Earnings: Johnson & Johnson | Merrill Lynch | EMC | Office Depot | United Technologies | Motorola | IBM | Yahoo | Intel

Johnson & Johnson Beats Estimates

NEW YORK (Reuters) - Johnson & Johnson (JNJ) Tuesday said its third-quarter profit rose on better-than-expected sales growth for its array of drugs, medical devices and consumer products.

The New Brunswick, N.J.-based company said it earned $2.76 billion, or 94 cents a share, compared with $2.54 billion, or 85 cents a share, in the year-ago period.

Analysts, on average, expected 93 cents a share, according to Reuters Estimates.

Quarterly revenue for the diversified health care company rose almost 8 percent to $13.29 billion, well above the $13.06 billion Reuters Estimates forecast.

Global sales of prescription drugs rose 7.8 percent to $5.9 billion, fueled by strong demand for schizophrenia drug Risperdal, arthritis treatment Remicade and Topamax for epilepsy.

Sales of medical devices rose 7.1 percent to $5 billion, with strongest growth in overseas markets, led by minimally invasive surgical products, contact lenses and orthopedic devices.

Consumer product sales rose 10.1 percent to $2.5 billion, helped by demand for the company's and recently acquired skin care products.

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Merrill Lynch Profit More Than Doubles

NEW YORK - (AP) - Merrill Lynch & Co. (MER), the nation's largest brokerage, on Tuesday reported third-quarter profit more than doubled on a huge one-time gain resulting its deal with money manager BlackRock Inc.

Quarterly profit attributable to common shareholders was $3 billion, or $3.17 per share, for the July-September period compared to $1.36 billion, or $1.40 per share last year. The results included a $1.1 billion, or $1.17 per share, gain from the combination of Merrill's investment management unit with BlackRock.

Excluding the BlackRock deal, Merrill Lynch would have reported a profit of $1.9 billion, or $2 per share. This still tops Wall Street projections for earnings of $1.47 per share, according to analysts polled by Thomson Financial.

"This was a very good quarter," said Chairman and Chief Executive Stan O'Neal in a statement. "The BlackRock transaction also resulted in a substantial financial gain for Merrill Lynch and will enable us to more efficiently deploy our capital as we continue to build out our capabilities and pursue growth."

Merrill Lynch said revenue from its global markets and investment banking division helped lift net revenue to $9.9 billion from $6.68 billion a year ago. Wall Street expected revenue of $7.3 billion during the quarter.

Merrill shares rose $2.14, or 2.5 percent, to $86.25 in premarket trading.

EMC Earnings Dip

BOSTON (Reuters) - EMC Corp. (EMC), the world's largest maker of corporate data-storage equipment, on Tuesday reported lower quarterly profit due to stock-based compensation and a tax benefit in the year-earlier period, and said it plans to cut 1,250 staff by the end of 2007.

The company said it expects to take a pre-tax charge of $150 million to $175 million, or 6 cents per share, in the fourth quarter to cover the cost of the restructuring.

It said third-quarter net income was $283.7 million, or 13 cents a share, compared with $421.7 million, or 17 cents a share, a year earlier.

Revenue rose to $2.82 billion from $2.37 billion, boosted by the acquisitions of RSA Security and Network Intelligence.

Analysts had expected revenue of $2.67 billion and earnings before special items of 12 cents per share, according to Reuters Estimates.

EMC said it expects fourth-quarter earnings of 9 cents a share, including the restructuring charge of 6 cents a share and a loss of 1 cent a share on its new security division.

The planned staff cuts are equivalent to about 4 percent of its work force, which now totals nearly 31,000.

EMC forecast fourth-quarter revenue of at least $3.16 billion, including at least $110 million from its new security division.

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Office Depot Swings To Profit

DELRAY BEACH, Fla. - (AP) - Office Depot Inc. (ODP), the nation's second-largest office supplies retailer, said Tuesday it swung to a third-quarter profit from a year-ago quarter burdened by charges, as sales rose 10 percent on the strength of the back-to-school season.

The company reported a profit of $133.3 million, or 47 cents per share. That beat the average estimate of 44 cents per share from analysts polled by Thomson Financial.

In the year-ago period, Office Depot posted a loss of $47.9 million, or 15 cents per share.

Earnings adjusted to exclude items rose to $139 million versus $111 million last year.

Sales gained 10 percent to $3.86 billion from $3.49 billion last year, beating Wall Street's average estimate of $3.73 billion. North America sales added 10 percent, while international sales climbed 13 percent. Same-store sales, or sales open at least a year, rose 3 percent in the period.

Office Depot gained 86 cents to close at $42.41 in Monday trading on the New York Stock Exchange.

United Technologies Posts 21 Percent Rise In Earnings

HARTFORD, Conn. - (AP) - Industrial conglomerate United Technologies Corp. (UTX), which owns elevator maker Otis, engine control maker Hamilton Sundstrand and Sikorsky helicopters, said Tuesday that third-quarter earnings rose 21 percent to top Wall Street expectations, and raised estimates for the full year.

Net income climbed to $996 million, or 99 cents per share, from $821 million, or 81 cents per share, a year ago.

Revenue increased 12 percent to $12.16 billion, including 8 percent organic growth, from $10.91 billion last year.

The results beat analysts' estimates for profit of 96 cents per share on sales of $11.92 billion, according to a poll by Thomson Financial.

"Commercial aerospace volumes and margins were up significantly at Pratt and Hamilton Sundstrand, along with solid profit growth at UTC Fire & Security and Otis. These gains more than offset weaker market conditions in two of Carrier's businesses and production challenges at Sikorsky on materially higher volumes," said UTC Chairman and Chief Executive Officer George David.

The company raised full-year earnings guidance to between $3.65 and $3.69 per share, up 17 to 18 percent from 2005 results, excluding accounting changes. Previously, the company forecast 2006 profit of $3.55 to $3.65 per share, up comparably 14 to 17 percent.

Analysts are predicting 2006 earnings of $3.66 per share, on average.

"We'll be reviewing our 2007 outlook at our usual December investor meeting and will be looking closely at market developments in Carrier's North American Residential and container refrigeration businesses in the interim. Both are important contributors to Carrier's results overall and both markets turned down in the third quarter. However, we still anticipate another solid growth year across UTC in 2007," David added.

The company said quarterly share repurchases totaled $580 million, on track with guidance of $2 billion for the year.

Shares closed Monday at $66.79 on the NYSE, near their 52-week high of $67.47.

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Motorola Posts Lower-Than-Expected Revenue

NEW YORK (Reuters) - Motorola Inc, (MOT) the world's second-biggest mobile phone maker, Tuesday posted lower-than-expected quarterly revenue and missed some analyst estimates on phone sales, sending shares down about 8 percent.

Motorola said its third-quarter profit fell to $968 million, or 39 cents a share, from $1.75 billion, or 69 cents a share, in the year-ago quarter, when it reported 39 cents per share of unusual gains including a gain from its investment in Nextel Communications.

Its shares fell $1.95, or 7.8 percent, to $22.90 on the news after closing at $24.85 on the New York Stock Exchange.

Revenue rose 17 percent to $10.6 billion from $9.05 billion compared with average analyst estimates for $11.06 billion, according to Reuters Estimates.

Motorola said it sold 53.7 million cell phones in the quarter compared with 51.9 million in the second quarter and 38.7 million in the third quarter of last year.

On average, four analysts contacted by Reuters expected shipments of 54.75 million.

The company forecast fourth-quarter sales of $11.8 billion to $12.1 billion, compared with average analyst estimates of $12.05 billion, according to Reuters Estimates.

Helped by continued strong demand for the slim Razr phone Motorola shares have risen 28 percent in the last three months on anticipation of strong growth.

This compares with a 2 percent rise for its biggest rival, Nokia, over the same time period as some investors worried that it could report a disappointing third quarter.

IBM's 3Q Earnings Jump

NEW YORK - Third-quarter earnings jumped nearly 50 percent to $2.22 billion at International Business Machines Corp. (IBM), thanks largely to a lower tax bill. The results topped expectations by a wide margin as sales of software and hardware helped offset continued weak growth in the key computer services business.

Net income for the three months ended Sept. 30 amounted to $1.45 per share. In the same period last year, IBM earned $1.52 billion, or 94 cents a share, as the company absorbed a $525 million tax expense on foreign earnings that were repatriated to the United States.

Wall Street analysts expected a per share profit of $1.35, according to a survey by Thomson Financial.

IBM's share price jumped more than 4 percent following the report, rising $3.55 to $90.50 in after-hours trading. The stock had risen 24 cents to $86.95 on the New York Stock Exchange in advance of the report, which came after the close of Tuesday's regular session.

Third-quarter revenue totaled $22.62 billion, up from $21.53 billion a year earlier. Global services accounted for $12.02 billion of the tally, an increase of just 2.7 percent. Hardware sales improved 8.9 percent to $5.58 billion, while software revenue rose 8.5 percent to $4.41 billion.

Software "was our largest profit contributor," Mark Loughridge, the company's chief financial officer, said in a conference call after the report. "We've been investing heavily in our software business for some time. Our performance in 2006 underscores that this strategy is working."

IBM said its gross profit margin improved a notch to 42 percent, up from 40.6 percent in last year's third quarter.

Yahoo 3Q Profit Falls

SAN FRANCISCO - Yahoo (YHOO) Inc.'s third-quarter profit slid 38 percent amid slowing revenue growth that has raised investor doubts about the Internet bellwether's strategy and execution. Management also dimmed the outlook for the current quarter.

The Sunnyvale-based company said Tuesday that it earned $158.5 million, or 11 cents per share, for the three months ended in September. That compared with net income of $253.8 million, or 17 cents per share, in the same period last year.

The quarters weren't totally comparable because of new accounting rules requiring Yahoo to deduct the cost of employee stock options from this year's profit.

Still, the results matched analyst expectations, according to Thomson Financial.

Revenue for this year's quarter totaled $1.58 billion, a 19 percent increase from $1.33 billion last year.

After subtracting commissions Yahoo paid its advertising partners, third-quarter revenue totaled $1.12 billion, slightly below analyst expectations that had been lowered by Yahoo management a month ago.

"I am not satisfied with our current financial performance, and we intend to improve it," Yahoo Chairman Terry Semel told analysts during a conference call Tuesday with analysts. "We are not exploiting our considerable strengths as well as we should be."

Yahoo didn't give investors any reason to feel better about the fourth quarter, traditionally the company's most lucrative because the holiday shopping season encourages more advertising.

Excluding ad commissions, Yahoo forecast its fourth-quarter revenue will range from $1.15 billion to $1.27 billion. The average analyst estimate had been $1.30 billion, according to Thomson Financial.

Wall Street has have been disappointed with Yahoo for most of this year, largely because the company hasn't been targeting online ads as effectively as Google Inc., the Internet search leader that runs the Web's largest marketing network.

Although Yahoo continues to run the most trafficked Web site on the Internet, the company faces stiff challenge from recent upstarts like News Corp.'s MySpace.com, Facebook.com and YouTube.com, which Google is buying for $1.65 billion.

The problems have battered Yahoo's stock price, which has dropped by 38 percent this year. Yahoo shares dipped 3 cents Tuesday to close at $25.15 on the Nasdaq Stock Market, then shed another 64 cents, or 2.7 percent, in after-market trading.

Intel Reports Declines but Beats Views

SAN FRANCISCO - Intel Corp. (INTC) reported a 35 percent decline in third-quarter profits and a 12 percent decline in revenues Tuesday, but the chip maker beat Wall Street's tepid expectations and shipped record numbers of microprocessors for mobile devices and computer servers.

Net income for the three months ended Sept. 30 was $1.3 billion, or 22 cents a share, compared with $2 billion, or 32 cents, in the same period last year.

Revenue fell to $8.74 billion from $9.96 billion.

Analysts had been expecting profits of $1.01 billion, or 17 cents a share, on sales of $8.62 billion, according to a survey by Thomson Financial.

Intel began initial shipments in the third quarter of the world's first "quad-core" processor chips — the powerful brains that allow a computer to function. The shipments are months ahead of those expected from Intel's nimble rival, Advanced Micro Devices Inc. (AMD), which has been dramatically gaining market share that Intel once had nearly to itself.

Intel's chief financial officer Andy Bryant expressed confidence Tuesday that performance would improve in upcoming quarters. Revenue in the current quarter is expected to be between $9.1 billion and $9.7 billion, in line with analysts' expectations averaging $9.46 billion.

"We lost market share and were under price pressure," Bryant said in a phone interview with The Associated Press after the earnings were released. "We still have to live with tough year-over-year comparisons ... but we think the worst is behind us."

Last month, Intel announced the elimination of 10,500 jobs — about 10 percent of its work force — through layoffs, attrition and the sale of underperforming business groups as part of a massive restructuring. The cuts were expected to save the company $3 billion per year by 2008.

For the first nine months of the year, Intel's net income fell 42 percent, to $3.54 billion from $6.21 billion in the year-ago period. Revenue declined 10 percent, to $25.69 billion billion from $28.63 billion.

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