Oil Prices Recede on OPEC Assurance; AIG Swings to Profit

Arthi Gupta
25 Feb, 2011
New York City

U.S. stocks gained after crude oil declined and OPEC member nations assured of higher supply to meet any shortfall from Libya. International Energy Agency also said it will release oil from its stockpile. Unrest and disruptions in Libya and Bahrain continue.

[R]9:30 AM New York – U.S. stocks gained after crude oil declined and OPEC member nations assured of higher supply to meet any shortfall from Libya. International Energy Agency also said it will release oil from its stockpile. Unrest and disruptions in Libya and Bahrain continue.[/R]

World indexes rose after crude oil prices declined as Saudi Arabia confirmed to increase oil supplies if needed and the International Energy Agency said it will release oil from its stockpile. Libya remained tense and protests continued in Bahrain.

The United States on Thursday called for Libya's ouster from the UN Human Rights Council following the violent clampdown on anti-government protesters demanding the resignation of embattled leader Muammar Gaddafi, reports said.

Switzerland said it will freeze all assets linked to Gaddafi and his entourage for the next three years.

Though U.K. and France called for sanctions against Gaddafi but failed to acknowledge hundreds of thousands of innocent lives lost during the U.S. and UK occupation of Iraq.

The Federal Reserve's $600 billion bond buying program was an appropriate substitute for ordinary monetary policy easing, according to St. Louis Fed President James Bullard.

""""The natural debate now,"""" he said, """"is whether to complete the program, or to taper off to a somewhat lower level of asset purchases.""""

U.S. GDP Growth Slows

U.S. economy growth was revised lower to 2.8% in the fourth quarter from the previous estimate of 3.2% after surging at 2.6% in the third. The price index of gross domestic purchases increased 1.2% in the quarter compared to 0.4% in the third. Change in private inventories added 3.70% compared to 1.61% in the third.

Boeing Secures USAF Contract

The Boeing Company received a contract from the U.S. Air Force to build the next-generation aerial refueling tanker aircraft edging out rival aircraft maker European Aeronautic, Defence & Space Co.

The contract to replace 179 of the service’s 400 KC-135 tankers is valued at about $35 billion and calls for Boeing to design and manufacture 18 initial combat-ready tankers by 2017.

Toyota Recalls 2.2 Million. U.S. Vehicles

Toyota Motor Corp., the Japanese automaker announced a voluntary recall of about 2.2 million Toyota and Lexus vehicles in the U.S. to solve sticking of gas pedal with floor mat.

HRT Acquires UNX Energy

UNX Energy Corp. agreed to be acquired by Brazilian independent oil and gas explorer HRT Participações em Petróleo S.A. The transaction values Calgary, Alberta-based UNX at around C$730 million.

Northwest Natural Forms Venture with Encana Unit

Northwest Natural Gas Co. announced the signing of an agreement with Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corp. to invest in a joint venture to develop gas reserves that will provide long-term supplies for NW Natural's Oregon utility customers over a 30-year period.

Earnings Review

American International Group, Inc. ((AIG)), the insurer reported fourth quarter net income of $11.2 billion or $16.60 per share compared to a loss of $8.87 billion or $65.51 per share last year. Net premiums written rose 9.4% to $7.578 billion compared with $6.929 billion in the year-ago quarter.

Applied Materials, Inc. ((AMAT)), the semiconductor equipment maker said first quarter net sales increased 45% to $2.69 billion from $1.85 billion in the same quarter last year. Net income in the quarter surged to $506 million or 38 cents per diluted share compared to net income of $83 million or 6 cents per share in the prior-year quarter.

Autodesk, Inc. ((ADSK)), the design software and services company reported fourth quarter revenue grew 16% to $527.7 million from $456.1 million in the year-ago period. Net income in the quarter rose 23% to $61.6 million or 26 cents per diluted share compared to net income of $50.1 million or 21 cents per share in the year-ago quarter.

Total net revenue for the full year grew 14% to $1.95 billion from $1.71 billion in 2009. For the full year, net income surged 266% to $212.0 million or $0.90 per share from $58.0 million or $0.25 per share for fiscal year 2010.

DreamWorks Animation SKG Inc. ((DWA)), the producer of animated feature films said fourth quarter revenues climbed 42% to $275.7 million from $194.2 million in the same quarter last year. Net income in the quarter soared 96% to $85.2 million or 99 cents per diluted share compared to net income of $43.56 million or 50 cents per share a year earlier.

First Solar, Inc. ((FSLR)), the thin-film solar panel maker said fourth quarter net sales decreased 4.8% to $610 million from $641 million in the same quarter of 2009. Net income in the quarter rose 10.2% to $156.0 million or $1.80 per share compared to net income of $141.6 million or $1.65 per share in the prior-year quarter.

Annual net sales increased 24% to $2.56 billion from $2.07 billion in fiscal year 2009. For fiscal year 2010, net income gained 4% to $664.2 million or $7.68 per share compared to $640.1 million or $7.53 per share in the previous year.

Freddie Mac ((FMCC.OB)), the mortgage credit guarantee provider reported fourth quarter net loss narrowed 78.2% to $1.7 billion or 53 cents per diluted share compared to net loss of $7.8 billion or $2.39 per share last year. Net interest income for the quarter declined 4.4% to $4.3 billion from $4.5 billion last year.

Pepco Holdings, Inc. ((POM)), the diversified energy company reported fourth quarter total operating revenue slipped 8% to $1.52 billion from $1.65 billion year ago. Net income in the quarter fell 19.5% to $33 million or 14 cents per diluted share compared to net income of $41 million or 18 cents per share a year before.

Portland General Electric Company ((POR)), the vertically integrated electric utility stated fourth quarter net revenues slipped 6.2% to $455 million from $485 million last year. Net income in the quarter surged 213% to $25 million or 34 cents per diluted share compared to net income of $8 million or 11 cents per share in the prior year.

salesforce.com, inc. ((CRM)), the provider of enterprise cloud computing applications reported fourth quarter total revenues increased 29% to $456.87 million from $354.05 million last year. Net income in the quarter declined 46.5% to $10.91 million or 8 cents per diluted share compared to net income of $20.39 million or 16 cents per share in the previous year.

The Gap Inc. ((GPS)), the specialty retailer said fourth quarter net sales increased 2.8% to $4.36 billion from $4.24 billion in the prior-year quarter. Comparable store sales for the quarter were flat compared with an increase of 2% in the fourth quarter of the prior year.

Net income in the quarter increased 4% to $365 million or 60 cents per diluted share compared to net income of $352 million or 51 cents per share for the same period last year.

Net sales for the full-year increased 3% to $14.7 billion from $14.2 billion last year and net income rose 9.1% to $1.20 billion or $1.88 per share from $1.10 billion or $1.58 per share for fiscal year 2009.