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By Mike Caggeso
A handful of big-name U.S. companies released fourth-quarter earnings Thursday and Friday, and each tells a story about how it was affected by the slowing U.S. economy and what it's doing to push profits.
Caterpillar Inc. (CAT) posted an 11% growth in quarterly earnings – like General Electric Co. (GE) – on the strength of international demand. For the year, sales and revenue were $44.9 billion, up 8%. Profit per share was $5.37, up 4% from 2006. The company's sweeping 2008 forecast expects sales and revenue to both increase 5% to 10%, while profit per share is expected to increase 5% to 15% from 2007's performance.
Caterpillar has long been wary of what it called "recessionary conditions" in the United States and has shifted its focus overseas. Sales and revenue in North America dropped 11%, but were boosted by business in Europe, Africa and the Middle East [up 34%], Latin America [up 18%] and Asia [28%].
Microsoft Corp. (MSFT) announced its fiscal second-quarter [ended Dec. 31] earnings – revenue up 30% to $16.37 billion and diluted earnings per share (EPS) up 92% to 50 cents.
"We continue to see healthy demand from both businesses and consumers in the United States and our growth in emerging markets is especially strong. Looking across Brazil, Russia, India, and China, our field revenue reached a combined growth rate over 65% this quarter," the company said in a statement.
While software sales were robust, sales of its Xbox 360 fell 2.3% despite the release of the console's most popular game, "Halo 3," in September.
Aerospace and technology company Honeywell International Inc.'s (HON) fourth-quarter net income climbed 18%, and it reiterated its full-year 2008 earnings of $3.65 to $3.80 per share. Its Chief Executive, , however, said the company would err on the side of caution this year, the Wall Street Journal reported.
Faced with higher operating costs and increased competition, food and candy titan Hershey Co. (HSY) posted lower-than-expected fourth-quarter earnings of $54.3 million and 24 cents per diluted share, down from the $153.6 million and 65 cents, respectively, from last year.
The Central Penn Business Journal reported that analysts expected the company to post 55 cents per diluted share. The company's goal this year is stabilizing marketplace performance.
Comeback kid Xerox Corp. (XRX) slogged through the murky U.S. market to post an impressive 79% growth in fourth-quarter profit, and EPS of 41 cents. Its board also approved an additional $1 billion for its stock buyback program, a strong vote of confidence in the company whose market value plummeted in the 1990s.
Like GE, more than half of its revenue was generated from overseas customers.
And iconic motorcycle maker Harley Davidson Inc. (HOG) said fourth-quarter profit fell 26%, capping off a year that saw its share price fall 32%. It also marked the first year since 1993 where earnings declined.
"We're putting a difficult year behind," Chief Executive Officer told Bloomberg. "We're well positioned to enter 2008, although we're cautious"
News and Related Story Links:
- Money Morning:
Foreign Growth Boosts GE's 2007 Earnings
- Wall Street Journal:
Honeywell's Net Climbs 18%
- Central Penn Business Journal:
Hershey Q4 earnings plunge