U.S. Congress Passes Tax Cut Bill; Oracle, RiM Net Surge

Arthi Gupta
17 Dec, 2010
New York City

The U.S. Congress voted in favor of the tax cut bill. The EU agreed on permanent rescue fund. American Express agreed to acquire Munich-based Loyalty Partner. BMO Financial acquired Marshall & Ilsley for $4.1 billion.

[R]8:50 AM New York – The U.S. Congress voted in favor of the tax cut bill. The EU agreed on permanent rescue fund. American Express agreed to acquire Munich-based Loyalty Partner. BMO Financial acquired Marshall & Ilsley for $4.1 billion.[/R]

U.S. stock futures traded sideways in the early trading and Research in Motion and Oracle report higher earnings.

Asian markets traded mixed and European indexes declined as leaders in the region agree to set up a rescue fund from 2013 and keep the current fund at 440 billion euros.

European Union leaders decided on Thursday to establish a permanent bailout mechanism for debt-trapped economies from 2013 and not to raise the size of the existing temporary rescue fund.

The permanent ""bailout"" mechanism for member states in financial difficulty must clearly detail how the private sector would be brought in to help, how non-euro-zone countries would be involved, and how the EU budget would be affected, according to a resolution adopted by Parliament on Thursday.

The permanent mechanism will succeed the current €750 billion European Financial Stability Facility in 2013.

Moody''s Investors Service lowered its rating on Ireland to Baa1 from Aa2, while maintaining its outlook at ''negative.'' The rating agency blamed the Republic''s deteriorating fiscal position. The move comes just a few weeks after Dublin agreed an €85 billion bailout deal with the European Union and the IMF.

U.S. Congress Passes Tax Cut Bill

U.S. lawmakers approved a two-year extension of tax cuts and continued unemployment insurance. The bill for continuing the tax-cuts, introduced during former President George W Bush''s tenure, was passed in the U.S. House by a 277-148 vote. President Barack Obama is expected to sign the bill into law today.

American Express Acquires Loyalty Partner

American Express Co. said it would acquire Munich-based marketing services company Loyalty Partner for €496 million or $660 million.

The acquisition will deepen American Express’ merchant relationships in select international markets, add more than 34 million consumers to the company’s international customer base and expand its range of rewards and loyalty marketing services.

Cablevision Proposes Rainbow Media Spin-off

Cablevision Systems Corporation said its Board authorized to proceed with the leveraged spin-off of its television programming subsidiary Rainbow Media Holdings LLC to Cablevision''s stockholders.

Suncor Energy Partners with Total E&P Canada

Suncor Energy Inc., the Canada-based integrated energy company stated that a strategic partnership has been formed with Total E&P Canada Ltd., an affiliate of France''s Total SA to jointly develop the Fort Hills and Joslyn oil sands mining projects.

Under the terms of the agreement, Suncor will receive a total cash consideration of about C$1.75 billion from the transaction. Total will acquire a 49% interest in Suncor''s planned third upgrader and a portion of Suncor''s interest in the Fort Hills oil sands project.

Separately, the company stated that its board of directors approved a C$6.7 billion capital spending plan for 2011 as part of the company''s long-term growth strategy of increasing daily production to over one million barrels of oil equivalent by 2020.

Ryder Acquires Scully Companies

Ryder System, Inc. reached an agreement to acquire the lease, contract maintenance, commercial rental and dedicated contract carriage businesses of The Scully Companies, Inc.

Under the terms of the agreement, Ryder will acquire Scully''s fleet management business consisting of about 1,800 full service lease units and 300 rental vehicles, and about 200 contract customers mainly served from its six service facilities.

BMO Financial Buys Marshall & Ilsley

Canada-based BMO Financial Group said today it entered into an agreement to acquire Wisconsin-based bank Marshall & Ilsley Corp. in a stock-for-stock transaction worth about $4.1 billion.

Earnings Review

Accenture Plc ((ACN)), the management consultants reported first quarter total revenues increased 13% to $6.48 billion from $5.75 billion last year. Net income in the quarter increased 20.2% to $534.71 million or 81 cents per diluted share, compared to net income of $444.82 million or 67 cents per share a year ago.

Discover Financial Services ((DFS)), the credit card and electronic payment services company reported fourth quarter revenue, net of interest expense, declined 8% to $1.60 billion from $1.73 billion in the prior-year quarter. Net income for the quarter was $346.52 million or 64 cents per diluted share, compared with a loss of $77.86 million or 14 cents per share in the previous year quarter.

Oracle Corporation ((ORCL)), the enterprise software company said second quarter revenues surged 47% to $8.58 billion from $5.86 billion a year ago. Net income in the quarter rose 28% to $1.9 billion or 37 cents per diluted share, compared to net income of $1.5 billion or 29 cents per share for the year-ago quarter, helped by higher software sales and new revenue from Sun Microsystems.

Research In Motion Limited ((RIMM)), the smartphone maker said third quarter revenue increased 40% to $5.49 billion from $3.92 billion in the same quarter of last year. Net income in the quarter soared 45% to $911.1 million or $1.74 per share, compared to net income of $628.4 million or $1.10 per share in the year-ago quarter, boosted by continuing demand for BlackBerry.

Take-Two Interactive Software, Inc. ((TTWO)), the entertainment software, hardware and accessories developer reported fourth quarter net revenue grew 32% to $373.7 million from $282.52 million in the same quarter last year. Net income generated in the quarter was $53.78 million or 58 cents per diluted share, compared with a net loss of $23.5 million or 30 cents per share a year earlier.