Jobless Claims Fall; PepsiCo Sales Surge

Arthi Gupta
07 Oct, 2010
New York City

U.S. stocks traded sideways after weekly jobless claims fell 11,000 to 445,000. Robbins & Myers agreed to buy T-3 Energy for $422 million. Marathon inked deal to sell majority of Minnesota downstream assets for $900 million. PepsiCo revenue surged 40% to $15.5 billion.

[R]9:35 AM New York – U.S. stocks traded sideways after weekly jobless claims fell 11,000 to 445,000. Robbins & Myers agreed to buy T-3 Energy for $422 million. Marathon inked deal to sell majority of Minnesota downstream assets for $900 million. PepsiCo revenue surged 40% to $15.5 billion.[/R]

Asian markets traded mixed and European markets pared losses.

The U.S. Labor Department released a report today showing an unexpected decrease in first-time claims for unemployment benefits in the week ended October 2. The report showed that initial jobless claims fell to 445,000 from the previous week''s revised figured of 456,000.

The preliminary insured unemployment rate in the week ending September 25 fell to 3.5% from the prior week''s revised rate of 3.6%.

The Monster Employment Index for the U.S., which is a monthly gauge of U.S. online job demand, was at 138 in September compared to 136 in August, Monster Worldwide Inc. reported today. The index increased 16% from September last year and 1% from August.

The Bank of England left its key interest rate unchanged at a record low again and maintained the size of the quantitative easing at £200 billion as expected.

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

The Australian Bureau of Statistics reported that the unemployment rate remained unchanged at 5.1% for September, same as in August.

The rate of economic growth in emerging markets fell for the second consecutive quarter during July to September, the latest HSBC Emerging Markets Index suggested.

Survey results released by Markit Economics showed that the HSBC EMI dropped to 54.3 in the third quarter from 56 in the second quarter of the year and off from a peak of 57.5 in first three months of the year.

Of the major emerging market economies, only India maintained a robust rate of expansion, far outpacing other countries, Markit said. Brazil, Russia and China reported falls in growth rates.

Robbins & Myers, Inc. agreed to buy oilfield and pipeline products and services provider T-3 Energy Services, Inc. for about $422 million in stock and cash. Under the terms of the deal with T-3 Energy, each T-3 stockholder will receive 0.894 common shares of Robbins & Myers plus $7.95 in cash. The company expects the deal to generate approximately $9 million of annual cost synergies in fiscal 2012, primarily from corporate cost reductions and purchasing efficiencies.

Marathon Oil Corp., a refiner and marketer of oil and gas stated that its wholly owned subsidiary reached a deal with private investment firms Acon Investments and TPG Capital to sell majority of Marathon''s Minnesota downstream assets for about $900 million. TPG Capital and Acon will form a new company, Northern Tier Energy LLC to operate the assets.

The transaction includes Marathon''s St. Paul Park refinery and associated terminals with a production capacity of 74,000 barrel per day, 166 SuperAmerica convenience stores including six stores in Wisconsin, SuperMom''s bakery and commissary, SuperAmerica Franchising LLC and interests in Minnesota pipeline assets and associated inventories, which supply the majority of the refinery''s crude oil.

Panasonic Corp. said it withdrew the shelf registration in Japan for offerings of common shares that was described in ""Panasonic Announces Shelf Registration in Japan for Future Equity Offerings"" announced on July 29. The company concluded that it would not conduct any public offerings of shares of common stock under the Shelf Registration.

South Korea''s Samsung Electronics Co. Ltd. said it expects third quarter operating profit to increase from last year, but fall from the previous quarter, while sales are expected to increase both from a year ago and sequentially.

The company estimates third quarter operating profit to be KRW 4.8 trillion or about $4.3 billion and sales to be KRW 40 trillion compared to KRW 35.89 trillion in the previous year.

Earnings Review

Constellation Brands, Inc. ((STZ)), the wine maker said second quarter net sales decreased 2% to $862.8 million from $876.8 million last year. Net profit declined 8% to $91.3 million or 43 cents per diluted share compared to a net profit of $99.7 million or 45 cents per share last year.

DuPont Fabros Technology, Inc. ((DFT)), the real estate investment trust reaffirmed its earnings per share and Funds from Operations guidance ranges both for the third quarter of 2010 and for the full year 2010.

The company said it expected FFO for the third quarter to be in the range of $0.33 to $0.36 per share and earnings per share were expected between $0.15 per share and $0.18 per share.

For the full year, the company had lifted its FFO guidance range to $1.30 to $1.40 per share from the prior guidance range of $1.25 to $1.35 per share and earnings per share between $0.49 per share and $0.57 per share.

Epicor Software Corporation ((EPIC)), the software solutions provider expects third quarter preliminary results to exceed the previously provided guidance. The company noted that driven by strong sales of Epicor 9, it expects third quarter software license revenue to be in the range of $19 million to $20 million, an increase of around 40% to 45% over $13.7 million reported last year.

Helen of Troy Limited ((HELE)), the personal care products maker reported second quarter sales revenue increased 7.8% to $174.82 million from $162.19 million in the prior year. Net income in the quarter soared 48% to $23.47 million or 75 cents per diluted share, compared with net income of $15.91 million or 51 cents per share for the same period a year earlier.

Immucor, Inc. ((BLUD)), the blood-testing equipments maker reported first quarter net sales rose 1% to $83.64 million from $83.07 million in the same quarter last year. Net income in the quarter grew 0.5% to $21.4 million or 30 cents per diluted share, compared to net income of $21.3 million or 30 cents per share for the year-ago quarter.

Marriott International, Inc. ((MAR)), the hospitality service provider reported third quarter revenues increased 7.2% to $2.65 billion from $2.47 billion in the same quarter last year. Net income in the quarter was $83 million or 22 cents per diluted share, compared to a net loss of $466 million or $1.31 per share in the prior year quarter.

PepsiCo, Inc. ((PEP)), the food and beverages maker stated third quarter net revenue surged 40% to $15.51 billion from $11.08 billion in the comparable period. Net income attributable to the company increased 12% to $1.92 billion or $1.19 per share from $1.72 billion or $1.09 per share in the prior-year period.

Robbins & Myers, Inc. ((RBN)), the engineered equipments maker said fourth quarter sales increased 15% to $178.40 million from $155.19 million in the comparable period. Net income in the quarter grew 15.6% to $14.81 million or 45 cents per diluted share, compared with net income of $12.81 million or 39 cents per share last year.

RPM International Inc. ((RPM)), the specialty chemical products company said first quarter net sales declined 2.3% to $894.81 million from $915.95 million in the same quarter last year. Net income in the quarter fell 5.5% to $69 million or 53 cents per diluted share, compared with net income of $73.03 million or 57 cents per share in the previous year.

Ruby Tuesday, Inc. ((RT)), the casual dining restaurant chain operator said first quarter total revenue increased 0.7% to $302.7 million from $300.6 million in the year-ago quarter. Same-restaurant sales for company-owned restaurants increased 1.2% over last year. Net income in the quarter soared 103% to $12.4 million or 19 cents per diluted share, compared to net income of $6.1 million or 11 cents per share in the prior-year quarter.