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Westar Energy Cuts Earnings Forecast

 
Simon Kennedy
MarketWatch Pulse
     

    LONDON -- Westar Energy Inc. said Thursday it's cutting its third-quarter earnings forecast to a range of $1.35 to $1.45 a share from a range of $1.50 to $1.65 a share due to abnormally cool weather. The forecast excludes a one-time tax benefit recorded in the first quarter of the year. The company said cooling degree days for the third quarter were 14 percent below normal which it estimated will reduce earnings by about 10 cents per share.

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    Same-Store Sales

    Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.

    So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.

    Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.