U.S. Deficit Widens, Jobless Rate at 8.3%; Molycorp to Buy Neo Materials

Arthi Gupta
09 Mar, 2012
New York City

U.S. and global indexes rose after Greece completed the landmark bond swap deal. The U.S. trade deficit widened in January and payrolls rose in February. Molycorp agreed to buy Canada-based Neo Material in $1.3 billion deal. Boston Scientific agreed to buy Cameron Health for nearly $1.35 billion.

[R]9:35 AM New York – U.S. and global indexes rose after Greece completed the landmark bond swap deal. The U.S. trade deficit widened in January and payrolls rose in February. Molycorp agreed to buy Canada-based Neo Material in $1.3 billion deal. Boston Scientific agreed to buy Cameron Health for nearly $1.35 billion.[/R]

U.S. and global indexes edged higher after Greece successfully completed the landmark bond swap deal with 85.8% of its private bond holders agreeing to participate in the debt restructuring.

Greece will use collective action clause to increase the participation rate to 95% and is less likely to be challenged in courts.

Greece said that holders of €177 billion Greek bonds agreed to the exchange and 69% of holders of Greek bonds issued under different laws worth €20 billion agreed as well. The high participation rate will save Greece from defaulting on its latest repayment due in ten days.

The Greek Finance Ministry stated the country received tenders and consents for €152 billion under Greek law and an additional €20 billion of foreign-law bonds were also tendered, and also extended the tender on foreign-law bonds to March 23.

Inflation in China eased to a twenty-month low in February. The National Bureau of Statistics said that the consumer price inflation eased to a 20-month low to 3.2% in February compared to the three-month high of 4.5% in January.

Also, industrial production increased 11.4% in the first two months of the year from the year ago period and retail sales rose 14.7% in the period.

Beijing combines the January and February data of production, investment and retail sales to avoid distortions caused by the Lunar New Year holiday.

U.S. Deficit Widens

The U.S. trade deficit widened to $52.6 billion in January from a revised deficit of $50.4 billion in December, according to a report released by the U.S. Commerce Department today.

U.S. Non-Farm Payrolls Up

The U.S. economy added a net of 227,000 jobs in February, with a gain of 233,000 jobs in the private sector offsetting losses in public sector employment, according to data released by the U.S. Labor Department today.

The unemployment rate was stable at 8.3% in February.

Molycorp to Acquire Neo Material

Molycorp agreed to acquire Neo Materials for approximately C$1.3 billion to create one of the most technologically advanced, vertically integrated rare earth companies in the world.

Neo Materials shareholders will receive consideration equal to C$11.30 per share comprising of C$8.05 per share in cash and 0.122 Molycorp shares based on 20–day volume weighted average price of $26.66.

This transaction brings Neo’s direct operating and sales channels in China, the world’s largest and fastest growing rare earth consuming nation.

Boston Scientific to Buy Cameron Health

Boston Scientific Corp., the medical device maker agreed to acquire Cameron Health to gain access to the world''s first and the only commercially available subcutaneous implantable cardioverter defibrillator.

The agreement calls for an upfront payment of $150 million, payable upon transaction closing, an additional potential $150 million payment upon FDA approval of the S-ICD System, plus up to an additional $1.050 billion of potential payments upon achievement of specified revenue-based milestones over a six-year period following FDA approval.

Earnings Review

ANN Inc. ((ANN)), the specialty retailer of women''s apparel reported fourth quarter total net sales rose 10% to $566.66 million from $515.26 million last year on comparable sales increase of 5.3%. Net income in the quarter declined 50% to $ $5.5 million or 10 cents per diluted share compared with net income of $11 million or 19 cents per diluted share in the fourth quarter of 2010.

Total net sales for fiscal year 2011 were $2.2 billion compared with net sales of nearly $2 billion in the full year of fiscal 2010. Net income for 2011 was $86.6 million or $1.64 per diluted share compared with net income of $73.4 million, or $1.24 per diluted share in 2010.

Air Lease Corp. ((AL)), the company engaged in purchasing commercial aircraft said fourth quarter revenues increased 25% to $115.1 million. Net income generated in the quarter was $24.8 million or 24 cents per diluted share compared with a loss of $2.7 million or 4 cents per share last year.

Hibbett Sports, Inc. ((HIBB)) said fourth quarter net sales rose 10.1% to $190.7 million from $173.2 million in the previous year. Net income in the quarter climbed 27% to $15.82 million or 59 cents per diluted share compared with net income of $12.46 million or 44 cents per share a year ago.

Net sales for fiscal year 2012 increased 10.2% to $732.6 million compared with $665.0 million for fiscal year 2011. Comparable store sales increased 6.8%. Net income for fiscal year 2012 increased 27.3% to $59.1 million or $2.15 per diluted share compared with $46.4 million or $1.60 per diluted share for fiscal year 2011.