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Nike Earnings, Currency, Taxes & Valuation: Just There (NKE)

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By Douglas A. McIntyre Published
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Nike Inc. (NYSE: NKE) posted its quarterly and fiscal earnings, with a fiscal gain of 14% in revenues, a 28% EPS gain, and a future orders gain of 11%.  For the quarter, Nike posted $0.98 diluted EPS on $5.088 Billion in revenues.  First Call estimates were $0.96 EPS on $4.95 Billion in revenues. 

To explain the difference in estimates versus actual numbers, Nike said that currency added revenue by 5% for the year and by 7% in the quarter.  The company also benefited from much lower tax rates compared to 2007 because of larger overseas revenues where taxes are lower.  The company said that currency exchange rates increased its reported future orders by 6% in Europe, 7% in Asia Pacific, and 1% in the Americas.

Nike did note that its global inventories stood at $2.4 billion, up 15% from May 31, 2007.  During the quarter, it repurchased a total of 4,447,605 shares for approximately $290 million under its original $3 Billion plan.  It has now exhausted some $2.1 Billion of that $3 Billion repurchase plan.

Shares closed flat on the day at $65.97, but shares are down more than 4% at $63.10 in after-hours trading.  It seems that with the company seeing most of the gains from the lower tax rates and from the currency rates that Wall Street is saying this one is fairly valued for now.

Jon C. Ogg
June 25, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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