U.S. Housing Starts Rise; Apple Inc Sale and Net Soar

Arthi Gupta
19 Oct, 2010
New York City

U.S. stocks declined after China raised its key interest rates by 25 basis points. U.S. housing starts rose 0.3% to 610,000 in September and home builder confidence improved in October. Sweden-based SKF agreed to buy U.S.-based Lincoln Industrial for $1 billion.

[R]9:35 AM New York – U.S. stocks declined after China's central bank raised its key interest rates by 25 basis points. U.S. housing starts rose 0.3% to 610,000 in September and home builder confidence improved in October. Sweden-based SKF agreed to buy U.S.-based Lincoln Industrial for $1 billion.[/R]

Asian markets traded mixed and European markets gained on optimism ahead of earnings reports.

Massey Energy is reviewing its strategic options including company sale. JCPenney adopted 'poison pill' to thwart any takeover attempt.

New construction on U.S. housing units rose in September, according to a report released by the Commerce Department today. Starts rose 0.3% to a seasonally adjusted 610,000 annualized units.

Home builder confidence rose for the first time in five months in October, according to industry data released today.

Builder confidence in the market for newly built, single-family homes rose three points to 16 on the National Association of Home Builders/Wells Fargo Housing Market Index for October.

The People's Bank of China hiked one-year benchmark deposit rate to 2.50% from 2.25% and one-year lending rate to 5.56% from 5.31%. The rate hike will take effect on October 20.

The Wall Street Journal reported on Monday that coal producer Massey Energy Co. is exploring strategic alternatives, including the possible sale of the company. According to the report, the company could still end up being independent after the review of strategic alternatives.

Bristol-Myers Squibb Co., the drug developer said on Monday that the U.S Food and Drug Administration approved its supplemental New Drug Application of Baraclude for the treatment of chronic hepatitis B in adult patients with decompensated liver disease.

J.C. Penney Co., Inc. adopted a poison pill to thwart any takeover attempt. The department store chain said on Monday that its board assumed a rights plan in the best interests of its stockholders, citing the recent rapid accumulations of a significant percentage of its outstanding common stock by outsiders. The rights plan will have a term of one year and will expire on October 14, 2011.

SKF AB, the ball bearings maker reported a deal to buy U.S.-based lubrication systems company Lincoln Holdings Enterprises, Inc for $1 billion on a cash and debt free basis from privately-owned Harbour Group, to expand sales in North America and Asia.

Banco Santander SA, the Spanish bank said on Monday that Qatar Holding will take a 5% stake in its Brazilian unit, Banco Santander Brazil.

Earnings Review

Apple Inc. ((AAPL)), the personal computers and mobile devices maker said fourth quarter net sales rose 67% to $20.34 billion from $12.21 billion in the same quarter last year. Net income in the quarter soared 70% to $4.31 billion or $4.64 per share, compared to net income of $2.53 billion or $2.77 per share for the year-ago quarter.

BancFirst Corporation ((BANF)), the provider of personal and commercial banking services reported third quarter net income increased 26% to $11.8 million or 75 cents per diluted share, compared with net income of $9.4 million or 60 cents per share in the prior-year quarter. Net-interest income in the quarter grew 9.4% to $36.1 million from $33.0 million in the same quarter last year.

Bank of America Corporation ((BAC)), the financial services company reported third quarter total revenue, net of interest expense, increased 3% to $26.700 billion from $26.035 billion last year. Net loss in the quarter widened 241% to $7.647 billion or 77 cents per diluted share, compared to a net loss of $2.241 billion or 26 cents per share in the year-ago quarter.

Brown & Brown, Inc. ((BRO)), the insurance service provider reported third quarter revenue rose 1.6% to $247.6 million, compared to $243.7 million a year-ago. Net income in the quarter climbed 8% to $44.3 million or 31 cents per diluted share, compared to net income of $41.0 million or 29 cents per share in the prior-year quarter.

Capital One Financial Corp. ((COF)), the diversified financial services company third quarter revenues gained 13% to $4.016 billion, compared to $3.558 billion in the prior-year quarter. Net income in the quarter surged 104% to $803 million or $1.76 per diluted share, compared to net income of $394 million or 87 cents per share in the year-ago quarter.

Coldwater Creek Inc. ((CWTR)), the multi-channel specialty retailer said it expects a loss for the third quarter due to a decline in comparable store sales. The company currently expects a third quarter loss in the range of $0.14 to $0.19 per share and net sales are expected in the range of $225 million to $230 million, reflecting a decline in comparable premium retail store sales of approximately 18% to 21% from last year.

Goldman Sachs Group, Inc. ((GS)), the investment banking firm said third quarter net revenues fell 28% to $8.90 billion, compared to $12.3 billion in the same period last year. Net earnings in the quarter declined 37% to $1.90 billion or $2.98 per share, compared to net earnings of $3.02 billion or $5.25 per share in the previous year period.

Hanger Orthopedic Group, Inc. ((HGR)), the company that owns and operates orthotic and prosthetic patient-care centers reported third quarter preliminary results. Net sales for the quarter grew 7.5% to $206.7 million from $192.3 million last year. Preliminary earnings in the quarter declined 28% to $6.9 million or 21 cents per diluted share from $9.6 million or 30 cents per share a year ago.

IDEX Corporation ((IEX)), the pumps, flow meters and fluid systems maker reported third quarter sales grew 16% to $373.71 million from $323.24 million in the prior-year period. Net income in the quarter rose 30% to $38.56 million or 47 cents per diluted share, compared to net income of $29.77 million or 37 cents per share in the year-ago period

International Business Machines Corp. ((IBM)), the information technology company said third quarter revenues increased 3% to $24.3 billion from $23.6 billion in the same quarter last year. Net income in the quarter advanced 12% to $3.6 billion or $2.82 per share, compared to net income of $3.2 billion or $2.40 per share in the prior-year quarter.

Johnson & Johnson ((JNJ)), the health care giant scheduled reported third quarter sales declined 0.7% to $14.982 billion, from $15.081 billion in the prior-year quarter. Net earnings in the quarter rose 2.2% to $3.417 billion or $1.23 per share, compared to net earnings of $3.345 billion or $1.20 per share in the same quarter last year.

Lincare Holdings Inc. ((LNCR)), the respiratory therapy and other services provider reported third quarter revenues rose 6.6% to $418.7 million from $392.6 million last year. Net income in the quarter increased 26.2% to $45.5 million or 47 cents per diluted share, compared to net income of $36.0 million or 36 cents per share last year.

Northeast Bancorp/ME ((NBN)), the bank holding company reported first quarter net income surged 107% to $900 million or 38 cents per diluted share, compared to net income of $435 million or 19 cents per share in the prior-year quarter. Net interest income in the quarter grew 2% to $4.3 million from $4.2 million in the prior-year quarter.

Steel Dynamics, Inc. ((STLD)), the steel producer and metals recycler reported third quarter revenues soared 35% to $1.6 billion from $1.2 billion a year ago. Net income in the quarter plunged 73% to $18.7 million or 9 cents per diluted share, compared to net income of $69.0 million or 30 cents per share last year.

The Bank of New York Mellon Corporation ((BK)), the financial services company reported third quarter total fee revenue rose 2% to $2.662 billion, from $2.610 billion in the year ago quarter. Net income generated in the quarter was $625 million or 51 cents per common share, compared with a net loss of $2.439 billion or $2.04 per common share, in the third quarter of 2009.

The Coca-Cola Company ((KO)), the beverages company said third quarter net operating revenues increased 4.7% to $8.426 billion, from $8.044 billion in the prior-year quarter. Net income in the quarter rose 8.4% to $2.055 billion or 88 cents per diluted share, compared to net income of $1.896 billion or 81 cents per share in the same quarter last year.

UnitedHealth Group Inc. ((UNH)), the health insurer Tuesday said third quarter revenues grew 9% to $23.67 billion from $21.7 billion in the same period last year. Net earnings in the quarter increased 23% to $1.28 billion or $1.14 per diluted share, compared to net earnings of $1.04 billion or 89 cents per share last year.

VMware, Inc. ((VMW)), the virtualization solution provider reported third quarter revenues soared 46% to $714.25 million, compared to $489.75 million in the prior-year quarter. Net income in the quarter rose 132% to $85 million, or 20 cents per diluted share, compared to net income of $38 million or 9 cents per share, for the third quarter of 2009.

Weatherford International Ltd. ((WFT)), the oil and natural gas service companies said third quarter revenue rose 18% to $2.53 billion from $2.15 billion in the same quarter last year. Net income in the quarter surged 87% to $144.8 million or 19 cents per diluted share, compared to net income of $77.4 million or 11 cents per share for the year-ago quarter.

Zions Bancorporation ((ZION)), the financial holding company stated third quarter net loss in the quarter narrowed 56% to $80.47 million or 47 cents per diluted share, compared to a net loss of $181.88 million or $1.43 per share in the previous year. Net interest income for the quarter fell 4.3% to $451.88 million, compared to $472.18 million in the prior-year quarter.