Earnings Down at Zones, Up at NBTY

Stamford, CT–With change, comes pain. So it goes with computer reseller Zones (Nasdaq: ZONS ), which stopped actively marketing to consumers at the start of the second quarter to focus small and midsize businesses. For the three months ended June 30, Renton, WA-based Zones posted net income of $92,000, less than one-third of the $300,000 it netted a year ago. (Last year’s second-quarter net income included the after-tax gain on the disposition of an overseas subsidiary of $227,000.)

Zones’ second-quarter net revenue decreased 15.5%, to $145.2 million from $171.8 million last year. Revenue from the outbound sales division to businesses, institutions, and governments accounted for $120.4 million of its sales for the quarter. Zones attributes its revenue decline to both sagging economic conditions and the discontinuation of its PC Zone catalog and Website, which targeted consumers.

Nutritional supplements manufacturer/marketer NBTY (Nasdaq: NBTY) enjoyed a healthier quarter. The Bohemia, NY-based company reported net sales of $204.0 million for the quarter ended June 30, an increase of 19% from last year’s second-quarter sales of $172.0 million. Net income increased 11%, to $13.0 million from $12.0 million. But sales from NBTY’s catalog/e-commerce business fell by $400,000, to $42.5 million. Quarterly Web sales increased 63%, to $4.6 million.

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