Analog Devices profit rises 15%

Sales at The Home Depot, the nation's largest home improvement retailer, fell 5.4 percent, the seventh decline in eight quarters. (Charles Rex Arbogast/Associated Press)

Analog Devices Inc., the Norwood maker of semiconductors for companies including Cisco Systems Inc., said profit rose 15 percent as sales of chips used in communications equipment and industrial products increased.

Third-quarter net income climbed to $138.6 million, or 47 cents a share, from $120.4 million, or 37 cents, a year earlier Analog said. Sales rose 6.7 percent to $659 million, short of the $660.4 million average of 16 analysts' estimates compiled by Bloomberg.

About three-quarters of Analog's revenue comes from industrial and communications businesses. Chief executive Jerald Fishman sold the company's cellphone chip unit and a voltage regulator business in January to concentrate on more profitable products.

Analog shares have gained 1.4 percent this year. (Bloomberg)

Hewlett-Packard Co. reported a higher quarterly profit on solid international sales in its computer and printer businesses, which overcame pockets of weak technology spending.

The Palo Alto, Calif., computer maker reported net income for the fiscal quarter ended July 31 of $2.5 billion, or 80 cents a share, up from $1.78 billion, or 66 cents per diluted share, in the year-ago quarter.

Excluding items, HP reported profit of 86 cents a share, ahead of the average analyst expectation of 84 cents a share.

Revenue rose 10 percent to $28.0 billion, ahead of Wall Street expectations of $27.43 billion.

Revenue from outside the United States accounted for 68 percent of the total. Adjusted for currency exchange rates, Europe, Middle East, and Africa revenue rose 5 percent, and Asia Pacific revenue rose 8 percent. Revenue in the Americas rose 3 percent.

Despite 3 percent US growth in the third quarter, chairman and chief executive Mark Hurd told reporters on a conference call that this was better than the company had expected, and marked a pickup from its second fiscal quarter. (Reuters)

The Home Depot Inc., the world's largest home improvement retailer, said profit fell 24 percent after US consumers grappling with the worst housing slump since the 1930s cut spending.

The retailer forecast a 24 percent earnings decline for the year, indicating that home improvement sales will retreat further after it reported an eighth straight quarterly profit drop.

Sales fell 5.4 percent, the seventh decline in eight quarters, and may retreat 5 percent this year, the retailer said. Home Depot followed Lowe's Cos. in forecasting lower annual profit after government tax rebate checks stimulated second-quarter earnings.

Second-quarter net income dropped 24 percent to $1.2 billion, or 71 cents a share, from $1.59 billion, or 81 cents, a year earlier, Atlanta-based Home Depot said. Profit exceeded analysts' estimates by 10 cents a share.

Full-year profit from continuing operations may decline 24 percent, Home Depot said.

Revenue fell to $21 billion from $22.2 billion, Home Depot, which has 2,257 locations, said. Sales in stores open at least a year dropped 7.9 percent.

Twenty-two analysts surveyed by Bloomberg estimated average second-quarter profit of 61 cents a share. Seventeen estimated sales of $20.6 billion. (Bloomberg)

Medtronic Inc.'s first-quarter earnings beat Wall Street estimates on a combination of lower expenses and higher sales of devices to treat clogged arteries, fractured spines, and other ailments.

The medical device maker posted a profit of $747 million, or 66 cents per share, up 11 percent from $675 million, or 59 cents per share, in the same quarter last year.

Double-digit growth of Medtronic's stent, spinal, and electrical stimulation devices helped offset lackluster growth in the company's largest business unit, heart-shocking defibrillator implants.

The company spent $66 million in the quarter on employee buyouts and other expenses. In May, Medtronic disclosed a restructuring plan that will shrink its workforce by 3 percent.

Excluding those expenses, the Minneapolis company said it earned $813 million, or 72 cents per share, for the quarter ended July 25. Sales rose 19 percent to $3.71 billion from $3.13 billion in the year-ago quarter.

Analysts expected a profit of 69 cents per share on $3.67 billion in sales, according to Thomson Reuters. Such estimates typically exclude onetime items.

The company also benefited from reduced research and development expenses compared with last year's first quarter, when it spent $25 million to license patents from NeuroPace, a maker of electrical implants to treat epilepsy. (AP)

Target Corp., the second largest US discount retailer, said its profit fell for the fourth straight quarter after consumers cut purchases of its most profitable clothing and home goods.

Second-quarter net income declined 7.6 percent to $634 million, or 82 cents a share. The profit beat analysts' estimates by 6 cents because Target reined in costs.

Sales at stores open more than a year dropped for the second quarter in a row, signaling that Target isn't keeping pace with Wal-Mart Stores Inc. while the slumping economy drives consumers to discounters. Wal-Mart said last week that tax rebate checks helped drive so-called same-store sales up 4.5 percent in the quarter.

"Right now they're just having to buckle down and figure out how to compete against Wal-Mart in a slowing market," said David Abella, a portfolio manager at Rochdale Investment Management in New York, which owns shares of both retailers.

Revenue increased 5.8 percent to $15.5 billion in the quarter. Net income a year earlier was $686 million, or 80 cents a share.

For the full year, chief financial officer Douglas Scovanner called a consensus estimate of $3.43 "within a reasonable range of likely outcomes." The average estimate of 20 analysts surveyed by Bloomberg is $3.42. (Bloomberg)

Saks Inc. reported its biggest quarterly loss in two years on discounts for women's apparel and said second-half sales would be lower than it forecast earlier.

The luxury chain's loss widened to $31.7 million, or 23 cents a share, in the second quarter ended Aug. 2, missing analysts' estimates. Saks, based in New York, said it expects a "flat to low-single-digit" sales decline for the second half of the year, instead of the previously predicted gain.

Saks's profitability eroded more than analysts expected as sales in nearly all merchandise categories and geographical regions slowed. Saks's projected sales shortfall indicates that spending by luxury consumers may deteriorate further as home values decline and Wall Street axes jobs.

Saks's sales trends became "much more challenging" in the second quarter and deteriorated in July, even among its wealthiest customers, chief executive Stephen Sadove told investors and analysts on a conference call.

"We turned on a dime from a double-digit growth environment to a no-growth environment," Sadove said.

Analysts surveyed by Bloomberg estimated an average loss of 19 cents a share.

In the year-ago period, Saks had a loss of $24.6 million, or 17 cents. (Bloomberg)