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Gillette issues profit warning
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June 17, 1999: 8:02 p.m. ET
Gillette warns on sales and earnings; priceline.com gets new prez
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NEW YORK (CNNfn) - A razor company warned of a cut in sales, while a name-that-price Web site named a new president after the market closed Thursday.
The Gillette Co.
The Gillette Co. (G) is expecting a close financial shave in the second quarter, warning that it will likely report a low single-digit increase in sales and about a 20 percent decrease in earnings per share versus the prior year.
The Boston-based razor and consumer products maker earned 33 cents per share in the June 1998 second quarter. Analysts polled by First Call Corp. were expecting earnings of 29 cents per share in the current second quarter.
The company said sales of its stationery and toiletries businesses and its Braun appliance business have been softer than expected and it said slower than anticipated recovery in several key markets - including Brazil, Germany, Japan and Russia-affected reporting results.
Gillette also announced that its board had authorized an expansion of its stock repurchase program, that began in September 1997, from 50 million to 75 million shares. The company expects the original 50 million share repurchase will be completed by the end of the year. Gillette plans to purchase the additional 25 million shares over the next 12 to 18 months in the open market or in privately negotiated transactions, depending on market conditions and other factors.
Priceline.com
priceline.com(PCLN), the Internet pricing service that enables consumers to name their own price on a variety of goods and services, named Daniel H. Schulman as its new president and chief operating officer.
Schulman, 41, president of AT&T's (T) Consumer Markets Division, is scheduled to start with the Stamford, Conn.-based Internet company on July 1, replacing Jesse M. Fink, who returns to Walker Digital, the intellectual property laboratory that invented priceline.com's patented pricing system.
Separately, AT&T announced that H. Eugene Lockhart, 49, currently executive vice president and chief marketing officer, will replace Schulman.
Adobe Systems Inc.
Adobe Systems Inc. (ADBE), which provides graphic design, publishing and imaging software for Web and print production, had some picture-perfect financials with a win over Wall Street estimates.
The San Jose, Calif.-based company reported revenue of $245.9 million, compared to $227.3 million reported in fiscal 1998. Net income was $45 million, up 60.7 percent from $28 million reported in the year ago period.
Diluted earnings per share were 70 cents, which handily beat First Call's estimate of 65 cents. The company reported diluted earnings of 41 cents per share in the year ago period.
Walden Residential Properties Inc.
Real estate investment trust Walden Residential Properties Inc. (WDN) confirmed reports that it had received several indications of interest to buy the Dallas-based company from both public and private entities and said it was assessing them.
"We are not actively seeking to sell the company," Chief Executive Marshall Edwards said in a statement, adding that "it is important that we act in the best interest of the shareholders and thoroughly evaluate all legitimate opportunities to increase shareholder value."
J.M. Smucker Co.
Jam and jelly maker J.M. Smucker Co. (SJMA) was spreading the news on Thursday, reporting that fiscal year sales reached $602 million, up 6.5 percent over fiscal 1998 sales of $565 million.
Earnings for the year increased about four percent to $37.8 million or $1.30 per share. This compares to earnings of $36.3 million or $1.25 per share last year, before the effect of an accounting change. First Call did not have an earnings estimates for Smucker.
The Orrville, Ohio-based company also said fourth- quarter sales were $156 million, up nearly 10 percent over the same period last year, while earnings for the period were $10 million, a 3 percent increase. Earnings per share in the fourth quarter were 35 cents compared to 34 cents last year.
Genesee Corp.
Genesee Corp. (GENBB) was crying in its beer after reporting revenues for fiscal 1999 were down due to lower sales and revenues in the Rochester, N.Y. company's brewing business.
Consolidated gross revenues for fiscal 1999 were $178.4 million, compared to $186.4 million for the prior year. Net earnings in fiscal 1999 were $2.5 million, or $1.52 basic and diluted earnings per share, compared to $1.3 million or 82 cents per diluted earnings per share in the prior year. First Call did not have an earnings figure for this company.
Genesee said the drop in beer sales was only partially offset by increased sales in the company's food division. The company said its Genesee Brewing continued to feel the effect of intense competition in the brewing industry and the slowdown of the specialty segment industry.
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