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Profit for Dole Jumps 81% in Second Quarter

Lower tax rate helps results. The firm says it will expense stock options. Callaway Golf beats expectations.

July 19, 2002|From Bloomberg News and Reuters

Dole Food Co., the world's largest fruit and vegetable producer, reported strong quarterly earnings Thursday and said it plans to change the way the company accounts for stock options and leases to make its financial statements more clear.

The Westlake Village-based company's second-quarter net income climbed 81% to $66.8 million, or $1.18 a share, from $37 million, or 66 cents, a year earlier, helped in part by a lower tax rate. Sales in the quarter ended June 15 were flat at $1.12 billion.

Analysts on average were expecting earnings of $1.10, according to Thomson First Call. Dole said the year-earlier results included an $8.9-million pretax gain from the sale of investments and a $28-million pretax expense related primarily to asset write-downs.

Dole said its core businesses, with the exception of fresh-cut flowers, continued to benefit from improved margins and its cost-cutting programs.

Dole said the flower industry has proved less attractive than the company anticipated when it made four acquisitions in the industry in 1998, and integration of the businesses has been slower than expected. As a result, the company said it would take a charge of $119.9 million for the write-off of goodwill associated with the fresh-cut flower business.

Dole also announced that it would begin accounting for all employee stock options as an expense and would bring $190 million in operating leases onto its balance sheet.

Many corporations are altering practices in the wake of probes of firms such as Enron Corp., which used special partnerships to hide debt and inflate profit.

U.S. rules require only an estimate of option costs in footnotes to profit statements. Coca-Cola Co., the world's largest soft-drink maker, and publisher Washington Post Co. said this week that they would change their options accounting.

Dole's shares fell 28 cents to $26.63 on the New York Stock Exchange.

Other earnings from Southern California companies:

* Callaway Golf Co. reported a 37% rise in second-quarter net income to $37.1 million, or 55 cents a share, beating analysts' forecast of 43 cents. But the company said full-year results would miss estimates because of a slow economy, less U.S. golf playing and price competition for golf equipment. Second-quarter results were helped by controlled costs; its year-earlier results included one-time costs related to an electricity-supply agreement. Sales edged up less than 1%.

* Cheesecake Factory Inc. said net income rose 30% to $13.2 million, or 27 cents a share, in its fiscal second quarter, helped by lower prices for food-related commodities and cost controls. Revenue rose 25% to $165.4 million, and sales at restaurants open at least a year were up 1.6%.

* CorVel Corp. reported a 15% increase in second-quarter net income to $4 million, or 36 cents a share, as revenue jumped 14% to $58 million. The Irvine-based company said continued growth in its preferred provider network and medical bill review services and an acquisition of a diagnostic imaging network contributed to results.

* Jacobs Engineering Group Inc. said net income rose 24% to $27.9 million, or 50 cents a share, in its fiscal third quarter on a 20% rise in revenue to $1.2 billion.

* Mattel Inc. reported second-quarter earnings of $29.6 million, or 7 cents a share, primarily because of cost savings, beating analysts' average estimate of 5 cents. The results exclude one-time charges for financial restructuring. It posted a loss of $4.9 million, or 1 cent, a year earlier. Sales fell 4% to $804.4 million.

* Reliance Steel & Aluminum Co., a metals distributor and processor, reported a 6% decline in second-quarter earnings to $10.8 million, or 34 cents a share, as it coped with weak aerospace, semiconductor and electronics markets. The results were in line with analysts' expectations. Sales rose 9% to $450.2 million because of acquisitions.

The Los Angeles-based company forecast third-quarter earnings at the lower end of the range of Wall Street estimates because it expects continued declines in the commercial aerospace market and only a gradual recovery in semiconductor and electronics sales.

* Vans Inc. reported a fiscal fourth-quarter net loss of $14.9 million, or 83 cents a share, including one-time charges, contrasted with net income of $2.7 million, or 17 cents, a year ago. On an operating basis, Van's had a loss of $4.4 million, or 24 cents a share. Sales rose 25% to $63.8 million.

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