Lennar Profit up 34%

Elena
28 Mar, 2006
New York City

Stock futures pointed to a slightly weak opening with ivestors awaiting the Fed Reserve''s decision on interest rate hikes. Homebuilder Lennar reported 34% earnings jump in Q1 on 35% revenue growth, beating expectations. Jewelery retailer Tiffany posted Q4 profit decline of 97 cents a share from $1.48 a share last year, despite sales growth, but still exceeding estimates.

[R]9:00AM Stock futures pointed to a mixed start.[/R]
U.S. stock futures indicated a mixed opening with investors awaiting the U.S. Fed Reserve’s decision on interest-rate increase and further interest rate hikes. The FOMC is widely expected to boost interest rates for the fifteenth consecutive time to 4.75%. Trading activity is likely to remain light ahead of the Fed's announcement. Banks and insurers which are interest-rate sensitive stocks, are expected to be in the spotlight as investors try to gauge the effect of rising borrowing costs on their profits. In corporate news, General Motors Corp. ((GM)) may be in focus after the automaker said it will cut a few hundred jobs on Tuesday. Shares of Lexar Media Inc. ((LEXR)), which agreed to be acquired by Micron Technology, fell after the company warned it would post a quarterly loss. Level 3 Communications Inc.'s ((LVLT)) shares rose after the company raised its Q1 outlook. Standard & Poor's 500 futures fell 1 point, about even with fair value. Dow Jones industrial average futures dropped 12 points, while Nasdaq 100 futures also shed 1 point.

Crude oil prices advanced with investors looking to oil inventory data Wednesday and worrying about potential supply disruptions in trouble spots like Nigeria, Iran. Light sweet crude May delivery rose 50 cents to $64.66 a barrel. Gasoline futures gained 1 cent to $1.8424 a gallon, while heating oil added 1 cent to $1.795. Natural gas climbed 5 cents to $7.113 per 1,000 cubic feet. European gold lost ground. In London gold traded at $563.75 per troy ounce, down from $565.70. In Zurich the precious metal fell to $563.30 from $566. In Hong Kong gold rose $3 to $563.30. Silver rose to $10.90 from $10.80. The U.S. dollar traded mixed versus major currencies ahead of Fed Reserve’s decision on interest-raising policy. The euro traded at $1.2064, up from $1.2012. The dollar bought 116.75 yen, up from 117.69. The British pound was quoted at 41.7483, down from $1.7464.

Lennar Corp, ((LEN)), homebuilder, reported that Q1 net earnings advanced 34% to $1.58 a share, on 35% revenue growth, beating analysts’ expectations for earnings of $1.55. The company added that its revenue was given a boost by an 18% rise in the number of home deliveries to 8,904, as well as a 12% rise in the average selling price to $326,000.

Tiffany & Co, ((TIF)), jewelry retailer, reported Q4 earnings of 97 cents a share, down from a profit of $1.48 a share a year-ago despite 6% sales growth and 6% same-store sales growth, beating analyst estimate for a profit of 84 cents a share. The results a year ago incorporated a pre-tax gain of $194 million related to the sale of a stake in Aber Diamond Corp., a charge of $15 million from asset impairment and a contribution of $25 million to a company foundation.


[R] 8:00 AM European averages traded mostly higher at mid-day.[/R]
European markets traded largely in the positive at mid-day, lifted by auto and tech stocks, recovering from yesterday’s sharp decline on weak oil sector and merger deals. However, bank stocks were weak as J.P. Morgan downgraded the European investment banking sector to underweight from neutral. The German DAX 30 rose 0.3% on data, showing improved confidence in economic growth, offsetting losses ahead of U.S. Fed Reserve’s decision on interest rates. The French CAC 40 gained 0.3%, while London FTSE 100 fell 0.1% on retail stocks.


[R]7:45AM Asian markets broadly advanced ahead of Fed reserve’s decision[/R]
Asian-Pacific benchmarks finished mostly higher, despite uncertainty about U.S. interest rate increases. The Nikkei erased early losses to rise 0.2% to 16,690.24, helped by technology, metals and retail stocks. Tech company Kiocera’s shares gained 1.5% and Advantest Corp. added 1.1%. However, bank and brokerage stocks declined, including Nikko Cordial, down 0.5% and Marusan Securities, falling 5%. Across the region, Taiwan’s Weighted index climbed 0.5%, Hong Kong’s Hang Seng rose 0.3% on continuous caution over interest-rate hikes, and Shanghai Composite gained 0.2%.Indian shares ended slightly higher leading the Sensex, the benchmark index of the Bombay Stock Exchange, to close at a record high of 11,086.03 points.