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Oakley's Third-Quarter Net Income Up 69%

Gain is attributed largely to publicity from Olympics, where many athletes sported the company's sunglasses.

October 19, 2000|Leslie Earnest

Sunglasses maker Oakley Inc., which got a publicity boost last month when hundreds of athletes wore its shades at the Summer Olympics, posted strong earnings gains for the third quarter.

Net income rose 69% to $17.4 million, or 25 cents a share, from $10.3 million, or 15 cents a share, during the same quarter last year. Analysts had expected the company to earn 21 cents a share, according to a survey by First Call/Thomson Financial.

Sales climbed 51% to $107 million, topping the $100-million mark for the second consecutive quarter. The second and third quarters are traditionally strong selling periods for sunglasses makers.

Foothill Ranch-based Oakley said it benefited from hefty sunglasses sales and growing contributions from new products. Sales of new styles of footwear, apparel and watches sharply exceeded expectations, and revenue from snow goggles and prescription eyewear also experienced "substantial growth" in the quarter, the company said.

Oakley, which acquired its Australian distributor last year, said its South Pacific sales nearly tripled, largely from the Olympic Games in Sydney. The company said that more than 450 Olympic athletes wore its glasses during the Games, 56 of whom won medals.

"The Olympics further reinforced Oakley's reputation for being the premier sunglasses if you're going to do something athletic," said Eric Beder, an analyst with Ladenburg Thalmann.

Oakley said it has substantially increased its manufacturing capacity to fulfill demand for the X Metal styles, including new designs that will be introduced next year. Tom Cruise used X Metal sunglasses in the movie "M:I-2."

The company said it had a backlog of orders worth $35.7 million as of Sept. 30, compared with $14.2 million at the same time last year. It attributed the backlog partly to the demand for its X Metal line.

Oakley's stock closed Wednesday at $19, up $1.81 a share, on the New York Stock Exchange. The shares have more than tripled this year.

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