U.S. Weekly Jobless Claims Fall, Cabot Acquires Norit for $1.1 B

Arthi Gupta
21 Jun, 2012
New York City

U.S. indexes traded sideways after weekly jobless claims fell and weak manufacturing data from China. Cabot agreed to acquire the Netherlands-based Norit for $1.1 billion. Agilent completed its acquisition of Denmark-based Dako.

[R]9:15 AM New York – U.S. indexes traded sideways after weekly jobless claims fell and weak manufacturing data from China. Cabot agreed to acquire the Netherlands-based Norit for $1.1 billion. Agilent completed its acquisition of Denmark-based Dako.[/R]

U.S. indexes see-sawed in early morning trading after weekly jobless claims fell, Chinese manufacturing contracted for the eighth month in June and European ministers gather to devise ways to contagion debt contagion.

European markets edged lower on the worsening fiscal situation in Spain fueling speculation that the country may be forced to seek a bailout from international lenders sooner than expected. Spain is also expected to release the state of its banks today.

Spain managed to raise €2.2 billion in a bond auction at higher yields, whereas France sold €8.43 billion of debt at lower borrowing costs today.

Antonis Samaras, leader of the conservative New Democracy party was sworn in as Greece''s new Prime Minister on Wednesday and will lead a coalition government of three parties.

All three parties back Greece’s pledges at the time of the bailout but are determined to renegotiate to soften harsher terms on minimum wages and the debt repayment schedules.

Asian stocks dropped on weak Chinese manufacturing data.

China''s manufacturing sector deteriorated in June amid falling export orders. The flash HSBC purchasing managers'' index for the manufacturing sector fell to a seven-month low of 48.1 in June from 48.4 in May, according to a key survey released by Markit Economics today.

The manufacturing output index fell to 49.1 in June from 49.7 in May to the lowest in three months.

U.S. Weekly Jobless Claims Fall

Seasonally adjusted weekly jobless claims in the U.S. for the week ending June 16 decreased 2,000 to 387,000 from the previous week''s revised level of 389,000, according to the U.S. Labor Department data released today.

The four-week moving average of new unemployment claims rose 3,500 to 386,250 from the previous week''s revised average of 382,750.

Cabot to Acquire Norit

Cabot Corporation agreed to purchase Norit N.V. from affiliates of Doughty Hanson & Co. Managers Ltd. and Euroland Investments B.V. for $1.1 billion.

The acquisition strengthens Cabot’s specialty chemicals portfolio with a non-cyclical, high growth and high margin business.

The estimated earnings per share accretion are expected to be in the range of 20 cents to 25 cents in fiscal year 2013 and 30 cents to 40 cents in fiscal year 2014, excluding one-time costs.

Agilent Completes Acquisition of Dako

Agilent Technologies Inc. completed its acquisition of Dako, the Danish cancer diagnostics company. Agilent paid $2.2 billion in cash excluding debt for Dako expects the acquisition to help strengthen Agilent''s cancer treatment.

Earnings Review

adidas estimated record sales of more than €1.6 billion in the football category in 2012, surpassing record sales during the World Cup in 2010.

Bed Bath & Beyond Inc. ((BBBY)), the home furnishing retailer said first quarter sales grew 5.1% to $2.22 billion compared to $2.11 billion last year. Comparable store sales in the quarter increased approximately 3% compared with an increase of 7% in last year''s fiscal first quarter.

Net income in the quarter climbed 15% to $206.8 million or 89 cents per diluted share compared to net income of $180.6 million or 72 cents per share last year.

ConAgra Foods, Inc. ((CAG)), the food company reported fourth quarter net rose 6.3% to $3.41 billion. Net loss in the quarter swung to $86.2 million or 21 cents per diluted share compared to net profit of $250.1 million or 60 cents per share a year ago.

Micron Technology, Inc. ((MU)), the memory chip maker said third quarter net sales rose 1.4% to $2.17 billion from $2.14 billion in the same quarter last year. Net loss in the quarter swung to $320 million or 32 cents per diluted share compared to net income of $75 million or 7 cents per share for the year-ago quarter.

Philip Morris International Inc. ((PM)), the cigarette manufacturer revised its 2012 reported diluted earnings per share forecast in a range of $5.10 to $5.20 on a constant currency basis compared to its April forecast of $5.20 to $5.30 a share.

Red Hat, Inc. ((RHT)), the provider of open source solutions said first quarter total revenue rose 19% to $314.73 million from $264.75 million in the same quarter last year. Subscription revenue for the quarter was $272.6 million, up 21% year-over-year.

Net income in the quarter climbed 15% to $37.5 million or 19 cents per diluted share compared to net income of $32.5 million or 17 cents per share for the year ago quarter.

Rite Aid Corporation ((RAD)), the retail drugstore chain said first quarter revenues increased 1.2% to $6.5 billion from $6.4 billion last year. Same store sales for the quarter increased 2.5% over the prior-year period, consisting of a 2.7% increase in front end sales and a 2.4% increase in pharmacy sales.

Net loss in the quarter narrowed 55% to $28.1 million or 3 cents per diluted share compared to net loss of $63.1 million or 7 cents per share last year.