SEATTLE – Starbucks Corp. said Wednesday that its second-quarter net income jumped 20 percent as more customers visited its stores, and it bumped up its earnings forecast for the year.
The coffee giant said it earned $261.6 million, or 34 cents per share, for the quarter that ended April 3 — meeting analysts' average expectations. That's up from the $217.3 million, or 28 cents per share, earned in the same quarter last year.
Revenue rose nearly 10 percent to $2.79 billion, beating expectations for $2.73 billion, according to FactSet.
Starbucks said the underlying health of its business has never been better, despite the challenges of higher costs and a weak economy. The results showed the company's strength.
The company, based in Seattle, now expects to earn $1.46 to $1.48 per share for the year, up from $1.44 to $1.47 per share.
But that's just short of Wall Street's average forecast for $1.49 per share, and Starbucks shares dipped 69 cents to $35.92 in after-hours trading.
The company said the new forecast takes into account a still bigger increase in commodity costs than it foresaw in January. It now says those rising costs will cut earnings for the year by 22 cents per share, up from 20 cents per share. The two-penny difference reflects an expectation that dairy and fuel costs will keep rising, Starbucks said.
The company said its board announced a dividend of 13 cents to be paid May 27 to shareholders of record as of May 11.
LOS ANGELES (Reuters) – Starbucks Corp (SBUX.O) warned that rising fuel and dairy costs will take a bigger chunk out of earnings than previously anticipated, and offered a full-year forecast that disappointed Wall Street.
Shares of the world's largest coffee chain slid 1.6 percent after hours to $36.59 despite a stronger-than-expected 7 percent jump in sales at established U.S. stores.
The Seattle company said on Wednesday that higher commodity costs will slash earnings by 22 cents a share this fiscal year, more than the 20 cents it originally forecast. Japan's earthquake March 11 and the bankruptcy of cafe partner Borders Group Inc (BGPIQ.PK) weighed on profits in the latest quarter.
Starbucks forecast fiscal 2011 earnings of $1.46 to $1.48 a share, up marginally from $1.44 to $1.47 previously but below the $1.50 analysts had expected on average.
The coffee chain restarted profit growth in 2010 after a two-year restructuring that involved slashing costs and shuttering almost 1,000 cafes globally. Since then, investors have enjoyed quarterly profits that often topped analysts' views. Starbucks shares have risen around 60 percent since the beginning of 2010.
(For a graphic on Starbucks' share price see: http://r.reuters.com/xuz29r)
Late last year, Starbucks started raising drink prices in the United States and China due to surging prices for coffee and other commodities. The company has warned that high coffee prices will trim profits this year.
Starbucks Chief Financial Officer Troy Alstead told Reuters the company had finished its market-by-market price increases. While Starbucks plans to "keep adjusting from time to time, here and there", he said no big price hikes were in the works.
High gasoline prices have not had a discernible impact on customer spending, said Alstead, who noted that traffic in the latest quarter rose 6 percent in the United States Same-restaurant sales rose 4 percent internationally.
Starbucks has roughly 11,000 cafes in the United States and another 6,000 elsewhere around the globe.
Net income for the company's fiscal second quarter, ended April 3, rose 20 percent to $261.6 million, or 34 cents per share, matching analysts' average view, according to Thomson Reuters I/B/E/S.
(Reporting by Lisa Baertlein; Editing by Steve Orlofsky)
NEW YORK (Reuters) – EBay Inc reported a higher than expected quarterly profit as more people bought items on its auction site and its PayPal payment system was used by more merchants.
EBay said first quarter revenue rose 15.9 percent to $2.55 billion, fueled by a 23 percent rise at PayPal and a 12 percent increase at its marketplaces, beating Wall Street forecasts of $2.48 billion.
EBay is in the final stages of a multi-year plan to revitalize its marketplaces unit, whose growth has slowed in recent years, hoping to make it more appealing for people to shop on ebay.com.
"It's proof that eBay is doing a good job of matching buyers with quality sellers," said Colin Gillis, an analyst with BGC Partners.
EBay also gave revenue forecasts for the current quarter and for 2011 that beat Wall Street expectations.
Gross merchandise volume excluding vehicles, a closely watched measure of the total value of goods sold, rose 8 percent to $14.5 billion, faster than Gillis expected.
During the first quarter, which ended March 31, active users of ebay.com rose 5 percent to 95.9 million.
PayPal has led the company's revenue growth for years, while its marketplaces unit has matured. Last year, revenues at PayPal grew nearly three times faster.
But the marketplaces' 8 percent revenue growth was faster than the 12 percent clip for all of 2010.
Net income for the first quarter, which ended on March 31, was $476 million, or 36 cents per share, compared with $398 million, or 30 per share, a year earlier. On an adjusted basis, eBay earned 47 cents per share, beating analyst forecasts by a penny, according to Thomson Reuters I/B/E/S.
For the current quarter, eBay is expecting adjusted earnings of 45 cents to 46 cents per share on revenue between $2.55 billion and $2.65 billion. That compares to analyst forecasts of 46 cents per share on revenues of $2.52 billion.
For all of 2011, eBay forecast adjusted earnings of $1.93 to $1.97 per share on revenues of $10.6 billion to $10.9 billion, above analyst forecasts of $1.94 per share on revenues of $10.48 billion.
Shares were up 1 percent in after-hours trading. They closed the day up 2.9 percent.
(Reporting by Phil Wahba, editing by Bernard Orr)