U.S. Stocks Up; Unilever, Albert-Culver Deal

Arthi Gupta
27 Sep, 2010
New York City

U.S. stocks gained after Unilever and Wal-Mart announced deals. China levied import duties on U.S. chicken. Unilever agreed to buy Alberto-Culver for $3.7 billion. Cal-Maine Foods swings to first quarter profit.

[R]9:35 AM New York – U.S. stocks gained after Unilever and Wal-Mart announced deals. China levied import duties on U.S. chicken. Unilever agreed to buy Alberto-Culver for $3.7 billion. Cal-Maine Foods swings to first quarter profit.[/R]

Asian markets climbed with the benchmark Nikkei 225 Index gaining 1.4% and European markets gained on positive economic and M&A data.

Central banks across the world and the International Monetary Fund sold the least amount of gold during the year ended September 26, under the Central Bank Gold Agreement, according to provisional data from the World Gold Council released today.

Total sales of gold were 94.5 tons in 2009-10, the first year under the third five-year agreement that runs between September 2009 and 2014. In 2008-09, the final year of the second agreement, sales were 157 tons.

China''s government on Sunday said it will levy import duties on U.S. chicken products, which it claims are being unfairly dumped into the Chinese market.

""The U.S. chicken industry has dumped broiler products into the Chinese market and caused substantial damage to the domestic industry,"" the Ministry of Commerce said in a statement.

Levies of up to 105% will be placed on chicken imports from the U.S. for the next five years, the ministry said. The duties take effect on Monday.

In another report, National Security Council Chief of Staff Denis McDonough said on Friday that an appreciation in the Chinese yuan would be a significant development.

Bank of Japan Governor Masaaki Shirakawa reportedly said on Sunday that the central bank is closely monitoring the effect of the yen''s appreciation on the economy. Shirakawa said the apex bank is prepared to take appropriate steps if required. He was speaking at a forum hosted by the Japan Society of Monetary Economics in Kobe in Western Japan.

Unilever plc, the consumer products maker entered into an agreement to acquire U.S.-based personal care products maker Alberto-Culver Co. for $3.7 billion in cash.

Unilever said it expects the acquisition to deliver significant synergies and, excluding restructuring costs, the acquisition will be accretive to earnings per share in the first full year.

The transaction would also add Alberto-Culver''s styling and conditioning brands like TRESemmé and Nexxus to Unilever''s U.S. portfolio, complementing its brands such as Suave, Dove and Sunsilk, and would expand UK product line.

Comcast Corp., the consumer entertainment company and General Electric Co. on Sunday named Stephen Burke, Chief Executive Officer of NBC Universal. Burke, the current chief operating officer of Comcast, will assume his new role upon the close of Comcast''s acquisition of 51% of NBCU from GE. Burke succeeds Jeff Zucker.

Wal-Mart Stores, Inc. said it has made a preliminary, non-binding proposal which could, if successful, lead to Wal-Mart making a cash offer to acquire Massmart Holdings Ltd. for ZAR148 per share.

Massmart is one of the largest distributors of consumer goods on the African continent and is an African retailer of general merchandise, home improvement equipment and supplies.

Vivendi SA completed the sale of 7.66% of NBC Universal to General Electric for $2 billion. The company added that the remaining 12.34% stake will be sold for $3.8 billion to General Electric upon completion of the transaction.

Nestlé S.A., the world''s largest food maker said it is creating two organizations - Nestlé Health Science S.A. and the Nestlé Institute of Health Sciences to pioneer a new industry between food and pharma. The two organizations would allow the company to develop personalized health science nutrition to prevent and treat health conditions such as diabetes, obesity, cardiovascular disease and Alzheimer''s disease

HgCapital Trust plc, the investment trust said its private equity investment arm HgCapital is selling 63.5% of its stake in Norway-based software services provider Visma Holding to buyout firm Kohlberg Kravis Roberts & Co. for an enterprise value of £1.2 billion or about $1.9 billion.

HSBC Holdings plc on Friday revealed a new team, stating that Douglas Flint would succeed Stephen Green as Group Chairman. Stuart Gulliver would be appointed Group Chief Executive with effect from January 1, 2011, following Michael Geoghegan''s decision to retire early next year

Earnings Review

Cal-Maine Foods, Inc. ((CALM)) the producer of eggs said first quarter net sales increased 1.5% to $190.4 million, compared with $187.67 million in the comparable period. Net income in the quarter was $4.76 million or 20 cents per diluted share compared with a net loss of $3.83 million or 16 cents per share in the year-earlier period.

Environmental Tectonics Corporation ((ETCC.OB)) said second quarter total sales rose 34.3% to $13.24 million from $9.86 million in the prior-year quarter. Net income in the quarter increased 41% to $1.1 million or 8 cents per diluted share, compared with net income of $789,000 or 6 cents per share last year.

EnviroStar, Inc. ((EVI)), the distributor of industrial laundry, dry cleaning machines and steam boilers reported fiscal 2010 revenues declined 15.2% to $19.6 million from $23.2 million in the prior year. Net earnings for fiscal 2010 fell 21.4%% to $414,066 or 6 cents per diluted share compared with net earnings of $526,863 or 7 cents per share in the year ago.

Zale Corporation ((ZLC)), the specialty retailer of fine jewelry reported fourth quarter revenues declined 3.4% to $345 million from $357.11 million in the prior-year quarter. Same store sales during the quarter decreased 2.1%. Net loss in the quarter narrowed 68.2% to $28.52 million or 89 cents per diluted share, compared to net loss of $89.8 million or $2.81 per share last year.