1 Q Gap net income falls 23 percent as costs soar

NEW YORK - cost increases faster than Gap Inc. anticipated - especially for its products at low prices - sank profit in the first quarter of the company, and the clothing company significantly reduced its forecast for the year earnings late Thursday.

Escalating costs are composed only of challenges to the company, which aims to boost sales of its namesake brand. In fact, the company also operates the brands Banana Republic and Old Navy, acknowledged that also more than expected refresh the string empty in the latest quarter.

Shares of Gap fell $3.47, or 14.9% to $pass after hours. They had completed exchanged regularly at $23,29, up to 21 cents.

The company said that he spends about 20 percent more than last year on each element, it intends to sell in the second half of the year, especially for the holidays, it more high season. And its price increases will be not able to keep pace.

"I shall be quite honest with you." I feel good having to come here today and re-guide, "Gap CEO and Chairman Glenn Murphy said, referring in a call with investors in new perspectives of the company result." Thursday "But the 20% increase in our average unit costs in half back is real".

Murphy, said the cost pressure was a challenge "short term", not a structural issue and noted that prices of cotton are already retreating. It also recalled that the company goes ahead with initiatives in the long term, especially online and in other countries.

Gap said its net income dropped by 23% to $ 233 million, or 40 cents per share, for the quarter ended April 30. That compares to 302 million, or 45 cents per share, a year earlier.

His income fell by 1% to $ 3.29 billion. Income has fallen more, about 4%, to its chain of Old Navy of low prices, which produces about 40% of the revenues of the company.

Analysts expected worse performance - pay the 39 cents and revenues of $ 3.27 billion, according to FactSet.

Prices of many companies clothing for raw materials such as cotton and labour in China is growing. But the warning of profit of the Gap shows that he was not able to navigate the challenges and its rivals such as J.C. Penney Co. and Abercrombie & Fitch.

Plan of Gap and other sellers of clothing to raise prices this fall to offset the higher costs, but there are limits to how many shoppers will tolerate low prices in an economy still difficult, particularly for strings. In fact, cost pressures are hitting the company facilities and Old Navy stores more difficult because buyers resist to pay even a few dollars more for a shirt, so the company had to absorb more fresh.

Stifel Nicolaus analyst Richard Jaffe said puzzled that Gap is facing cost increases larger than its rivals, who reported increases in the cost of 10 to 15 per cent.

"This could be single their", said Jaffe.

Sabrina Simmons, Chief Financial Officer of the Gap, said investors Thursday that he had ordered to the spring and summer in February goods, only when it is sunny throughout the year forecasts, and he assumed costs would facilitate after he commissioned of goods of the fall.

But that does not. When the chain began to negotiate with suppliers in March and April for holiday orders, it found costs had soared. Murphy said that Gap is still in the hope of reducing costs when it finishes its purchases of vacation.

Gap Inc. has made a series of organizational changes and management recently. In February, Art Peck became the President of the trade mark, its fifth in nine years. The San Francisco-based company has also established a Global Creative Center and consolidated its marketing in New York. And earlier this month, he ousted Patrick Robinson, Director of design for the empty string. Murphy said that the brands Old Navy and Banana Republic also need to work.

The key indicator of revenue at stores open at least a year fell by 3 per cent for Gap Inc. as a whole. Gap North America, the figure decreased by 3%, while he fell 1 percent to Banana Republic and 2 percent to Old Navy North America. International division of the company saw a decrease of 6%. The number is significant because it is not distorted by stores who has recently opened or closed.

Gap continues to remodel the Old Navy stores and added its first stores in China and Italy last year. The company now sells its wares online in more than 90 countries and has recently announced plans to introduce the brand Gap in the Serbia and the Ukraine and a store on the largest e-commerce Chinese, called Alibaba group Mall site.

Total income Gap Online Inc. has increased by 18% to 348 million dollars, compared to $ 295 million in the first quarter of last year.

The company said the March earthquake and tsunami in the Japan, where she operates a cluster of stores, cut into its revenue and said that it will take some time for the company to recover.

Gap now expects to earn $ 1.40 to $ 1.50 per share for the year, at the bottom of his February forecast for $1.88 to 1.93 $ per share. Prior to report earnings Thursday, analysts expected $1.84 per share, according to FactSet.

Dell profit jumps such as the computer manufacturer reduced costs (AP)

SAN FRANCISCO - Dell Inc., said Tuesday that its net income for the last quarter almost tripled as the manufacturer of personal computer benefited more low-cost component computer and growth in some of its most profitable product lines.

Shares of Dell, analysts who Beats adjusted estimates of income net but is come a little below revenue increased 5 percent in extended trade.

For the three months ended April 29, Dell earned $ 945 million, or 49 cents per share, compared to $ 341 million, or 17 cents per share, a year earlier.

Excluding non-recurring items, Dell earned 55 cents per share, easily beating what Wall Street wanted. Analysts surveyed by FactSet adjusted forecasts earnings of 43 cents per share.

Revenue increased only 1% to 15.02 billion $ 14.9 billion last year, missing Analyst estimates of $ 15.4 billion. Product revenues remained stable at $ 12.1 billion, while revenues from services soared to 6 per cent to 3.0 billion.

Dell segment consumers, which is about 20% of its revenues and is therefore much smaller that the portion of its income from the sale to companies, fell from 7% to $ 3.0 billion.

The consumer demand has fallen more than expected Dell and, in an interview, Chief Financial Officer Brian Gladden some this attributed to the market for consumer PC being saturated in developed countries. He added that, while tablet computers are still a small part of the PC market, there is clearly a "impact" of them at the request of the consumer for the traditional PC.

Revenue from large companies climbed to 5 per cent to 4.5 billion, while the incomes of small and medium-sized enterprises has increased by 7% to $ 3.8 billion. Revenues in the public sector decreased by 2 per cent to $ 3.8 billion.

By product category, the company saw the biggest gain of servers and networking, where income has increased by 11% to $ 2.0 billion. Desktop PC sales fell by 8% to $ 3.3 billion, while mobile PCs has increased from 3% to $ 4.7 billion.

Dell strives to increase the proportion of server computers, peripheral storage of data and technology consulting services that it sells, because these areas are more profitable than the base of the PC business. Compared to the year there are, however, most of the categories of Dell products accounted for on the same percentage of revenues and computers for consumers and ongoing companies to make more than half the income of Dell.

Again, the gross margin of Dell, is an indicator of the activities of Dell how effective, waiting arrived by 22.9%, higher than the percentage of 20.4 analysts interviewed by Thomson Reuters.

Strategy of Dell by focusing on more profitable areas of its business and pruning of offerings lower-margin "works well," said Gladden.

Pacific Crest analyst Andy Hargreaves called gross margin of the company "impressive" and said Dell should be able to keep for the moment.

"They do not have the possibility to maintain long term margins, but to have therefore lead towards more service-oriented companies,"he said.""

Looking at the current quarter, Dell has predicted income will increase by a percentage in the figures mid-single in the first quarter, slightly faster than its seasonal growth of 2 to 3%. Analysts expect $ 16.0 billion.

For the full fiscal year, the company continues to expect revenue to increase from 5 to 9%, which implies a total of 64.6 to 67.0 billion. Analysts expect annual income of $ 64.4 billion.

Dell sharing roses 86 cents or 5.4%, to $16,76 in extended trade. The regular commercial finished stock down 10 cents to 15.90 $.

CVS Caremark 1 q profit falls on the margins, costs

NEW YORK - CVS Caremark Corp., said Thursday that its net income in the first quarter declined 8% that its pharmacy benefits management company has continued to report lower profits.

The company said it expects results of the Caremark to begin to improve in 2012, when it will be reaping the benefits of a wave of cost-effective generics and low-cost. In his first conference call as the CEO, Larry defended Merlo model of CVS Caremark business, which has faced criticism of some shareholders and a review of competitors and regulators.

"Despite the speculation on the market, there is no intention to split the company," he said. "Breaking the company would be a step in the wrong direction to members, retail customers and certainly our payers."

Merlo, who became CEO in March when Thomas Ryan retired, also said the charges that Caremark steers improperly business to CVS stores are "false, baseless and false".

Critics have said benefit of CVS plans reduces the choice to participants and that society is facing a conflict of interest, as its pharmacies get revenues from filling of prescriptions and pharmacy benefits unit attempts to reduce costs for its sponsors and beneficiaries.

The pharmacy benefits management company benefits Caremark fell because of the costs related to a new contract with Aetna Inc.. The 12-year agreement came into force on 1 January and Caremark programs are gradually removed. The company also reported lower prices of drugs to a contract with the Government Federal health benefits, a Union of employees of the Government plan.

The company has already said that these issues will reduce for the benefit of the Caremark this year. Caremark profit also decreased in 2010.

Woonsocket, R.I., the company said its profit fell to $ 713 million, or 52 cents per share, in the quarter ending in March, 771 million, or 55 cents per share. Its turnover increased 9% 25,88 billion from $ 23.76 billion.

The exclusion of acquisition and other charges, the company said it earned 57 cents per share. FactSet said analysts expected a profit of 55 cents per share and 25,76 billion in revenue.

Revenues from the retail company stores rose 4.4% to $ 14.6 billion, while revenue at stores open at least a year increased by 2.6%. Revenues from Caremark has increased by 18.4% to $ 14 billion with the addition of the Aetna contract. Approximately 2.7 billion in revenue is accounted for the two companies.

The company opened 57 stores during the quarter and closed 13, giving him a total of 7,226. CVS pharmacy chain is the country second behind Walgreen Co., which has approximately 7,700 stores.

CVS Caremark has maintained its annual profit Outlook, saying: it expects to earn between $2.72 and $2.82 per share excluding non-recurring items and discontinued operations. Analysts expect $2.77 per share.

The company expects to earn 63 and 65 cents per share in the second quarter and forecast revenue will increase from 10 to 12%, which implies a total of 26.41 billion to 26,89 billion. The company said revenues from the sale in the retail and pharmacy benefits management companies will grow, but the Caremark profit declines by about a quarter of the same period in 2010.

Analysts expect a profit adjusted 64 cents per action and NKJV billion on average.

CVS Caremark sharing roses 51 cents to $36.63 in afternoon trading.

Pfizer 1 net q 10 per cent for the lower costs, taxes (AP)

Drugmaker Pfizer Inc. said Tuesday its profit in the first quarter increased by 10%, despite flat revenues, due to reduce production costs, research and a smaller tax bill.

Largest drugmaker of the world by revenue said its net income of $ 2.22 billion, or 28 cents per share. Located 2.03 billion, or 25 cents per share, in the first quarter of 2010.

Excluding non-recurring items, income was $ 4.81 billion, or 60 cents per share, down just 1% of a year ago.

The author based in New York of blockbuster cholesterol Lipitor and Viagra impotence pill said income $ 16.5 billion, on a half - percent of 16.58 billion a year ago.

Analysts surveyed by FactSet expected earnings per share of 58 cents and the 16,59 billion in revenue. In General, they exclude non-recurring items.

Shares of Pfizer fell 49 cents, or 2.3% to $20.53 in trade at the beginning.

Pfizer has maintained its forecast given in January for 2011 earnings per share of $2.16 on $2.26, excluding slightly more than $1 to non-recurring items. But it reduced its revenue forecast to approximately $67 billion to $ 66.2 billion.

Pfizer for a second time reduced its 2012 prior forecast revenues, this time to $ 63.5 billion, $ 64,25 billion. This year is essential since Lipitor, medicine more sold in the world with almost 11 billion in annual sales, loses late November U.S. patent protection and generic competition will quickly erode sales.

In a statement, Chief Executive Ian Read said he was pleased with our solid financial performance in the quarter despite the loss of exclusivity (patent) of several products to the United States"" and other countries.

"I believe that we are well placed to succeed in our innovative base, which, if successful, can lead to a higher value in both the short and long term fixation", he added.

The United States sales fell by 3% to $ 7.02 billion, while sales abroad struck 9.48 billion, up to 2% or 1% excluding the impact of the favourable exchange rate. Income in the first quarter was a boost of 224 million dollars from the sale of products manufactured by that Pharmaceuticals, a manufacturer of pain resistant to abuse and other drugs that Pfizer acquired March 1 for $ 3.6 billion.

Pfizer said it bought back about $2.2 billion of its stock from January to April 30 and is now expected to buy $ 5 billion to 7 billion of shares in this year. in February, he said that it would buy back to 5 billion dollars in shares.

The company is to relieve investors still upset that Pfizer half its dividend of 32-100 at the beginning of 2009 to help finance the purchase of rival drugmaker Wyeth $ 68 billion. That deal, third megamerger of Pfizer in a decade, introduced biotech, consumer and veterinary drugs of the Wyeth company and leave yet another round of layoffs and other reductions in price. Pfizer has raised the quarterly dividend of 20 cents in December.

Meanwhile, Pfizer shares have largely languished in adolescence for the past two years, after negotiating over $28 there five years - a reason, the Council ousted predecessor of Read, Jeffrey Kindler, in December.

First quarter sales were driven out by the solid performance of treatment of pain treatment with Lyrica, painkiller Celebrex, antidepressant Pristiq, Prevnar pneumococcal vaccine, arthritis treatment Enbrel Rheumatoid biotech and asthma Spiriva inhaler.

Pfizer noted that Lipitor received generic competition in the Canada and Spain in the middle of last year. In November, the disease of Alzheimer Aricept drug, Pfizer sells jointly with Esai Co. Ltd. of the Japan, lost U.S. patent protection. In total, these losses reduced patent income of $ 590 million, the company said. Lipitor sales were flat in the United States and down 25%, to $ 2.39 billion.

During this time, Pfizer hit with new generic competition in the first quarter for drugs for heartburn blockbuster Protonix and Neurontin, for the treatment of pain caused by shingles and seizures.

Total sales of pharmaceuticals tempered 2%, 14.22 billion, while sales in emerging markets increased by 8% to $ 2.18 billion. Countries including China, the India and the Brazil are a key target for virtually all cash international, as the consolidation of U.S. health and pressures on the prices of European government health programs have been stifling the growth of incomes in these areas.

Sales of veterinary drugs jumped 16 per cent of $ 982 million, and sales of health products to consumers such as Centrum vitamins increased by 12% to $ 745 million.

Drug discount higher than required under the U.S. health care income review reduced by 166 million dollars in the quarter.

Molson Coors net income falls on rising costs (AP)

DENVER - Molson Coors Brewing Co.'s net income fell 21 percent in the first quarter on ingredients and fuel costs rising.

Brewer net income fell to 82.9 million, or 44 cents per share, in the quarter that ended March 26. Which is in line with the analyst's expectations but down of $ 104.6 million, or 56 cents per share, last year.

Revenue from brewer based in Denver, except excise taxes increased by 4% to 690.4 million, missing only 690.5 million analysts expectations.

Shares of Molson dropped $ 2.37, or 4.9% to $46.03 in Premarket trade.

But the volume of beer in the world total of brewer fell by 1.5% in the previous year. The company said first quarter of the year had a beginning of Easter and the Olympic Games in Vancouver. United States, the United Kingdom and the Canada are the main markets of Molson Coors.

Molson was assisted by MillerCoors joint venture with SABMiller plc which sells the two companies marks to the United States.

The MillerCoors revenue was virtually flat, but it increases the net income of approximately 12% of costs and its campaign "mind the gap". Which has trimmed the difference in price between the lower range and top range of beers to convince clients to trade at higher price of brands such as Blue Moon and Leinenkugel.