A series of companies reported earnings Wednesday, offering a mixed picture and generally cautious outlooks.
Legg Mason Loss Worse than Forecast
Legg Mason posted a worse-than-expected quarterly loss on Wednesday as investors pulled $20 billion out of the asset manager's funds and it took a charge to bail out its money-market funds that are stuck with risky securities.
The No. 2 publicly traded U.S. asset manager said it has "identified significant cost savings" that will be implemented in the current and next quarters to make it "leaner and meaner." Legg said it recorded a net loss of $103.8 million, or 74 cents a share, in the fiscal second quarter ended Sept. 30, compared with a net profit of $177.5 million, or $1.23 a share, a year earlier.
Analysts had on average expected a net loss of 48 cents a share.
The company took a charge of $191.1 million, or $1.35 a share, related to the bailout of its money-market funds. It announced most of the writedowns last month.
Assets under management, the main driver of revenue and profit at money managers, fell to $841.9 billion as of Sept. 30 from $1 trillion a year earlier and $923 billion at the end of June. Clients pulled out a net $20 billion in the quarter, Legg said.
Legg shares are the worst performers in the sector so far this year, losing 82.3 percent. Despite stocks rallying on Tuesday, Legg closed down 6.62 percent at $12.98.
Corning Profit Jumps on Tax Gain
Despite flat sales, Corning says third-quarter profit jumped 24 percent, helped by a one-time tax gain and steady demand for liquid crystal display glass.
The world's largest maker of glass for flat-screen televisions and computers says Wednesday its net profit climbed to $768 billion, or 49 cents a share, from $617 million, or 38 cents a share, a year earlier.
Excluding one-time items, its profit of 46 cents a share exceeded Wall Street's forecast of 44 cents a share. Sales edged up to $1.56 billion from $1.55 billion but fell shy of the $1.59 billion in sales forecast by analysts polled by Thomson Reuters.
Qwest Communications Profit Down 93%
Third-quarter profit fell 93 percent at Qwest Communications International and the phone company plans to cut 1,200 jobs, or slightly more than 3 percent of its work force.
The planned cuts disclosed Wednesday come as Qwest, like other traditional phone companies, are losing customers to cable and cell phones. Qwest's chief executive, Ed Mueller, also said the weak economy was a factor. "We have taken a number of steps to keep our costs aligned with customer demand and maintain maximum financial strength and flexibility," Mueller said in a statement.
The Denver-based phone company, the country's third-largest, earned $151 million, or 9 cents per share, in the three months ended Sept. 30, down from $2.06 billion, or $1.08 per share, a year ago. The 2007 results were boosted by a tax benefit.
Revenue fell 2 percent to $3.38 billion from $3.43 billion a year ago.
Analysts polled by Thomson Reuters had expected the company to earn 10 cents per share on $3.33 billion in revenue. Analyst estimates typically exclude one-time items, like a $30 million net charge for severance benefits and a lease restructuring in the latest quarter.
Qwest also said it expects results this year to come in at the low end of its previous forecast, which called for which called for earnings before interest, taxes, depreciation and items, or adjusted EBITDA, to fall 1 percent to 2 percent.
Analysts were already expecting a 2.25 percent full-year decline in that earnings measure, which fell 6 percent in the third quarter to $1.08 billion.
Office Depot Posts Loss
Office Depot says weakness in Florida and other parts of North America, and store-closing costs led it to loss in the third quarter.
Delray Beach, Fla.-based Office Depot's loss for the period was $6.7 million, or 2 cents per share, compared with profit of $117.5 million, or 43 cents per share a year ago. Excluding store-closing and a U.K. tax law change it lost 1 cent per share.
Sales fell 7 percent to $3.66 billion from $3.94 billion. Thomson Reuters says analysts expected profit of 7 cents per share on $3.83 billion in sales.
Sales in stores open at least one year, a key metric known as same-store sales, fell 14 percent during the quarter, hurt by a decline in Florida, where the housing market has been particularly weak.
Moody's Cuts 2008 View
Moody's , the parent of Moody's Investors Service, lowered its 2008 earnings forecast on Wednesday and said third-quarter profit fell, as the global credit crisis caused demand to plummet for mortgage bonds and collateralized debt obligations.