Starbucks profit falls 97% on fewer customers and rising costs

Profit falls 97% on fewer customers and rising costs

Fewer U.S. customers and venti-sized costs for closing poorly performing stores led to lower sales and profit in the fourth quarter at Starbucks Corp., the company said.

Seattle-based Starbucks said profit fell 97% to $5.4 million, or a penny a share, from $158.5 million, or 21 cents a share, a year earlier. Revenue rose 3% to $2.52 billion from $2.44 billion. Same-store sales, or sales at locations open at least a year, dropped 8% in the U.S. as fewer customers came into the stores.

Starbucks began shutting the U.S. and Australian stores this summer as part of a campaign to reverse slowing sales and falling profit at the company.

SEMPRA ENERGY

Net income is little changed

Sempra Energy, owner of the largest U.S. natural-gas utility, said third-quarter profit was little changed as increased earnings from power generation helped offset its reduced stake in a commodities-trading venture with Royal Bank of Scotland Group.

Net income rose to $308 million, or $1.24 a share, from $305 million, or $1.15, a year earlier, the San Diego-based company said. Revenue rose 1.1% to $2.69 billion.

Net income from power generation soared 62% to $94 million, mostly on the increased value of long-term energy contracts with RBS Sempra Commodities and other parties when adjusted to reflect changing market prices.

Profit from Southern California Gas, the largest U.S. gas utility, rose 22% to $77 million, mostly because of the favorable resolution of regulatory and income-tax issues. Earnings from the utility San Diego Gas & Electric were unchanged at $123 million.

MIDWAY GAMES

Loss widens on higher costs

Midway Games Inc., the video-game publisher controlled by Sumner Redstone, reported a wider third-quarter loss because of higher costs to develop titles, and predicted it would stay unprofitable in the current period.

The net loss expanded to $75.9 million, or 83 cents a share, from $33.5 million, or 37 cents, a year earlier, the company said.

Third-quarter revenue rose 40% to $51.4 million.

Chicago-based Midway, maker of the Mortal Kombat games, hasn't had a profit in more than three years.

DISH NETWORK

Net income declines 54%

Dish Network Corp. reported a 54% drop in third-quarter net income as it spent more on promotions to keep customers from canceling and wrote down the value of its investments.