U.S. Factory Orders Rise; Chrysler Sales Jump 34%

Arthi Gupta
03 Apr, 2012
New York City

U.S. indexes declined after factory orders rose less than estimated in February. Auto industry is likely to increase its annual sales target of 14 million in the year. Illumina urged shareholders to reject Roche offer. Dell agreed to acquire Clerity Solutions.

[R]11:15 AM New York – U.S. indexes declined after factory orders rose less than estimated in February. Auto industry is likely to increase its annual sales target of 14 million in the year. Illumina urged shareholders to reject Roche offer. Dell agreed to acquire Clerity Solutions.[/R]

U.S. indexes fell after factory orders rose less than estimated in February and European indexes pared gains on global growth worries and the expectations of rising Spanish debt in the current year.

Auto industry reported another monthly gain as consumer respond to incentives, Japanese makers rebound production after a year of supply chain problems and Hyundai said sales rose to record high with a 13% increase in March. Monthly sales were estimated at 1.4 million units.

Chrysler, before the market opening reported March sales soared 34%, its best monthly sales gain in four years. The sales of cars and trucks increased for the 24th month in a row as the auto industry sales recover after dropping to the lowest four years ago.

General Motors said sales increased 12% in the month from a year ago and Ford Motor Company sales jumped 5%.

The Spain’s finance ministry said total debt-to-gross domestic product ratio will rise to 79.8% in 2012 from 68.5% last year and unemployment rate jumped to a new high in the wider euro zone region.

British Sky Broadcasting Group announced that James Murdoch has stepped down from the Chairman and is succeeded by Nicholas Ferguson.

Asian markets traded mixed. China reported manufacturing expansion but the elevated crude oil and commodities prices are expected to take a bite out of consumer spending in emerging markets and in the euro zone.

The purchasing managers'' index for the Chinese service sector rose to a six-month high of 58 in March from 48.4 in February, according to a report published by the China Federation of Logistics and Purchasing.

The Reserve Bank of Australia retained the benchmark cash rate unchanged at 4.25% for a third consecutive month.

U.S. Factory Orders Recover

U.S. factory orders rebounded in February, according to data released by the U.S. Commerce Department today. New orders for manufactured goods rose 1.3% to $468.4 billion in February.

Durable goods orders climbed 2.1% in February reversing the 3.5% drop in January.

Molson Coors to Buy StarBev

Molson Coors Brewing Company, the Canadian-American beer maker agreed to acquire StarBev L.P. from private equity investor CVC Capital Partners Limited for €2.65 billion or $3.54 billion.

With this acquisition, Molson Coors aims to increase its portfolio of premium brands and deepen its reach into growth markets around the world.

Illumina Urges Shareholders to Reject Roche Offer

Illumina, Inc. urged its stockholders to reject Roche’s efforts to acquire the company at a “grossly inadequate price.”

Roche began its tender offer to buy the U.S-based Illumina for $44.50 per share cash on January 27 and increased its offer to $51 per share cash for an aggregate of $6.7 billion on a fully diluted basis on March 29.

RBC Acquires Venture with Dexia

Royal Bank of Canada agreed to acquire the 50% stake that RBC does not already own in the joint venture RBC Dexia Investor Services Limited from Banque Internationale à Luxembourg S. A. for total consideration of €837.5 million or C$1.1 billion in cash.

Following the closing of the transaction RBC will own 100% of RBC Dexia.

Earnings Review

Comverse Technology, Inc. ((CMVT)), the technology company reported fourth quarter total revenue declined 6% to $405.46 million from $430.84 million in the prior-year quarter. Net profit in the quarter plunged 71% to $4.48 million or 2 cents per diluted share compared to net profit of $15.43 million or 7 cents per share last year.

Conn''s, Inc. ((CONN)), the specialty retailer of consumer products said fourth quarter total revenues rose 3.7% to $226.67 million from $218.66 million in the earlier year quarter, with same-store sales up 12.1%.

Net income in the quarter was $7.70 million or 24 cents a diluted share compared to a loss of $3.58 million or 12 cents per share last year.

The Pep Boys-Manny, Moe & Jack ((PBY)), automotive aftermarket service and retail chain reported fourth quarter sales increased 5.9% to $505.3 million from $477.4 million last year. Comparable sales increased 0.8%, consisting of a decrease of 0.1% in comparable service revenue and an increase of 1.0% in comparable merchandise sales.

Net loss for the quarter was $4.4 million or 8 cents per diluted share compared to net earnings of $8.4 million 16 cents per share in the same period last year.

Sales for fiscal year 2011 increased 3.8%, to $2.06 billion from $1.99 billion for fiscal 2010. Comparable sales decreased 0.6%, consisting of a 0.6% comparable service revenue increase offset by a 0.9% comparable merchandise sales decrease.

Net earnings for fiscal year 2011 fell 21% to $28.9 million or 54 cents per diluted share from $36.6 million or 69 cents per share in fiscal 2010.