April 28, 2005 in Business

Starbucks, Verizon earnings up sharply

Associated Press
 

Starbucks Corp. on Wednesday reported a 27 percent jump in second-quarter earnings, helped by its specialty coffee drinks business and its continued expansion overseas.

For the three months ended April 3, the Seattle-based retailer earned $101 million, or 24 cents per share, up from $79.5 million, or 19 cents per share, in the same period a year earlier.

Revenue was $1.52 billion, up 22 percent from $1.24 billion in the year-ago period.

The figures were in line with the mean estimate of analysts surveyed by Thomson Financial, who had forecast 24 cents per share on revenue of $1.51 billion.

Starbucks shares rose $1.19, or 2.6 percent, to $47.60 in after hours trading. The shares fell 20 cents in the regular session on the Nasdaq Stock Market before the results were announced.

Starbucks attributed its revenue surge to the opening of 669 new stores in the last 12 months. The growth in sales at stores open at least a year reflects a 4 percent increase in the number of transactions and a 3 percent increase in the average value per transaction. Starbucks also raised prices on its lattes, cappuccinos and other specialty coffee drinks last October.

Verizon Communications Inc. earned $1.76 billion in the first quarter, surpassing expectations as Verizon Wireless improved on its already industry-leading performance and the DSL business posted its fastest growth yet.

Verizon’s first-quarter profit amounted to 63 cents per share. In the same period last year, Verizon earned $1.20 billion, or 43 cents per share, weighed down by $446 million in costs to cover early retirement packages as the company reduced its work force by 21,000 employees.

Revenues totaled $18.18 billion in the most recent quarter, up from $17.06 billion in the year-ago period.

The company declined after Wednesday’s report to provide any comment regarding its next move in a tense bidding war to acquire long-distance carrier MCI Inc., which over the weekend embraced a $9.75 billion offer from Qwest Communications International Inc.

Verizon’s shares jumped $1.22, or 3.6 percent, to close at $35.22 in Wednesday trading on the New York Stock Exchange.

• Shares of Amazon.com fell Wednesday after the company reported its net income sagged 30 percent on tax expenses and a new fee-based membership program that expands the online retailer’s foray into free shipping even further.

Amazon shares fell 99 cents, or 3 percent, to close at $31.72 in Wednesday trading on the Nasdaq Stock Market.

Amazon, one of the world’s largest e-commerce companies, said Tuesday that it earned $78 million in the first quarter, or 18 cents per share, compared with net income of $111 million, or 26 cents per share, in the same period a year ago.

The results include a charge of $56 million for taxes and a $26 million gain from an accounting change.

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