U.S. Durable Goods Orders Up 1.9%; Q1 GDP Revised Higher

Arthi Gupta
24 Jun, 2011
New York City

U.S. indexes edged higher after first quarter GDP estimate was revised higher and durable goods orders rose more than estimated in May. Williams proposed to acquire Southern Union for $8.7 billion. Oracle net rose 36% on strong sales.

[R]10:10 AM New York – U.S. indexes edged higher after first quarter GDP estimate was revised higher and durable goods orders rose more than estimated in May. Williams proposed to acquire Southern Union for $8.7 billion. Oracle net rose 36% on strong sales.[/R]

World markets cautiously advanced after the European Union leaders pledged more financial aid to Greece on condition that the Greek parliament passes an austerity plan in the next two weeks.

U.S. GDP Growth Revised Higher

The U.S. gross domestic product for the first quarter of 2011 was upwardly revised slightly, according to data released by the U.S. Commerce Department.

The U.S. economic growth was revised higher to 1.9% in the first quarter from the 1.8% growth in the previous estimate last month but slower than the 3.1% growth recorded for the fourth quarter of 2010.

The increase was driven smaller than estimated increase in trade deficit and higher than estimated inventories. The consumer spending rose at the same pace as previously estimated.

The Fed lowered its annual economic growth outlook for the second time down to an increase between 2.7% and 2.9% from the previous estimate of increase between 3.1% and 3.3%.

U.S. Durable Goods Orders Climb

New orders for U.S. durable goods recovered in May, according to data released by the U.S. Commerce Department today.

Durable goods orders rose by $3.6 billion or 1.9% to $195.6 billion in May, from the 2.7% decline in April. Orders excluding transportation increased 0.6% and defense rose 1.9%.

Williams Proposes to Acquire Southern Union

Williams Companies Inc., the integrated natural gas company producer proposed to acquire all of the outstanding shares of Southern Union Company for $39 a share in cash, for a total enterprise value of $8.7 billion.

The enterprise value also includes approximately $3.7 billion of existing Southern Union debt.

Earnings Review

H&R Block, Inc. ((HRB)), the tax consulting service provider said fourth quarter revenues declined 0.4% to $2.33 billion from $2.34 billion in the same quarter last year. Net income in the quarter fell 4.7% to $658.6 million or $2.14 per diluted share compared to net income of $690.8 million or $2.10 per share in the prior-year quarter.

Micron Technology, Inc. ((MU)), the memory chip maker said third quarter net sales fell 6.6% to $2.14 billion from $2.29 billion in the same quarter last year. Net income in the quarter plunged 92% to $75 million or 7 cents per diluted share compared to net income of $939 million or 92 cents per share for the year-ago quarter.

Oracle Corporation ((ORCL)), the business software and database developer said fourth quarter revenues rose 13% to $10.78 billion from $9.51 billion a year ago. Net income in the quarter surged 36% to $3.2 billion or 62 cents per diluted share compared to net income of $2.4 billion or 46 cents per share for the year-ago quarter

The Finish Line, Inc. ((FINL)), the mall-based specialty retailers said first quarter net sales increased 6% to $299.5 million from $282.4 million a year ago. Net income in the quarter rose 20% to $16.4 million or 30 cents per diluted share compared to net income of $13.7 million or 25 cents per share in the year-ago quarter.