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Quiksilver: Sales Up, Net Down

NEW YORK -- Quiksilver Inc. on Wednesday posted second-quarter earnings that were lower than a year ago, but still managed to beat Wall Street earnings-per-share expectations by 4 cents.<P>For the three months ended April 30, income dipped 3.4 percent...

NEW YORK — Quiksilver Inc. on Wednesday posted second-quarter earnings that were lower than a year ago, but still managed to beat Wall Street earnings-per-share expectations by 4 cents.

For the three months ended April 30, income dipped 3.4 percent to $13.5 million, or 55 cents a diluted share, compared with $14 million, or 58 cents, in the year-ago quarter.

Sales in the period rose 10.6 percent to $186 million from $168.2 million. Domestic sales inched up 0.7 percent to $111.2 million. The company, which converted overseas results to the dollar from the euro, said European sales rose 29.3 percent to $74.8 million from $57.8 million.

Robert B. McKnight Jr., chairman and chief executive officer, said in a statement: “Once again, we outperformed both sales and earnings expectations with exceptional strength in Europe. We were also pleased with our domestic business, which performed well during the quarter despite the challenging retail environment.”

The ceo noted that Quiksilver’s “strong business in Europe has insulated our financial results from some of the recent turbulence in the U.S. market.”

Coverage of Quiksilver was initiated by CIBC World Markets and US Bankcorp Piper Jaffray early Wednesday in advance of the earnings release, which came after the day’s trading session ended.

Jeffrey Klinefelter, analyst at US Bankcorp, rated the stock a “strong buy.” He wrote in his coverage note: “As the leading `board sport’ lifestyle company, we believe Quiksilver is poised to benefit from mass migration to board sports from traditional `ball sports.”‘

The analyst added that the company also has a number of growth opportunities that include growing its global presence as well as expanding distribution for a number of its portfolio brands.

For the six months, income was down 6.5 percent to $16.5 million, or 69 cents a share, compared with $17.7 million, or 74 cents a year ago. Sales were up 14.4 percent to $331.8 million from $290 million.”