WORLD> America
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WORLD> America
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Widespread earnings woes reflect consumer fears
(Agencies)
Updated: 2008-07-22 17:40 "It's a reaction to Apple's typical conservative guidance," Chris Whitmore of Deutsche Bank said. "Investors are likely to focus on the rationale for the conservative guidance." Also in the tech world, Texas Instruments Inc (TXN.N) scared away the bulls with a weak current-quarter outlook and disappointing past results, sending its shares down 7 percent. TI is a key technology and consumer indicator, as it makes analog chips for everything from cell phones to industrial equipment. It forecast earnings of 41 to 47 cents per share on revenue of $3.26 billion to $3.54 billion for the third quarter versus Wall Street's call for 51 cents on revenue of $3.57 billion. The third quarter is often a strong one for TI due to back-to-school sales and as demand increases ahead of year-end holiday-season shopping. "It's very worrying for TI and the semiconductor industry," Charter Equity Research analyst John Dryden said. "The outlook was as poor as the report." Dryden said that while slowing wireless demand could only mean softness at a few companies, weakness in analog chips reflected badly on multiple industries. "When you're talking analog you're talking thousands and thousands of customers." Sinking Ships? As for higher-end discretionary spending, Royal Caribbean reported a narrower quarterly profit due to a doubling of fuel costs, and laid out a plan to save $125 million a year. "Too much of our profitability is being eroded by the increase in fuel prices. This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively," said Richard Fain, chairman and chief executive of the world's number-two cruise operator. Royal Caribbean said net income was $84.7 million, or 40 cents per share, down from $128.7 million, or 60 cents, for the comparable year-ago period. Its fuel prices rose 55 percent. As part of its cost-cutting, the company said it would eliminate about 400 shore-side positions. |
