Nike's 2nd Quarter Earnings Trample Analyst Predictions

Nike Inc. posted second-quarter profit that beat analysts' estimates on higher sales in China and Europe and a weaker dollar. The shares rose 4.2 percent in late U.S. trading.

Net income climbed 10 percent to $359.4 million, or 71 cents a share, from $325.6 million, or 64 cents a share, a year earlier, the Beaverton, Ore.-based company said Wednesday in a statement. Analysts estimated profit of 66 cents.

Orders for clothing and footwear through April rose 10 percent excluding currency gains, in line with some analysts' projections. Sales in China, the world's fastest-growing major economy, are increasing as consumers there buy shoes and athletic gear ahead of next year's Olympics.

"It was strong quarter and I was really impressed with the futures number they put up," said Jon Fisher, a fund manager in Minneapolis for Fifth Third Asset Management Inc., which has more than $22 billion in assets. "Nike has a very strong international business right now."

Sales for the three months that ended Nov. 30 rose 14 percent to $4.34 billion, Nike said.

Ten analysts surveyed by Bloomberg estimated average profit of 66 cents a share. Eleven projected sales of $4.22 billion.

Nike shares rose $2.70 to $66.50.

Orders for clothing and footwear through April rose 13 percent, with a 3 percentage point benefit from the weaker dollar. Brad Cragin, an analyst with Goldman, Sachs & Co., estimated 10 percent excluding currency gains.

"Nike is doing better than most of their competitors," John Shanley, an analyst at Bala Cynwyd, Pa.-based Susquehanna Financial Group, said in an interview before the results were released. "The company has a strong global presence. Investors look at Nike as a way to broaden their exposure to the international market."

In October, Nike said it would pay $570 million for Umbro PLC, which makes the shirts for England's soccer team. Nike is challenging Adidas AG, which outfits the German, French and Argentine squads.

The bid depends on the support of billionaire Mike Ashley, who owns 29.9 percent of Umbro through Sports Direct International PLC.