Durable Orders Up; Nike Earnings Up 9%

Arthi Gupta
24 Sep, 2010
New York City

U.S. stocks edged higher after durable goods orders fell 1.3% in August and excluding transportation increased 2%. Petrobras raised $70 billion in public share offering. Nike reported higher earnings on China demand. CSG Systems agreed to buy UK-based Intec for $371 million.

[R]9:35 AM New York –U.S. stocks edged higher after durable goods orders fell 1.3% in August and excluding transportation increased 2%. Petrobras raised $70 billion in public share offering. Nike reported higher earnings on China demand. CSG Systems agreed to buy UK-based Intec for $371 million.[/R]

Asian markets traded mixed and the markets in China region were closed for a holiday. European markets traded rebounded after German business confidence index increased to a three-year high. Nike reported higher earnings after China orders increased 25%.

The Conference Board report showed that the leading indicators index increased 0.3% in August following a 0.1% increase in July. The interest rate spread, real money supply, and the average workweek made the largest positive contributions to the index, although the increase by the index was limited by negative contributions from initial unemployment claims and supplier deliveries.

The coincident economic index was unchanged in August after edging higher 0.1% in July.

The Commerce Department said today that orders for manufactured durable goods showed a notable decrease in August, largely due to the steep decline in volatile orders for transportation equipment.

The report showed that durable goods orders fell 1.3% in the month following a revised 0.7% increase in July.

CSG Systems International Inc. announced a deal to buy UK-based Intec Telecom Systems Plc for about £236.7 million or approximately $371 million in cash.

Intec shareholders would receive 72 pence in cash for each share and the offer price represents a premium of 44% to the closing share price of 50 pence per Intec share on July 22, and a premium of 30.3% to the price of 55.25 pence on July 23, the last business day before Intec entered into an offer period.

Petroleo Brasileiro SA, the Brazilian federal oil company reportedly raised about $70 billion through one of the world''s largest-ever global public share offering. Petrobras stated that it priced 2.29 billion voting shares at 29.65 reals or $17.25 per share, and 1.79 billion preferred shares at 26.30 Brazilian reals or $15.30 per share.

The aggregate proceeds of the global offering to Petrobras, after underwriting discounts and commissions, before expenses, will be equivalent to about $67 billion.

The proceeds from the share offering is expected to fund Petrobras'' $42.5 billion oil-for-stock swap deal with the Brazilian government and expand exploration, which is expected to catapult Brazil to being a major oil exporter.

Netflix Inc. and NBC Universal Domestic Television Distribution announced an expanded license agreement through which Netflix members can instantly watch a selection of broadcast series from the NBC television network and for the first time on Netflix content from some of NBC Universal''s cable channels.

The deal adds significantly to the growing selection of movies and TV episodes that can be streamed instantly from Netflix with memberships starting at $8.99 a month.

GlaxoSmithKline plc confirmed on Thursday that following a review of its diabetes drug Avandia or rosiglitazone maleate by the U.S. Food and Drug Administration and the European Medicines Agency, each agency announced their individual regulatory decisions and the resulting actions.

In the wake of elevated cardiovascular risk, the U.S. FDA said that Avandia will be restricted to patients with Type 2 diabetes who cannot control their diabetes on other medications.

The European Medicines Agency suspended the marketing authorization for the rosiglitazone-containing anti-diabetes medicines Avandia, Avandamet and Avaglim. These medicines will stop being available in Europe within the next few months.

According to the Financial Times, UK-based lender HSBC Holdings plc''s Chief Executive Michael Geoghegan is set to step down at the year end. Geoghegan is expected to be succeeded by Stuart Gulliver, the Head of HSBC''s investment bank.

BHP Billiton has been granted early termination by the U.S. Federal Trade Commission and the Antitrust Division of the Department of Justice of the mandatory waiting period under the HSR Act, in association with its offer to acquire all of the issued and outstanding common shares of Potash Corporation of Saskatchewan Inc.

The termination is effective immediately, thereby ending the HSR waiting period for the proposed acquisition.

Earnings Review

Advanced Micro Devices, Inc. ((AMD)), the semiconductor maker lowered its revenue outlook for the third quarter, due to weaker than expected demand, particularly in the consumer notebook market in Western Europe and North America.

The company estimates revenue to decline in the range of 1% to 4% or $1.58 billion to $1.63 billion for the third quarter.

Comtech Telecommunications Corp. ((CMTL)), the communications products maker reported fourth quarter net sales surged 111% to $256.95 million from $122.03 million a year ago. Net income in the quarter increased 118% to $13.47 million or 43 cents per share compared with net income of $6.18 million or 21 cents per share in the previous year.

KB Home ((KBH)), the homebuilder said third quarter revenue increased 9% to $501.0 million, from $458.5 million in the third quarter of 2009. Net loss in the quarter narrowed 98% to $1.40 million or 2 cents per diluted share compared with net loss of $66.05 million or 87 cents per share last year,

Neogen Corporation ((NEOG)), the food and animal safety testing solutions provider said first quarter revenue advanced 33% to $42.92 million from $32.35 million a year ago. Net income in the quarter increased 32% to $5.82 million or 25 cents per diluted share compared with net income of $4.40 million or 19 cents per share last year.

Nike, Inc. ((NKE)), the maker of athletic shoes and apparel said first quarter revenues increased 8% to $5.18 billion from $4.80 billion in the same quarter last year. Net income in the quarter rose 9% to $559 million or $1.14 per share, compared to net income of $513 million or $1.04 per share for the year-ago quarter.

Texas Industries, Inc. ((TXI)), the heavy construction materials maker said first quarter net sales dipped 6.4% to $172.12 million from $183.96 million in the first quarter of the prior fiscal year. Net loss in the quarter was $23.69 million or 85 cents per diluted share, compared to net income of $1.72 million or 6 cents per share in the previous year.

The Finish Line, Inc. ((FINL)), the mall-based specialty retailer stated second quarter net sales edged higher 0.8% to $301.1 million from $298.7 million a year-ago. Comparable store net sales increased 2%. Net profit for the period was $16.8 million or $.31 per share, compared to a net loss of $0.87 million or $0.02 per share in last year period.

Tibco Software Inc. ((TIBX)), the provider of infrastructure software reported third quarter revenue increased 23% to $184.48 million from $150.25 million last year. Net income in the quarter rose 17% to $17.35 million or 10 cents per diluted share compared with net income of $14.87 million or 9 cents per share in the previous year.

Vail Resorts, Inc. ((MTN)), the mountain resorts operator reported fourth quarter net revenues grew 34.4% to $137.09 million from $101.93 million in the prior year. Net loss in the quarter widened 8.2% to $41.92 million or $1.16 per share, compared to prior year''s loss of $38.73 million or $1.07 per share.