Household International Inc. reported net income of $503.8 million, or $1.07 per diluted share, in the third quarter, a 12 percent increase from $451.2 million, or 94 cents a share, a year ago.
It met analysts’ expectations, according to Thomson Financial/First Call. Shares closed up $1.16, to $57.16, Wednesday on the New York Stock Exchange.
The Prospect Heights-based firm has been one of the nation’s best-performing finance companies in recent months, as some competitors have run into trouble with bad loans.
“They prepared for a recession earlier than most, and that has suited them well,” said Joel Gomberg, an analyst at William Blair & Co.
– In August, banking behemoth Bank of America Corp. said it would exit its consumer finance business because it was no longer sufficiently profitable. Finance firms typically make loans to people with spotty credit records.
Besides its strong loan portfolio–which experienced a minor 5 percent increase in charge-offs between Sept. 30, 2000, and Sept. 30, 2001–Household also is among the leaders in consolidating debt for consumers, which helps boost revenue, Gomberg said.
Net interest and fee income totaled $2.6 billion in the third quarter, up 19 percent from a year ago.
For the first nine months of 2001, Household posted net income of $1.37 billion, or $2.91 per diluted share, an increase of 14 percent from $1.21 billion, or $2.52 a share, in the same period of 2000.
Also on Wednesday, Household announced that Roberto Herencia, the former head of Banco Popular’s U.S. operations, was hired to develop programs for the U.S. Hispanic market.
In other earnings news:
– Illinois Tool Works Inc. reported third-quarter net income fell 25 percent as a result of continued slowing in many of the company’s North American markets.
Net income fell to $199 million, or 65 cents a diluted share, from $264 million, or 87 cents a diluted share in the year-earlier quarter, the company reported.
Analysts had expected ITW to earn 66 cents a share, according to First Call.
Revenue for the quarter fell 3 percent, to $2.39 billion from $2.47 billion.
Glenview-based ITW also trimmed its fourth-quarter forecast, citing eroding market conditions. The company now foresees fourth-quarter earnings per share to be in the range of 59 cents to 69 cents. Analysts surveyd by First Call are expecting fourth-quarter earnings of 66 cents.
For the full year, the company forecasts earnings per share of $2.60 to $2.70. Analysts expect earnings of $2.68 a share for the year.
For the first nine months, ITW’s net income fell 19 percent to $614.6 million, or $2.01 a diluted share, from $756.5 million, or $2.49 a diluted share, in the year-earlier period. Revenue for the nine months fell 2 percent, to $7.30 billion from $7.45 billion.
ITW shares fell $1.73, to $58.02, on the NYSE.
– CDW Computer Centers Inc. said third-quarter earnings were 49 cents a diluted share, unchanged from the year-earlier period.
Higher profit margins offset a decline in sales, the Vernon Hills-based company said Wednesday. Sales slipped 4 percent to $991 million, compared with $1.03 billion during 2000’s third quarter. But the gross profit margin was 13.5 percent of net sales, compared with 12.8 percent in the year-earlier quarter.
In August, CDW predicted third-quarter earnings of 43 to 47 cents a share on revenue of $960 million to $1.01 billion. However, CDW said it expects fourth-quarter sales of $960 million to $1 billion, and sees earnings dipping to 44 cents to 48 cents a share.
CDW shares closed down $1.15, to $42.65, on the Nasdaq stock market.
