The largest maker of sporting goods in the world, Nike, Inc saw its stock price jump the most in more than 48 months on Friday. The increase was due to investor’s concerns easing over the company profitability and business in China both becoming weaker.
Nike shares were up 11% on Friday to close at $59.53. The Beaverton, Oregon based company saw its largest gain since October of 2008. Nike is up in 2013 by 15% compared to only a 9.1% increase by the S&P 500 Index.
Nike finally saw dividends pay off for its increases in prices that were put into place over a year ago, as gross margins in the company became wider for just the first time in more than 24 months. While at the same time, Nike saw its own brand orders increase in China after sales in the Asian country fell by 10% over the quarter for the second straight quarterly fall.
The gross margin increase during Nike’s fiscal third quarter ending February 28, came at a time the company’s earnings from operations were up 16% to nearly $662 million for the quarter, compared to more than $569 million during the same quarter a year earlier.
The per share earnings were equal to 73 cent a share, which beat the estimates of analysts who had predicted it would be 63 cents per share. An initial 2014 forecast for the company was released that was in line with analysts’ estimates. Nike said its sales would increase by mid-single digits and its earnings would increase by the mid-teen percentage. Wall Street analysts had predicted that 2014 would produce gains of 7% in revenue for Nike and 14% in earnings.
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