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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Company News: Starbucks earnings rise 18 percent

From Wire Reports The Spokesman-Review

Starbucks Corp. said Thursday its fiscal second-quarter profits jumped 18 percent, as the company opened 560 new stores as part of an aggressive global expansion.

The world’s largest coffeehouse chain reported net income of $150.8 million, or 19 cents a share, for the 13 weeks ended April 1. That was up from earnings of $127.3 million, or 16 cents per share, in the same period last year.

Revenue for the latest quarter rose 20 percent to $2.26 billion, compared to $1.89 billion last year.

Analysts polled by Thomson Financial had projected earnings of 19 cents per share on revenue of $2.3 billion.

Starbucks said sales at stores open at least 13 months rose 4 percent over the same quarter last year. That’s toward the low end of its forecast, but Jim Donald, the company’s president and chief executive, said that’s not a concern.

Shares of Starbucks rose 37 cents, or 1.2 percent, to $31.62 in regular trading, then rose another 93 cents to $32.55 after the earnings report.

“The troubled mortgage market spilled onto General Motors Corp.’s balance sheet Thursday as first-quarter profits dropped 90 percent from a year ago due mainly to losses at GM’s former financial arm.

But the fact that the nation’s largest automaker still lost money on its North American operations seemed to trouble industry analysts more than losses at GMAC Financial Services because GM is more than a year into a massive restructuring plan that includes cost cuts and multiple new products.

The net profit of $62 million, or 11 cents a share for the January-March period, was GM’s second consecutive quarterly profit, although it was down from $602 million, or $1.06 per share, a year ago.

GM said in Thursday’s report it had record vehicle sales of 2.26 million worldwide and showed improvements in its automotive operations in the latest quarter.

Investors appeared skeptical of GM’s performance, sending its stock price down $1.75, or 5.3 percent, to $30.69 on Thursday.

Wal-Mart Stores Inc. announced Thursday that it paid its hourly employees more than $1.1 billion in profit sharing, retirement accounts, discounts and other benefits last fiscal year.

For the fiscal year ended Jan. 31, Wal-Mart paid $667 million in profit sharing and 401(k) contributions, $51.4 million toward the company’s stock purchase plan, $397 million in discounted merchandise and $529.8 million in bonuses, the Bentonville-based company said.

Those benefits were paid to Wal-Mart’s hourly employees.