Citigroup Profit up 4%

Elena
17 Apr, 2006
New York City

Stock futures predicted a slightly positive start, reflecting strong earnings report from Citigroup. The largest U.S. bank reported Q1 profit rise of 4% on revenue growth from foreign operations. In other earnings news, Wachovia Corp. said that its Q1 net income advanced to $1.09 a share, up from $1.01 a share a year earlier, but missed estimates of $1.12 a share. Knight Ridder reported Q1 profit decrease of 42 cents a share from 79 cents last year, despite revenue increase.

[R]9:00AM Stock futures indicated a slightly positive opening.[/R]
U.S. stock futures pointed to a slightly higher opening of Monday session. On the one hand, strong earnings report from Citigroup renewed optimism about corporate profits, but on the other hand, surging oil prices weighed on market sentiment. Citigroup Inc.((C)), the largest U.S. bank and a Dow component, reported Q1 profit rose 4% on revenue growth from foreign operations. Other banks scheduled to release earnings today are JPMorgan Chase & Co. ((JPM)), Bank of America Corp. ((BAC)) and Merrill Lynch & Co. ((MER)). However, a steep jump in oil to $70 a barrel for the first time in seven and a half months is likely to limit gains. Giant tech companies like Intel Corp. (INTC)) and Apple Computer Inc. ((AAPL)), as well as major internet companies Google Inc. ((GOOG)), Yahoo Inc. ((YHOO)) and eBay Inc. ((EBAY)), are expected to report quarterly results this week. S&P 500 futures were up 1.90 points, above fair value. Dow Jones industrial average futures were up 14 points, and Nasdaq 100 futures fell 1.25 point.

Crude oil prices slightly jumped to eight-month highs on speculations the U.S. might take military actions against Iran because of its pursuit of its nuclear program. Light sweet crude May delivery rose 45 cents to $69.75 a barrel. London Brent climbed 54 cents to reach $71.11. Gold hit a 25-year high on fears of oil disruptions. Gold futures for June delivery rose $9.40 to $609.70 per troy ounce on the Comex division. In London gold for immediate delivery climbed $3.08 to $606.07 per troy ounce. Silver jumped nearly 30 cents to $13.15 on Comex. The U.S. dollar traded sharply down vs. the yen and the euro ahead of the Treasury report. The dollar declined to $1.2246 per euro from $1.2110. The dollar bought 117.70, down from 118.69.

Corus Bankshares Inc, ((CORS)), provider consumer and corporate banking products, reported Q1 net income of $1.50 a share, up from 97 cents earned in the same period of 2005. The company’s quarterly net operating revenue totaled $88 million from $55.7 million in the year-ago period. Analysts had been expecting earnings of $1.35 a share on revenue of $80 million. Total assets came to $9.2 billion, up 65% from a year earlier.

Invitrogen Corp, ((IVGN)), biotechnology company, announced that it expects Q1 pro forma earnings to be a bit higher than previously expected on an improved product mix, lower royalty expenses, and a lower share count. The company expects sales of about $309 million for Q1 - approximately 3% lower than anticipated on weak performances for its U.S. Bioproduction and Japan businesses. Analysts expect the company to post a profit of 77 cents a share in Q1 on revenue of $319.9 million.

W.W. Grainger Inc((GWW)), maker of building maintenance supplies, reported Q1 net income of 93 cents a share, up from 79 cents a share in the year-ago period, beating analysts’ forecasts of 88 cents a share. The company added that revenue in Q1 advanced 6% but stock-based compensation charges reduced its earnings by 3 cents a share.

HCA Inc, ((HCA)), hospital company, said it expects Q1 earnings in a range of 89 cents a share to 93 cents a share, down from the 95 cents a share it posted in the year-earlier period. Q1 of 2006 results take into account 11 cents a share in gains on sales of investments, and 2 cents a share in compensation costs. The company anticipates to post revenue of $6.42 billion for Q1. Same-facility revenues rose 5%, and same-facility revenue per equivalent admission rose 5.1% in Q1 of 2006. Analysts’ views are for the company to to post a profit of 89 cents a share on revenue of $6.45 billion.

J.B. Hunt Transport Services Inc., ((JBHT)), transportation logistics provider, reported Q1 net income of 31 cents a share, up from 29 cents a share in the year-ago period on 10% revenue growth, matching analysts’ estimates.

Wachovia Corp, ((WB)), commercial and retail banking provider, reported that its Q1 net income advanced to $1.09 a share, up from $1.01 a share a year earlier. If not for merger costs, the company said it earned $1.12 a share. The $1.12 a share incorporated $98 million of costs for a new accounting method for options. The company missed analyst estimate of $1.12 which included the cost for the new options accounting rule.

Citigroup ((C)), financial services provider, reported that its Q1 net income advanced 4% to $1.12 a share, up from $1.04 a share in the same period a year earlier on strong results in its global consumer banking and corporate investment banking operations, beating analyst estimate for earnings of $1.02 a share. That estimate included the effect of a non-cash accounting adjustments for stock option costs. The results incorporated a $648 million charge to account for options awards under new accounting rules. The new accounting rules require companies to count stock-based compensation as expenses.

Eaton Corp, ((ETN)), diversified industrial manufacturer, reported that its Q1 net income advanced to $1.36 a share, up from $1.19 a share a year ago. The company announced that operating income excluding charges grew to $1.40 a share, up from $1.23 a share a year ago. The company topped analysts’ estimate of $1.32 a share. Revenue advanced 14%.

Knight Ridder, ((KRI)), media company, reported Q1 earnings of 42 cents a share, down from a profit 79 cents a share year-ago despite revenue growth, missing analyst estimate of 59 cents a share. Q1 results include 6 cents a share in expenses related to the company''s review of its strategic options, and 5 cents a share in costs related to equity-based compensation. The company added earnings in Q1 were hurt by an increase in interest expense of roughly 74% year-over-year due to increased borrowing and higher rates.

SunTrust Banks Inc, ((STI)), investment services provider, reported Q1 net income of $1.46 a share, up from $1.36 a share in the same period last year on 9% revenue growth, beating analyst forecasts for earning of $1.43 a share. Loan growth was 13%.

Texas Regional Bancshares Inc, ((TRBS)), financial services provider, reported Q1 income of 42 cents a share, down a penny from 43 cents a share in the year-earlier period, beating analysts’ views for earnings of 41 cents a share. Provision for loan losses of about $4.9 million for Q1 declined 9.9% from a year earlier.

Regions Financial Corp, ((FR)), banking and financial-services company, reported Q1 net income advanced 22% to 64 cents a share, up from 51 cents in the year-ago period. The year-ago figure takes into account 6 cents of merger-related and other charges. The company beat analysts estimate of 62 cents a share. Net interest income grew 9%. The net interest margin grew 0.34 percentage point to 4.18%.


[R]7:45AM Asian markets closed mixed.[/R]
Asian-Pacific benchmarks ended Monday session mixed. The Nikkei led decliners, falling 1.4% to 17,000.36 on surging oil and gold prices. The index decline also reflected weakness in property and consumer-finance stocks, following concerns about recent sharp increases in Japan''s long-term interest rates. Among losers, Aiful dropped 6.8% on government sanction for aggressive loan-collection practices, Sumitomo Mitsui Financial fell 1.5%, and Mitsubishi UFJ Financial lost 1.1%. In addition, many investors were reluctant to buy ahead of the new rush of U.S. and Japanese earnings reports from major companies. South Korea’s Kospi abandoned record-high levels reached on Friday to close down 0.7% on profit taking in major financial and tech stocks. China Shanghai Composite sharply rose to 1.4% on investor fund flows into heavyweight stocks. Taiwan Weighted index closed at a two-year high of 0.7% on strong tourism and construction shares, boosted by expectations of improved trade relations with China.