U.S. GDP Revised Up to 1.7%, Heinz Net Rises

Arthi Gupta
29 Aug, 2012
New York City

U.S. indexes advanced after gross domestic product increased an upwardly revised 1.7% in the second quarter. Japan-based Daikin agreed to acquire Goodman Global for $3.7 billion. Schnitzer Steel planned to slash 300 jobs.

[R]10:00 AM New York – U.S. indexes advanced after gross domestic product increased an upwardly revised 1.7% in the second quarter. Japan-based Daikin agreed to acquire Goodman Global for $3.7 billion. Schnitzer Steel planned to slash 300 jobs.[/R]

U.S. indexes gained after a better-than-estimated GDP data in the second quarter. Investors look ahead to the speech from Federal Reserve Chairman Ben Bernanke at the annual symposium on Friday in Wyoming.

European indexes traded lower in thin trading as markets await central bank decisions that may support sovereign bond market of peripheral nations. The latest indicators in the region offered a slightly better view.

Asian markets sold off as most market watchers shifted attention to central bankers and political leaders in the euro zone.

U.S. GDP Revised Higher to 1.7%

U.S. gross domestic product increased an upwardly revised 1.7% in the second quarter, from the 1.5% growth initially reported, according to data released by the U.S. Commerce Department today.

Consumer spending increased 1.7% in the second quarter compared to the 1.5% growth initially reported.

Economy is still expected to slowdown in the second half as exports struggle and rising uncertainty about the presidential election in three months and unresolved debt reduction plan.

Schnitzer Steel to Slash 300 Jobs

Schnitzer Steel Industries, Inc. announced initiatives to realign the organization to support future growth.

The company said the restructuring charges primarily represent costs connected with the elimination of approximately 300 positions or 7% of our current workforce, and contract termination costs, including from the consolidation of certain administrative offices.

These initiatives are expected to lead to annual operating costs savings of $25 million, and total restructuring charges of about $12 million, with $5 million to be incurred in the fourth quarter of fiscal 2012.

Daikin Acquires Goodman

Daikin Industries, Ltd., the Japanese manufacturing firm agreed to acquire privately held Goodman Global Group, Inc. for $3.7 billion. The transaction is expected to be completed during the fourth quarter.

With the acquisition, the company aims to enter the ducted-style air-conditioning market for residential and commercial applications in North America.

Earnings Review

Genesco Inc. ((GCO)), the shoe and clothing retailer reported second quarter net sales increased 15% to $543.5 million from last year on comparable store sales increase of 4%. Net earnings for the quarter swung to $10.52 million or 43 cents per diluted share compared to net loss of $392,000 or 2 cents per diluted share in the prior-year quarter.

H.J. Heinz Company ((HNZ)), the food products maker reported first quarter total sales declined 1.5% to $2.79 billion from the same quarter last year. Net income in the quarter rose to $258.03 million or 80 cents per diluted share compared to net income of $226.11 million or 70 cents per share in the prior-year quarter.

Jos. A Bank Clothiers, Inc. ((JOSB)), the tuxedo rental products retailer said second quarter total sales increased 12.9% to $260.3 million from $230.7 million in the second quarter of fiscal year 2011. Comparable store sales increased 6.1% and direct marketing sales increased 39.3% in the second quarter.

Net income for the quarter increased 12.7% to $23.2 million or 83 cents per share compared with net income of $20.6 million or 74 cents last year.

Joy Global Inc. ((JOY)), the mining equipment maker reported third quarter net sales increased 22% to $1.4 billion compared to the same period last year. Income from continuing operations rose to $194 million or $1.82 per fully diluted share compared to income from continuing operations of $172 million or $1.61 per fully diluted share in the third quarter of 2011.