Overseas Orders Keep Nike’s Earnings Respectable Company News

Nike Inc.’s fiscal fourth-quarter earnings are expected to rise as its expansion in Europe and Asia boosts sales of athletic clothes and shoes.

But the increase won’t be as large as originally anticipated. Nike last month said product shortages, order delays and cancellations would result in earnings of 51 cents to 56 cents a share for the quarter ended May 31, less than the 71-cent average estimate of 13 analysts polled by IBES International Inc.

The world’s largest maker of athletic shoes is now expected to earn 53 cents a share, based on 13 analysts surveyed by IBES. A year ago, Nike earned 45 cents, adjusted for a 2-for-1 stock split and a change in how international units report earnings.

Investors are looking for Nike’s futures orders, or order for delivery between July and December, to give an indication of the company’s outlook.

Some analysts expect the orders to rise 15 percent to 20 percent, which they said may disappoint people accustomed to the company’s increases of 34 percent, 54 percent and even 66 percent the last three quarters.

“Futures orders will remain strong, which is anything above 15 percent,” said analyst Peter Russ of Shelby, Cullom Davis & Co. In May, the company said future demand in Europe looks strong, having risen 10 percentage points during the quarter.

Based on Nike’s announcement last month, analysts expect revenue to rise 27 percent to 29 percent, mainly from higher overseas sales.

In the U.S., Nike has said it had $30 million in canceled orders and $30 million to $35 million in lost sales for the quarter because it couldn’t meet demand for its clothing.

The company may also be seeing more demand for its mid-priced sneakers, which run $70 to $100, analysts said. Nike faces rising competition from companies such as Reebok International Ltd. and Converse Inc. in the mid-price range.

Some stocks that moved substantially or traded heavily Friday:

NYSE

Caterpillar, up 2-3/8 at 108.

Representatives from Caterpillar Inc. and the United Auto Workers met with a federal mediator for the first time in two years, according to The (Peoria) Journal Star. The union and the Peoria, Ill.-based company have not had a labor agreement since September 1991.

Procter & Gamble, up 2-13/16 at 139-5/16.

The Cincinnati, Ohio-based home products company said it will stop doing business with a New Jersey lab that became the target of protests for allegedly abusing test monkeys.

Hambrecht & Quist, down 1-7/8 at 32-1/4.

Smith Barney lowered its rating of the investment banking and securities firm from attractive to neutral.

NationsBank, down 1-3/8 at 65-1/4.

The Charlotte, N.C., banking giant’s stock has been volatile due to rumors that it’s near a deal to buy San Francisco-based Montgomery Securities. NationsBank also announced a series of management changes, including the heads of risk and credit management.

Delta & Pine Land, down 7/8 at 35-1/8.

The commercial producer of cotton planting seed reported earnings slightly below analysts’ expectations. Delta & Pine Land is based in Scott, Miss.

Chesapeake Energy, down 2-15/16 at 9-1/8.

The company said it would diversify its exploration efforts following disappointing drilling in Louisiana.

NASDAQ

SyQuest Technologies, up 2-1/32 at 2-1/2.

The Fremont, Calif., portable disk drive company said it expects to report third-quarter earnings above the previous quarter’s level, the Dow Jones News Service reported. The company is considered a pioneer of removable disk drives.