U.S. Stocks Up; GDP Revised Lower

Arthi Gupta
27 Aug, 2010
New York City

U.S. stocks advance after GDP expanded a downwardly revised 1.6% in the second quarter. 3PAR accepted Dell

[R]9:35 AM New York – U.S. stocks advance after GDP expanded a downwardly revised 1.6% in the second quarter. 3PAR accepted Dell’s increased offer of $27 a share. Boeing postponed delivery schedule of 787. Automakers in Japan reported surge in global production for July.[/R]

The U.S. Commerce Department reported today that economic activity in the second quarter expanded less than previously estimated. The Commerce Department said that GDP growth in the second quarter was downwardly revised to 1.6% from the advance estimate of 2.4%.

Traders focus on U.S. Federal Reserve''s annual Economic Symposium in Jackson Hole, Wyoming, where both Fed Chairman Ben Bernanke and his European Central Bank counterpart Jean-Claude Trichet are due to deliver speeches on the economic outlook.

Dell announced today that 3PAR accepted its increased offer to acquire the storage leader for $27 per share in cash, or approximately $1.8 billion, net of 3PAR’s cash.

The transaction is expected to close before the end of the year. Based on current estimates, the transaction is expected to be accretive to Dell non-GAAP earnings in its fiscal year 2012.

Boeing Co. postponed the delivery schedule of the first 787, citing a delay in engine availability from Rolls Royce. The Dreamliner is now expected to be delivered by the middle of the first quarter of fiscal 2011.

The company said it is working closely with Rolls-Royce to expedite engine availability, and flight testing across the test fleet continues as planned. The first customer for the plane is All Nippon Airways Co.

ING Groep N.V., the Dutch financial services firm agreed to sell its 50% stake in Canadian real estate investment fund ING Summit Industrial Fund LP to a joint venture between KingSett Capital and Alberta Investment Management Corp. Summit has a total transaction value of about C$2 billion, including assumed debt.

The transaction, expected to close in the fourth quarter of 2010, will not have a material impact on ING Group''s results and capital ratios.

Subject to regulatory approvals, the deal is expected to close in the fourth quarter of 2010 and not to have a material impact on ING Group''s results and capital ratios.

Barnes & Noble Inc. board urged its shareholders to reject Ronald Burkle''s takeover bid. Burkle''s investment firm Yucaipa Cos., the second largest shareholder of Barnes & Noble with a 19.2% stake, is currently waging a proxy war with the bookseller.

Japanese auto majors Toyota Motor Corp., Honda Motor Co. Ltd. and Nissan Motor Co. Ltd. reported double-digit increases in worldwide total production in July.

Toyota said its worldwide production in July climbed 10.7% to 714,426 units. Honda Motor’s total production rose 21.6% to 314,911 units. Nissan said its global production in July increased 17.9% from last year to 330,401 units, a record for July.

Earnings Review

Adept Technology, Inc. ((ADEP)) the provider of robotics systems said fourth quarter revenues surged 92% to $16.5 million from $8.6 million in the year-ago quarter. Net loss in the quarter narrowed 94% to $186,000 or 2 cents per diluted share, compared to a net loss of $3.3 million or 40 cents per share in the prior-year quarter.

Aruba Networks, Inc. ((ARUN)), the distributed enterprise network solutions provider said fourth quarter revenues rose 45% to $77.33 million from $53.33 million in the comparable quarter a year ago. Net income for the quarter was $0.42 million or break-even per share, compared to a net loss of $4.50 million or 5 cents per share last year.

International Rectifier Corporation ((IRF)), the maker of power management semiconductors reported fourth quarter revenue increased 65.3% to $263.8 million from $159.6 million in the fourth quarter last year. Net income for the quarter dropped 0.3% to $29.0 million or 41 cents per diluted share, compared with a net income of $29.1 million or 40 cents per share in the year-ago quarter.

J. Crew Group, Inc. ((JCG)), the specialty retailer stated second quarter revenues edged higher 14% to $407.5 million from $357.6 million in the year-ago quarter on comparable store sales rise of 11%. Net income in the quarter soared 88% to $34.9 million or 53 cents per diluted share, compared to net income of $18.6 million or 29 cents per share in the prior-year quarter.

Micros Systems, Inc. ((MCRS)), the enterprise information solutions provider reported fourth quarter revenue increased 11.4% to $248.22 million from $222.84 million last year. Net income in the quarter rose 48% to $33.88 million or 42 cents per diluted share compared to net income of $22.86 million or 28 cents per share in the previous year.

Netezza Corporation ((NZ)), the data warehouse products producer said second-quarter revenue surged 45% to $63.80 million from $43.93 million last year. Net income in the quarter soared 336% to $3.18 million or 5 cents per diluted share, compared to a net income of $0.73 million or 1 cent per share a year earlier.

Novell, Inc. ((NOVL)), the software solutions provider said third-quarter net revenue declined 8% to $199 million from $216 million in the same quarter last year. Net income in the quarter fell 6% to $16 million or 4 cents per diluted share compared with net income of $17 million or 5 cents per share in the prior-year quarter.

OmniVision Technologies, Inc. ((OVTI)), the digital imaging solutions provider reported first-quarter revenues increased 23% to $193.1 million from $157.2 million in the prior-year quarter. Net income generated in the quarter was $16.9 million or 30 cents per diluted share, compared to a net loss of $9.9 million or 19 cents per share in the year-ago quarter.

Patterson Companies, Inc. ((PDCO)), the dental and veterinary products distributor reported consolidated net sales increased 8% of $849.79 million from $789.58 million in the year-earlier quarter. Net income in the quarter gained 20% to $53.92 million or 45 cents per diluted share as against net income of $45.06 million or 38 cents per share a year ago.

Solera Holdings, Inc. ((SLH)), the business software and services provider stated fourth quarter revenues increased 7.3% to $154.72 million from $144.13 million last year. Net income in the quarter rose 51.2% to $18.6 million or 26 cents per diluted share, compared to net income of $12.3 million or 18 cents per share in the prior-year quarter.

Tiffany & Co. ((TIF)), the jewelry retailer reported second-quarter net sales rose 9.2% to $668.76 million, from $612.49 million in the prior-year quarter. Net earnings in the quarter increased 19.2% to $67.68 million or 53 cents per diluted share compared to net earnings of $56.78 million or 46 cents per share in the same quarter last year.

XETA Technologies, Inc. ((XETA)), the integrator of communication technologies reported third quarter revenue climbed 22% to $20.9 million, compared to $17.2 million in the previous year period. Net earnings in the quarter were $513,000 or 5 cents per diluted share, compared to a net loss of $8.6 million or 84 cents per share in the prior-year quarter.