Nike’s strong earnings fail to impress Wall Street

nike-logoThe world’s largest apparel company, Nike Inc., today announced earnings for the fourth quarter of 2010.

Net income also increased significantly by over 50-percent in the quarter to $522-million ($1.06 per share) compared to the same period last year.

The company posted strong earnings, with total revenue up 8-percent year-over-year to $5.1-billion, excluding currency charges, but still failed to meet Wall Street analyst expectations.

The earnings are aggregated across all Nike brands, including Umbro and the Converse brand.

It is important to consider the strong growth numbers considering in Q4 2009, Nike incurred a loss of impairment on goodwill on its balance sheet in the amount of $241-million net of tax, and also a separate $145-million net of tax restructuring charge.

The company also said future orders increased materially by 7-percent over Q4 2009, to $8.8-billion in footwear and apparel orders scheduled to be delivered June through November of this year.

Despite the strong earnings, the company warned of a significant increase in future expected costs, including freight, labor, inflation, and currency volatility; particularly the expected appreciation of China’s currency the yuan as the country tries to down play Western concerns it is manipulating its currency to maintain an international competitive export advantage with an undervalued currency.

Nike CFO Don Blair today said in a conference call some of these costs would, “put significant pressure on top and bottom line results for fiscal 2011.”

The company previously said emerging markets would play a critical role in future growth and earnings. This quarter was no exception, with total growth across emerging markets being reported at 30-percent over the same period last year.

The Chinese market grew by 19-percent in the quarter YoY alone, with other emerging markets like Brazil and South America performing well as well.

The Japanese market saw the biggest decline in future orders of -17-percent.

The Nike stock (NYSE:NKE) is trading about 3.75-percent down to $69.80 per share as at 11:11 am today.


tag TAGS: ,
Short URL: http://business2press.com?p=6746
Recommended:
b2p Ensure that you follow us on Twitter and Like us on Facebook
Peggy holds a Bachelor Arts degree with honors in Economics from York University in Toronto, Canada. She is a Certified Management Accountant (CMA). She has also passed Level I of the Chartered Financial Analyst (CFA) Program. She is also a realtor. Write to peggy@business2press.com
checkmark
We are perfectly committed to the highest ethical and professional codes of conduct and standards in the industry on a firm wide basis. Learn more about us, our contributors, and our governance
b2p
We encourage you to comment. Comments are moderated. Comments that are abusive, off-topic, have marginal substance, or include promotional content will be removed. We cannot facilitate requests to edit or remove comments, or explain moderation decisions

Business 2.0 Press publishes exclusive business tech news and analysis covering start-ups to large-caps from Bay & Wall streets since 2008 from a group of highly knowledgeable industry professionals that abide by the toughest industry codes of conduct and professional standards lightMore

lightAdd value by subscribing (RSS)

logo

StockFractions.com has the most stock ratios for public companies. Get the most comprehensive micro insight on public firms available on the web, all for free.
Stock Fractionsgo

title

Colon cancer is one of the leading causes of death. Irrespective of family history, everyone is exposed to the risk. About 90% of colon cancer cases begin from non-cancerous tumors, polyps, which could form in the large bowel. Screening with a colonoscopy will painlessly remove any polyps hence almost entirely reducing your risk of developing the horrible disease. The good news is that about 90% of colon cancer cases are preventable through a simple (yes, simple) colonoscopy.
Learn moreatom
Public service message from Business 2.0 Press