U.S. Personal Income Rises 0.5%; Microsoft Profit Soars 31%

Arthi Gupta
29 Apr, 2011
New York City

U.S. indexes traded sideways after personal income rose 0.5% and pending home sales rose more than estimated in March. France-based Total SA acquired 60% stake in SunPower. Caterpillar, D.R. Horton, Merck quarterly earnings surge.

[R]9:00 AM New York – U.S. indexes traded sideways after personal income rose 0.5% and pending home sales rose more than estimated in March. France-based Total SA acquired 60% stake in SunPower. Caterpillar, D.R. Horton, Merck quarterly earnings surge.[/R]

The U.S. indexes trending higher in the pre-market trading as the dollar traded lower for the fifth day in a row and commodities and precious metal prices edge higher.

The European indexes traded mixed after weaker-than-anticipated economic data. Euro-zone inflation accelerated for a fifth consecutive month in April and German retail sales dropped unexpectedly in March.

Spain, suffering from one of the worst housing market on the continent reported unemployment hovered at 21.3% in the first quarter.

Asian markets declined on worries that China may further tighten its monetary policy.

China''s manufacturing sector expanded at a steady pace in April, final data from Markit Economics showed today, confirming the flash estimate. The final purchasing managers'' index was at 51.8 in April, unchanged from March.

U.S. Personal Income Rises

Personal income increased by $67 billion, or 0.5% in March, following an upwardly revised 0.4% increase in February, according to figures released by the U.S. Department of Commerce today.

Personal consumer expenditures increased by $60.7 billion, a 0.6% increase in March.

U.S. Pending Home Sales Rise

Pending home sales in the U.S. increased for the second consecutive month in March, according to a report released by the National Association of Realtors on Thursday.

NAR said its pending home sales index rose 5.1% in March following a downwardly revised 0.7% increase in February.

Total Group Acquires Stake in SunPower

SunPower Corp., the solar power products company agreed to sell a controlling stake of up to 60% to French oil company Total SA in a friendly tender offer at $23.25 per share or about $1.38 billion, which values SunPower equity at about $2.3 billion.

Earnings Review

Caterpillar Inc. ((CAT)), the maker of earth-moving equipment reported first quarter sales and revenues surged 57% to $12.949 billion from $8.238 billion in the first quarter of 2010. Net profit in the quarter soared 426% to $1.225 billion or $1.84 per diluted share compared to net profit of $233 million or 36 cents per share in the prior-year quarter.

D.R. Horton, Inc. ((DHI)), the homebuilding company said second quarter revenue fell 18.3% to $733.1 million compared with $896.8 million in the same quarter of fiscal 2010. Net income in the quarter surged 144% to $27.8 million or 9 cents per diluted share compared to net income of $11.4 million or 4 cents per share last year.

Merck & Co., Inc. ((MRK)), the global health care company stated first quarter sales grew 1.4% to $11.58 billion from last year''s $11.42 billion. Net income in the quarter soared 248% to $1.04 billion or 34 cents per diluted share compared to net income of $299 million or 9 cents per share last year.

Microsoft Corporation ((MSFT)) said third quarter profit revenue rose 13% to $16.43 billion from $14.50 billion in the same quarter last year, driven by strong growth at its entertainment and devices division. Net income in the quarter increased 31% to $5.2 billion or 61 cents per diluted share compared to net income of $4 billion or 45 cents per share for the year-ago quarter.

Research In Motion Ltd. ((RIMM)), Canada based wireless device maker estimates earnings of $1.30 to $1.37 per share for the first quarter of fiscal year 2012, down from its previous expectation of $1.47 to $1.55 per share.

Samsung Electronics Co., Ltd., the South Korean conglomerate reported first quarter total sales increased 7% to 36.99 trillion won from last year''s 34.64 trillion won. Net profit in the quarter declined 30% to 2.78 trillion won from 3.99 trillion won in the prior-year quarter.