U.S. Private Sector Employment Expands; Qualcomm Acquires Atheros

Arthi Gupta
05 Jan, 2011
New York City

U.S. indexes gained after private sector employment rose more than anticipated in December. The U.S. Fed noted stimulus to continue until economy recovery and improvement in jobs situation. Qualcomm agreed to buy Atheros Communications that values the company at $3.1 billion.

[R]9:00 AM New York – U.S. indexes gained after private sector employment rose more than anticipated in December. The U.S. Fed noted stimulus to continue until economy recovery and improvement in jobs situation. Qualcomm agreed to buy Atheros Communications that values the company at $3.1 billion.[/R]

Asian markets traded mixed and European markets fell and commodities price rose. Sugar rose to 30-year high and wheat traded at seven year high. Private sector employment survey showed a higher than expected gain.

The economy remains sluggish and the jobs situation too bleak for the Federal Reserve to consider halting the $600 billion asset purchase plan announced in November, according to the minutes of the last Federal Open Market Committee meeting released yesterday.

The Fed said that residential and nonresidential construction activity was still ""quite depressed,"" and while labor demand rose further in recent months, unemployment stayed at a “high level.”

The unemployment rate, which remained at 9.6% during the preceding three months, increased to 9.8% in November.

U.S. Factory Orders, Private Sector Employment Up

Orders for U.S. manufactured goods unexpectedly showed a notable increase in the month of November, according to a report released by the Commerce Department on Tuesday.

The report showed that orders for manufactured goods increased 0.7% in November following a revised 0.7% decrease in October.

Private sector employment in the U.S. showed a substantial increase in the month of December, according to a report released by Automatic Data Processing, Inc. on Wednesday.

ADP said private sector employment increased by 297,000 jobs in December following a downwardly revised increase of 92,000 jobs in November.

Indian Police Files Case against Citigroup Executives

The Indian police have reportedly registered a case against Citigroup, Inc.''s chief executive officer Vikram Pandit in connection with the fraud perpetrated by an employee at a Citibank branch.

Shiv Raj Puri, a Citibank employee, allegedly masterminded and operated a fraudulent scheme, targeted at wealthy individuals and corporate clients. He is said to have forged documents to sell the fake scheme to more than 40 of the bank''s clients. The amount involved in the scam is estimated as much as $88 million.

Citibank informed the Reserve Bank of India and the Securities and Exchange Board of India about the fraud.

Qualcomm Buys Atheros Communications

Qualcomm Incorporated agreed to acquire Atheros Communications Inc for $45 per share in cash, representing an enterprise value of $3.1 billion. This purchase is intended to help accelerate the expansion of Qualcomm''s technologies and platforms to new businesses beyond cellular and provide access to significant new growth opportunities.

Thomas Lee Plans to Buy Acosta

Thomas Lee Partners LP, the private equity firm plans to buy food marketing company Acosta Inc. from private equity firm AEA Investors LP for more than $2 billion, Bloomberg reported on Tuesday, citing people with knowledge of the matter.

U.S. Companies Auto Sales Rise

General Motors Co., Ford Motor Co. and Chrysler Group LLC on Tuesday reported higher U.S. sales for the month of December amid growing consumer demand. Ford and Chrysler also recorded double digit growths in U.S. vehicle sales for the full year 2010.

GM, the largest U.S. automaker, said its December U.S. vehicle sales grew 7.5% to 224,185 units from 208,511 units in the same month last year.

For the full year 2010, total U.S. vehicle sales increased 6.3% to 2.22 million units from 2.08 million units in the prior year.

Ford sold 190,976 vehicles in December, an increase of 6.7% from 179,017 vehicles sold in the same month last year.

Ford''s 2010 U.S. vehicle sales increased 19.4% to 1.94 million units from 1.62 million in 2009.

Chrysler Group LLC reported that its U.S. vehicle sales for December increased 16% to 100,702 units from 86,523 units a year ago.

For the full year 2010, total vehicle sales increased 17% to 1.09 million units from 0.9 million units in 2009.

CIT Group Announces Order for Boeing 737s

CIT Group Inc. and Boeing announced that CIT Aerospace placed an order for 38 Next-Generation 737 airplanes and purchase rights for seven additional 737s.

Financial terms of the deal were not disclosed, but the order is worth more than $3 billion based on Boeing''s list prices for the aircraft.

The order, with deliveries into 2017, is the largest order placed by CIT for Boeing airplanes.

Macy''s Expands Online Business

Macy''s, Inc. stated that it is adding about 725 new positions over the next two years to support the growth of its online businesses, macys.com and bloomingdales.com. In total, the company expects to add nearly 3,500 full-time, part-time and seasonal holiday associates in the next two years.

Dell Acquires SecureWorks

Dell Inc. agreed to acquire SecureWorks Inc., a provider of information-security services, aiming to expand its IT security services portfolio. Financial details of the transaction were not disclosed.

Schnitzer Purchases State Line Scrap Co.

Schnitzer Steel Industries, Inc. said on Tuesday that it agreed to buy substantially all of the assets of State Line Scrap Co., Inc. and certain of its affiliates. Terms of the deal were not disclosed.

Earnings Review

AngioDynamics, Inc. ((ANGO)), the medical devices maker stated second quarter net sales edged higher 0.2% to $53.4 million compared to $53.5 million generated last year. Net income in the quarter increased 6.5% to $3.3 million or 13 cents per diluted share, compared to net income of $3.1 million or 13 cents per share a year ago.

Family Dollar Stores, Inc. ((FDO)), the discount retail chain operator said first quarter sales rose 9.5% to $2 billion from $1.82 billion in the prior year. Net income in the quarter increased 9.9% to $74.32 million or 58 cents per diluted share, compared to last year''s net income of $67.62 million or 49 cents per share.

Neogen Corporation ((NEOG)), the maker of food-testing and veterinary products reported second quarter revenues increased 25% to $43.93 million from prior year''s $35.25 million in the comparable period. Net income in the quarter surged 33% to $6.1 million, or 26 cents per diluted share, compared to net income of $4.6 million, or 20 cents per share, a year earlier.

Rite Aid Corporation ((RAD)), the retail drugstore chain reported a 0.6% increase in its same-store sales for the four weeks ended December 25, 2010. Front-end same store sales grew 0.1%, while pharmacy same store sales, including an approximate 201 basis points negative impact from new generic introductions, rose 1.0%.

Sonic Corporation ((SONC)), the drive-in restaurant chain reported first quarter total revenues declined 5% to $129.15 million from $136.48 million last year. Net income in the quarter increased 16% to $7.24 million or 12 cents per diluted share, compared to net income of $6.23 million or 10 cents per share in the previous year.

Team, Inc. ((TISI)), the provider of specialty maintenance and construction services reported second quarter revenue climbed 8% to $133.1 million, compared to $123.3 million in the same period a year-ago. Net income in the quarter increased 40% to $8.1 million or 41 cents per diluted share, compared to net income of $5.8 million or 30 cents per share a year-ago.

The Mosaic Company ((MOS)), the fertilizer giant said second quarter net sales surged 56% to $2.67 billion from $1.71 billion in the same quarter last year. Net income in the quarter rose 828% to $1 billion or $2.29 per diluted share, compared to net income of $107.8 million or 24 cents per share for the year-ago quarter, helped by significantly higher phosphate selling prices and potash sales volumes as well as a hefty gain on sale of its stake in Fosfertil S.A.