U.S. January Inflation Increase 0.4%; Jobless Claims Rise 25,000

Arthi Gupta
17 Feb, 2011
New York City

U.S. indexes decline after weekly jobless claims rose 25,000 and January inflation increased 0.4%. Aveo formed joint venture with Astellas worth $1.3 billion. Williams Companies to split into two. Chesapeake completed $570 million project cooperation deal with CNOOC.

[R]9:00 AM New York – U.S. indexes decline after weekly jobless claims rose 25,000 and January inflation increased 0.4%. Aveo formed joint venture with Astellas worth $1.3 billion. Williams Companies to split into two. Chesapeake completed $570 million project cooperation deal with CNOOC.[/R]

The index of U.S. consumer prices increased 0.4% in January from December and increased 1.6% from a year ago month. Core rate excluding food and energy increased 0.2%, a sharpest increase since 2008.

The energy index rose 2.1% and gasoline index increased 3.5% in January.

Seasonally adjusted weekly jobless claims increased 25,000 to 410,000 from the revised previous week claims of 385,000.

The preliminary insured unemployment rate in the week ending February 5 unchanged from the prior week''s unrevised rate of 3.1%.

Taiwan Economy Expands

Taiwan''s economy expanded faster in the fourth quarter boosted by exports. In a preliminary report released on Thursday, the Directorate-General of Budget, Accounting and Statistics revised up fourth quarter annual economic growth rate to 6.92% from a flash estimate of 6.48%.

Williams Companies to Split

Williams Companies plans to separate its businesses into two stand-alone, publicly traded corporations, as it looks to enhance growth and valuation.

Williams'' plan involves one company focusing on infrastructure related to supplies of domestic natural gas, while the other will be centered on developing and producing the gas and oil resource plays.

Chesapeake Completes Deal with CNOOC

Chesapeake Energy and CNOOC announced the closing of a project cooperation agreement for $570 million in cash.

Under the deal, CNOOC International Limited, a wholly owned subsidiary of CNOOC, purchased 33.3% undivided interest in Chesapeake''s 800,000 net oil and natural gas leasehold acres in the Denver-Julesburg and Powder River Basins in northeast Colorado and southeast Wyoming.

In addition, CNOOC Limited has agreed to fund 66.7% of Chesapeake''s share of drilling and completion costs up to $697 million, which Chesapeake expects to occur by year-end 2014.

Borders Receives Court Approval for Debtor-in-Possession Financing

Borders Group announced that it received court approval for $505 million in Debtor-in-Possession financing led by GE Capital, Restructuring Finance.

Borders Group plans to use funds to pay vendors, publishers and other suppliers for post-petition goods and services and to operate its day-to-day business.

Aveo Forms Joint Venture with Astellas

AVEO Pharmaceuticals agreed to jointly develop and commercialize its cancer drug tivozanib with global pharmaceutical company Astellas Pharma worldwide outside of Asia.

As part of this agreement, AVEO will receive $125 million in up-front cash payments from Japanese drugmaker Astellas, and up to $1.3 billion in potential regulatory and sales milestone payments in future.

The agreement would see Aveo lead commercialization of tivozanib in North America, and Astellas lead in the European Union.

Earnings Review

CBS Corporation ((CBS)), the mass media company reported fourth quarter revenues grew 11% to $3.90 billion from $3.50 billion for the year-ago period. Net earnings in the quarter soared 381% to $283.0 million or 41 cents per diluted share compared to net earnings of $58.8 million or 9 cents per share in the prior-year quarter.

Revenues for the full year grew 8% to $14.06 billion from $13.01 billion in the fiscal year 2009. For the full year, net income rose 220% to $724.2 million or $1.04 per share from $226.5 million or $0.33 per share in the fiscal year 2009.

Cliffs Natural Resources Inc. ((CLF)), the mining and natural resources company said fourth quarter revenues soared 74% to $1.42 billion from $820.5 million in the same quarter of last year. Net income in the quarter surged 255% to $384 million or $2.82 per diluted share compared to net income of $108.2 million or 82 cents per share a year ago.

For the full year, revenues rose 100% to $4.68 billion from $2.34 billion. Net income soared 388% to $1.0 billion or $7.49 per share from $205 million or $1.63 per share the prior year.

Express Scripts, Inc. ((ESRX)), the healthcare services company said fourth quarter revenues climbed 38% to $11.29 billion from $8.19 billion in the comparable quarter of last year. Net income in the quarter soared 48% to $329.6 million or 62 cents per diluted share compared to net income of $223.3 million or 41 cents per share in the year-ago quarter.

For the full year, revenues surged 82% to $44.97 billion from $24.72 billion a year ago. Net income increased 43% to $1.18 billion or $2.19 per share from $827.6 million or $1.57 per share the previous year.

FirstEnergy Corp. ((FE)), the electric utility stated fourth quarter revenue rose 9% to $3.22 billion from $2.96 billion in the prior-year period. Net income in the quarter declined 22.2% to $185 million or 61 cents per diluted share compared to net income of $238 million or 78 cents per share in the year-ago period.

Total revenues for the year rose 3% to $13.34 billion from $12.97 billion last year. For fiscal year 2010, net income declined 22.4% to $784 million or $2.57 per share from $1.01 billion or $3.29 per share in the prior year.

Lenovo Group Limited ((LNVGY.PK)), the personal computers maker reported third quarter consolidated sales climbed 22% to $5.81 billion from $4.76 billion in the prior-year quarter. Net profit in the quarter grew 25% to $100 million or 98 cents per diluted share compared to net profit of $80 million or79 cents per share last year on strong PC shipment growth across all geographies and product lines.

NetApp Inc. ((NTAP)), the data storage device company reported third quarter net revenues increased 26% to $1.27 billion from $1.01 billion last year. Net income in the quarter increased 60% to $172.5 million or 42 cents per diluted share compared to net income of $107.9 million or 30 cents per share in the previous year.

NVIDIA Corporation ((NVDA)), the graphics chip maker said fourth quarter revenue fell 10% to $886.38 million from $982.49 million in the same quarter last year. Net income in the quarter rose 31% to $171.7 million or 29 cents per diluted share compared to net income of $131.1 million or 23 cents per share for the year-ago quarter.

Revenue for the fiscal year 2011 rose 6.3% to $3.54 billion from $3.33 billion the prior year. For the fiscal year 2011, the company reported net income of $253.1 million or $0.43 per share compared to a net loss of $68.0 million or $0.12 per share for the fiscal year 2010.

O''Reilly Automotive, Inc. ((ORLY)), the auto parts retailer said fourth quarter sales rose 12% to $1.31 billion from $1.17 billion in the same quarter last year. Net income in the quarter surged 47% to $105.8 million or 74 cents per diluted share compared to net income of $71.9 million or 52 cents per share for the year-ago quarter.

Sales for the full year 2010 increased 11% to $5.40 billion from $4.85 billion the prior year. For the full year 2010, net income increased 36.4% to $419.4 million or $2.95 per share compared to $307.5 million or $2.23 per share for the full year 2009.

The J. M. Smucker Company ((SJM)), the manufacturer and marketer of branded food products reported third quarter net sales increased 9% to $1.31 billion from $1.205 billion in the comparable period. Net income in the quarter declined 3% to $132.0 million or $1.11 per share compared to net income of $135.48 million or $1.14 per share last year.

Waste Management, Inc. ((WM)), the provider of integrated waste services stated fourth quarter operating revenues grew 6% to $3.19 billion from $3.01 billion in the comparable period a year ago. Net income in the quarter fell 11% to $281 million or 59 cents per diluted share compared to net income of $315 million or 64 cents per share last year.