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Nike 2Q beats estimates
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December 17, 1998: 5:04 p.m. ET
Better-than-expected profits reflect cost cutting, but future orders off 10%
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NEW YORK (CNNfn) - Athletic shoe maker Nike Inc. Thursday reported fiscal second-quarter earnings slightly ahead of Wall Street estimates. But in a sign of tougher times to come, the company also reported a reduction in its worldwide future orders.
The Beaverton, Ore.-based company posted net income of $68.9 million, or 24 cents a share, on $1.91 billion in revenue. Analysts expected Nike (NKE) to report earnings of 22 cents a share, according to First Call.
Although Nike's performance beat Wall Street estimates, its second-quarter figures lagged far behind last year's results. The company reported net income of $141.1 million, or 48 cents a share, on $2.26 billion in revenue in the year-ago quarter.
"We endured many significant challenges in the second quarter, in particular, a soft U.S. retail market for athletic footwear and apparel," said Philip Knight, Nike's chairman and chief executive. "Despite these challenges, we met our bottom line expectations as we began to see an impact from our efforts to control expenses in a weak retail environment."
Faced with a growing glut of unsold sneakers and apparel, Nike has been slashing jobs and cutting costs in an effort to trim expenses by more than $100 million in fiscal 1999.
Nike also said worldwide future orders for athletic footwear and apparel -- scheduled for delivery between December 1998 and April 1999 -- totaled $3.8 billion, 10 percent lower than such orders for the same period last year.
Future orders are a key barometer for Nike because they indicate whether the market for sneakers and other sports apparel is expanding or contracting.
The Asia-Pacific region was hit hardest with a 37-percent reduction in future orders. U.S. orders were down 7 percent.
Nike shares fell 1/8 to close at 41-3/4 in Thursday trade before slipping to 41-1/2 in after-hours trading. 
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