GM Narrows Loss

Elena
20 Apr, 2006
New York City

General Motors reported sixth consecutive quarterly loss. The automaker postedQ1 netloss of $323 million, or 57 cents a share, narrower than a loss of $1.3 billion, or $2.22 a share a year-ago. Q1 included a $1.20 a share charge for a healthcare settlement for its retired workers.

[R]9:00 AM Stock futures indicated a positive opening.[/R]
Stock futures pointed to a higher start, lifted by quarterly reports from a number of big companies. Shares of Apple ((AAPL)) gained in pre-market trading on better-than-expected Q2 earnings, citing strong sales of its iPod players. Apple reported earnings for the quarter of 47 cents per share on $4.36 billion in revenue vs. expectations of 43 cents per share on $4.52 billion in revenue. Nokia ((NOK)) also moved higher after reporting strong Q1 profit and sales growth. The company also said that it increased its device market share to 35%. Shares of Intel ((INTC)) also moved higher, despite reporting lower Q1 earnings and forecast Q2 and full year sales below analyst estimates. General Motors ((GM)) gained after the company reported narrower profit loss for the Q1. Other companies which released earnings were eBay ((EBAY)), Continental Airlines ((CAL)), Merck ((MRK)), Bank of America ((BAC)), and UPS ((UPS)).

Crude oil prices jumped over $72 on petroleum report which showed declining crude and gasoline stocks. Light sweet crude May delivery climbed to $72.49 a barrel. London Brent hit a record high of $74.22. European gold extended gains over $600 on strong energy market and geopolitical worries. In London gold climbed to $644.50 per troy ounce from $627.20. In Zurich the precious metal rose to $642.53 from $627.35. In Hong Kong gold surged $21.40 to close at $645.40. Silver fell to $14.30 from $14.40. The U.S. dollar traded higher vs. major currencies. The euro traded at $1.2349, down from $1.2380. The dollar bought 117.55 yen, up from 117.28. The British pound was quoted at $1.7831,down from $1.7915.

General Motors, ((GM)), automaker, reported a Q1 loss of 57 cents a share, up from loss of $2.22 a share a year-ago. Q1 included a $1.20 a share charge for a healthcare settlement for its retired workers. GM added that special items came to an increase of 37 cents a share, including its sale of stake in Suzuki. The company said its adjusted loss, including the health care charge but excluding the special items, totaled 94 cents a share. The company didn’t meet analysts’ forecasts for a GM loss of 44 cents a share. GM announced that sales advanced 14.1% to $52.2 billion.

Textron Inc, ((TXT)), provider of products and services in industry, reported Q1 net income advanced 33% to$1.26 a share, from 91 cents in the year-ago period on 16% revenue growth. Earnings from continuing operations almost doubled to $1.19 a share against 61 cents. The company topped analysts’ views for earnings of $1.06. Revenue grew to $2.63 billion from $2.27 billion.

Bank of America Corp., ((BAC)), banking services company, reported that its net income grew 14% to $4.99 billion from $4.39 billion a year ago. Earnings per share remained unchanged from the same period last year at $1.07. Q1 results include 5 cents a share in expenses for a new rule for options accounting. The company beat analysts’ expectations for the company to earn $1 a share, including the options expensing cost.

Marriott International Inc, ((MAR)), hotel operator, reported that Q1 net income dropped 55% to 29 cents a share, in the wake of a one-off after tax charge of $105 million resulting from the adoption of new accounting rules. Adjusted net income advanced 31% to 76 cents a share, topping on that basis analyst estimate of 72 cents a share. Total revenue for Q1 advanced 7% to $2.71 billion. The company added that hotel industry supply in North America is growing modestly, but it is taking a greater share of new hotels being developed internationally.

Schering-Plough Corp, ((SGP)), pharmaceutical producer, reported that Q1 earnings tripled to 24 cents a share, from 7 cents a share in the year-ago period on 7.7% higher sales. Q1 figure includes 2 cents for costs of stock-based compensation. The company topped analysts’ estimate of 14 cents for Q1.

Nokia Corp, ((NOK)), maker of mobile phones, reported Q1 net profit advanced 21% to 0.25 euros a share from a year ago owing to 29% sales growth. Mobile phone sales grew 30% to 5.87 billion euros while enterprise solutions sales dropped 39%. Operating margin dropped to 14.4% from 15.1% a year ago. Nokia''s device market share advanced by 3 percentage points to 35%.

Orbital Sciences Corp., ((ORB)), commercial and military rocket manufacturer, reported Q1 net income advanced 43% to 14 cents a share on 15% revenue growth, beating analysts forecasts for earnings of 12 cents a share.

Danaher Corp, ((DHR)), manufacturer of industrial tools, reported Q1 net income of 67 cents a share, up from 58 cents in the year-ago period. Adjusted profit for Q1 came at 66 cents a share, up about 20%, while sales totaled $2.14 billion, up 17.5% from $1.83 billion in the prior year quarter, including growth from existing businesses of 7.5%. The company beat analysts’ estimates for earnings of 65 cents a share.

Barnes Group, ((B)), maker of precision metal components, reported Q1 net income advanced 61% to 73 cents a share on 9.5% revenue growth. The company now envisages 2006 earnings between $2.55 and $2.65 a share, up by a nickel.


[R]8:15AM European average advanced at mid-day.[/R]
European markets posted gains at mid-day, reflecting strong earnings results from mobile giant Nokia and positive news from the French companies like Vivendi Universal and Groupe Danone. Technology stocks were leading gainers as Nokia rose 6% on net profit jump of 21% and 29% sales growth. Semiconductor stocks like Infineon and STMicroelectronics provided support. The French CAC 40 led advancers, rising 0.7%, followed by the German DAX 30, up 0.4%, and London’s FTSE, up 0.2%.


[R]7:45AM Asian markets closed mixed.[/R]
Asian-Pacific benchmarks closed mixed with the Nikkei reversing from yesterday’s advance to finish down 0.2% to 17,317.53. The Japanese index was dragged down by new record-high oil prices which hurt energy-sensitive stocks like Oji Paper which dropped 2%. Banking stocks also stood out among losers, ending a winning streak earlier in the week with Mizuho Financial Group falling 1.3%. In addition, economic data showing that trade surplus fell for the first time in four years further weighed. However, strong commodities stocks helped limit losses with Nippon Mining Holdings fell 1.35. Across the region, South Korea’s Kospi dropped 0.4%, Singapore Straits Times lost 0.3$, while Hong Kong’s Hang Seng added 0.1% on metals stocks.