Earnings: Starbucks | Time Warner | Proctor & Gamble | Marsh & McLennan | Qwest

Starbucks Profit Up, April Sales Disappoint

(Reuters) - Starbucks Corp. (SBUX) Wednesday reported higher quarterly earnings due to more stores and an annual sale of coffee-making equipment, but April sales at established stores were toward the low end of Wall Street targets.

Shares fell to $36.75 in after hours trade from a Nasdaq close of $37.35.

The company said April same-store sales, known as 'comps' in the industry, rose 6 percent. Three Wall Street analysts' forecasts had ranged from increases of 6 percent to 9 percent.

"Short-term investors may view a 6 percent comp as a hiccup," said ThinkEquity Partners analyst Nicole Miller, who has a "buy" rating on Starbucks shares. "We feel comfortable with that number. It's still a number that can easily provide leverage to the bottom line."

Net income in the fiscal second quarter rose to $127 million, or 16 cents per share, from $100 million, or 12 cents per share, a year ago.

Wall Street analysts had expected the fast-growing company to report earnings of between 14 cents and 16 cents per share with an average view of 14 cents per share, according to Reuters Estimates.

Starbucks said it still expects monthly same-store sales increases for the remainder of this year to be in line with its long-term forecast of between 3 percent and 7 percent, including some "monthly anomalies." The company, however, has a track record of exceeding that goal.

It also raised its full-year earnings target to a range of 71 cents to 72 cents per share from the prior range of 68 cents to 70 cents. although its fiscal third and fourth-quarter targets were broadly in line with Wall Street.

Time Warner Sees Profit Rise

NEW YORK (Reuters) - Time Warner Inc. (TWX), the world's largest media company, on Wednesday said quarterly profit rose, with strong growth in cable television, high-speed Internet and digital phone subscribers.

Earnings rose to $1.5 billion, or 32 cents per share, from $915 million, or 19 cents per share, a year ago.

Excluding items in both quarters, largely one-time gains from asset sales, it posted a 20-cents-per-share profit, compared with 17 cents share a year earlier. The Reuters Estimates average analyst expectation was 20 cents per share.

The New York-based owner of the AOL Internet service and portal, Warner Brothers movie studios and HBO cable network said revenue rose 1 percent to $10.5 billion.

Cable revenue rose 15 percent to $2.6 billion. It added 82,000 basic video subscribers, its largest quarterly gain in six years.

It added 241,000 digital video customers, 346,000 high-speed Internet subscribers. It also added 270,000 digital phone subscribers, its biggest gain ever.

Results were dragged by a 7 percent decline in AOL revenue as it lost 835,000 subscribers from the fourth quarter to high-speed Internet services. It lost 147,000 subscribers in Europe. AOL ended the quarter with 18.6 million U.S. subscribers.

AOL, which has focused most of its efforts on boosting its free online Web site to increase advertising revenue saw ad sales rise 26 percent in the quarter.

Shares in Time Warner have trailed the S&P 500 Index by 5 percent since the start of the year. The stock picked up last month as investors hoped for strong growth after rivals in the cable sector like Comcast Corp. (CMCSA) posted better-than-expected results.

Time Warner's enterprise value — market capitalization plus debt minus cash — is about eight times its estimated 2007 earnings before interest, taxes, depreciation and amortization, compared with News Corp.'s (NWS) 11.5 times valuation.

The company reaffirmed its full-year financial outlook. It expects full-year 2006 adjusted operating income before depreciation and amortization growth to be in the high-single-digits percentage range.

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Proctor & Gamble Posts 37% Higher Profit

CINCINNATI - (AP) - Procter & Gamble Co. (PG), the consumer products company behind such brands as Crest toothpaste and Pampers diapers, said Wednesday that third-quarter profit rose 37 percent on stronger sales, cost savings and the addition of its Gillette business.

Net income grew to $2.21 billion, or 63 cents per share, in the January-March period from $1.61 billion, or 59 cents per share, a year ago. Revenue rose 21 percent to $17.3 billion from $14.3 billion. Excluding last year's acquisition of Gillette, sales were up 6 percent.

P&G said the addition of Gillette diluted per-share earnings by 7 to 8 cents.

Analysts surveyed by Thomson Financial expected earnings of 61 cents per share on sales of $17.6 billion. The company had narrowed its earnings per share forecast in March to 59 cents to 61 cents a share, including 7 cents to 10 cents a share dilution related to the Gillette acquisition.

The company forecast earnings per share of 52 cents to 54 cents for the fourth quarter, and $2.61 to $2.63 for the year. Analysts estimate earnings per share of 55 cents for the fourth quarter, and $2.62 for the year.

March & McLennan Reports Profit Triples

NEW YORK (Reuters) - Marsh & McLennan Cos. (MMC), the world's largest insurance broker, on Wednesday said first-quarter profit more than tripled, helped by selling out of a management services business and lower one-time costs.

Net income rose to $416 million, or 75 cents a share, compared to $134 million, or 25 cents a share, a year earlier.

Selling its investment in Sedgwick Claims Management Services in January this year boosted earnings by $178 million, or 32 cents a share, while one-time items reduced earnings by 11 cents a share compared to 27 cents a year ago.

The New York-based company said income from continuing operations was $238 million, or 43 cents share, compared with $129 million, or 24 cents a share, a year ago.

Revenue fell 1 percent, to $3.03 billion — missing expectations of analysts polled by Reuters for revenue of $3.1 billion.

Chief Executive Michael Cherkasky said the company had started to see signs of recovery in the last quarter of 2005 after questions in the marketplace about whether and when Marsh would recover.

He said in the first quarter the company saw revenue improvement with a significant increase in operating income.

"We are also seeing an increase in our new business opportunities, a high win rate in competitive situations, a return of previously lost business, and an increase in retained business," Cherkasky said in a statement.

He said Guy Carpenter, the reinsurance broking business, reported an increase in underlying revenues, consultancy Mercer's revenue growth accelerated, but risk consulting firm Kroll's results were mixed with revenue growth slowing and margins weakening.

Investment management unit Putnam was helped by a strong market performance.

Marsh & McLennan shares closed at $30.20 on Tuesday, having risen about 7 percent in the past year.

Qwest Posts Higher Profit On High-speed Internet Growth

NEW YORK (Reuters) - Qwest Communications International Inc. (Q), the fourth-largest U.S. local telephone company, on Wednesday posted a higher quarterly profit as revenue rose on growth in its high-speed Internet services.

Profit was $88 million, or 5 cents a share, up from $57 million, or 3 cents a share, a year earlier.

The latest profit included a gains of $257 million, or 14 cents per share, on the sale of wireless assets.

Operating revenue rose to $3.48 billion from $3.45 billion.

Qwest is still struggling to overcome massive debt and is seen missing out on much of the growth in the wireless sector compared to rivals like AT&T Inc. (T). But Qwest's strong cash position has helped its share price double over the past year.

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