Walgreen Profit up 7%

Elena
27 Mar, 2006
New York City

U.S. stocks opened flat on cautiousness ahead of FOMC meeting and Fed Reserve''s decision on interest rates. Drugstore chain Walgreen, the most important company releasing quarterly results today, posted Q2 profit increase of 6.6%. Among other companies, Alvarion posted narrower-than-expected Q4 loss, Cal-Maine Foods reported Q3 profit rise on sales growth, Retalix posted tripled Q4 income on 52% revenue increase.

[R] 9:45AM Stocks opened flat ahead of FOMC.[/R]
With traders focused on FOMC meeting and announcement on further interest rates increases, and no significant economic news due out Monday, trading activity is expected to be light. The Fed Reserve is expected to raise the fed funds rate for a 15th consecutive time by a quarter-percentage point to 4.75% from 4.5%. Blue-chip stocks declined at opening, while tech stocks were little changed. The Dow Jones industrial average was down 17.04 points, or 0.15%. The S&P's 500 Index was down 1.42 points, or 0.11%. The Nasdaq was up 2.73 points, or 0.12%. Among companies reporting quarterly results, drugstore chain Walgreen ((WAG)) reported Q2 earnings rise but one penny below analyst estimates. Walgreen reported earnings of 51 cent per share on sales of $12.16 billion compared to earnings of 48 cent per share on sales of $10.99 billion in the year ago quarter. In corporate news, Goldman Sachs ((GS)) confirmed that it is part of a consortium considering a takeover of Associated British Ports at the value of 2.3 billion pounds. Circuit City shares jumped 2.3% after Lehman Brothers raised its rating on the stock to equal-weight from underweight.

[R]9:00AM Stock futures pointed to a positive start.[/R]
U.S. stock futures indicated a strong opening with focus on the Federal Reserve’s two-day monetary meeting and the decision on interest-rate increases. This FOMC meeting will be the first, presided over by the new Chairman Ben Bernanke and investors will scrutinize the wording of the Fed statement, expecting clues to be given about the future path of short-term interest rates in the world''s largest economy. The three major averages were near five-year highs in pre-market trading. Apart from drugstore chain Walgreen''s ((WAG)) fiscal Q2 results, no major U.S. company earnings are expected. The S&P 500 future was up 0.02%, the Dow Jones future was up 0.01% and the Nasdaq future was 0.12% higher.

Crude oil prices retreated below $64 after a positive development in Nigeria’s conflict eased supply concerns. Light sweet crude May delivery dropped 48 cents to $63.78 a barrel. Gasoline lost 2 cents to $1.8050 a gallon, while heating oil edged down a penny to $1.7813. Natural gas dropped 9 cents to $7.200 per 1,000 cubic feet. London Brent for April delivery fell 7 cents to $63.44 a barrel. Gold advanced ahead of FOMC meeting. Gold for April delivery gained $2.40 to $562.90. The U.S. dollar declined versus the yen on speculations the Fed Reserve will end its interest-raising policy. The euro traded at $1.2024, down from $1.2036. The dollar bought 116.90 yen, down from 117.46.

Alvarion Ltd, ((ALVR)), wireless broadband provider, reported that Q4 net loss was less than announced previously, in view of a favorable settlement with a former customer of inter WAVE Communications International, bought by Alvarion in December 2004. The Alvarion’s revised net loss for Q4 was $3.9 million as opposed to the previously announced $4.8 million.

Cal-Maine Foods Inc, ((CALM)), egg producer, reported Q3 net income of 34 cents a share, up from 10 cents a share a year earlier on sales growth and strong egg demand leading up to Easter.

Retalix Ltd, ((RTX)), global provider of enterprise-wide software solutions for food retailers, reported Q4 GAAP net income 32 cents per share, almost tripled from 11 cents per share for the prior-year period. Revenue rose 52% compared to the year-ago period and gross profit rose 46% in Q4 from the same period last year.

Buca Inc, ((BUCA)), Italian restaurants operator, posted a preliminary net loss of 32 cents a share, against a restated net loss of 90 cents a share in the same period a year ago on 5.3% sales growth. The company is restating results for fiscal 2001 through 2004 and the first three quarters of 2005. Buca Inc also added it has identified certain material weaknesses in its system of internal controls over financial reporting and will therefore provide more detail in its form 10-K for 2005, which it expects to file by March 27.

[R] 8:00 AM European averages traded lower on deal talk.[/R]
European markets lost ground at mid-day, hurt by takeover speculation. The French CAC 40 was the most notable decliner as pharmaceutical shares were dragged down by a 0.7% loss of Sanofi-Aventis shares after the company agreed to buy part of generics drug maker. Meanwhile electronics maker Thomson advanced 7.8% on bid speculation. The German DAX 30 fell 0.1% and London FTSE 100 fell 0.1%, dragged by weak oil shares and London Stock Exchange, down 1.6% on deal talk.

[R]7:45AM Asian markets broadly advanced. Australian shares hit a new high.[/R]
Asian-Pacific benchmarks finished mostly in the positive at the start of a week, heavily loaded with economic data. The Nikkei climbed 0.5% to 16,650.10, supported by property developers and consumer-related stocks, including Mitsubishi Estate, Sumitomo Realty, and Toyota Motor. Australia All Ordinaries hit a new high, rising 1% to 5,088.1, reflecting merger activity and strength among resource stocks like BHP Billiton and Rio Tinto. Among other regional markets, South Korea’s Kospi gained 0.7% on tech stocks, led by Samsung Electronics, Taiwan Weighted index rose 0.7%, and Hong Kong’s Hang Seng added 0.6%