Entries in Profit (8)


Best Buy Reports Near-90 Percent Profit Drop

KAREN BLEIER/AFP/Getty Image(NEW YORK) -- Best Buy Co. on Tuesday reported a nearly 90 percent drop in profit for the second quarter, owing to tight margins and poor sales.

Shares were down more than 6 percent to about $17 Tuesday morning at the end of the company’s conference call with stock analysts, which was shorter than usual.

The Minneapolis-based company reported a profit of $33 million in the second quarter from $260 million a year ago in the same period -- a drop of about 87 percent.

The company said little about its new CEO, Hubert Joly, who is expected to take the reins in September, nor the takeover offer from founder Richard Schulze, except that the offer still stands.

R.J. Hottovy, senior retail analyst with investment firm Morningstar, said he had expected the steep drop in profits, much of which came from a squeeze in company margins.

A few factors contributed to the shortfall, Hottovy said.  In the smartphone category, companies like Apple and Samsung control a large part of retailers’ sales.  In addition, Hottovy said consumers are buying smaller televisions, which also have lower profit margins.

He said company sales numbers came in slightly better than anticipated in the United States, some of which was because of stronger promotional strategies to drive notebook sales. Company sales were $10.55 billion for the quarter, a drop of 3 percent.

“I think today’s results are the latest sign the company is in transition, not only internally but externally,” Hottovy said.

“There was not a lot of detail with turnaround plans, which is a little bit unnerving,” he continued. “But part of it is expected with a new CEO.”

Copyright 2012 ABC News Radio


General Motors Posts Largest-Ever Profit in 2011

Bill Pugliano/Getty Images(DETROIT) -- Three years after avoiding liquidation, General Motors has come back roaring, posting its largest annual profit in the automaker's 103-year history.

The Detroit-based company announced Thursday it earned $7.6 billion, or $4.58 per share, last year.  That's up 62 percent from the $4.7 billion GM made in 2010.

The automaker also said revenue jumped 11 percent in 2011 from the year before, rising to $150.3 billion from $135.6 billion.

Copyright 2012 ABC News Radio


JPMorgan Profit Falls as Bank Earnings Season Opens

Chris Hondros/Getty Images(NEW YORK) -- As the Occupy Wall Street protest approaches its one-month anniversary, third-quarter earnings season opened with lower profit from JPMorgan Chase, the first of the major U.S. banks to report.

JPMorgan Chase said third-quarter profit fell 4 percent to $4.26 billion, or $1.02 a share, from $4.42 billion, or $1.01, a year earlier.  The bank was the most profitable in the U.S. last year, so its earnings are considered a barometer for the industry, which received a massive government bailout during the financial crisis that began in 2008.

"All things considered, we believe the firm's returns were reasonable given the current environment," Chief Executive Jamie Dimon said in a statement.

It is unclear how the Volcker rule, which proposes to ban banks with insured deposits from "high-risk," short-term trading with its own funds, will affect banks' financial results.  David Hilder, analyst with Susquehanna International Group, said Goldman Sachs and Morgan Stanley may exit the banking business if compliance regulations of the Volcker rule are implemented.  The rule is expected to be implemented next year.

Hilder said those two banks are less dependent on deposits as a source of funding than other banks.

"Once the Volcker Rule implementation regulations are final, we would expect both [Goldman Sachs and Morgan Stanley] to examine the feasibility, as well as benefits and costs, of exiting the banking system," he wrote in a research note on Tuesday.  "We would also expect to see more capital attracted to market-makers who are already outside the banking system."

Investment banking client activity may have slowed due to uncertainty in the global economy, especially in Europe; that slowdown has led to lower profit expectations for banks more heavily invested in the capital markets. Some analysts expect Goldman Sachs to report its first loss.  If the forecast is accurate, it would be Goldman Sachs' second quarterly loss since its initial public offering in 1999.

Copyright 2011 ABC News Radio


Toyota Reports 77% Drop in Fourth Quarter Profit

TED ALJIBE/AFP/Getty Images(TOKYO) -- Toyota released its latest quarterly report Wednesday, showing a 77 percent drop in profit for the company's fourth quarter.

The Japanese automaker said its net income fell to 25.4 billion yen, or about $314 million, for the three months ended March 31.  During the same time period in 2010, the company made 112.2 billion yen.

Meanwhile, Toyota's fourth quarter sales fell 12 percent and operating profits were down 52 percent from last year.

These sluggish figures are mainly due to the March 11 earthquake and tsunami that struck Japan, causing disruptions in production.

Toyota said on Wednesday that it expects global production to be carried out at 70 percent capacity by June.  Currently, Japanese production plants are operating at half capacity, while North American plants are running at 30 percent capacity due to parts shortages.

Copyright 2011 ABC News Radio


Chrysler Posts $116 Million Profit in First Quarter

Karen Bleier/AFP/Getty Images(AUBURN HILLS, Mich.) -- Chrysler is back to making a profit, according to figures released by the carmaker Monday.

During the first three months of 2011, Chrysler showed a $116 million profit -- a significant change, considering that over the same period last year it lost $197 million.

Futhermore, global sales of Chrysler cars were up 18 percent compared to the first quarter of 2010.

This is a far cry from just two years ago, when Chrysler was forced to declare bankruptcy and the Obama administration ordered the government to loan the company $12 billion.  That huge infusion of cash helped Chrysler get leaner and meaner.

In a statement, Chrysler Group's chief executive Sergio Marchionne celebrated a better sales showing, adding, "our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers."

Copyright 2011 ABC News Radio


Berkshire Hathaway Expects Decline in First-Quarter Profits

Jemal Countess/Getty Images for Time Inc.(OMAHA, Neb.) -- In his address at the Berkshire Hathaway Annual Shareholders meeting on Saturday, investor and philanthropist Warren Buffett is expected to inform shareholders that the company’s estimated 2011 first-quarter profits have decreased significantly when compared to profits from the previous year.

According to a press release from the company, Berkshire Hathaway expects to report about $1.5 billion in net earnings for the first three months of 2011, down from the $3.6 billion posted for the same period in 2010. One factor which led to the decline in expected profits is an estimated $1.07 billion in losses incurred as a result of the Japan earthquake in March. Buffet, who is the chairman and Chief Executive Officer of Berkshire Hathaway, is also expected to inform shareholders about significant losses caused by an earthquake in New Zealand and flooding in Australia earlier in the year.

Copyright 2011 ABC News Radio


Submit Your Ideas, Make Some Cash

Jupiterimages/Thinkstock(NEW YORK) -- Have you ever had what you thought was a simple, money making idea and wondered if anyone would be interested?

Well, guess what?  "Companies are looking for those ideas," says Steven Key, author of One Simple Idea.

And you don't have to reinvent the wheel to pocket some cash.  Key says you can make a profit by simply coming "up with small improvements on existing ideas."

For example, he explains, "If you got a new kitchen gadget, that's perfect."  You make your pitch "and if they like it, they take it to market for me, they take all the risk, and I get the royalty check every time they sell one."

Copyright 2011 ABC News Radio


Back in Black: TARP Bank Programs Turn Profit

Adam Gault/Thinkstock(WASHINGTON) -- With a $7.4 billion repayment from three banks Wednesday, the TARP bank support programs launched two and a half years ago have turned a profit, according to the Treasury Department.
Taxpayers saw the government pump $245 billion of their money into the Capital Purchase Program, Targeted Investment Program, Community Development Capital Initiative and Asset Guarantee Program in a historic effort to stave off the financial collapse of hundreds of the nation’s largest financial institutions.
With Wednesday’s repayments -- and the proceeds of interest and dividend payments the banks were obligated to pay the Treasury while they participated in the programs -- the taxpayer has made a profit of about $6 billion with a total of $251 billion in total recoveries.
The folks at Treasury estimate that as banks continue to pay off their loans to these programs, taxpayers can expect another $14 billion of money coming back in for a total of about $20 billion in “profits.”
“While our overriding objective with TARP was to break the back of the financial crisis and save American jobs, the fact that our investment in banks has also delivered a significant profit for taxpayers is a welcome development,” said Treasury Secretary Tim Geithner in a press release. “We still have more work to do repairing the damage caused by the crisis and strengthening the recovery, but today is an important milestone in our efforts to recover taxpayer dollars as we continue winding down TARP.”
One caveat -- these programs which have turned a profit don’t include the massive injection of taxpayer money into failed insurance firm AIG or housing giants Fannie Mae and Freddie Mac. We’ll likely see massive (read $100 billion) in losses from those “investments.” But those losses are likely going to be offset by huge gains the Federal Reserve has made on purchases of American mortgages and other securities since the beginning of the financial crisis. Anything the Fed makes goes right back to Treasury (No “performance bonus” for Fed Chairman Bernanke or the other folks at the Fed).
When all is said and done, Uncle Sam is likely to have made about $24 billion more than he lost on all this financial maneuvering.

Copyright 2011 ABC News Radio

ABC News Radio