Federated sales sluggish

Thu., Nov. 9, 2006

Associated Press The Spokesman-Review

McDonald's sales rise

» Breakfast offerings and a Monopoly game promotion strengthened U.S. results and helped boost McDonald's Corp.'s worldwide same-store sales by 5.5 percent last month, the burger chain said Wednesday.

» While extending its sales momentum, McDonald's continues to lag some of its biggest rivals in the fast-food industry's efforts to switch to a healthier cooking oil.

» The Oak Brook, Ill.-based company said it is testing a zero-trans fat oil in a limited number of its U.S. restaurants. But after disclosing in Europe on Tuesday that it plans to switch oils in its European outlets, it said it still isn't ready to make such a move in its largest market.

» Total October sales – including those from restaurants opened in the past year – grew 8.2 percent, or 6.6 percent excluding currency fluctuations.

» Same-store sales, or those from restaurants open at least 13 months, rose 5.6 percent in the U.S., aided by sales of breakfast items and the Snack Wrap, as well as Chicken Selects and premium chicken sandwiches, which were both featured in McDonald's recent Monopoly promotion.

Federated Department Stores Inc. on Wednesday reported a $3 million loss in the third quarter as it struggled with disappointing sales at its 400 newly converted Macy’s stores and continued hefty costs related to last year’s acquisition of May Department Stores Co.

The department store operator, which also operates Bloomingdale’s, said the loss for the quarter ended Oct. 28 amounted to a penny per share compared with a profit of $436 million, or 90 cents per share, last year.

Chief Financial Officer Karen Hoguet admitted to analysts in a conference call Wednesday that extensive changes in the stores – in assortments, systems and people – cost Federated business in the third quarter, but the company feels well-positioned for the holiday season.

Excluding costs related to the May acquisition and inventory adjustments of $90 million, or 17 cents per share, the retailer posted earnings of 20 cents per share. Revenue grew 6 percent to $5.89 billion from $5.56 billion a year ago.

“Cisco Systems Inc., the world’s largest networking equipment maker, said Wednesday its first-quarter earnings jumped 27 percent over last year on higher sales of the gear that connects computers to the Internet.

Net income for the quarter ended Oct. 28 was $1.61 billion, or 26 cents per share, compared with $1.26 billion, or 20 cents per share, in the same period last year.

Quarterly sales for the San Jose-based company were $8.18 billion, compared with $6.55 billion last year.

Excluding one-time charges, the company would have earned $1.9 billion, or 31 cents per share.

The company was expected to earn, on average, 29 cents per share on $7.9 billion in revenue, according to analysts surveyed by Thomson Financial.

“This strong momentum demonstrates that customers increasingly share our vision of the network as the platform for all forms of communication and IT,” said John Chambers, Cisco’s chief executive officer.

“Cablevision Systems Corp. reported a narrower third-quarter loss Wednesday as the cable TV operator signed up more customers for premium services like high-speed Internet access and digital phone.

Cablevision, which also owns Madison Square Garden, Radio City Music Hall and a handful of cable channels, posted a loss of $59.2 million, or 21 cents per share, versus a loss of $63 million, or 22 cents per share, a year ago.

Analysts polled by Thomson Financial had been expecting a loss of 14 cents per share. Revenues rose 13.4 percent to $1.41 billion from $1.24 billion, meeting analysts estimates.

Cablevision’s shares slipped 2 cents to close at $27.91 on the New York Stock Exchange.

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Federated sales sluggish

Jesse Tinsley

Jim Meehan

Molly Quinn

Rob Curley

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