U.S. Payrolls Fall; Alcoa, Micron Net Rises

Arthi Gupta
08 Oct, 2010
New York City

U.S. stocks declined after employment fell by 95,000 jobs in September and consumer credit dropped more than estimated in August. Alcoa quarterly earnings fell 21% to $61 million and Micron swung to a profit of $342 million.

[R]9:35 AM New York – U.S. stocks declined after employment fell by 95,000 jobs in September and consumer credit dropped more than estimated in August. Alcoa quarterly earnings fell 21% to $61 million and Micron swung to a profit of $342 million.[/R]

Asian markets traded mixed while the European markets declined in anticipation of the non-farm payroll report for September from the U.S. Labor Department.

The U.S. Labor Department said non-farm payroll employment fell by 95,000 jobs in September following a revised decrease of 57,000 jobs in August. However, the unemployment rate remained flat at 9.6% in September, unchanged from August.

The Federal Reserve reported that consumer credit fell by slightly more than anticipated in the month of August, with a decrease in revolving credit more than offsetting a continued increase in non-revolving credit. The report showed that consumer credit fell $3.3 billion in August following a revised $4.1 billion decrease in July.

The Federal Reserve also said that total consumer credit fell at an annual rate of 1.7% in August compared to the 2.0% annual rate of decline in July.

The New York Times reported on its Bits technology blog that Microsoft Corp.''s CEO Steve Ballmer met with Adobe CEO Shantanu Narayen recently and that Adobe could be a possible acquisition target of Microsoft.

Avis Budget Group, Inc. said that its wholly-owned subsidiary, Avis Budget Car Rental, LLC priced an offering of $400 million aggregate principal amount of 8.25% senior notes due 2019.

Avis Budget Group plans to use the net proceeds of the offering to partially fund its proposed acquisition of Dollar Thrifty Automotive Group, Inc. or to repay outstanding corporate indebtedness, and to pay fees in connection with the offering and other related expenses.

BHP Billiton Group expects to pay about C$90 billion in royalties and taxes to the municipal, provincial and federal governments of Saskatchewan related to its Jansen Potash Project in Saskatchewan.

The Lockheed Martin F-35 Lightning II has been selected as the Israel Air Force''s next-generation fighter aircraft. Israel will be the first country to receive the F-35 through the United States government''s Foreign Military Sales process. The deal is worth $2.75 billion.

According to a report in the Wall Street Journal, real estate investment trust ProLogis is close to selling about 180 properties to Blackstone Group LP for $1 billion. The sale involves more than 20 million square feet of warehouse and distribution property in a variety of U.S. markets.

General Motors Corp. announced on Thursday that it will invest $145 million at the Orion assembly plant for retooling it to build the new Chevrolet small car Aveo and Buick''s Verano compact car. The improvements are expected to be finished by summer 2011, and the total investment for the project is about $600 million.

Silanis International Ltd. said that the U.S. Army renewed its annual electronic signature enterprise license support with Silanis Technology Inc. The Army Audit Agency said that the use of electronic signatures is expected to save the U.S. Army $1.3 billion every year after the implementation of Army Publishing Content Management System.

Honda Motor Co., Ltd. said it commenced sales in Japan of a newly refreshed Fit model together with the all-new Fit Hybrid, a new addition to the Fit lineup. The newly-added Fit Hybrid will be offered at the starting price of 1.59 million yen.

Earnings Review

Abercrombie & Fitch Co. ((ANF)), the specialty retailer reported that comparable store sales for the month of September increased 13%. The company posted net sales of $305.3 million for the five-week period ended October 2, up 25% from $244.0 million for the five-week period ended October 3, 2009.

Alcoa Inc. ((AA)), the aluminum producer said third quarter sales rose 15% to $5.29 billion from $4.62 billion in the same quarter last year. Net income in the quarter fell 21% to $61 million or 6 cents per diluted share, compared to net income of $77 million or 8 cents per share for the year-ago quarter.

AngioDynamics, Inc. ((ANGO)), the therapeutic and diagnostic device maker stated first quarter net sales increased 3% to $51.51 million from $50.09 million last year. Net income for the quarter declined 10.4% to $1.89 million or 8 cents per diluted share, compared to net income of $2.11 million or 9 cents per share in the previous year.

BJ''s Wholesale Club, Inc. ((BJ)), the warehouse club operator reported that comparable club sales for September grew by 1.5%, including a contribution of 0.7% from sales of gasoline. Excluding gasoline, merchandise comparable club sales improved by 0.8%.

The company''s sales for September increased 3.6% to $961.60 million from $928.1 million in September 2009.

Kohl''s Corporation ((KSS)), the department store chain reported that its comparable store sales for the month of September increased 3.0%. Total sales for the five-week month ended October 2 increased 5.3% over the five-week month ended October 3, 2009.

Limited Brands, Inc. ((LTD)), the women''s apparel retailer reported a 12% upturn in its comparable store sales for the month of September, versus a 1% improvement a year ago, reflecting strong performance at Victoria''s Secret.

Micron Technology Inc. ((MU)), the memory chipmaker reported fourth quarter net sales surged 92% to $2.5 billion from $1.3 billion in the same quarter of fiscal 2009. Net income generated in the quarter was $342 million or 32 cents per diluted share, compared to a net loss of $100 million or 12 cents per share in the prior-year quarter.

NaviSite, Inc. ((NAVI)), the enterprise-hosting and application services provider stated fourth quarter total revenue gained 7.5% to $32.68 million, compared to $30.39 million in the same quarter last year. Net loss in the quarter narrowed 84% to $1.4 million or 4 cents per diluted share, compared to a net loss of $8.6 million or 24 cents per share in the previous year quarter.

99 Cents Only Stores ((NDN)), the general merchandise retailer reported a 0.6% increase in same-store sales for the second quarter, with a 2.7% rise in total sales. Total sales for the second quarter were $333.6 million, up 2.7% from $324.7 million in the same quarter last year.

Nordstrom, Inc. ((JWN)), the fashion specialty retailer reported a 7.5% increase in same-store sales for the five-week period ended October 2 compared with the five-week period ended October 3, 2009. Preliminary total retail sales were $810 million, up 12.5% from total retail sales of $720 million for the same period in fiscal 2009.

PriceSmart, Inc. ((PSMT)), the company engaged in international membership shopping warehouse clubs said its September comparable warehouse sales for the warehouse clubs open at least 12 full months grew 16.8%, compared with last year.

For the month of September 2010, net sales increased 21.7% to $116.6 million from $95.8 million in September a year earlier.

Regis Corporation ((RGS)), the largest hair salon chain in the world reported that its first quarter total same-store sales decreased 1.5%. Consolidated revenues decreased 4.5% to $578 million, from $606 million a year ago.

ScanSource, Inc. ((SCSC)), the wholesale distributor of specialty technology products raised its sales outlook for the first quarter. For the first quarter, the company now expects sales of $623 million to $633 million, compared to $488 million for the same period one year ago. Earlier, the company estimated sales of $555 million to $575 million for the first quarter.

Stein Mart, Inc. ((SMRT)), the discount department store reported a 0.4% increase in its comparable store sales for the five-week period ended October 2 compared with a 5.4% decline in the previous year. Total sales for the period were $101.4 million, down 0.6% from $101.9 million in the five week period ended October 3, 2009.

The Cato Corporation ((CATO)), the operator of women’s fashion specialty stores reported that the same-store sales for the month of September increased 2% over the prior year. The company reported sales of $72.1 million for the five weeks ended October 2, a 3% increase over sales of $70.0 million for the five weeks ended October 3, 2009.