Mixed bag for Q2 results

 

The latest bout of financials has turned up some interesting results. With the effects of the current retail slump not showing up till later in the year, the US retail sector is looking forward to the back-to-school season to help pick-up the market. Americans have been shopping less over the summer due to rising fuel costs and poor weather, but the US National Retail Federation spending during this important annual revenue boost to increase by 19 percent this year.

 

At the time of writing, this year’s Q2 has seen some good results for technology manufacturers, especially Ingram Micro which reported its highest-ever Q2 sales. Paper manufacturers have again had a mixed bag of results, but it’s still too early to see the long-term affects of this sector’s massive restructuring.

 

Elsewhere, a good quarter for SP Richards saw it beat analysts’ expectations and Acme posted record-breaking sales and revenue for the period, with United Stationers due to release its results on 3 August.

 

Second-quarter results:

 

Resellers

 

• Office Depot — saw an 18 percent rise in Q2 net income to $118.3 million, or EPS of $0.41, compared to $100 million, or EPS of $0.31, in Q2 2005. Q2 total sales rose four percent to $3.49 billion from $3.36 billion in the previous year. Excluding exit costs and other charges the company posted Q2 profit of $125 million or $0.45 per share.

 

Manufacturers

 

• Avery Dennison — reported increase in net income on the back of increased productivity to £112 million, or EPS of $1.12, from $89.4 million, or EPS of $0.89, in Q2 2005. The company reported Q2 net sales of $1.41 billion, approximately even with the same period a year before.

 

• Canon — reported net profit of ¥105.9 billion ($906 million) compared to ¥82.2 billion in Q2 2005. Group sales increased by 13 percent to ¥1.03 trillion.

 

• HNI — announced sales of $671.3 million compared to $594.2 million for the same period a year earlier. Net income fell by 18.1 percent to $28.7 million, or EPS of $0.56, from $35 million, or EPS of $0.63 in Q2 last year.

 

• Imation — announced revenue of $365.8 million, an increase of 21.3 percent compared to $301.5 million in Q2 2005. Operating income was $18.6 million, compared to $23.8 million a year earlier. The company was subject to a restructuring charge of $8.9 million.

 

• IngramMicro — posted the highest Q2 sales in company history. Sales peaked at $7.4 billion, up eight percent from $6.84 billion in Q2 2005. Q2 net income increased by 29 percent to $53.8 million, or diluted EPS of $0.32, compared to $41.7 million, or diluted EPS of $0.26, a year earlier.

 

• Iomega — reported revenue of $40.7 million compared to $65.7 million in Q2 2005. The company also posted a Q2 net loss of $10.4 million, or loss per share of $0.20, compared to a net loss of $6.4 million, or a loss per share of $0.12, in Q2 2005. Iomega was subject to a restructuring charge of $4.2 million.

 

• Lexmark — posted a four percent drop in profit to $76.7 million, or EPS of $0.74, compared to $79.9 million, or EPS of $0.64 million, for the same period the year before. Revenue also fell by four percent to $1.23 billion from $1.28 billion in Q2 2005.

 

• Knoll — posted an increase of 25.2 percent in Q2 net sales to $247.5 million, from $197.7 million in the same period a year earlier. The office furniture manufacturer reported net income of $14.8 million or EPS of $0.28 compared to $11.4 million or EPS of $22 in the previous year.

 

• Newell Rubbermaid — posted a rise of 9.6 percent in net sales to $1.7 billion compared to $1.55 billion in the same quarter a year earlier. Income from continuing operations was $135.7 million, or EPS of $0.49, compared to $87.4 million, or EPS of $0.32, in Q2 2005. Net sales of the company’s office products subsidiary also rose from $495.5 million in Q2 2005 to $579.1 million in Q2 2006.

 

• Seiko Epson — reported a group operating profit of ¥7.01 billion ($60 million), compared to a loss of ¥5.04 billion in the same quarter of the previous year. Sales for the quarter fell 5.3 percent to ¥322 billion.

 

• UPM — posted a net loss of €103 million ($130 million), compared to a net profit of €22 million in Q2 2005, mainly attributable to a reduction in the value of assets and a rise in nonrecurring items. Net sales rose from €2.25 billion in Q2 2005 to €2.48 billion in Q2 2006.

 

• 3M — worldwide sales totalled $4.7 billion, an increase of 7.5 percent on Q2 2005. Net income was $882 million, or EPS of $1.15, compared to $754 million, or EPS of $0.96, in the same quarter of the previous year. Net sales for the consumer and office business segment were $786 million in Q2 2006 compared to $748 million in Q2 2005.

 

• Weyerhaeuser — announced a sharp fall in net earnings following restructuring costs of $12 million. Net earnings for the quarter were $314 million, or diluted EPS of $1.26, compared to $420 million, or diluted EPS of $1.71, in Q2 2005. Net sales for the quarter remained the same as Q2 2005 at $5.7 billion.

 

• Xerox — posted a large fall in net income available to common shareholders as the company felt the pressure from a pricing battle with HP and Canon. Reported net income to common shareholders of $245 million, or EPS of $0.26, compared to $408 million, or EPS of $0.40, a year ago. The company reported a one percent increase in Q2 sales to $1.88 million compared to $1.82 in the same period of the previous year. Total revenue was $3.98 million compared to $3.92 in Q2 2005.

 

Wholesalers

 

• SP Richards (SPR) — reported a 6.5 percent increase in sales to $427 million, compared to $401 million in the same period a year earlier.

 

• Acme United — announced a record-breaking 14 percent rise in net sales to $17 million, compared to $14.9 million a year earlier. Net income for the quarter reached $1.5 million, or EPS of $0.40, compared to £1.31 million, or EPS of $0.34, in Q2 2005.