U.S. Jobless Claims; Productivity Drop

Arthi Gupta
02 Sep, 2010
New York City

U.S. stocks trade sideways after weekly jobless claim fell 6,000 to 472,000 and productivity declined 1.8% in the June quarter. India demanded Google, Skype, and RIM set up local servers. Orexigen and Takeda in $50 million deal to develop and commercialize obesity drug.

[R]9:50 AM New York – U.S. stocks trade sideways after weekly jobless claim fell 6,000 to 472,000 and productivity declined 1.8% in the June quarter. India demanded Google, Skype, and RIM set up local servers. Orexigen and Takeda in $50 million deal to develop and commercialize obesity drug.[/R]

Petrobras agreed to buy oil reserves from the Brazilian government in a $42.5 billion deal. Allergan agreed to pay $600 million to U.S. Department of Justice to settle Botox charge.

U.S. stocks fluctuate, Asian markets advanced while European markets pared gains.

The U.S. Labor Department stated today that first-time claims for unemployment benefits showed a modest decrease in the week ended August 28th.

The Labor Department said that initial jobless claims edged down to 472,000 from the previous week's revised figure of 478,000.

The preliminary insured unemployment rate in the week ending August 21 fell to 3.5% from the prior week's unrevised rate of 3.5%.

In another report, the Commerce Department said productivity declined at an annual rate of 1.8% in the April-to-June quarter.

The U.S. Monster Employment Index recorded its seventh consecutive month of positive annual growth rate in August, according to a report by Monster Worldwide Inc. released today. The index rose 12% annually to 136 in August.

The European Central Bank left its key interest rate unchanged at a record low of 1% for the sixteenth straight month.

India said that Google Inc., Skype Technologies SA and other service providers must set up servers in India to allow security forces to monitor encrypted data.

The move comes just two days after India gave BlackBerry smartphones maker Research In Motion Ltd. a 60-day extension to fulfill the government's demand to open encrypted Blackberry services for scrutiny.

G K Pillai, the chief bureaucrat in India's Home Ministry, said """"all people who operate communication services in India will have to install servers in the country"""" to aid in monitoring encrypted data.

Brazilian federal oil company Petroleo Brasileiro SA agreed to buy 5 billion barrels of oil reserves from the Brazilian government in one of the world's largest-ever public share offering.

According to the agreement, Petrobras will make an initial payment of $42.53 billion in new shares to the Brazilian government for the right to explore and produce oil, natural gas and other hydrocarbon fluids in specified areas from government-held offshore deposits. The production will be limited to a maximum yield of 5.0 billion barrels of oil equivalent, resulting in a weighted average price of $8.51 per barrel.

Petrobras expects to reach an oil production goal of 3.9 million barrels of oil equivalent per day or boed, at the end of the business plan in 2014, and projects production of 5.4 million boed in 2020. Currently, total production of oil and natural gas from Petrobras in Brazil and abroad in first-half of 2010 has been 2.57 boed.

Apple Inc. unveiled the upgraded versions of the iPod at the Apple fall 2010 event. The company also announced its entry into the online social networking introducing Ping, a music-oriented social network. It will be available in the company's latest version of the online music store, the iTunes 10.

Apple also unveiled its second generation Apple TV, which allows users to watch HD movies and TV shows from Fox and ABC for 99 cents.

Allergan, Inc. reached a resolution with the United States Department of Justice regarding the previously reported Government investigation into Allergan's past U.S. sales and marketing practices relating to certain therapeutic uses of Botox.

Allergan agreed to plead guilty to a single misdemeanor """"misbranding"""" charge covering the period 2000 through 2005, and pay $375 million to the government. Allergan will also pay $225 million to resolve civil claims asserted by the DOJ under the civil False Claims Act.

Orexigen Therapeutics, Inc., a biopharmaceutical company focused on the treatment of obesity entered into an exclusive partnership with Japan-based Takeda Pharmaceutical Co. Ltd. to develop and commercialize Orexigen's lead investigational obesity drug Contrave in North America.

Under the deal terms, Takeda will obtain an exclusive marketing right from Orexigen in the United States, Mexico and Canada for an upfront cash payment of $50 million. In addition, Orexigen will be eligible to receive payments of over $1 billion upon achieving certain regulatory and sales-based milestones.

Under the terms of the agreement, both companies would work together on ongoing development of the product, with Orexigen leading pre-approval activities, and Takeda leading post-approval activities. Both parties will share in the costs of any future development of the product.

BP plc spent over $93 million on advertising over the three-month period following the Gulf of Mexico oil spill, more than three times the amount spent by the company on ads in the same period last year, the U.S. House Energy and Commerce Committee said on Wednesday.

Earnings Review

American Software, Inc. ((AMSWA)), the supply chain management and enterprise software solutions provider stated first quarter revenues improved 7% to $19.09 million from $17.83 million in the previous year's first quarter. Net earnings in the quarter increased 16% to $1.37 million from $1.18 million last year. On a per-share basis, earnings remained unchanged at $0.05.

Casella Waste Systems Inc. ((CWST)), the company that provides solid waste management services reported first-quarter revenues increased 5.6% to $139.84 million from $132.45 million last year. Net loss in the quarter narrowed 3.6% to $2.9 million from $2.8 million. Loss per share for the first-quarter was $0.11, same as year ago.

Collective Brands Inc. ((PSS)), the footwear and related accessories retailer stated second quarter net sales grew 0.6% to $841.3 million from $836.3 million in the prior-year quarter. Net income in the quarter rose 13% to $21.1 million or 32 cents per diluted share as against net income of $18.7 million or 29 cents per share in the same quarter last year.

Genesco Inc. ((GCO)), the branded footwear retailer reported second quarter net sales increased 9% to $363.65 million from $334.65 million in the year-ago quarter. Net loss in the quarter widened 17% to $3.18 million or 14 cents per diluted share compared to net loss of $2.72 million or 13 cents per share in the year-ago period.

Greif, Inc. ((GEF)), the industrial packaging products maker reported third quarter net sales climbed 28% to $921.3 million from $717.6 million in the prior-year quarter. Net income in the quarter soared 75% to $66.0 million or $1.12 per share, compared to net income of $37.8 million or 65 cents per share in the same quarter last year.

Hovnanian Enterprises, Inc. ((HOV)), the homebuilder said third quarter total revenues fell 1.7% to $380.60 million from $387.11 million in the same quarter last year. Net loss in the quarter narrowed 57% to $72.9 million or 92 cents per diluted share, compared to a net loss of $168.9 million or $2.16 per share for the year-ago quarter.

LTX-Credence Corporation ((LTXC)), the wireless and computing test equipment solutions provider reported fourth quarter net sales more than doubled 108% to $73.16 million from $35.17 million for the year-ago period. Net income in the quarter was $14.12 million or 9 cents per diluted share, compared to a net loss of $9.62 million or 8 cents per share for the previous year.

Martek Biosciences Corp. ((MATK)), the developer of fatty acid-derived health products reported third quarter revenues increased 51% to $117.2 million from $77.8 million in the prior-year quarter. Net income in the quarter rose 33% to $11.9 million or 35 cents per diluted share, compared to net income of $8.9 million or 27 cents per share in the year-ago quarter.

Methode Electronics, Inc. ((MEI)), the global designer and manufacturer of electro-mechanical devices reported first quarter net sales increased 9.5% to $98.3 million from $89.8 million in the previous year. Net income in the quarter was $4.1 million, compared to a net loss of $19 thousand. On a per share basis, earnings were 11 cents, compared to breakeven in the same period last year

Oxford Industries, Inc. ((OXM)), the apparel company said second quarter net sales declined 3.3% to $186.53 million from $192.89 million last year. Net earnings in the quarter was $7.22 million or 44 cents per diluted share, compared to a loss of $0.18 million or 1 cent per share in the previous year.

SAIC, Inc. ((SAI)), the defense contractor reported second quarter revenues grew 2% to $2.79 billion from $2.75 billion a year earlier. Net income in the quarter surged 54% to $189 million or 50 cents per diluted share as against net income of $123 million or 31 cents per share last year.