GE Net Rebounds, BofA Loss Widens; Google Appoints Co-founder as CEO

Arthi Gupta
21 Jan, 2011
New York City

U.S. indexes rose after General Electric reported better-than-estimated earnings but Bank of America loss widened. St. Jude Medical reached a settlement with U.S. regulators. Google Inc quarterly revenues rose 26% and net soared 29% and also appointed co-founder as its chief executive.

[R]8:50 AM New York – U.S. indexes rose after General Electric reported better-than-estimated earnings but Bank of America loss widened. St. Jude Medical reached a settlement with U.S. regulators. Google Inc quarterly revenues rose 26% and net soared 29% and also appointed co-founder as its chief executive.[/R]

Asian markets declined on speculation that China may hike interest rates or increase bank reserves again to curb inflation and European markets advanced.

Chinese President Hu Jintao met with Congressional leaders on Thursday. While Obama''s meetings with Hu seemed to focus on China''s currency controls and economic cooperation between the U.S. and China, members of Congress pressed Hu on issues on intellectual property theft, North Korea, and human rights violations.

U.S. President Barack Obama appointed General Electric CEO Jeffrey Immelt as the head of a new economic advisory panel that would concentrate on boosting jobs growth, reports said on Friday.

The panel will replace the existing Economic Recovery Advisory Board headed by former Federal Reserve Chairman Paul Volcker, originally set up by Obama in 2009 to help formulate the administration''s response to the financial crisis.

Google appointed its co-founder, Larry Page, as chief executive officer, while Eric Schmidt will assume the role of executive chairman. He will continue to act as an advisor to Larry and Sergey Brin, Google''s other co-founder.

U.S. Leading Economic Index Rises

The Conference Board''s index of leading U.S. leading economic indicators increased more than expected in the month of December.

The Conference Board said its leading economic index rose 1.0% in December following an unrevised 1.1% increase in November.

Wendy''s/Arby''s Contemplates Selling Arby''s

Wendy''s/Arby''s Group, Inc., the fast food chain said that it is exploring strategic alternatives, including sale of its quick-service sandwich chain Arby''s Restaurant Group, Inc. The company said it plans to focus all of its management and financial resources on continuing to build the Wendy''s brand to maximize shareholder value.

St. Jude Medical Settles with U.S. DoJ

St. Jude Medical, Inc., a global medical device company reached a settlement agreement with the U.S. Department of Justice regarding a previously disclosed 2005 investigation in Boston related to an industry-wide review of post-market studies and registries. The company will make a payment of $16 million to the DOJ.

St. Jude is alleged to have used three post-market studies and a device registry to pay kickbacks to induce physicians to implant the company''s pacemakers and defibrillators in patients.

Warner Music Considers Buyout

Warner Music Group Corp. is reportedly looking to sell itself off and has hired Goldman Sachs to find potential buyers, according to reports on Thursday.

Goldman Sachs will explore strategic alternatives, including selling only a part of the company and also a possible buyout of rival and British music company EMI Group Plc.

People’s United Acquires Danvers Bancorp

People’s United Financial, Inc. will acquire Danvers Bancorp in a 55% stock and 45% cash transaction valued at approximately $493 million. People’s United expects the transaction to be immediately accretive to operating earnings with an internal rate of return greater than 15%.

Earnings Review

Advanced Micro Devices, Inc. ((AMD)), the chip maker said fourth quarter net revenue was flat compared to last year at $1.65 billion. Net income in the quarter plunged 68% to $375 million or 50 cents per diluted share compared to net income of $1.18 billion or $1.52 per share for the year-ago quarter.

Revenue for the full year 2010 rose 20% to $6.49 billion from $5.40 billion last year. For the full year 2010 net income was $471 million or $0.64 per share compared to $304 million or $0.45 per share for the full year 2009.

Bank of America Corporation ((BAC)) reported fourth quarter total revenue, net of interest expense, fell 11% to $22.6 billion compared to $25.4 billion in the previous year period. Net loss in the quarter widened 519% to $1.2 billion or 16 cents per diluted share compared with a loss of $194 million or 60 cents per share, a year earlier.

Loss for the quarter included goodwill impairment charge of $2.0 billion in the Home Loans and Insurance segment.

Capital One Financial Corp. ((COF)), the diversified financial services company reported fourth quarter net income rose 85% to $697 million or $1.52 per share from $376 million or $0.83 per share in the year-ago period. Net interest income for the quarter on an as-reported basis rose 55% to $3.02 billion from $1.95 billion a year ago.

Earnings for full year 2010 soared to $2.74 billion or $6.01 per share from $320 million or $0.74 per share for 2009. Net interest income for the full year surged to $12.45 billion from $7.69 billion in fiscal 2009.

Consolidated Edison, Inc. ((ED)), the diversified utility company said fourth quarter total operating revenues decreased 4% to $3.14 billion from $3.27 billion in the same quarter last year. Net income in the quarter increased 15.3% to $233 million or 80 cents per diluted share compared to net income of $202 million or 73 cents per share in the prior-year quarter.

Annual operating revenues increased to $13.33 billion from $13.03 billion a year ago. For the full year 2010, net income was $992 million or $3.49 per share, up from $868 million or $3.16 per share in the previous year.

Google Inc. ((GOOG)), the Internet search engine said fourth quarter revenues increased 26% to $8.44 billion from $6.67 billion in the same quarter last year. Net income in the quarter rose 29% to $2.54 billion or $7.81 per share compared to $1.97 billion or $6.13 per share in the prior-year quarter.

Annual revenues increased to $29.32 billion from $23.65 billion in the year-ago. For the full year 2010, net income was $8.51 billion or $26.31 per share, up from $6.52 billion or $20.41 per share in the previous year.

General Electric Company ((GE)), the multinational conglomerate said fourth quarter revenues increased 1% to $41.38 billion from $41.05 billion in the year-ago quarter. Net earnings in the quarter rose 52% to $4.46 billion or 42 cents per diluted share compared to net earnings of $2.94 billion or 28 cents in the prior-year quarter.

International Game Technology ((IGT)), the slot machines maker said first quarter total revenue fell 10% to $464.8 million from $515.1 million in the same quarter last year. Net income in the quarter edged higher 0.5% to $73.7 million or 25 cents per diluted share compared to net income of $73.3 million or 25 cents per share for the year-ago quarter.

Intuitive Surgical, Inc. ((ISRG)), the maker of robotic surgical systems reported fourth quarter total revenue increased 21% to $389.3 million from $323.0 million last year. Net income in the quarter soared 56.3% to $121.2 million or $3.02 per share compared to net income of $77.5 million or $1.95 per share in the previous year.

Total revenue for the full year rose to $1.41 billion from $1.05 billion last year. For fiscal year 2010, net income was $381.8 million or $9.47 per share, compared to $232.6 million or $5.93 per share last year.

Schlumberger Limited ((SLB)), the oilfield services provider reported fourth quarter revenue climbed 58% to $9.07 billion from $5.74 billion in the year-ago quarter. Net income in the quarter increased 31% to $1.04 billion or 76 cents per diluted share compared to net income of $795 million or 65 cents per share last year.

Wipro Limited ((WIT)), the Indian software services provider reported third quarter total revenues rose 12% to Rs 78.29 billion from Rs 69.77 billion in the same quarter last year. Net income in the quarter rose 9.6% to Rs 13.19 billion or Rs 5.39 per share compared to Rs 12.03 billion or Rs 4.91 per share in the year ago.