Verizon up on Earnings

Elena
02 May, 2006
New York City

Verizon reported Q1 earnings of $1.6 billion or 56 cents a share compared to $1.8 billion or 63 cents per share last year on 25% revenue growth. Excluding special items, the company earned 60 cents per share, a penny above analyst estimates. Pinnacle Entertainment swung to profit in Q1, reporting 28 cents a share, up from a loss of 6 cents a share due to 70% revenue jump. Quarterly results exceeded analyst estimates. Hovnanian Enterprises fell 6% on lowered Q2 and 2006 profit outlook.

[R]9:00 AM Stock futures indicated a positive market opening.[/R]
U.S. stock futures indicated a positive market opening as robust quarterly earnings offset worries about interest rate increases. Fears about further interest-rate hikes were reignited on Monday, following Fed Reserve Chairman Ben Bernanke’s claim that he had been misinterpreted about the outlook for interest rates. As a result, stock markets turned to sell-off of rate-sensitive financial and utility stocks. On Tuesday stronger-than-expected earnings reports from companies, including insurer St. Paul Travelers Cos. ((STA)) and Sirius Satellite Radio Inc. ((SIRI)) counteracted concerns about rising interest rates. St Paul Travelers posted better than expected Q1 earnings growth and raised its 2006 outlook, while Sirius rose 5.8% as the company posted a narrower-than-expected quarterly loss. Shares of Verizon Communications ((VZ)), one of the world''s largest telephone companies, rose nearly 1% on the Inet electronic brokerage after the company posted earnings slightly above estimates, excluding items. However, shares of Hovnanian Enterprises ((HOV)) fell in pre-market trading after the homebuilder lowered its Q2 and 2006 earnings guidance. Standard & Poor''s 500 futures were up 4.9 points, above fair value. Dow Jones industrial average futures were up 35 points, and Nasdaq 100 futures were up 7 points.

Crude oil prices jumped above $74 on fears that the international pressure on Iran may lead to disruptions in the global oil exports. Light sweet crude June delivery gained 35 cents to $74.05 a barrel. Heating oil added almost a cent to $2.0670 a gallon, while gasoline was marginally up to $2.1560. Natural gas futures rose 10 cents to $6.798 per 1,000 cubic feet. London Brent rose 36 cents to $74.25. European gold futures surged to 25-year highs. In London the precious metal rose to $657.70 per troy ounce, up from $644. The U.S. dollar traded mixed in European trading. The euro traded at $1.2620, up from $1.2583. The dollar bought 113.59, up from 113.32 yen. The British pound was quoted at $1.8340, up from $1.8252.

Genesee & Wyoming Inc., ((GWR)), railroad operator, reported Q1 net income advanced to 33 cents a share, up from 26 cents a share in the year-earlier period. Sales advanced 34% in Q1 to $112.9 million from $84.1 million.

Pinnacle Entertainment, ((PNK)), casino operator, reported Q1 earnings of 28 cents a share, swinging from a loss of 6 cents a share a year-ago. The company added that Q1 includes pre-opening and development costs, an impairment charge related to its Biloxi property and $1.4 million in non-cash charges from stock option expensing. On an adjusted basis, the company gained 39 cents a share in Q1 up from a profit of 7 cents a share a year-earlier. Revenue soared nearly 70% in Q1. The company topped analysts’ estimates for a profit of 24 cents a share. The company attributed the higher revenue to the performance of its L'Auberge du Lac property, which opening in May of last year, and continued strong results at its Boomtown New Orleans property.

Charter Communications Inc, ((CHTR)), cable TV firm, reported that its Q1 net loss grew to $1.45 a share, from $1.16 a share in the year-earlier period despite 8% revenue increase. Adjusted earings were flat at $471 million. The firm cited greater operating expenses associated with higher customer counts, investments in customer service enhancements, increased marketing spending, and annual programming rate increases. The company missed analysts’ forecasts for a loss of 83 cents a share.

Noble Energy, ((NBL)), oil and gas company, reported Q1 earnings of $1.26 a share, up from 92 cents a share in the year-ago period on revenue growth, following 77% sales volume increase to 186,453 barrels of oil equivalent per day. The company topped analysts’ forecasts for earnings of $1.17 a share.

Hearst-Argyle Television Inc, ((HTV)), owner of television stations, reported Q1 net income of 14 cents a share, unchanged from the year-earlier period. The company announced that current earnings include a one cent charge for stock-option expensing. Revenue advanced 7% on a rise in advertising sales, cable retransmission revenue and digital media revenue, which was partially offset by a fall in network compensation. The company missed analyst estimate by a penny.

Steve Madden Ltd, ((SHOO)), footwear company, reported that Q1 income advanced to 74 cents a share, from 7 cents, a year earlier on sales growth, beating analysts’ forecasts for earnings of 52 cents a share.

Verizon Communications, ((VZ)), communications company, reported Q1 earnings of 56 cents a share, down from a profit of 63 cents a share a year-ago. If not for the influence of certain items, such as employee relocation and merger costs, the early extinguishment of debt and an accounting change, the company reported adjusted earnings of 60 cents a share in Q1. Revenue advanced 25.1% in Q1. The company missed analysts views for a profit of 59 cents a share. The company added its Verizon Wireless operations put on 1.7 million net new customers in the first quarter, bringing its total to 53 million customers nationwide, a 16.7% increase from a year earlier.

Arch Chemicals Inc., ((ARJ)), specialty chemicals manufacturer, reported net income advanced to 24 cents a share, up from 15 cents a share a year ago. Earnings from continuing operations totaled at 25 cents a share on the company’s plan to improve profit margins at its HTH water products business. The company beat analyst estimate for earnings of 14 cents a share. Arch Chemicals added it anticipates Q2 earnings from continuing operations in the range of $1.20 to $1.30 a share.


[R]8:15AM European markets advanced at mid-day on resource stocks.[/R]
European markets resumed trading Tuesday after the long holiday weekend, posting gains on strong resource stocks and corporate news. Commodities, oil and gas stocks advanced with BP and Xstrata standing out among gainers. However, Spain’s Repsol declined 2.1% after Bolivia nationalized its natural gas sector. Oil prices hovered over $74 a barrel, while gold futures traded about $657 per ounce. In corporate news, Credit Suisse Group rose 2.2% after reporting Q1 net income growth of 36%. French Lafarge gained 1.7% on 28% sales increase in the first quarter. Telecoms group Alcatel and beer company Heineken gained on brokerage upgrade, rising 0.8% and 2.4% respectively. The German DAX 30 added 0.4%, the French CAC 40 rose 0.6%, and London FTSE 100 climbed 0.7%.


[R]7:30AM Strong Nikkei boosts Asian markets.[/R]
In Japan the Nikkei 225 advanced 228.06 points, or 1.4%, to 17153.77 on Bridgestone’s results and gains in commodity issues, led by oil and metal prices in the U.S. South Korean Kospi ended up 1.1%, or 15.17 points up, at 1434.90 on robust earnings news and optimistic outlooks despite Hyundai Motors displayed weakness. Hong Kong’s blue-chip Hang Seng closed also higher 206.74 points, or 1.24%, to 16868.04, after fears about interest rates alleviated. In automotive stocks, Bridgestone soared 4.9% as the tire maker profits advanced despite higher raw material costs. Other gainers were Mitsui & Co ending 1.7% up on strong mining and energy stocks, as well as Nippon Oil, gaining 1.2%, Sumimoto Metal Mining, producer of gold by volume, which put up 2.3% on gold prices. The dollar was trading at 113.82 yen late Tuesday in Tokyo, up 0.49 yen against Monday levels in New York.