Time Warner Net up 60%

Elena
03 May, 2006
New York City

Stocks opened flat on surging oil and gold prices which offset the positive sentiment generated by strong earnings from Time Warner and Procter & Gamble. Time Warner posted 60% quarterly profit rise, lifted by growth in its cable television business and from the sale of its book group.

[R] 9:45AM Stocks opened flat on surging oil and gold[/R]
Stocks opened near the flat line, reflecting surging oil and gold prices as well as disappointing earnings from software maker Adobe which offset a higher forecast from wireless technology company Qualcomm Inc. ((QCOM)) and upbeat quarterly news from Time Warner ((TWX)) and Procter & Gamble ((P&G)). Time Warner's quarterly profit surged 60%, lifted by growth in its cable television business and from the sale of its book group.

The tech-heavy Nasdaq posted a modest gain, benefiting from early strength in the disk drive sector, with Advanced Digital Information ((ADIC)) rising notably higher. After the close of trading on Tuesday, Advanced Digital said it agreed to be acquired by Quantum ((DSS)) for about $770 million. Cognizant Technology ((CTSH)) provided support, climbing 12% on stronger-than-expected Q1 earnings and lifted full-year outlook. Meanwhile, health insurance stocks came under pressure in early trading, with Cigna ((CI)) helping to lead the sector lower, posting a decline of nearly 11% after the company reported lower Q1 earnings and provided disappointing guidance. Among other stocks, Blue Nile ((NILE)) rose 8%, despite 10% profit drop in Q1 which came above estimates. In the first hour of trading, the Dow Jones industrial average fell 26.50, or 0.23%. The Standard & Poor's 500 index was down 2.98, or 0.23 percent, at 1,310.23, and the Nasdaq composite index dropped 1.81, or 0.08%. Bonds drifted lower, with the yield on the 10-year Treasury note edging up to 5.13% from 5.11% late Tuesday.


[R]9:00 AM Stock futures indicated a positive market opening.[/R]
U.S. stock futures pointed to a lower market opening, following Tuesday stock rise on upbeat earnings reports and moderation in treasury yields. Pre-market sentiment was largely hurt by lower-than-than-anticipated profit outlook from software maker Adobe ((ADBE)) and surging oil prices toward $75 a barrel.

After closing bell Adobe shares fell 7% on company’s warning that its Q2 profit and revenue would fall at the low end of a previous forecast due to weakness in Europe and North America. Growing tension over Iran’s nuclear program added to supply worries, sending crude oil prices higher. In earnings news, Time Warner Inc. ((TWX)) said quarterly profit rose on strong growth in cable television and high-speed Internet subscribers. Strong earnings were also released by consumer products company Procter & Gamble ((PG)). On the economic news front, the Commerce Department is scheduled to release March factory orders at 10 a.m. with economist expecting median rise of 3.5%. Investors will also focus on U.S. oil inventories report, expected to show a drop in crude and gasoline stockpiles. Standard & Poor''s 500 futures were down 2.9 points, below fair value. Dow Jones industrial average futures were down 23 points, and Nasdaq 100 futures were down 2.75 points.

Crude oil prices neared $75 on expectations of weak oil and gas stocks as well as fears that the international pressure on Iran may lead to disruptions in the global oil exports. Light sweet crude June delivery gained 14 cents to $74.75 a barrel. Heating oil added 1.5 cents to $2.0825 a gallon, while gasoline was marginally up to $2.0825. Natural gas futures were steady at $6.741 per 1,000 cubic feet. London Brent rose 10 cents to $74.74. European gold futures surged to a new 25-year high, boosted by weaker dollar, surging oil, and tensions over Iran’s nuclear program. In London the precious metal rose to $675.25 per troy ounce, up from $663.60. In Zurich gold rose to $674.35 from $665.25. In Hong Kong gold surged $18.70 to $676.50. Silver opened at $14.40, up from $14.10. The U.S. dollar traded mixed in European trading. The euro traded at $1.2635, up from $1.2630. The dollar bought 113.30, up from 113.11 yen. The British pound was quoted at $1.8383, up from $1.8419.


Clear Channel Communications, ((CCU)), broadcasting and advertising company, reported Q1 profit advanced to 19 cents a share, from 9 cents a share. If not for gains, the company earned 14 cents a share, up from 12 cents a share on revenue growth, beating analyst estimate for earnings of 13 cents a share. Clear Channel announced that it is optimistic about its outlook for the rest of the year.

Aquila Inc., ((ILA)), electric and natural gas transmission company, reported a Q1 loss of $1.1 million, breakeven on a per share basis, vs. earnings of $700,000, or 2 cents a share in the year-ago period despite revenue growth. Natural-gas operations sales rose to $263 million from $231.5 million.

Panera Bread Co, ((PNRA)), food company, reported that system-wide sales at bakeries rose 2.8% for April period. Company-owned same-bakery sales advanced 3.1%, while franchise-operated sales increased 2.7%. Panera added that the shift of the Easter holiday into April damaged same-bakery sales in the period by 1.5% to 2%, as normal operating hours are reduced on Easter.

Cincinnati Financial Corp, ((CINF)), insurance company, reported Q1 net income quadrupled to $3.13 a share, from 81 cents a share in the year-earlier period. Operating income dropped to 74 cents a share from 78 cents a share in the year-earlier period, while revenue advanced 75% on strong property casualty insurance underwriting performance and higher investment income. The company beat analysts’ forecast for earnings of 67 cents a share.

Dominion Resources, (d)), energy producer, reported Q1 earnings of $1.53 a share, up from a profit of $1.25 a share a year-ago. On an operating basis, aside from certain charges, the company earned $1.63 a share, up from a year-ago equivalent profit of $1.44 a share. Revenue advanced to $4.96 billion from $4.74 billion in the same period a year ago. The company topped analyst estimate for a profit of $1.49 a share. The Dominion added that the latest results beat its internal expectations owing to higher than expected oil production in the Gulf of Mexico. Dominion affirmed its outlook for operating earnings of $5.05 to $5.25 a share for the full year.

Sinclair Broadcasting Group, ((SBGI)), TV broadcaster, reported Q1 earnings of 13 cents a share, up from earnings of 10 cents a share in the year-ago period. If not for discontinued operations, earnings would have been 10 cents a share. Revenue dropped to $163.5 million from $163.9 million last year, as a rise in net station broadcast revenue offset declines in revenue realized from station barter arrangements and other operating divisions. The company guides Q2 net broadcast revenue to be flat to up 2% from year-ago levels.

Cognizant Technology Solutions, ((CTSH)), information technology services provider, reported better than expected Q1 results and lifted its guidance. The company reported earnings of 32 cents a share, up from a profit of 22 cents a share a year-earlier. On a non-GAAP basis, excluding stock option expensing, the company reported a profit of 36 cents a share in Q1. Revenue soared in Q1 to $285.5 million from $181.7 million in the same period a year ago. The company beat analysts’ estimate for a profit of 29 cents a share. The company added it saw escalating demand for its integrated services in the quarter. Cognizant expects non-GAAP earnings of 36 cents a share for Q2 on revenue of at least $317 million. For the full year, the company expects non-GAAP earnings of $1.52 a share on revenue of at least $1.3 billion. It expects total headcount to be more than 35,000 by the end of the year.

[R]8:15AM European markets dropped at mid-day on rising oil.[/R]
European markets moved lower at mid-day, reversing from early gains fueled by commodities and mining stocks. Stocks declined on continuously rising oil prices leading auto stocks down. Some weakness shown by drug maker GlaxoSmithKline and telecom company Vodafone also weighed. Deutsche Bank and insurer Allianz declined 0.5% and 0.9% respectively, despite strong quarterly results. However, resource stocks like Rio Tinto traded higher on record-high gold prices of above $678 per ounce. The German DAX 30 dropped 0.6%, the French CAC 40 declined 0.3%, and London FTSE 100 fell 0.6%.


[R][7:30 AM Hong Kong and Singapore Lead Markets up.[/R]
Asian markets finished higher. South Korea’s Kospi advanced 1.2% to 1451.53 at midday on strong banking news from Kookmin Bank, which hit an all-time high before ending the day 0.8% lower. Kospi finished flat at 1435.17. Hyundai ended 1.23% lower despite 2.5% sales growth. Hong Kong’s Hang Seng closed higher. Hong Kong-listed China shares finished up 1.32% to 7,100.88. HSBC Holdings advanced as much as 1.3%, after hitting record highs earlier in the session. China Unicom rose 5.6% to a two-year high. Blue-chip property developer Sino Land advanced 4.9%. In Taiwan, shares finished at a new five-and-a-half-year high following the rise of food, paper, cement and construction shares. Australia''s All Ordinaries index also closed flat, edging 0.02% down to 5,221.6, after the central bank announced its was raising interest rates 25 basis points to 5.75%. Crude oil for June delivery advanced 30 cents to $74.91 a barrel in Asian trading. Hong Kong blue-chip Hang Lung Properties rose 2%, China’s PetroChina, the country’s biggest petroleum company advanced 2.3% on energy prices. The yen advanced slightly against the dollar to 113.47 yen vs. dollar, up from 113.26 yen vs. dollar on Tuesday.