The Wall Street Journal - 23.10.2019

THE WALL STREET JOURNAL. Wednesday, October 23, 2019 |B7

EARNINGS WATCH

UPS

Overnight Shipping

Fuels Jump in Profit

United Parcel Service Inc.
benefited from a surge in over-
night air shipments in the third
quarter, as speedy next-day de-
livery increasingly becomes the
standard for online orders.
The company also announced
the departure of Chief Operating
Officer Jim Barber.
UPS said high demand for
next-day shipping and strong
cost management helped boost
profit in the period. Overall U.S.
volume rose 9%.
The shipper posted quarterly
earnings of $1.75 billion, or $2.01
a share, up from $1.51 billion, or
$1.73 a share, a year earlier. Ex-
cluding certain costs, per-share
earnings were $2.07, slightly
topping analysts’ estimates. Rev-
enue rose 5% from the year prior
to $18.32 billion.
—Paul Ziobro

HARLEY-DAVIDSON

Sales Stall in U.S.,

Advance Abroad

Harley-Davidson Inc. is still
struggling to attract new riders
to its U.S. market but said it has
found success in several markets
abroad in recent months.
Retail sales outside the U.S.
rose 2.7% in the third quarter.

The company said it spent more

on marketing, and changed how

it rewarded international dealer-

ships for increasing sales.

Overall motorcycle-related

revenue fell 4.9% to $1.07 billion

in the third quarter from a year

earlier but was higher than ex-

pected. Profit fell as the com-

pany shipped fewer bikes. U.S.

retail sales fell for an 11th

straight quarter.

Profit was $86.6 million, or 55

cents a share, in the quarter,

compared with $113.9 million, or

68 cents a share, a year ago.

Adjusted earnings were 70

cents a share, better than ex-

pected.

—Austen Hufford

LOCKHEED MARTIN

Order Backlog to

Reach $140 Billion

Lockheed Martin Corp. ex-

pects its order backlog to reach

a record $140 billion by year-end,

showing the resilience of some

U.S. defense companies amid do-

mestic budget pressures and

geopolitical turmoil.

The defense company said

that while it expects sales

growth to slow next year follow-

ing surging sales of missiles,

space systems and its F-35 com-

bat jet in 2019, it will still gener-

ate more cash for dividends and

stock buybacks.

Lockheed Martin Chief Finan-

cial Officer Ken Possenriede said

the company expects to add $17

billion in orders this year, with

the backlog stretching out fur-

ther than in recent years.

The initial 2020 outlook fell

just shy of expectations.

Profit in the quarter rose to

$1.61 billion from $1.47 billion a

year earlier, with per-share earn-

ings climbing to $5.70 from

$5.18, well above the $5.02 con-

sensus among analysts.

—Doug Cameron

UNITED TECHNOLOGIES

Aerospace Company

Raises Its Guidance

United Technologies Corp.

raised its profit outlook for the

year as it recorded higher quar-

terly earnings and revenue

driven largely by its 2018 acqui-

sition of airplane-parts maker

Rockwell Collins Inc.

For the full year, the aero-

space company now expects ad-

justed per-share earnings to be

between $8.05 and $8.15, up

from its previous outlook of

$7.90 to $8.05. The sales out-

look was narrowed to between

$76 billion and $76.5 billion, com-

pared with prior guidance of

$75.5 billion to $77 billion.

The company posted adjusted

earnings of $2.21 a share in the

third quarter, up 15% from the

same quarter last year and sur-

passing the $2.03 a share ana-

lysts had expected.

Net income totaled $1.15 bil-

lion, down 7.3% from the compa-

rable quarter a year earlier.

United Technologies said it in-

curred 73 cents a share of

charges related to the separation

of its Otis elevator and Carrier

air-conditioner businesses.

Shareholders this month ap-

proved a $135 billion combina-

tion with Raytheon Co.

—Dave Sebastian

CHIPOTLE

Delivery Costs Bite

Into Online Gains

Chipotle Mexican Grill Inc. is

selling more burritos as the

chain pushes online sales,

though handling deliveries is

coming at a cost.

The company said that online

sales grew by 88% during its

third quarter, now accounting for

18% of its business. But delivery

expenses grew during the quar-

ter ending in September, and ad-

ministrative costs increased dur-

ing the quarter compared with

the previous year’s period.

The chain reported adjusted

earnings per share of $3.82 on

$1.4 billion in income, excluding

one-time events, for its third

quarter. The company’s earnings

per share were up 77% from last

year’s period. Analysts projected

earnings per share of $3.21, ex-

cluding one-time items.

—Heather Haddon

that have entered the category

with lower-price items.

Overall, the company re-

ported a profit of $212.9 mil-

lion, or $1.67 a share, down

from $263.9 million, or $2.06

a share, a year earlier. Ana-

lysts polled by FactSet were

expecting earnings of $2.21 a

share.

Excluding one-time charges,

the company reported ad-

justed earnings of $1.84 a

share for the latest period.

products from China, down

from more than 80% in 2012.

Sales of its Magic: The

Gathering and Monopoly prod-

ucts grew during the quarter,

but revenue from the com-

pany’s franchise brands fell 8%

to $779.7 million due to lower

demand for its My Little Pony

and Play-Doh products.

Hasbro’s Nerf brand also

continued to struggle. The

brand’s high-end toy blasters

have been undercut by rivals

tional sales were flat.

Shares of Hasbro fell nearly

17% to $100.02 on Tuesday but

are up 23% on the year.

Mr. Goldner said that retail-

ers could continue to alter

their orders before the Dec. 15

tariff is implemented.

The CEO said the company

plans to reduce the portion of

products it sources from China

to below 50% by the end of

2020. Hasbro this year said it
      sourced about two-thirds of its

an earnings call. “The prospect

had our retailers cancel major

direct import program orders

and rewrite many of those or-

ders as domestic shipments.”

The Pawtucket, R.I., com-

pany said third-quarter reve-

nue rose slightly to $1.58 bil-

lion. Analysts were expecting

$1.72 billion, according to

FactSet.

Revenue in the U.S. and

Canada declined 2% from a

year earlier while interna-

$156 billion in goods from

China, including consumer

items such as toys.

The 10% duty is scheduled

to go into effect on Dec. 15 af-

ter being delayed in early Au-

gust due to concern over the

holiday shopping season.

“The threat of and the im-

plementation of tariffs in cer-

tain instances impacted our

shipments and our ability to

fully meet demand,” Chief Ex-

ecutive Brian Goldner said on

BUSINESS NEWS

Shares of Hasbro Inc. tum-
bled after the company re-
ported that trade tensions
with China cut into its latest
quarterly results.
Retailers, spooked by po-
tential tariffs on imports from
China, canceled or changed
their orders during the third
quarter, the toy maker said.
President Trump plans to
impose new tariffs on about

BYPATRICKTHOMAS

Tariffs on China Cast Shadow Over Hasbro

Harley-Davidson gained in overseas markets but shipped fewer bikes overall.

SHAWN THEW/EPA/SHUTTERSTOCK

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