Coach Buyback and Fluor, Chipotle Earnings

123jump.com Staff
09 May, 2006
New York City

US averages see little change early in the afternoon with DOW and S&P having modest gains and NASDAQ down only slightly. Prices light crude oil rose $1.63 to $71.40 from $69.77 on Monday. Oil prices are still short of the record highs seen in April of this year when prices reached $75.35 a barrel. Gold climbed over $700 today for the first time since October of 1980, the highest futures level in almost 26 years. Sara Lee Corp reported earnings of 6 cents vs. 24 cents a year ago.

[R]2:15PM Fluor and Chipotle report earnings, Coach announces buy-back.[/R]
Coach ((COH)), a hand bag retailer, reported that the company board has authorized buy-back program of $500 million to be executed by the end of June of 2007. Coach has traded between $24 and $37 in the last one year and recently the stock has lost 20% from the peak.

Fluor ((FLR)) reported after-the-close first quarter net income rose to $1 a share from 56 cents a year ago with revenues for the period increasing 27% to $3.62 billion. The company raised 2006 full-year earnings outlook from $2.80 to $3.10 to $2.90 to $3.20 a share. Flour shares, up 21% since the beginning of the year, rose another 0.4% on Monday closing at $93.75.

Chipotle ((CMG)) reported earnings of 26 cents a share up from 10 cents a share a year ago. Revenue increased 42%. Outlets open at least one year saw sales rise 19.7%. Operating margins rose from 17.1% to 20.2%. General and administrative expenses were lowered to 8.2% vs. 8.4% a year ago.

[R]12:30PM European markets closed higher on telecoms.[/R]
European markets closed in the positive, lifted by gains in the telecommunications and automotive sectors which helped offset weakness among tech stocks. Shares of Vodafone Group rose 3.2% on a report that U.S. Verizon Communications offered to buy out Vodafone''s 45% stake in Verizon Wireless for $38 B. Automakers Renault and Volkswagen rose 3% and 4% respectively, following a brokerage upgrade on General Motors. Tech stocks Infineon Technologies and STMicroelectronics declined after computer giant Dell cut its profit outlook. Merger-and-acquisition deals provided some support with steelmaker Arcelor rising 2.2% on speculations that Mittal will raise its offer.. The German DAX 30 added 0.2%, the French CAC 40 rose 0.6%, and London FTSE 100 climbed 0.6%.

Crude oil prices rose over $1 as a latter from Iran’s leader to President Bush failed to settle the tensions. Light sweet crude June delivery rose $1.13 to $70.90 a barrel. Gasoline gained 2 cents to $2.028 a gallon, while heating oil added 5 cents to $2.006. London Brent climbed $1.09 to $71.30. European gold advanced on weaker dollar and higher oil prices. In London the precious metal rose to $695.50 per troy ounce, up from $677. In Zurich gold gained to $694.40, up from $675.90. Silver closed at $14.20, up from $13.90. The U.S. dollar dropped vs. major currencies in European trading. The euro traded at $1.2766, up from $1.2704. The dollar bought 111.14, down from 111.69 yen. The British pound was quoted at $1.8667, down from $1.8569.


[R]11:30AM Stocks traded mixed ahead of FOMC meeting.[/R]
Stocks traded mixed as markets nervously awaited news on interest rate hikes and the tech sector declined on profit warning from Dell. While the tech-heavy Nasdaq moved below the flat line, the Dow moved to the upside, benefiting from a strong gain by shares of General Motors ((GM)). The auto maker rose 4.2% after the company revised its Q1 loss to a profit due to an accounting change. Shares of GM were also lifted by an upgrade by Deutsche Bank, which raised its rating on the stock to hold from sell. Blue-chip stocks Home Depot ((HD)), McDonald''s ((MCD)), and Alcoa ((AA)) notably advanced, providing further support to the Dow Jones index. At the same time, Hewlett-Packard ((HPQ)) and Intel ((INTC)) posted significant losses, reflecting weakness throughout the technology sector. A sharp rise in the price of gold, up $15.10 to $695, helped gold stocks recover from weakness shown in the two previous sessions, with the Amex Gold Bugs Index currently up 2.2%. Similarly, energy stocks also benefited from an increase in the price of oil to $70.75 a barrel.


[R]10:30AM Sensex finishes above the 12,500 mark to hit yet another high.[/R]
Sensex in India finished up 51.39 points, at 12,513.86, or 0.41% higher. Total turnover on BSE came to 4,907 crore, lifted by the most traded script today ONGC, which saw a block deal of 16.63 lakh shares. The market-breadth was near 1.5:1 as 1,510 stocks advanced, against 1,029 that sank.63 scripts remained unchanged. ONGC led the gainers, moving 4% up to Rs 1,434 on a high volume of lakh shares. Auto tocks also performed strongly due to lower oil prices. Maruti Udyog advanced 2.37% to Rs 962 and Tata Motors jumped 2.33% to Rs 985.60, after a recent Supreme Court decision, favorable to the company. Supreme Court has disallowed overloading of transportation trucks benefiting the Tata Motors truck division. Sales are expected to be higher for the rest of the year. Goetze India surged 20% after an American company Federal Mogul is reported to have bought the entire stake of its majority partner. Goetze close at Rs 300.50.

Tata Steel rose 2.26% to Rs 659.20 on a high trading volume. Among the decliners was Dr Reddy’s which declined 2.16% to Rs 1,646.15. ONGC led the most active stocks in trading value stock with a turnover of Rs 300.67 crore or $63 million, followed by Reliance Industries with Rs 252.90 crore and Tata Motors with turnover of Rs 133.71 crore. Kamdhenu Ispat initial publilc offering listed shares at Rs. 25 and traded as high as Rs. 50 before settling at close to Rs. 45.75 on a heavy trading volume.


[R] 9:45AM Stocks opened flat on weak tech stocks.[/R]
U.S. stocks traded mixed at opening on cautiousness ahead of FOMC meeting Wednesday and weakness in the tech sector. The Dow moved slightly higher, while the Nasdaq moved below the flat line, reflecting weakness among tech stocks brought about by a steep decline in the shares of computer giant Dell. Dell ((DELL)) helped to lead the tech sector lower, as lowered Q1 guidance on price cuts led the computer maker down 6.3%. Following the news, computer hardware and semiconductor stocks moved notably lower. Altera ((ALTR)) fell 4.5%, helping to drag the semiconductor sector on delayed Q1 earnings report. The health care provider sector sharply dropped, led by Sunrise Senior Living ((SRZ)), down more than 20% after it delayed the release of its Q1 earnings. Meanwhile, gold stocks led the sector up 1.5%, benefiting from an increase in the price of the precious metal to $693.20 an ounce. The airline sector was another noteworthy gainer in the early going, climbing by about 1%. Among rising stocks, FMC Technoligies ((FTI)) climbed 9%, Fluor Corp. ((FLR)) rose 10%, Hospira ((HSP)) surged 11%, Morningstar ((MORN)) gained 5%, and Greenhil & Co. ((GHL)) also gained 5%. In the first hour of trading, the Dow Jones industrial average rose 7.20, or 0.06%. The Standard & Poor''s 500 index was down 1.16, or 0.09%, and the Nasdaq composite index slid 7.35, or 0.31%. Bonds slid further ahead of the Fed''s meeting, with the yield on the 10-year Treasury note rising to 5.14% from 5.11% late Monday.


[R]9:00 AM Stock futures indicated a flat market opening.[/R]
U.S. stock futures were sitting near the unchanged mark, pointing to a flat start of Tuesday session ahead of FOMC meeting and interest rate decision on Wednesday. The U.S. central bank is expected to raise its benchmark interest rate by to 5% on Wednesday, but investors will be mainly looking for clues about the future direction of rates. In addition, lowered earnings guidance from Dell generated negative sentiment, threatening to hurt tech stocks. Computer giant Dell ((DELL)) dropped 6.4% before the opening bell as quarterly profit fell short of the company''s forecast. At the same time, analysts at Robert W. Baird & Co. lowered their rating on the company to neutral from outperform. In other corporate news, General Motors Corp. ((GM)) climbed 2.2% before the bell as the automaker revised its Q1 results to show a profit. Sara Lee Corp. ((SLE)), the maker of deli meat, baked goods and household products, posted lower quarterly profit. Cisco Systems Inc. ((CSCO)) and Walt Disney Co. ((DIS)) are due to release their earnings after the market closes. Standard & Poor''s 500 futures were up 0.50 point, slightly below fair value. Dow Jones industrial average futures were up 1 point, and Nasdaq 100 futures were unchanged.

Crude oil prices steadied, following the developments in the international standoff with Iran. Light sweet crude June delivery lost 4 cents to $69.73 a barrel. London Brent added 12 cents to $70.33. European gold advanced on weaker dollar and higher oil prices. In London the precious metal rose to $679.75 per troy ounce, up from $677. In Zurich gold gained to $679.60, up from $675.90. Silver opened at $14.30, up from $13.90. The U.S. dollar was mixed in European trading. The euro traded at $1.2692, down from $1.2704. The dollar bought 111.58, down from 111.69 yen. The British pound was quoted at $1.8550, down from $1.8569.

Hillenbrand Industries Inc, ((HB)), maker of health care equipment, reported Q2 net income advanced to 89 cents a share, from 87 cents a share a year earlier. The company added that adjusted earnings totaled 81 cents a share. Revenue dropped 1%. The company beat analyst views for earnings of 84 cents a share.

Sara Lee Corp, ((SLE)), consumer-goods company, reported that Q3 income dropped to 6 cents a share, from 24 cents, a year earlier. If not for charges and other items, earnings would have been 22 cents a share, while earnings from continuing operations totaled 18 cents a share. Sales dropped to $3.79 billion from $3.84 billion in the same time a year ago. The company missed analysts’ estimates for earnings of 25 cents a share.

US Airways Group Inc, ((LCC)), airline company, reported Q1 earnings of 76 cents a share, up from a loss of $6.58 a share a year-ago. The company added Q1 are being compared to America West''s standalone results due to the merger of the former US Airways Group and America West in late September. If not for the impact of a change in accounting principle, the company earned 75 cents a share. Q1 included a number of items, most notably a gain of $90 million related to forgiveness of a loan by Airbus. If not for all items, US Airways would have earned 5 cents a share, up from a year-ago loss of $1.09 a share.

Hospira Inc, ((HSP)), pharmaceutical company, reported Q1 net income advanced 3.9% to $80.2 million, or 49 cents a share, from $77.2 million, or 49 cents a share in the year-earlier period on 0.3% sales growth, beating analysts’s forecasts for earnings of 48 cents a share.

The Warnaco Group Inc, ((WRNC)), apparel group, reported Q1 net income dropped to 34 cents a share, from 63 cents a share a year earlier. The company added revenue advanced to $466.3 million from $439.5 million. Warnaco announced current earnings included contributions from its Calvin Klein Jeans and related businesses in Europe and Asia that it acquired on Jan. 31 2006. The company also said these businesses contributed $6.1 million in operating income and $60.4 million in revenue. The company missed analyst estimate for earnings of 58 cents a share.

Lazard Ltd, ((LAZ)), financial advisory services provider, reported Q1 adjusted net income advanced 68% to 51 cents a share, from 31 cents a share in the year-earlier period. Operating revenue rose 32% on financial advisory and asset management business growth. The company''s income from continuing operations declined 75.5%, reflecting differences in reporting payments for services rendered by managing directors, tax provisions and minority interest expense. The company beat analysts’ forecasts for earnings of 47 cents a share.

Western Gas Resources, ((WGR)), natural gas company, reported Q1 earnings of 81 cents a share, up from a profit of 26 cents a share a year-ago on revenue growth, topping analyst estimate for a profit of 74 cents a share.

Kos Pharmaceuticals, ((KOSP)), pharmaceutical company, reversed to a loss of 6 cents a share in Q1, hurt by inventory management agreements and stock option expenses despite 11% revenue growth. If not for those agreements and expenses, it would have earned 28 cents a share, still short of the 62 cents a share earned in the year-earlier period. The company missed analysts’ expectations for a loss of 4 cents a share.

Watson Pharmaceuticals Inc, ((WPI)), generic drug maker, reported that its Q1 net income dropped to 23 cents a share, from 32 cents a share in the year-ago period despite 2% net revenue growth, helped by higher generic product sales, but offset by lower brand product sales. The company missed analysts’ forecasts for earnings of 32 cents a share.


[R]8:15AM European markets gained ground at mid-day.[/R]
European markets advanced at mid-day, lifted by gains in the telecommunications and automotive sectors which helped offset weakness among technology stocks. Shares of Vodafone Group rose 3.2% on a report that U.S. Verizon Communications offered to buy out Vodafone''s 45% stake in Verizon Wireless for $38 B. Automakers Renault and BMW rose each 3%, following a brokerage upgrade on General Motors. Among tech stocks, microchip maker Infineon Technologies and STMicroelectronics declined after computer giant Dell cut its profit outlook. Merger-and-acquisition deals provided some support with steelmaker Arcelor rising 2.3% on speculations that Mittal will raise its offer.. The German DAX 30 added 0.2%, the French CAC 40 rose 0.4%, and London FTSE 100 climbed 0.6%.


[R]7:45AM Asia closed largely lower. China Shanghai Composite surged.[/R]
Asian-Pacific benchmarks finished broadly lower, reflecting currency jitters, profit taking and cautiousness ahead of U.S. Fed Reserve’s decision on interest rates Wednesday. However, China Shanghai Composite jumped 2.3%, extending Monday’s rally on improved demand for Chinese shares. Brokerage Citic Securities rose by the 10% daily limit on news that it plans to issue 500 million new shares to Chinese institutional investors. Across the region, the Nikkei slipped 0.6% to 17,190.90 as weaker dollar weighed on exporter issues, threatening to hurt overseas earnings. Export-related high-tech component maker Kyocera fell 2.3%, followed by optics and electronics giant Canon, which dropped 1.4%. In currency markets the dollar bought 111.65 yen. Hong Kong’s Hang Seng slid 1%, dragged down by real-estate issues and energy stocks. Taiwan weighted index slipped 1.1%, Singapore Straits Times lost 1.1%, while Australia’s All Ordinaries inched up 0.05%, helped by the country’s top logistics firm, Toll Holdings, up 6.42%.