Starbucks reports soaring profits

Starbucks Corp.’s fiscal third-quarter profits soared nearly 30 percent, bolstered by strong U.S. and international sales, the company said Wednesday.

For the 13 weeks ended July 3, the Seattle-based specialty coffee retailer reported earnings of $126 million, or 31 cents per share, up from $98 million, or 24 cents per share, in the same period a year earlier.

Revenue increased 21 percent to $1.6 billion, up from $1.3 billion in the third quarter of 2004.

Analysts surveyed by Thomson Financial had been expecting earnings of 30 cents per share on revenue of nearly $1.6 billion.

Starbucks raised its earnings estimates slightly for the full year ending in September, predicting $1.19 to $1.20 per share, up from previously projected earnings of $1.17 to $1.19 a share.

The company said it plans to open 1,800 new stores in fiscal 2006, up from 1,500 new stores in the current fiscal year.

Other companies reporting earnings Wednesday included:

“ Boeing Co.‘s second-quarter results breezed past Wall Street’s earnings expectations Wednesday while the aerospace company boosted its profit outlook, forecasting continued strong demand for its commercial airplanes.

Profit in the quarter dipped 7 percent, mostly from a charge related to the sale of commercial airplane facilities in Wichita, Kan., and Tulsa, Okla., and because earnings from a year earlier were inflated by a tax refund.

But Boeing said better productivity helped boost operating profit at both its defense unit and its commercial airplane business, which has seen a surge in airplane orders as spending on new aircraft grows worldwide, particularly from low-cost and overseas carriers.

“The bottom line is that the operating engine of our company is getting stronger,” said Boeing CEO W. James McNerney, hosting his first earnings conference call with analysts since his appointment June 30.

The Chicago-based company’s shares rose after it upped its earnings outlook for the year, citing stronger operating margins in both businesses. But it warned of weaker revenue growth from military products because of an expected slowdown in U.S. defense spending on missile defense and other advanced systems.

Boeing said it earned $566 million, or 70 cents per share, for the April-June period, down from $607 million, or 75 cents a share, a year earlier. The results easily surpassed the average estimate of analysts polled by Thomson Financial of a 61 cents share.

Net earnings fell in part because of a 23 cents-a-share benefit from a tax refund in the year-ago period. The $900 million sale of the commercial airplane facilities resulted in a charge of 9 cents.

Shares of Boeing rose 35 cents to close at $66.70 Wednesday on the New York Stock Exchange, after eclipsing its 52-week high of $67.12 earlier in the day.

“ A surge in Airbus passenger jet deliveries helped European Aeronautic Defence & Space Co. to post a 47 percent rise in second-quarter net profit Wednesday but the company left its full-year earnings guidance unchanged.

EADS said net profit rose to 488 million euros ($585 million) in the April-June quarter from 332 million euros a year earlier.

The closely watched earnings before interest and taxes, or EBIT, before goodwill impairment and exceptional items rose 13 percent to 883 million euros ($1.06 billion).

Revenue increased 6 percent to 9.02 billion euros ($10.8 billion). Both profits and revenue were ahead of market expectations. Airbus delivered 102 planes in the second quarter, eight more than in the corresponding 2004 quarter.

“ Martha Stewart Living Omnimedia Inc. posted a wider loss in the second quarter from a year ago, weighed down by charges associated with its new TV show. But the company had its first revenue gain in 10 quarters, boosted by advertisers returning to its flagship magazine as the founder puts her personal legal woes behind her.

The New York-based multimedia company also said Wednesday it expects to break even in operating income before depreciation and amortization and noncash equity compensation in the second half of 2005.

The company reported a loss of $33.5 million, or 65 cents per share for the three months ended June 30. That compared with a loss of $17.8 million, or 36 cents per share, in the year-ago period.

“ Investors rewarded Sprint Corp. Wednesday after the nation’s No. 3 wireless carrier said second-quarter profit more than doubled, beating analysts’ estimates, and raised its forecast for annual operating earnings.

In trading Wednesday on the New York Stock Exchange, Sprint shares closed up $1.40, or 5.61 percent, at $26.37, surpassing its previous 52-week high of $25.87.

The results seem to give Sprint a strong push as it prepares later this summer to acquire Nextel Communications Inc., which also reported strong revenue growth last week.

Overland Park, Kan.-based Sprint reported earnings of $599 million, or 40 cents per share, after preferred dividend payments, up from $229 million, or 16 cents per share, in the second quarter of 2004.

The results included $33 million in impairment of computer applications and $27 million in costs associated with Sprint’s proposed deal for Nextel. The deal is expected to close in the current quarter.

Without those adjustments, the company said it earned 42 cents per share, compared with 21 cents in the year-ago quarter.

Revenue increased 3.6 percent to $7.1 billion from $6.87 billion a year earlier.

“ Railroad companies CSX Corp. and Norfolk Southern Corp. reported much higher second-quarter earnings Wednesday as the growing economy spurred the need to ship coal and merchandise.

Both railroads said the increased transportation revenues for coal, which is used to fuel power plants and to make steel, and products such as construction materials offset rising diesel and labor costs.

CSX, based in Jacksonville, Fla., said second-quarter earnings rose more than 38 percent to $165 million, or 73 cents a share, up from $119 million, or 53 cents a share, a year ago. Excluding one-time expenses and benefits, earnings were 96 cents a share, above the average estimate of 81 cents a share expected by analysts surveyed by Thomson Financial.

Norfolk Southern, based in Norfolk, Va., reported profits nearly doubled in the quarter to $424 million, or $1.04 per share, compared to $213 million, or 54 cents per share, in a year ago. The quarter included a $96 million gain related to Ohio phasing out its corporate franchise tax, as well as an extra $24 million for the settlements of two coal rate cases.