LA-based Kaufman & Broad and San Diego-based PC-maker Gateway are two of SoCal's largest companies and biggest employers. Taken together, their two reports show the dichotomy that's emerging in the region's economy: it's the best of times for companies in certain types of industries and the worst of times for those involved in others.
Gateway's disappointing earnings announcement and lay-off plans surprised most analysts, who expected much better figures. Gateway says poor holiday sales helped to push fourth-quarter profit from operations down to $37.6 million, or 12 cents a share. It earned $126 million, or 38 cents a share, a year earlier.
The PC-maker also says it will lay off more than 2,400 workers within the next couple of months, though it won't disclose where those cuts will be made. Gateway, which occupies several Southland buildings, employs about 800 people at its Orange County facilities and another 400 at its San Diego headquarters.
The news was much better from Kaufman & Broad, the homebuilder who says its profit in the fiscal fourth quarter ended Nov. 30 jumped 14% from a year earlier to $73.4 million, or $2 per diluted share. Analysts had expected about $1.81, according to First Call, the New York-based firm that tracks Wall Street earnings estimates.
Kaufman & Broad says the strong economy and relatively low mortgage rates helped the company deliver a record 22,847 homes across the United States during the fiscal year. CEO Bruce Karatz says he expects earnings per share of between $4.60 and $4.65 for fiscal 2001, though First Call says the consensus among analysts is $4.59.
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