U.S. Indexes Higher; Dell Acquires AppAssure; AIG Net Soars 77%

Arthi Gupta
24 Feb, 2012
New York City

The U.S. indexes advanced ahead of key domestic economic data. P&G planned to cut 5,700 jobs aimed at cost savings of $10 billion by 2016. Dell agreed to acquire AppAssure. Citigroup sold its 9.85% stake in India-based Housing Development Finance Corp. for $1.9 billion.

[R]9:35 AM New York – The U.S. indexes advanced ahead of key domestic economic data. P&G planned to cut 5,700 jobs aimed at cost savings of $10 billion by 2016. Dell agreed to acquire AppAssure. Citigroup sold its 9.85% stake in India-based Housing Development Finance Corp. for $1.9 billion.[/R]

U.S. indexes climbed ahead of key domestic economic data. Traders await the new home sales and consumer sentiment reports to gauge the health of the economy.

European markets climbed after better-than-estimated corporate earnings. Italy successfully sold €3 billion of zero-coupon bonds and €1.5 billion of inflation-linked bonds today.

The Greek Parliament approved the debt swap deal with its private creditors, a pre-requisite for receiving the second bailout package worth €130 billion from the European Union, International Monetary Fund, and the European Central Bank.

The final agreement increased the loss to private bond holders to 53.5% of face value or the equivalent to 75% of overall loss.

Greece will lower its debt to 120.5% of its gross domestic product by 2020, from the current debt of nearly 160%.

Asian markets closed higher tracking the U.S. and European markets.

P&G to Cut 5,700 Jobs

Procter & Gamble Co. planned to eliminate about 5,700 jobs or 10% of non-manufacturing jobs by the end of fiscal 2013. Of the 5,700 jobs, 1,600 will be eliminated in fiscal 2012 and 4,100 in fiscal 2013 resulting in total overhead cost savings of about $800 million by the end of 2014.

The company said it target to save about $8 billion through cost reductions and $2 billion through cost control & leverage.

The company now projects first quarter earnings in a range of $0.89 to $0.95 per share, down from the prior guidance range of $0.91 to $0.97 per share.

Citi Sells HDFC Stake

Citigroup sold 145.3 million shares or its 9.85% stake in India-based Housing Development Finance Corp. for $1.9 billion realizing an after-tax gain of $722 million.

Cisco to Acquire Lightwire

Cisco Systems Inc. said it intends to acquire privately held Lightwire, Inc. for approximately $271 million in cash and retention-based incentives in exchange for all shares of Lightwire.

Dell Acquires AppAssure

Dell announced it has acquired AppAssure, a global leader in complete application protection for virtual, physical and cloud infrastructures to further extends Dell’s comprehensive storage and software strategy.

Earnings Review

American International Group, Inc. ((AIG)), the insurance organization reported fourth quarter net income attributable to AIG surged 77% to $19.8 billion compared to $11.2 billion in the prior year quarter. On a per share basis, earnings were lower at $10.43 compared to $16.60 last year, due to increased share count.

For the full year 2011, net income attributable to AIG gained 128.2% to $17.8 billion compared to $7.8 billion in 2010. Diluted earnings per share were $9.44 for the full year and $11.60 for the prior year.

Portland General Electric Company ((POR)), the electrical utility said fourth quarter revenues rose 5.3% to $479 million compared with $455 million a year-ago quarter. Net income in the quarter climbed 20% to $29 million or 38 cents per diluted share compared to net income of $25 million or 34 cents per share, for the comparable period of 2010.

The company reported net income of $147 million, or $1.95 per diluted share, for the year ended December 31, 2011 compared to $125 million, or $1.66 per diluted share, for 2010.

salesforce.com, Inc. ((CRM)), the provider of enterprise cloud computing applications said fourth quarter revenue grew 38% to $631.9 million from $456.87 million in the prior-year quarter. Net loss in the quarter was $4.08 million or 3 cents per diluted share compared to net income of $10.91 million or 8 cents per share in the same quarter last year.

For the full fiscal year 2012, the company reported revenue of $2.27 billion, an increase of 37% from the prior year.

Volkswagen AG ((VOW)), the Germany-based automobile manufacturer reported fiscal year 2011 revenues surged 25.6% to €159.34 billion from €126.9 billion in 2010.

Net profit for the full-year 2011 more than doubled to €15.41 billion from €6.84 billion in the previous year. Earnings per basic share surged to €33.10 from €15.17 in the prior-year.