U.S. GDP Growth Lowered; Tiffany Net Rises 33%

Arthi Gupta
26 Aug, 2011
New York City

U.S. indexes traded sideways after economic growth estimate was lowered to 1% and consumer sentiment dropped to the level last seen in November 2008. BHP Billiton completed acquisition of Petrohawk Energy. Tiffany quarterly net soared 33% on revenues rise of 30%.

[R]9:35 AM New York – U.S. indexes traded sideways after economic growth estimate was lowered to 1% and consumer sentiment dropped to the level last seen in November 2008. BHP Billiton completed acquisition of Petrohawk Energy. Tiffany quarterly net soared 33% on revenues rise of 30%.[/R]

U.S. stocks wavered after the gross domestic product was revised lower in the second quarter and the consumer confidence index was near the lows last seen in May 1980.

The second quarter GDP was estimated in the second estimate at 1% increase compared to the previous read of 1.3%. The final estimate on the economic growth will be available in a month.

The U.S. economy is on the brink of recession as consumer confidence declined and retail inflation stays ahead of market expectations. Many segments of the economy have not recovered since 2008 and continue to languish for more than ten quarters in a row.

The Thomson Reuters/University of Michigan’ consumer sentiment in August was 55.7 from 63.7 in July and was near the lows in April and May 1980 and in November 2008.

Stocks in Europe were on the defensive after German sovereign debt rating was reaffirmed by three rating agencies. The market index melted down more than 4% in fifteen minutes in Frankfurt on Thursday after rumours that the country’s rating may be lowered.

The number of jobseekers registered at employment offices in France at the end of July was 2.76 million, the highest since February 2000.

Asian markets traded mixed after Japan’s current Prime Minister, Naoto Kan, confirmed his resignation as leader of the Democratic Party of Japan. A new leader to succeed Kan will be elected on Monday.

U.S. GDP Growth Revised Down

U.S. economic growth in the second quarter of 2011 was slower than initially reported, according to data released by the U.S. Commerce Department today.

Gross domestic product increased at an annual rate of 1% in the second quarter, revised down from an initial estimate of 1.3%.

The downward revision to GDP growth reflected lower levels of inventory investments and exports.

Bloomberg to Acquire BNA

Bloomberg L.P., the news and financial information provider agreed to acquire The Bureau of National Affairs, Inc., the legal and regulatory research company for $39.50 per share in a cash tender offer that values the company at $990 million.

BHP Billiton Completes Petrohawk Acquisition

BHP Billiton completed its acquisition of Petrohawk Energy Corporation through a short-form merger under Delaware law of its wholly owned subsidiary with and into Petrohawk, with Petrohawk being the surviving corporation as a wholly owned subsidiary of BHP Billiton.

Last month, BHP Billiton agreed to buy Petrohawk Energy Corp. for $38.75 a share in cash with a total enterprise value of about $15.1 billion, including the assumption of net debt.

The merger was the final step of the acquisition process and follows the previously announced completion of the tender offer by BHP Billiton to acquire all outstanding shares of common stock of Petrohawk.

Softbank to Repay Citibank Loan

Softbank Corp., the Japanese telecommunications and media corporation said it will deliver Yahoo! Inc. shares to Citibank, N.A. to repay a $1.135 billion loan it took from the U.S. lender.

Following the settlement, Softbank''s ownership in Yahoo will be reduced to 0.002% from the current holding of approximately 4%.

Earnings Review

Aruba Networks, Inc. ((ARUN)), the networking equipment maker reported fourth quarter revenue surged 47% to $113.8 million from $77.3 million a year ago. Net income in the quarter soared to $68.2 million or 57 cents per diluted share compared to net income of $0.4 million or $0.00 per share in the year-ago period.

OmniVision Technologies, Inc. ((OVTI)), the digital imaging products maker said first quarter sales soared 43% to $276.0 million, from $193.0 million reported last year. Net earnings in the quarter gained 147% to $42.0 million or 68 cents per diluted share compared to net earnings of $17.0 million or 30 cents per share last year.

Pandora Media, Inc. ((P)), the Internet based radio service provider stated second quarter revenues soared 117% to $67 million from $30.8 million in the year-ago quarter. Net loss in the quarter widened 700% to $3.2 million compared to a net loss of $0.4 million in the year-ago period.

Tiffany & Co. ((TIF)), the jewelry retailer reported second quarter net sales soared 30% to $872.71 million from $668.76 million in the prior year on comparable store sales rise of 28%. Net earnings in the quarter increased 33% to $90.04 million or 69 cents per diluted share compared to net earnings of $67.68 million or 53 cents per share last year.