U.S. Durable Orders Rise 4%; Toll Brothers Net Surges 54%

Arthi Gupta
24 Aug, 2011
New York City

U.S. indexes rose after durable goods orders improved more than anticipated in July but mortgage activity dropped 2.4%. Par Pharmaceutical agreed to acquire Anchen Pharmaceuticals for $410 million. American Eagle and Toll Brothers quarterly net soared.

[R]9:35 AM New York – U.S. indexes rose after durable goods orders improved more than anticipated in July but mortgage activity dropped 2.4%. Par Pharmaceutical agreed to acquire Anchen Pharmaceuticals for $410 million. American Eagle and Toll Brothers quarterly net soared.[/R]

U.S. indexes traded higher after better-than-estimated durable goods orders.

European indexes gained but German business sentiment deteriorated in August. German business sentiment declined 4.2 points to 108.7 in August from 112.9 in July. However, new industrial orders in the euro zone declined 0.7% on a monthly basis in June after a 3.6% increase in May.

The Danish Prime Minister Lars Lokke Rasmussen unveiled a stimulus package worth DKK 10.8 billion or $2.1 billion that will boost economic activity in 2012 and 2013 by about 0.3%.

Germany''s Finance Minister Wolfgang Schaeuble prepared a draft contract for the euro-zone rescue fund where the German Parliament would have no direct control on the functioning of the fund, German daily Handelsblatt reported on Wednesday.

Asian markets declined after Moody''s Investors Service downgraded Japan''s sovereign rating by one notch to ""Aa3"" from ""Aa2"", citing ""weak"" economic prospects but the outlook is stable.

Separately, Japan’s finance minister Yoshihiko Noda announced the setting up of a $100 billion facility to help domestic firms pursuing overseas acquisitions and purchasing energy resources.

U.S. Durable Goods Orders Improve

New orders for U.S. manufactured durable goods increased 4% or $7.7 billion to $201.5 billion in July, according to data released by the U.S. Commerce Department today.

Orders excluding transportation increased 0.7% and defense rose 4.8%.

U.S. Mortgage Activity Drops

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity in the U.S. fell 2.4% in the week ended August 19.

Loan applications for home purchases declined 5.7% and the refinancing index eased 1.7%.

Fixed 30-year mortgage rates rose to 4.39% from 4.32% the week before.

Par Pharmaceutical to Acquire Anchen Pharmaceuticals

Par Pharmaceutical Companies, Inc. agreed to acquire Anchen Pharmaceuticals, a privately-held specialty pharmaceutical company focused on developing and commercializing extended release and niche generic products, for $410 million in cash.

Earnings Review

American Eagle Outfitters, Inc. ((AEO)), the apparel and accessories retailer said second quarter total sales increased 4% to $675.7 million from $651.5 million last year. Net income in the quarter soared 104% to $19.67 million or 10 cents per diluted share compared to net income of $9.66 million or 5 cents per share a year ago.

Aspen Technology, Inc. ((AZPN)), the process optimization software provider reported fourth quarter revenues soared 38% to $52.6 million from $38.2 million in the year-ago quarter. Net income in the quarter was $41.7 million or 43 cents per diluted share compared to a net loss of $34.0 million or 37 cents per share in the year-ago period.

Globe Specialty Metals, Inc. ((GSM)), the silicon metal and silicon-based alloy producer reported fourth quarter net sales grew 20% to $175.93 million from $146.44 million in the same period last year. Net income in the quarter surged 135% to $15.55 million or 20 cents per diluted share compared to net income of $6.61 million or 9 cents per share in the year-ago quarter.

Shanda Games Limited ((GAME)), the Chinese online games provider reported second quarter net revenues advanced 19% to 1.32 billion renminbi from 1.11 billion renminbi in the second quarter last year. Net income in the quarter improved 0.3% to 305.2 million renminbi or 0.54 renminbi per share from 304.3 million renminbi or 0.53 renminbi per share in the second quarter last year.

Toll Brothers, Inc. ((TOL)), the luxury home-builder reported third quarter revenues declined 13% to $394.31 million from $454.2 million in the same quarter last year. Net income in the quarter surged 54% to $42.11 million or 25 cents per diluted share compared to net income of $27.3 million or 16 cents per share in the previous year.