U.S. CPI Up 0.3%; Oracle, RiM Net Rise

Arthi Gupta
17 Sep, 2010
New York City

U.S. stocks gained after consumer prices rose 0.3% in August. The U.S. Senate approved small business bill. J&J negotiated to buy rest of Crucell shares for

[R]9:35 AM New York – U.S. stocks gained after consumer prices rose 0.3% in August. The U.S. Senate approved small business bill. J&J negotiated to buy rest of Crucell shares for €24.75 per share. Oracle quarterly net increased 20% and Research in Motion net soared 68%.[/R]

Asian and European markets advanced.

Clearwater Paper agreed to buy Cellu Tissue for $12 a share. Boeing raised 737 monthly production rate to 38 in the second quarter of 2013.

The U.S. Senate voted 61 to 38 in favor of the Small Business Jobs and Credit Act of 2010.

The bill aimed at helping small businesses create 500,000 new jobs, establishes a $30 billion fund to help banks increase lending to small businesses and provides $12 billion in tax breaks. The small business bill will be sent back to the House, where it is expected to pass and be sent to Obama for his signature.

In another report, President Barack Obama reaffirmed his commitment to supporting U.S. businesses selling more products overseas.

Obama, speaking at a meeting of the President's Export Council at the White House, said that in the coming years the country's economic recovery would need a realignment of business and workers into a """"united front"""" to ensure America succeeds.

He reiterated that the goal of doubling U.S. exports in five years was achievable if exports continued to grow at roughly 15% per year.

According to a report released by the Census Bureau on Thursday, the poverty rate in America jumped to a fifteen-year high in 2009, with the number of Americans living in poverty reaching its highest level in the 51 years since the record keeping began.

The report said that there were 43.6 million Americans living in poverty in 2009 compared to 39.8 million in 2008.

The median household income in the U.S. in 2009 was $49,777 statistically unchanged to 2008 median according to the Census Bureau.

According to a report released by the U.S. Labor Department today, consumer prices increased more than expected in the month of August, with the price growth largely due to a notable rise in energy prices.

The report showed that the consumer price index rose 0.3% in August, matching the increase in July. Core consumer prices which excluding food and energy prices, was unchanged in August after edging higher 0.1% in July.

Johnson & Johnson, the healthcare giant announced today that it is in advanced negotiations for a potential offer for all outstanding shares of the Dutch biopharmaceutical company, Crucell N.V., not already held by it, for a purchase price of €24.75 per share.

Johnson & Johnson currently holds nearly 17.9% of Crucell. As per the terms of the negotiations, Johnson & Johnson would acquire all outstanding equity of Crucell for about €1.75 billion in cash.

Crucell's strength in the manufacture, discovery and commercialization of vaccines is expected to create a strong platform for Johnson & Johnson in the vaccine market.

Clearwater Paper Corp. agreed to acquire Cellu Tissue Holdings, Inc. for about $502 million, including equity value of about $247 million and net debt of about $255 million. The company said that it will pay $12.00 per share in cash for Cellu Tissue's outstanding common stock.

Clearwater Paper believes the acquisition will be immediately accretive to earnings per share before taking into account an estimated $15 million to $20 million in net annual cost synergies expected by the end of 2012.

Shareholders of Italy's Fiat SpA voted to approve the company's plan to separate its truck and tractor business from its car making operations. The demerger will see the car business kept as Fiat SpA, which will include the Fiat, Alfa Romeo and Lancia brands as well as the 20% minority stake in Chrysler Group LLC.

The company will demerge its truck and tractor business as a newly incorporated company, Fiat Industrial SpA, which will include Iveco trucks and Fiat Powertrain Industrial and Marine as well as CNH Global NV (CNH), a subsidiary of Fiat Netherlands Holding N.V. The company expects the demerger date to be January 1, 2011.

Ford Motor Co. announced today the launch of Fiesta App on Apple Inc.'s App Store for iPad. The company stated that its newest small car, Fiesta, is the first Ford vehicle to use an app to deliver a new interactive sales brochure that brings the car's features and attributes to Apple iPad.

Boeing Co. announced on Thursday that it will boost production rate for the Next-Generation 737 model to 38 planes per month in the second quarter of 2013 from the previously announced 35, citing continued strong demand. This is the third time the company has raised the production rate for the aircraft this year.

Dell Inc. said it will develop Chengdu as its second flagship site and customer support center in China after long-standing Xiamen operations, as part of its Go-West policy. The new manufacturing, sales and service center is being developed in the West Chengdu High-Tech Park and is expected to be operational in 2011.

China, the second largest market for Dell after the U.S., is thus poised to receive more than $100 billion in investment from the PC maker over the next 10 years. This includes facilities, employment, research and development and purchases from suppliers in China.

Novell, Inc. is in advanced talks with at least two buyers to sell the company in separate parts, the Wall Street Journal reported on Thursday. The report said that the one of the buyers is virtualization solutions provider VMware Inc., which intends to acquire Novell's open source Suse Linux operating system business.

The other potential buyer for Novell is Attachmate Corp., a private equity-backed software company that could buy Novell's remaining assets, including its networking operating system, Netware.

The board of directors of Texas Instruments, Inc. authorized a new $7.5 billion share repurchase program and said it would raise its quarterly dividend by 8%.

BP plc's Development Driller III relief well intersected the Macondo oil well in the Gulf of Mexico, federal officials announced on Thursday night.

Retired Coast Guard Admiral Thad Allen, the federal spill commander stated, """"We intend to proceed with preparation to cement the annulus and complete the bottom kill of the well.""""

Earnings Review

Eastman Chemical Company ((EMN)), the chemicals, plastics and fibers company lifted its earnings outlook for the third quarter and fiscal 2010, citing strong selling prices and lower-than projected seasonal decline in sales volume. The company currently estimates third quarter earnings in a range of $2.20 to $2.30 per share, up from its previous projection of $1.65 to $1.75 per share and for fiscal 2010, earnings per share to approach $7, compared to its prior outlook range of $6.20 to $6.40.

Herman Miller, Inc. ((MLHR)), the office furniture systems maker reported first quarter net sales rose 17.5% to $380.7 million from $324.0 million last year. Net earnings in the quarter surged 92% to $16.1 million or 22 cents per diluted share compared with net income of $8.4 million or 14 cents per share in the previous year.

Oracle Corporation ((ORCL)), the enterprise software company said first quarter revenues rose 48% to $7.50 billion from $5.05 billion a year ago. Net income in the quarter increased 20% to $1.4 billion or 27 cents per diluted share, compared to net income of $1.1 billion or 22 cents per share for the year-ago quarter.

Research In Motion Limited ((RIMM)), the Canadian telecommunication and wireless device company said second quarter revenue increased 31% to $4.62 billion from $3.53 billion in the same quarter last year. Net income in the quarter soared 67.5% to $796.7 million or $1.46 per share, compared with net income of $475.6 million or 83 cents per share in the prior-year quarter.

Rockwell Collins, Inc. ((COL)), the communication and aviation electronics products maker confirmed its earnings and revenue outlook for fiscal 2010. The company said it continues to expect fiscal 2010 earnings per share of approximately $3.50 and revenues of about $4.7 billion.

Williams Companies, Inc. ((WMB)), the natural gas company said it may fall short of the company's own projections through 2012, and will pull back on spending over the same time period. The company estimates adjusted earnings for 2010 in a range of $1.00 to $1.20 per share.