in stock.

Techne Corp.

Techne Corp. (TECH), a maker of medical testing and diagnostic products, said Tuesday its fiscal third-quarter profit rose 24% on a jump in biotechnology sales and a boost from the weaker U.S. dollar.

For the three months ended March 31, the company earned $29.6 million or 76 cents per share, compared with profit of $23.9 million or 60 cents per share in the same quarter a year ago.

Revenue rose 15% to $69.5 million from $60.2 million.

Analysts polled by Thomson Reuters expected profit of 66 cents per share on sales of $64.1 million.

Biotechnology research sales rose 17% to $39.1 million. Sales from the R&D Europe unit rose 16% to 20 million.

Masco Corp.

Masco Corp. (MAS), a manufacturer of home improvement and building products, said Tuesday its first-quarter earnings fell dramatically due to reduced sales volume in both the new home construction and home improvement markets.

Net income plunged to $2 million, or 1 cent per share, from $143 million, or 37 cents per share, during the same period the previous year. Earnings from continuing operations totaled 7 cents per share, compared with 35 cents a year ago.

Total sales fell 13% to $2.4 billion as demand among both new home markets and home improvement projects declined as the economy weakened and the housing market continued to sag.

Analysts polled by Thomson Reuters, on average, forecast much higher earnings of 21 cents per share for the quarter on sales of $2.52 billion.

First-quarter results also included non-cash charges for financial investments totaling $26 million. The charges reduced earnings by 5 cents per share.

Shares of Masco fell $1.71, or 8.7%, to $17.99 in premarket trading. Shares have traded between $17.78 and $31.58 during the past year.

United America Indemnity Ltd.

United America Indemnity Ltd.'s (INDM) profit tumbled 67% in the first quarter as the insurer paid more claims for damage caused by fires and bad weather, the company said late Monday.

United America earned $7.4 million, or 21 cents per share, in the first quarter, compared with profit of $22.6 million, or 60 cents per share, in the first quarter last year.

Operating income, which insurers emphasize because it provides a clearer glimpse of an underwriter's strength, was 23 cents per share. Analysts polled by Thomson Reuters forecast profit of 59 cents per share.

Premiums slipped 39% to $82 million from $134.1 million. The insurer has pared back its business in areas prone to catastrophe and has resisted selling policies for prices that do not meet the company's underwriting standards. Prices across the insurance industry have been sinking for three years because of competition.

Of each premium dollar collected, United America spent $1.02 administering claims, more than 10 cents on the dollar more than the first quarter last year. The insurer paid more claims for damage caused by weather and fires.

Spirit AeroSystems Holdings Inc. 

Aircraft component maker Spirit AeroSystems Holdings Inc. (SPR) said Tuesday its first-quarter profit rose 21%, helped by increased revenue and operating efficiencies.

For the period ended March 27, net income climbed to $85 million, or 61 cents per share, compared with $70 million, or 50 cents per share, in the prior year. Its quarterly sales grew to $1.04 billion from $954 million.

Analysts surveyed by Thomson Reuters predicted earnings of 55 cents per share on revenue of $1.06 billion.

Backlog increased 4% to $27.5 billion.

Burlington Northern Santa Fe 

Railroad Burlington Northern Santa Fe (BNI) says its first-quarter earnings jumped 30%, on rising farm product and coal shipments and increased fuel surcharges.

Fort Worth, Texas-based Burlington Northern Santa Fe Corp. said Tuesday it earned $455 million, or $1.30 per share, compared with $349 million, or 96 cents per share, in the year-ago quarter.

Revenue leaped 17% to $4.26 billion, from $3.65 billion a year earlier. Agricultural product revenues rose 38% to $866 million, on more carloads of wheat, soybeans, corn and ethanol. Coal revenue rose 26%.

Thomson Reuters says analysts forecast profit of $1.22 per share on revenue of $4.09 billion.

ArvinMeritor Inc.

ArvinMeritor Inc. (ARM), which makes parts for commercial and light vehicles, said Tuesday it swung to a fiscal second-quarter profit on foreign currency translation gains and higher international sales.

For the quarter ended March 31, ArvinMeritor earned $20 million, or 28 cents per share, compared with a loss of $94 million, or $1.34 per share, for the same quarter in 2007.

The company posted a profit from continuing operations of $24 million, or 33 cents per share, compared with a loss from continuing operations of $13 million, or 19 cents per share, for the year-ago period.

Revenue rose 9.5% to $1.78 billion from $1.63 billion in the prior-year period.

The results beat Wall Street predictions. Analysts polled by Thomson Reuters expected, on average, profit from continuing operations of 26 cents per share on $1.65 billion in revenue.

ArvinMeritor said that excluding the impact of foreign currency translation sales were flat, with weak North American demand offset by strong sales growth in South America, Europe and Asia.

The recent quarter's results included a $3 million restructuring charge, while the year-ago period included a total of $25 million in special items.

G&K Services Inc.

G&K Services Inc. (GKSR), which makes and rents workplace uniforms, said Tuesday its fiscal 2008 third-quarter profit fell 12% on a jump in the company's tax rate.

For the quarter ended March 29, the company earned $10.6 million, or 54 cents per share, from $12.1 million, or 57 cents per share, a year prior. Revenue rose 7% to $251.1 million from $235.2 million.

Analysts polled by Thomson Reuters expected earnings of 56 cents per share on revenue of $254 million.

The company said the period proved to have a tough comparison, citing the year-ago benefit of 11 cents per share from an "unusually low" effective tax rate. G&K's provision for income taxes rose 71% to $7.1 million during the third-quarter.

During the quarter, rental business revenue rose 10% to $233 million while direct sales fell 23% to $18.1 million.

Valero Energy

Oil refiner Valero Energy (VLO) says its first-quarter profit tumbled 77%, as higher oil prices cut into its margins.

The San Antonio-based company said Tuesday it earned $261 million, or 48 cents per share, compared with $1.14 billion, or $1.86 per share, for the same quarter in 2007.

The latest quarter's results include a pretax benefit of $101 million, or 12 cents per share. Thomson Reuters says analysts expected a profit of 29 cents per share. The estimates typically exclude one-time items.

Valero says refined product margins fell as the cost of crude oil and other feedstocks outpaced prices of gasoline and other products.

Belo Corp.

Broadcast company Belo Corp. (BLC) says it swung to a first-quarter loss due to charges related to the spin-off of its four newspapers.

The Dallas-based company says it lost $15.4 million, or 15 cents per share, in the January-March period compared with a profit of $15.5 million, or 15 cents per share, in the prior year.

Excluding spinoff-related charges and other items, Belo earned $10.5 million, or 10 cents per share, in the first quarter.

Belo Corp., which spun off its four newspapers and related assets in February, reports revenue dipped 2% to $174.8 million from $178.3 million.

Waste Management

Waste Management (WMI), the nation's largest garbage hauler and landfill operator, said Tuesday its first-quarter profit edged up a little more than 1% as higher prices offset lower volumes and increased costs for diesel fuel.

Houston-based Waste Management Inc. said it earned $241 million, or 48 cents per share, in the quarter ended March 31 compared with $238 million, or 45 cents per share, in the year-earlier period. Revenue rose 2.5% to $3.27 from $3.19 billion last year.

Excluding one-time tax benefits, the company says it earned 47 cents per share.

Analysts polled by Thomson Reuters were expecting earnings per share of 46 cents on revenue of $3.2 billion. Those forecasts typically exclude one-time items.

"We started the year on a solid note as we again accomplished our primary financial goals of earnings growth, margin expansion and strong free cash flow," said David Steiner, Waste Management's chief executive.

Waste Management has improved results in the past several quarters by reviewing low-margin accounts and either raising prices or eliminating them altogether, a strategy applauded by analysts.

Steiner said that strategy continues.

He said the company overcame several challenges in the first three months of 2008, including sharply higher diesel fuel prices, a sluggish economy and harsh winter weather in the Midwest.

Fuel prices squeezed per-share earnings by about 1 cent in the quarter as fuel surcharge revenue lagged the spike in diesel prices, which are near all-time highs.

The company said it also benefited in the most-recent quarter from higher recycling commodity prices. It was hurt by lower volumes and the carry-over effect of divesting underperforming operations.

Looking ahead, Waste Management reiterated its 2008 earnings forecast of $2.19 to $2.23 a share. The current Wall Street estimate is for earnings of $2.22 a share.

Pacific Capital Bancorp

Pacific Capital Bancorp's (PCBC) profit surged 41% in the first quarter as the bank bolstered its profitable tax-refund loan business, the company said Tuesday.

Pacific Capital earned $72.5 million, or $1.56 per share, in the first quarter, compared with profit of $51.6 million, or $1.09 per share, in the first quarter last year. Analysts polled by Thomson Reuters forecast profit of $1.27 per share.

Profit from lending shrank 8% to $161.2 million. The profit margin from lending contracted to 9% from 9.48%.

The bank's $5.55 billion loan portfolio suffered from bad credit, mainly in its book of loans to real estate developers. With property markets -- particularly in Reno, Nev., and the Central Valley of California -- in a slump, many homebuilders are defaulting on their loans.

The bank set aside $48.4 million to cover bad loans.

The company's refund-transfer and refund-anticipation loan carried the quarter. Under these products, the bank issues a loan secured by a customer's tax refund.

The company nearly doubled its profit in this business as default rates halved and the company issued more loans through more tax preparers.

Pacific Capital runs 50 branches, mostly in California.

Office Depot Inc.

Office Depot Inc. (ODP), the nation's second biggest office-supply chain, said Tuesday its first-quarter profit dropped 55% due to North American sales declines, but results still managed to top Wall Street's expectations. Its shares rose 7% on premarket trading.

The Delray Beach, Fla.-based company said earnings dropped to $68.8 million, or 25 cents per share, compared with $153.8 million, or 55 cents per share, a year earlier.

Sales dipped 3% to $3.96 billion from $4.09 billion.

Excluding items, net income dropped to 29 cents per share from 59 cents per share.

Analysts surveyed by Thomson Reuters forecast a profit of 22 cents per share on revenue of $4.07 billion.

Its shares rose 84 cents to $12.80 in premarket trading.

The office supply retailer has been hit hard by the sluggish economy and lagging housing markets. The company blamed housing-related issues for a deterioration in profits across North America, where sales were down 7% to $1.7 billion.

For the first quarter of this year, sluggish sales in Florida and California continued to hurt Office Depot's profit margin as small business customers were affected by "difficult housing-related economic conditions," the company said in its earnings release. Combined, the two states represented about 26% of total store sales.

In February, the company said its fourth-quarter profit slid 85% as sales slumped in Florida and California.

First-quarter sales for the North American business solutions division were $1.1 billion, down 5% compared to the same period a year ago. Operating profit was $60 million for the quarter compared to $72 million for the same period last year, but $59 million higher than the fourth quarter of 2007, the company said.

The company's international division reported a sales increase of 6% in the first quarter of 2008 compared with the same period last year, but sales in local currency decreased by 4%, largely driven by an economic slowdown in the U.K.

Last week, Office Depot announced that its shareholders re-elected all 12 of the office supply retailer's directors at its annual meeting. A week earlier, a dissident shareholder group dismayed with the company's current management had called for shareholders to replace Office Depot Chairman and Chief Executive Steve Odland and former Chairman and CEO David I. Fuente.

The Woodbridge Group later canceled its proxy contest for the two board seats, noting it had sent its intended message that it was displeased with the company's lagging sales and leadership.

Office Depot, the nation's second-largest office supplies retailer behind Framingham, Mass.-based Staples Inc., has annual sales of about $15.5 billion.

United States Steel Corp.

United States Steel Corp. (X) says its first-quarter earnings fell 14% as higher sales failed to offset declines in its European and tubular businesses and pretax charges.

The Pittsburgh-based steel producer earned $235 million, or $1.98 per share, in the quarter that ended March 31, compared with $273 million, or $2.30 per share, a year earlier.

Charges tied to a court ruling and an acquisition reduced net income by $45 million, or 38 cents per share.

Revenue grew 38% to a record-setting $5.20 billion from $3.76 billion in the first quarter of 2007.

The results beat Wall Street estimates. Analysts polled by Thomson Reuters, on average, expected a profit of $1.81 per share on revenue of $5.09 billion.