miercuri, 5 martie 2008
Applied Materials signs $1.9B contract
Applied Materials Inc. (NASDAQ:AMAT) , a supplier of computer chip-making equipment, said Tuesday it has signed a contract valued at $1.9 billion with a privately held company based outside the U.S.According to a filing with the Securities and Exchange Commission, Applied Materials will supply equipment and installation and warranty services for multiple solar factories to be constructed by the company. Collectively, the factories are expected to produce an annual output of solar modules capable of generating gigawatts of electricity, the company said.Shares of the Santa Clara, Calif.-based company spiked 85 cents, or 4.5 percent, to $19.73 in morning trading. Shares have traded between $16.13 and $23 in the past 12 months.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Fed officials debate recession risk
Dallas Fed President Fisher argues inflation greatest threat to economy, while Fed Governor Mishkin says recession risks are greater than central bank's forecast.
Two members of the Federal Reserve's rate-setting body gave conflicting speeches Tuesday as to whether rising inflation or a recession is the greater risk for the economy.
Inflation risk greater Dallas Federal Reserve President Richard Fisher said Tuesday he believes inflation is a greater threat, saying he would accept a slowdown of the U.S. economy in order to keep price pressures in check. The remarks suggest that Fisher, a so-called inflation hawk, will keep pushing his Fed colleagues to stop cutting rates.
But Frederic Mishkin, a Fed governor and a close ally of Fed Chairman Ben Bernanke, argued in a speech to the National Association for Business Economics that the risks are so great that the economy will not be able to meet even the Fed's modest forecast, which essentially calls for little or no growth in the first half of the year. He argued price pressures remain in check and that the threat from inflation should wane in upcoming years.
The Fed made a 0.75 percentage point rate cut at an emergency meeting Jan. 21, and another half-point cut at the conclusion of the Jan. 29-30 meeting. Fisher, who joined the Federal Open Market Committee for the two-day meeting, was the sole vote against that cut.
The FOMC is next set to meet March 18, and investors are widely expecting another half-point cut at that meeting.
In remarks prepared for a speech in London, Fisher said that he's upset by talk that recent Fed rate cuts represent an "easy money" policy by the U.S. central bank.
"Talk of 'cheap money' makes my skin crawl," he said in his prepared remarks. "The words imply a debased currency and inflation and the harsh medicine that inevitably must be administered to purge it."
"So you should not be surprised that I consider the perception that the Fed is pursuing a cheap-money strategy, should it take root, to be a paramount risk to the long-term welfare of the U.S. economy," he added.
Fisher points out that yields on long-term bonds have risen, not declined, in the wake of the Fed rate cuts, a sign of growing concern about inflation - although he conceded that traders could be mistaken about the effect of the cuts on prices.
"Twitches in markets that have occasionally led me to wonder if they were afflicted with the financial equivalent of Tourette's syndrome," he said.
But Fisher said inflation readings have not been encouraging and that he believes price pressures can continue to build even in the face of an economic slowdown, an economic condition popularly known as "stagflation."
Fisher argues it's better to have the economy go into an economic downturn than to risk a pickup in inflationary pressure through low rates due to global forces.
"We cannot, in my opinion, confidently assume that slower U.S. economic growth will quell U.S. inflation and, more important, keep inflationary expectations anchored," he said. "Containing inflation is the purpose of the ship I crew for, and if a temporary economic slowdown is what we must endure while we achieve that purpose, then it is, in my opinion, a burden we must bear, however politically inconvenient."
Recession risk greater But Mishkin said he believes the economy is at greater risk than seen in the Fed forecast released last month which called for modest growth between 1.3% to 2% between the fourth quarter of 2007 and the end of this year.
"I see significant downside risks to this outlook," he said. "These risks have been brought into particularly sharp relief by recent readings from a number of household and business surveys that have had a distinctly downbeat cast."
The Fed governor argues that the housing prices are at risk of falling more than forecasts, and that if that happens, he believes it will put a crimp in both consumer confidence and their access to credit. He said that the declines also could create greater upheaval in the financial markets, which he argues "causes economic activity to contract further in a perverse cycle."
Mishkin also said he expects the problems in the economy to cause a rise in unemployment. And while he believes the Fed needs to keep an eye on inflation pressures, he doesn't believe they pose a significant threat anytime soon.
"By a range of measures, longer-run inflation expectations appear to have remained reasonably well contained even as recent readings on headline inflation have been elevated," he said.
"I expect inflation pressures to wane over the next few years, as product and labor markets soften and the rise in food and energy prices abates," he added. He also said he believes that inflation measures that strip out volatile food and energy prices should be close to 2% a year going forward, which is the upper end of what is generally believed to be the Fed's comfort zone that leaves the door open for further rate cuts.
Two members of the Federal Reserve's rate-setting body gave conflicting speeches Tuesday as to whether rising inflation or a recession is the greater risk for the economy.
Inflation risk greater Dallas Federal Reserve President Richard Fisher said Tuesday he believes inflation is a greater threat, saying he would accept a slowdown of the U.S. economy in order to keep price pressures in check. The remarks suggest that Fisher, a so-called inflation hawk, will keep pushing his Fed colleagues to stop cutting rates.
But Frederic Mishkin, a Fed governor and a close ally of Fed Chairman Ben Bernanke, argued in a speech to the National Association for Business Economics that the risks are so great that the economy will not be able to meet even the Fed's modest forecast, which essentially calls for little or no growth in the first half of the year. He argued price pressures remain in check and that the threat from inflation should wane in upcoming years.
The Fed made a 0.75 percentage point rate cut at an emergency meeting Jan. 21, and another half-point cut at the conclusion of the Jan. 29-30 meeting. Fisher, who joined the Federal Open Market Committee for the two-day meeting, was the sole vote against that cut.
The FOMC is next set to meet March 18, and investors are widely expecting another half-point cut at that meeting.
In remarks prepared for a speech in London, Fisher said that he's upset by talk that recent Fed rate cuts represent an "easy money" policy by the U.S. central bank.
"Talk of 'cheap money' makes my skin crawl," he said in his prepared remarks. "The words imply a debased currency and inflation and the harsh medicine that inevitably must be administered to purge it."
"So you should not be surprised that I consider the perception that the Fed is pursuing a cheap-money strategy, should it take root, to be a paramount risk to the long-term welfare of the U.S. economy," he added.
Fisher points out that yields on long-term bonds have risen, not declined, in the wake of the Fed rate cuts, a sign of growing concern about inflation - although he conceded that traders could be mistaken about the effect of the cuts on prices.
"Twitches in markets that have occasionally led me to wonder if they were afflicted with the financial equivalent of Tourette's syndrome," he said.
But Fisher said inflation readings have not been encouraging and that he believes price pressures can continue to build even in the face of an economic slowdown, an economic condition popularly known as "stagflation."
Fisher argues it's better to have the economy go into an economic downturn than to risk a pickup in inflationary pressure through low rates due to global forces.
"We cannot, in my opinion, confidently assume that slower U.S. economic growth will quell U.S. inflation and, more important, keep inflationary expectations anchored," he said. "Containing inflation is the purpose of the ship I crew for, and if a temporary economic slowdown is what we must endure while we achieve that purpose, then it is, in my opinion, a burden we must bear, however politically inconvenient."
Recession risk greater But Mishkin said he believes the economy is at greater risk than seen in the Fed forecast released last month which called for modest growth between 1.3% to 2% between the fourth quarter of 2007 and the end of this year.
"I see significant downside risks to this outlook," he said. "These risks have been brought into particularly sharp relief by recent readings from a number of household and business surveys that have had a distinctly downbeat cast."
The Fed governor argues that the housing prices are at risk of falling more than forecasts, and that if that happens, he believes it will put a crimp in both consumer confidence and their access to credit. He said that the declines also could create greater upheaval in the financial markets, which he argues "causes economic activity to contract further in a perverse cycle."
Mishkin also said he expects the problems in the economy to cause a rise in unemployment. And while he believes the Fed needs to keep an eye on inflation pressures, he doesn't believe they pose a significant threat anytime soon.
"By a range of measures, longer-run inflation expectations appear to have remained reasonably well contained even as recent readings on headline inflation have been elevated," he said.
"I expect inflation pressures to wane over the next few years, as product and labor markets soften and the rise in food and energy prices abates," he added. He also said he believes that inflation measures that strip out volatile food and energy prices should be close to 2% a year going forward, which is the upper end of what is generally believed to be the Fed's comfort zone that leaves the door open for further rate cuts.
The $34 trillion problem
Medicare is poised to wreak havoc on the economy. And our presidential candidates are avoiding the issue.
Twice I have asked Alan Greenspan what he considers the greatest threat to the U.S. economy, and both times he has answered immediately with a single word: Medicare. He isn't so worried about the trade deficit and the housing crash; he figures market forces will sort them out. But Medicare is something else - a multitrillion-dollar problem that's about to get dramatically worse, and one that nobody wants to talk about. You'd think that the greatest threat to America's economy would be Topic A for the presidential candidates. But it's actually a topic they hate to touch.
Especially now. An analysis of their speeches shows that last year Senators Hillary Clinton, John McCain, and Barack Obama would occasionally mention the Medicare mess. But recently, with the economy slowing and voters feeling insecure, all three candidates have turned more populist: Their economic talking points are about feel-good reassurances, not about facing hard realities.
Unfortunately the day of reckoning is imminent. Sometime in the next President's first term, Medicare Part A (hospital insurance) will go cash-flow-negative, and it's all downhill from there. Medicare provides a wide range of services and subsidies to more than 40 million old and disabled Americans. As the country ages, Medicare and Medicaid (for those of any age with low incomes) will devour growing chunks of U.S. economic output. So will Social Security, but its cut of GDP should stop increasing around 2030. The federal budget has averaged about 18% of GDP over the past several decades. If that average holds and if the rules of our social insurance programs don't change, then by 2070, when today's kids are retiring, Medicare, Medicaid, and Social Security will consume the entire federal budget, with Medicare taking by far the largest share. No Army, no Navy, no Education Department - just those three programs.
But wait - the situation is actually much worse. Those estimates, reported in the latest Financial Report of the U.S. Government, assume that Medicare payments to doctors will be slashed drastically, by some 41% over the next nine years, as required by current law. It won't happen. Every year for the past five years, Congress has overridden the mandatory cuts. As for future cuts, the Financial Report says drily, "Reductions of this magnitude are not feasible and are very unlikely to occur fully in practice." So in reality, Medicare will go into the hole even faster than official projections reflect. And they show that if Medicare had to be accounted for like a company pension fund, it would be underfunded by $34 trillion.
Obviously those long-term scenarios won't happen, because they can't happen - we won't be shutting down the Army, Navy, and so on. But it's easy to see why the candidates don't want to discuss it. As you listen to them, keep three points in mind:
Pain-free remedies won't do the job. All three major candidates, on those rare occasions when they mention Medicare's finances, stress how they'll make the system more efficient, eliminate errors, and improve incentives. That's all wonderful, but it won't be nearly enough. Only John McCain has hinted at what else will be required, including means-testing and limits on benefits. Give him major points, but it's unlikely we'll hear much more on that theme.
Any mention of trust funds is bogus. They're too complicated to explain here, but the bottom line is that no piles of money are socked away to cover future Medicare expenses. Any money the government needs to pay out this year, it needs to take in this year, and every year.
Tax and spending plans must Include Medicare. We'll hear plenty of budget proposals over the next eight months. But without changes to Medicare, they're meaningless. Medicare will eventually overwhelm everything else in the budget, except for the interest on the mushrooming debt to pay for it.
If this is the greatest threat to the U.S. economy and the candidates haven't told us what they'd do about it, they haven't told us a thing.
Twice I have asked Alan Greenspan what he considers the greatest threat to the U.S. economy, and both times he has answered immediately with a single word: Medicare. He isn't so worried about the trade deficit and the housing crash; he figures market forces will sort them out. But Medicare is something else - a multitrillion-dollar problem that's about to get dramatically worse, and one that nobody wants to talk about. You'd think that the greatest threat to America's economy would be Topic A for the presidential candidates. But it's actually a topic they hate to touch.
Especially now. An analysis of their speeches shows that last year Senators Hillary Clinton, John McCain, and Barack Obama would occasionally mention the Medicare mess. But recently, with the economy slowing and voters feeling insecure, all three candidates have turned more populist: Their economic talking points are about feel-good reassurances, not about facing hard realities.
Unfortunately the day of reckoning is imminent. Sometime in the next President's first term, Medicare Part A (hospital insurance) will go cash-flow-negative, and it's all downhill from there. Medicare provides a wide range of services and subsidies to more than 40 million old and disabled Americans. As the country ages, Medicare and Medicaid (for those of any age with low incomes) will devour growing chunks of U.S. economic output. So will Social Security, but its cut of GDP should stop increasing around 2030. The federal budget has averaged about 18% of GDP over the past several decades. If that average holds and if the rules of our social insurance programs don't change, then by 2070, when today's kids are retiring, Medicare, Medicaid, and Social Security will consume the entire federal budget, with Medicare taking by far the largest share. No Army, no Navy, no Education Department - just those three programs.
But wait - the situation is actually much worse. Those estimates, reported in the latest Financial Report of the U.S. Government, assume that Medicare payments to doctors will be slashed drastically, by some 41% over the next nine years, as required by current law. It won't happen. Every year for the past five years, Congress has overridden the mandatory cuts. As for future cuts, the Financial Report says drily, "Reductions of this magnitude are not feasible and are very unlikely to occur fully in practice." So in reality, Medicare will go into the hole even faster than official projections reflect. And they show that if Medicare had to be accounted for like a company pension fund, it would be underfunded by $34 trillion.
Obviously those long-term scenarios won't happen, because they can't happen - we won't be shutting down the Army, Navy, and so on. But it's easy to see why the candidates don't want to discuss it. As you listen to them, keep three points in mind:
Pain-free remedies won't do the job. All three major candidates, on those rare occasions when they mention Medicare's finances, stress how they'll make the system more efficient, eliminate errors, and improve incentives. That's all wonderful, but it won't be nearly enough. Only John McCain has hinted at what else will be required, including means-testing and limits on benefits. Give him major points, but it's unlikely we'll hear much more on that theme.
Any mention of trust funds is bogus. They're too complicated to explain here, but the bottom line is that no piles of money are socked away to cover future Medicare expenses. Any money the government needs to pay out this year, it needs to take in this year, and every year.
Tax and spending plans must Include Medicare. We'll hear plenty of budget proposals over the next eight months. But without changes to Medicare, they're meaningless. Medicare will eventually overwhelm everything else in the budget, except for the interest on the mushrooming debt to pay for it.
If this is the greatest threat to the U.S. economy and the candidates haven't told us what they'd do about it, they haven't told us a thing.
A temple of glass
Boutique hotelier Provenance Hotels opens its newest art-themed spot in March, Tacoma's Hotel Murano. FSB arranged a sneak peak at the hotel's glass art treasures.
"Art is sort of my drug," says Gordon Sondland, president of Provenance Hotels, a boutique chain that is opening its fifth art-themed location in March, the Hotel Murano in Tacoma. "I wanted to share that with our guests. What we try to do is install interesting and controversial works that people will react to."
Because Tacoma is at the center of U.S. glassmaking, Sondland, 50, and curator Tessa Papas filled the hotel with glass sculpture. There are 46 artists represented, from Seattle's Dale Chihuly to Greece's Costas Varotsos to Denmark's Vibeke Skov, whose glass Viking ships are seen here.
"I wanted different examples from different parts of the world - different glassmaking techniques," Papas says. "I wanted well-known artists and up-and-coming artists." Each floor of the Murano features work by a different artist, plus a portrait and biography. And the rooms, which start at about $175 a night, include sketches of the artist's inspiration process.
Click through for a peek at the creations of some of Hotel Murano's glass artisans - and a glimpse of their other themed properties, such as the Hotel Preston, where Elvis lives on.
"Art is sort of my drug," says Gordon Sondland, president of Provenance Hotels, a boutique chain that is opening its fifth art-themed location in March, the Hotel Murano in Tacoma. "I wanted to share that with our guests. What we try to do is install interesting and controversial works that people will react to."
Because Tacoma is at the center of U.S. glassmaking, Sondland, 50, and curator Tessa Papas filled the hotel with glass sculpture. There are 46 artists represented, from Seattle's Dale Chihuly to Greece's Costas Varotsos to Denmark's Vibeke Skov, whose glass Viking ships are seen here.
"I wanted different examples from different parts of the world - different glassmaking techniques," Papas says. "I wanted well-known artists and up-and-coming artists." Each floor of the Murano features work by a different artist, plus a portrait and biography. And the rooms, which start at about $175 a night, include sketches of the artist's inspiration process.
Click through for a peek at the creations of some of Hotel Murano's glass artisans - and a glimpse of their other themed properties, such as the Hotel Preston, where Elvis lives on.
Bad economy? Time to get aggressive
(FORTUNE Small Business) -- In the first of five columns for FSB, StartupNation.com founder Rich Sloan offers advice on how entrepreneurs can prosper during an economic downturn.
The morning paper spins stories of doom and gloom. Customers and financing seem harder to come by. These are the realities of tougher economic times.
So what do you do? The conservative solution is to hunker down and wait for the storm to pass. For other entrepreneurs, though, downturns represent an opportunity to become stronger, to capture market share and to be poised for dominance when things turn around.
Consider the surprising recent growth of Two Men and a Truck. The company is the creation of Brig and Jon Sorber, two brothers who started a tiny moving business in the early 1980s with, yes, a single truck. Today the company boasts 200 franchisees. Last year's revenues were $198 million, up 2.5% over 2006. During the same period, revenues for the national moving industry contracted by 12%.
In a recent phone conversation, Brig Sorber shared his secrets for flourishing in tough times:
Band together. You can add more punch to what you sell by partnering with a company that offers a complementary product. Two Men and a Truck does this with apartment complexes. "Free Moving" is a great incentive for renters, and the landlords get deep discounts in exchange for the volume of business they provide to Brig's franchisees.
Talk to customers. With fewer customers calling in, Two Men and a Truck decided to start calling back. During busy times they gave quotes over the phone but typically didn't place a follow up call. Nowadays they use the extra available minutes to call back people who had inquired previously.
The result? A game-changing 25% of these prospects now become paying customers. In addition, the Sorbers sent franchise owners to visit customer homes while moves were underway. This made their customers feel like VIPs, creating dynamite word of mouth in the neighborhood.
Be flexible. Despite the slack market, Two Men and a Truck started running 24 hours a day, offering maximum convenience and flexibility to their customers. Meanwhile, many of their competitors were actually cutting back their operating hours.
Build relationships. When new franchisees sign on, Two Men and a Truck pays for their first year of membership in the local chamber of commerce. Over time, the company also encourages franchisees to work their way onto chamber boards. The strategy yields credibility, awareness of community trends, and deep relationships that have helped Two Men and a Truck expand its clientele from homeowners to commercial customers as well.
Sure, it's a tough economy. But the worst of times are also the best of times for companies that are willing to work hard and be resourceful. In my next column I'll share tips for identifying screaming needs in the market-especially during a downturn.
Rich Sloan is co-founder of StartupNation, a leading online business advice and networking website for entrepreneurs. He also hosts the nationally syndicated talk show, StartupNation Radio, airing on over 70 stations across the country. He is co-author of the acclaimed how-to book, StartupNation: America's Leading Entrepreneurial Experts Reveal the Secrets to Building a Blockbuster Business (Doubleday, 2006).
The morning paper spins stories of doom and gloom. Customers and financing seem harder to come by. These are the realities of tougher economic times.
So what do you do? The conservative solution is to hunker down and wait for the storm to pass. For other entrepreneurs, though, downturns represent an opportunity to become stronger, to capture market share and to be poised for dominance when things turn around.
Consider the surprising recent growth of Two Men and a Truck. The company is the creation of Brig and Jon Sorber, two brothers who started a tiny moving business in the early 1980s with, yes, a single truck. Today the company boasts 200 franchisees. Last year's revenues were $198 million, up 2.5% over 2006. During the same period, revenues for the national moving industry contracted by 12%.
In a recent phone conversation, Brig Sorber shared his secrets for flourishing in tough times:
Band together. You can add more punch to what you sell by partnering with a company that offers a complementary product. Two Men and a Truck does this with apartment complexes. "Free Moving" is a great incentive for renters, and the landlords get deep discounts in exchange for the volume of business they provide to Brig's franchisees.
Talk to customers. With fewer customers calling in, Two Men and a Truck decided to start calling back. During busy times they gave quotes over the phone but typically didn't place a follow up call. Nowadays they use the extra available minutes to call back people who had inquired previously.
The result? A game-changing 25% of these prospects now become paying customers. In addition, the Sorbers sent franchise owners to visit customer homes while moves were underway. This made their customers feel like VIPs, creating dynamite word of mouth in the neighborhood.
Be flexible. Despite the slack market, Two Men and a Truck started running 24 hours a day, offering maximum convenience and flexibility to their customers. Meanwhile, many of their competitors were actually cutting back their operating hours.
Build relationships. When new franchisees sign on, Two Men and a Truck pays for their first year of membership in the local chamber of commerce. Over time, the company also encourages franchisees to work their way onto chamber boards. The strategy yields credibility, awareness of community trends, and deep relationships that have helped Two Men and a Truck expand its clientele from homeowners to commercial customers as well.
Sure, it's a tough economy. But the worst of times are also the best of times for companies that are willing to work hard and be resourceful. In my next column I'll share tips for identifying screaming needs in the market-especially during a downturn.
Rich Sloan is co-founder of StartupNation, a leading online business advice and networking website for entrepreneurs. He also hosts the nationally syndicated talk show, StartupNation Radio, airing on over 70 stations across the country. He is co-author of the acclaimed how-to book, StartupNation: America's Leading Entrepreneurial Experts Reveal the Secrets to Building a Blockbuster Business (Doubleday, 2006).
FotoNation founder sells company - again
(FORTUNE Small Business) -- When Eran Steinberg agreed to sell FotoNation, a maker of camera software, to Tessera Technologies (TSRA) for $29 million in February, he ceded control over his business for the second time.
Steinberg, 46, started the camera software company in 1997, sold it at the height of the dot-com craze to Zing.com, then bought it back in 2002 after the bubble burst and Zing.com closed.
Once back at the helm, Steinberg focused on developing technology to address common photographic challenges - red eye, dust particles, poor lighting conditions - and enticed customers such as Samsung and Pentax to use his software in 80 million digital cameras. FotoNation's recent inventions include tools that enable cameras to focus on faces and detect smiles, which helped to double revenues in 2007 to $14 million.
Once Tessera, a $195.7-million-a-year business that creates miniaturization technologies for electronics, noticed FotoNation's explosive growth, it wanted to make a deal. Steinberg remains CEO, and he is preparing for FotoNation's next growth spurt - this time among the world's 3.3 billion cellphone users.
"In 2008," he says, "our software will become a check-box item for camera phones."
Steinberg, 46, started the camera software company in 1997, sold it at the height of the dot-com craze to Zing.com, then bought it back in 2002 after the bubble burst and Zing.com closed.
Once back at the helm, Steinberg focused on developing technology to address common photographic challenges - red eye, dust particles, poor lighting conditions - and enticed customers such as Samsung and Pentax to use his software in 80 million digital cameras. FotoNation's recent inventions include tools that enable cameras to focus on faces and detect smiles, which helped to double revenues in 2007 to $14 million.
Once Tessera, a $195.7-million-a-year business that creates miniaturization technologies for electronics, noticed FotoNation's explosive growth, it wanted to make a deal. Steinberg remains CEO, and he is preparing for FotoNation's next growth spurt - this time among the world's 3.3 billion cellphone users.
"In 2008," he says, "our software will become a check-box item for camera phones."
Costco posts 31% profit gain
Wholesale retailer's quarterly earnings up from year-ago period that was hurt by charges, sales rise 12%.ISSAQUAH, Wash. (AP) -- Warehouse club operator Costco Wholesale Corp. says its fiscal second-quarter earnings rose 31% from a year-ago period that was hurt by multiple charges.
The Issaquah, Wash.-based company said early Wednesday net income grew to $327.9 million, or 74 cents per share, from $249.5 million, or 54 cents per share, in a year-ago period which included $53.4 million in charges.
Sales increased 12% to $16.62 billion from $14.80 billion a year ago.
Costco matched the earnings-per-share expectations of analysts polled by Thomson Financial and was just below the consensus revenue prediction of $16.85 billion.
Warehouse club operators like Costco (COST, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500)' Sam's Club have seen meaningful sales and margin growth despite a challenging U.S. economic backdrop against which many retailers have stumbled.
The Issaquah, Wash.-based company said early Wednesday net income grew to $327.9 million, or 74 cents per share, from $249.5 million, or 54 cents per share, in a year-ago period which included $53.4 million in charges.
Sales increased 12% to $16.62 billion from $14.80 billion a year ago.
Costco matched the earnings-per-share expectations of analysts polled by Thomson Financial and was just below the consensus revenue prediction of $16.85 billion.
Warehouse club operators like Costco (COST, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500)' Sam's Club have seen meaningful sales and margin growth despite a challenging U.S. economic backdrop against which many retailers have stumbled.
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