Earnings: Cisco, Disney, Cablevision, Sara Lee, US Airways

Earnings: Cisco | Disney | Cablevision | Sara Lee | A&P | US Airways

Cisco Earnings Top Forecasts

SAN JOSE, Calif. - Networking gear provider Cisco Systems Inc. (CSCO) saw a slightly lower fiscal third-quarter profit as stock-option expenses ate into higher sales.

Net income for the period ending April 29 was $1.4 billion, or 22 cents a share, compared with $1.41 billion, or 21 cents, in the same quarter of 2005. The quarterly results included $188 million, or 3 cents, in stock option expenses as a result of a recent change in accounting rules.

Excluding options and other items, Cisco earned 29 cents per share, 3 cents better than the mean forecast of analysts surveyed by Thomson Financial. The Wall Street forecast excludes options costs.

Sales rose 18 percent to $7.3 billion compared with $6.2 billion last year. Revenue was helped by the acquisition of Scientific-Atlanta Inc., which was completed in February. It contributed $407 million to sales, San Jose-based Cisco said in a release.

The results were released after financial markets closed.

Cisco shares rose 84 cents, or 3.9 percent, after finishing the regular session 8 cents lower at $21.68 on the Nasdaq Stock Market.

Disney Profit Boosted By Tv, Theme Parks

LOS ANGELES (Reuters) - Walt Disney Co. (DIS) reported a higher net profit on Tuesday as strength in its television business and theme parks outweighed a dip in profits at its studio.

Profit topped Wall Street expectations at Disney, which has seen its TV advertising rates and viewership soar on hit shows such as "Desperate Housewives" and "Lost." Revenue lagged analysts' targets, however.

Disney, which operates theme parks, a film studio, TV and radio networks and a consumer goods licensing business, posted net income of $733 million, or 37 cents per share, compared with $657 million, or 31 cents per share a year ago.

Revenue rose to $8.03 billion, from $7.83 billion in last year's second quarter. Analysts, on average, expected net and adjusted earnings of 31 cents per share and revenue of $8.2 billion for the second quarter, according to Reuters Estimates.

Media networks earnings rose 20 percent to $969 million, more than half total segment operating income. Parks income rose 17 percent to $214 million, while studio profit fell 39 percent to $147 million and consumer products income fell 8 percent to $104 million.

Disney last week completed its $8.1 billion acquisition of Pixar Animation Studios Inc, giving Apple Computer Inc. (APPL) Chief Executive Steve Jobs a 6.3 percent stake in the company and a seat on its board of directors.

Disney shares were trading at price-to-estimated 2007 earnings ratio of 17.8, compared with a price-to-earnings ratio of 16.5 for Time Warner Inc (TWX), and of 17.3 for Viacom Inc (VIA).

Cablevision Loss Narrows On Higher Core Earnings

NEW YORK - (AP) - Cablevision Systems Corp. (CVC) reported Tuesday a narrower loss of $58.9 million in the first quarter on higher earnings from its core cable TV business. Cablevision also owns Madison Square Garden, Radio City Music Hall and several cable networks.

The loss, which amounted to 21 cents per share for the three months ended March 31 compared with a net loss of $118.9 million, or 41 cents per share, in the same period a year ago. Revenues rose 16 percent to $1.41 billion from $1.21 billion.

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On an operating basis, before interest payments, taxes, investment gains and losses and other factors, income rose 38 percent to $103.1 million. Cablevision's net income is greatly affected by interest payments on its debt which is currently $11.4 billion.

The gain in operating income was largely due to a 35 percent jump in profits from cable TV and telecommunications services. Cablevision has been aggressively signing up customers to premium offerings like high-speed Internet and phone service delivered over cable lines.

Cablevision's cable networks unit, which includes AMC, IFC and WE, swung to an operating loss of $5 million from a profit of $4.7 million in the year-ago period on higher programming and marketing costs for original material.

Madison Square Garden had a slightly wider operating loss of $12.3 million due to several factors, including an NBA luxury tax and higher costs from professional hockey compared to last season when there was a lockout. Cablevision owns the New York Knicks NBA team and the NHL's New York Rangers.

Cablevision shares rose 75 cents, or 3.6 percent, to $21.65 in premarket trading.

Sara Lee Posts Lower Profit

CHICAGO (Reuters) - Sara Lee Corp. (SLE), the maker of deli meat, baked goods and household products, on Tuesday posted lower quarterly profit, as it continued to dramatically pare down company assets.

Earnings before items missing analyst estimates, and Sara Lee shares fell 5 percent in premarket trading.

The company cited weakness in its household and body care businesses and international bakery and food service units, while North American meats and baked goods were strong.

Profit fell to $42 million, or 6 cents a share, in the fiscal third quarter ended April 1, from $189 million, or 24 cents a share, a year earlier.

Excluding one-time items, earnings were 22 cents a share from continuing operations, compared with the average analyst estimate of 25 cents, according to Reuters Estimates. Analysts cautioned that estimates for Sara Lee are fluid because of the timing of various parts of its overhaul.

In 2005, Sara Lee started selling or spinning off businesses equal to about 40 percent of revenues. The plan includes the spin-off of its North American apparel business.

Sales fell 1 percent to $3.84 billion, hit by the stronger dollar and divestitures.

Last week, Sara Lee said it was in exclusive negotiations for Smithfield Foods Inc. (SFD) to purchase Sara Lee's European meats business, one of the few remaining items in its Sara Lee's portfolio overhaul.

Earlier Tuesday, it said it was essentially giving away its Courtaulds private-label apparel business in Britain to apparel maker PD Enterprises Ltd. to complete its overhaul.

Sara Lee will post an additional $33 million impairment charge for the business in its third quarter. It already took a $1 million charge in the second quarter to reduce the carrying cost of the business to zero.

The company forecast fourth-quarter earnings of 27 cents a share to 32 cents a share, excluding results from discontinued operations and any gains or losses from the disposition of assets. Analysts, on average, expected 32 cents a share, according to Reuters Estimates.

Among Sara Lee brands are Ball Park franks, Jimmy Dean sausages, Champion athletic wear, Playtex bras, Hanes underwear, Sanex shower gel as well as its namesake cakes.

Sara Lee shares traded at $17.75 on the Inet electronic broker system, down 94 cents from Monday's New York Stock Exchange close of $18.69.

Before Tuesday, Sara Lee shares trade at about 15.6 times estimated 2007 earnings, compared with a multiple of 18.7 for H.J. Heinz Co. (HNZ) and 15.7 for Kraft Foods Inc. (KFT), two other food companies undergoing major overhauls.

A&p Loss Larger On Restructuring

CHICAGO (Reuters) - Great Atlantic & Pacific Tea Co. Inc. (GAP), the grocer known as A&P, posted a larger quarterly loss on Tuesday due to restructuring charges.

In a statement, Christian Haub, the board's executive chairman, said that A&P's "improved performance and financial resources also present the opportunity to participate in the expected consolidation" of the grocery industry.

The U.S. grocery industry is in the midst of change. The operations of Albertsons Inc. (ABS), the nation's No. 2 grocer, are set to be sold to a group of buyers, including Supervalu Inc. (SVU) and CVS Corp. (CVS) in June.

Analysts said last month that A&P could look to combine with Pathmark Stores Inc. (PTMK), which operates supermarkets in New York, New Jersey and the Philadelphia area. Pathmark's shares jumped on April 5 after A&P declared a special dividend, a move analysts said could signal consolidation.

Last June, shareholders of Pathmark approved private equity firm Yucaipa Cos.' $150 million bid to buy a 40-percent stake in the grocer and warrants to purchase more shares.

Yucaipa, the private equity firm owned by billionaire grocery magnate Ronald Burkle, also raised its stake in Wild Oats Markets Inc. (OATS), an organic and natural foods grocer, to about 15 percent earlier this year.

A&P's loss for the fourth quarter that ended February 25,widened to $39.1 million, or 95 cents per share, from $5.7 million, or 15 cents a share, a year earlier.

The company, which was founded in 1859, operates 405 stores under names such as A&P, Waldbaum's and The Food Emporium in nine states including New York, New Jersey and Pennsylvania, as well as in the District of Columbia.

Sales fell to $1.61 billion from $2.56 billion a year earlier. The year-ago period included $853 million in sales related to A&P Canada, which was sold in August 2005.

U.S. sales fell to $1.6 billion from $1.7 billion.

Us Airways Posts Profit

CHICAGO (Reuters) - US Airways Group Inc. (LCC), formed from the merger of America West Airlines and US Airways last year, Tuesday said first-quarter results swung to a profit, benefiting from fare increases and capacity reduction throughout the industry and its shares rose 5 percent.

The airline also said that it expected to be profitable for the full 2006 year, helped by cost savings from the merger.

Excluding special items, the merged US Air reported a profit of $5 million, or 5 cents per share in the most recent quarter, reversing a loss of $16 million, or $1.09 per share, a year earlier at the stand-alone America West.

On that basis, Wall Street analysts had a consensus forecast for a loss of 15 cents per share, according to Reuters Estimates.

"There is a strong macro trend in RASM (revenue per available seat mile) and yield increases for the industry as domestic capacity is being cut back," said Calyon Securities analyst Ray Neidl in a research note.

"However, the old America West management that is now running the combined companies is doing a commendable job in controlling costs but, even more importantly, raising yields in the old US Airways system," he said.

Calyon raised its rating on US Air to "buy" from "add" with a target price of $60.

Net income for the combined airline was $65 million, or 76 cents per share, compared with a loss of $174 million, or $6.58 per share, a year ago, reflecting an independent America West's struggles with overcapacity and price competition.

"Looking forward, we anticipate a very strong spring and summer and now expect to be profitable for the full year 2006, even after accounting for merger related expenses and with continued high fuel costs," Chief Executive Doug Parker said in a statement.

Before the effect of an accounting change, the combined airline had profit of 75 cents per share in the 2006 first quarter, compared with year-ago profit of $1.29 per share at a stand-alone America West.

The special items in the most recent quarter include a $90 million gain associated with the forgiveness by Airbus of a company loan and a $26 million unrealized gain related to the airline's fuel hedges. The carrier said the gains were offset by $46 million in merger-related expenses. There was also $11 million associated with the pay-down of debt.

US Air reported operating revenue of $2.65 billion, up from $733 million a year earlier. At the former America West, revenue per available seat mile (RASM) rose 16.2 percent to 10.27 cents. At the former US Air, RASM rose 27.7 percent to 13.34 cents.

The company said fuel prices in the first quarter were $1.95 per gallon, up 37.3 percent over the same quarter in 2005 at the former America West.

The carrier ended the quarter with an unrestricted cash balance of $1.6 billion.

The airline industry has been battered by soaring fuel prices and low-fare competition that has made it hard for airlines to raise ticket prices enough to cover costs. In recent months, however, capacity -- the number of seats for sale -- has come out of the market and airlines have implemented some lasting fare hikes.

The former US Air and America West merged last year and took the name US Airways for the combined carrier. The two airlines are in the process of integrating labor and operations now.

US Air stock rose $2.48 at $49.78 on the New York Stock Exchange.

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