U.S. Stocks Gain; Jobless Claims Drop

Arthi Gupta
26 Aug, 2010
New York City

U.S. stocks rose after weekly jobless claims fell 31,000 to 473,000. Chilean President agreed to sell TV network to Time Warner. Google unveiled voice calling service. Mazda and Ford joint venture plan to invest $350 million in Thailand. Novartis acquired 77% stake in Alcon for $28.3 billion.

[R]9:35 AM New York – U.S. stocks rose after weekly jobless claims fell 31,000 to 473,000. Chilean President agreed to sell TV network to Time Warner. Google unveiled voice calling service. Mazda and Ford joint venture plan to invest $350 million in Thailand. Novartis acquired 77% stake in Alcon for $28.3 billion.[/R]

Asian markets traded mixed and European markets pared losses. Potash Corp board believed shareholder rights plan is justified. Superconductor Technologies priced public offering at $1.50 per share.

The Labor Department said first-time claims for unemployment benefits fell by more than expected in the week ended August 21st.

Initial jobless claims fell to 473,000 from the previous week''s revised figure of 504,000.

Growth in world trade eased notably in the second quarter as an upturn in advanced economies failed to offset a slow-down in emerging economies, according to a study by the Netherlands Bureau for Economic Policy Analysis released today.

The think tank also found that the global trade momentum eased to 3.6% annually in June from 5.1% in May. Month-on-month, trade grew 0.7% following an upwardly revised 2.3% increase in May.

Chilean President Sebastian Pinera is to sell his television channel, Chilevision SA to Time Warner Inc., according to reports. The value of the deal was not disclosed but media reports quoting Time Warner said it was set for around $150 million. The transaction is pending approval by Chile''s Antitrust Office.

Google unveiled a new voice calling service that would enable to make phone calls from the Google Chat interface. The service, which would be incorporated in the Gmail Inbox, is a combination of Google Talk and Google Voice.

Mazda Motor Corp. and Ford Motor Company''s joint venture, AutoAlliance (Thailand) Co. Ltd. will invest $350 million in its pickup truck plant to support the production of Mazda and Ford''s next generation pickup trucks. AAT is scheduled to begin manufacturing Mazda and Ford''s next generation compact pickups in mid-2011.

The investment will increase Mazda and Ford''s total joint investment in the AutoAlliance Thailand facility to more than $1.85 billion since operations began in 1995.

The Office of Thrift Supervision reported that the U.S. thrift industry reported a profit of $1.49 billion in the second quarter 2010 compared to a loss of $94 million in the second quarter a year ago. This is the fourth consecutive quarterly profit for the industry.

Potash Corp. of Saskatchewan Inc. said its board believes that the continued operation of the shareholder rights plan is in the best interests of the company and its shareholders.

The company adopted a shareholder rights plan last week to thwart BHP Billiton''s hostile bid. The rights plan, also known as poison pill, enables potential acquirers to make a ""Permitted Bid"" without the approval of the PotashCorp Board, so long as a bidder adheres to certain requirements consistent with the objectives of the rights plan.

Novartis AG and Nestlé S.A. completed the purchase and sale of about 156 million shares of Alcon Inc. for $28.3 billion in cash. Novartis is currently Alcon''s majority shareholder and controls about 77% of Alcon''s outstanding shares.

The transaction announced by Nestlé and Novartis does not affect the remaining 23% of Alcon''s shares, Alcon added.

Superconductor Technologies Inc. priced 4 million shares of common stock at a price of $1.50 per share for gross proceeds of $6.0 million.

The company expects to receive net proceeds after deducting underwriting discounts and commissions and estimated offering expenses of about $5.3 million from the offering. The company expects to close the sale of its common stock on or about August 31.

Earnings Review

Cyberonics, Inc. ((CYBX)), the medical devices producer stated first quarter net sales rose 16% to $44.8 million, from $38.5 million in the comparable period last year. Net income in the quarter edged lower 8.9% to $7.2 million or 25 cents per diluted share, compared to net income of $7.9 million or 23 cents per share in the prior-year quarter.

Fred''s, Inc. ((FRED)), the fashion specialty retailer reported second quarter net sales improved 4% to $449.47 million from $434.21 million in the previous year. Net profit in the quarter advanced 17% to $4.96 million or 13 cents per diluted share compared to net income of $4.24 million or 11 cents per share in the previous year.

Guess?, Inc. ((GES)), the international fashion house reported second quarter revenue rose 10.5% to $577.14 million from $522.42 million in the same quarter last year. Net income in the quarter increased 12% to $66.8 million or 72 cents per diluted share, compared to net income of $59.6 million or 64 cents per share for the year-ago quarter.

HEICO Corporation ((HEI)), the aerospace and electronics related products maker stated third quarter sales grew 18% to $158.27 million from $134.09 million in the comparable quarter a year ago. Net income in the quarter rose 34% to $14.93 million or 44 cents per diluted share compared to net income of $11.13 million or 33 cents per share last year.

JDS Uniphase Corporation ((JDSU)), the communication equipment maker stated fourth quarter net revenue increased 43% to $390.9 million from $273.2 million in the same quarter last year. Net income generated in the quarter was $1.5 million or 1 cent per share, compared to a net loss of $63.6 million or 29 cents per share in the prior-year quarter.

Jo-Ann Stores, Inc. ((JAS)), the fabrics and crafts retailer reported second quarter net sales rose 4.7% to $439.3 million from $419.4 million last year. Net income in the quarter was $5.4 million or 20 cents per diluted share, compared to a net loss of $3.2 million or 13 cents per share in the previous year quarter.

Northern Offshore Ltd. ((NFSHF.PK)), the company which operates offshore oil and gas production and drilling vessels reported second quarter revenues fell 33.4% to $48.9 million from $73.4 million in the year-ago quarter. Net loss in the quarter was $0.5 million compared to a net income of $22.8 million in the same quarter last year. On a per share basis, earnings for the quarter were break even compared to a profit of $0.15.

Sigma Designs, Inc. ((SIGM)), the integrated system-on-chip solutions provider said second-quarter net revenue advanced 43% to $73.33 million, compared to $51.28 million in the year-ago quarter. Net income in the quarter climbed 2.7% to $8.25 million or 26 cents per diluted share compared to net income of $8.03 million or 29 cents per share last year.

The Hain Celestial Group, Inc. ((HAIN)), the natural and organic products company reported fourth quarter net sales decreased 14% to $222.8 million, compared with $258.8 million in the year-ago period, which included net sales of $35.5 million by Hain Pure Protein. Net income in the quarter surged 431% to $6.69 million or 16 cents per diluted share compared to net income of $1.26 million or 3 cents per share last year.

TiVo Inc. ((TIVO)), the digital video recorder maker said second quarter net revenues declined 11% to $51.55 million from $57.61 million in the same period last year. Net loss in the quarter widened 465% to $15.30 million or 13 cents per diluted share compared to net loss of $2.71 million or 3 cents per share in the year-ago period.