U.S. Indexes in Early Advance, Caterpillar Lowers Outlook

Arthi Gupta
25 Sep, 2012
New York City

U.S. indexes trend higher in early pre-market trading. The IMF Chief Lagarde urged European policymakers to approve single banking authority. Caterpillar lowered earnings guidance for 2015. C.H. Robinson agreed to acquire Phoenix International.

[R]8:30 AM New York – U.S. indexes trend higher in early pre-market trading. The IMF Chief Lagarde urged European policymakers to approve single banking authority. Caterpillar lowered earnings guidance for 2015. C.H. Robinson agreed to acquire Phoenix International.[/R]

U.S. markets trended higher in pre-market trading but world market sentiment was weak. European markets were under pressure as bond yields of Spain and Italy rise and thousands of people demonstrated in Madrid.

European markets extended losses for the second day this week and look ahead to the meeting of German Chancellor Angela Merkel and ECB President Mario Draghi.

Yesterday, stocks edged lower after Spain and France struggled to propose budgets that meet the European Union guideline of keeping the deficit below 3% of gross domestic product. And, Germany and France disagreed on the timetable to implement a single supervisory banking authority under the European Central Bank.

Asian indexes traded mixed on weak global economic cues and rising domestic tensions. Territorial disputes between China and Japan are increasingly forcing Japanese companies to look at other locations to move manufacturing.

Christine Lagarde, Managing Director of the International Monetary Fund in a speech urged the European policymakers to establish a single supervisory banking mechanism and enabling the direct recapitalization of banks.

C.H. Robinson to Acquire Phoenix International

C.H. Robinson Worldwide, Inc. reached a stock purchase agreement to acquire Phoenix International, Inc. for $571.5 million in cash and about $63.5 million in newly-issued stock. Closing of the acquisition is expected to occur in the fourth quarter.

Sidewinder to Buy Union Drilling

Sidewinder Drilling Inc., a land drilling company controlled by Avista Capital will acquire all of the outstanding shares of Union Drilling, Inc. common stock in an all-cash tender offer valued at approximately $242 million.

Earnings Review

Caterpillar Inc. ((CAT)), the mining equipment manufacturer estimated earnings per share between $12 and $18 and sales of $80 billion to $100 billion in 2015.

FactSet Research Systems Inc. ((FDS)), the integrated financial information provider reported revenues increased to $207.7 million, up 8% compared to the prior year. Net income in the quarter rose 18.7% to $48.54 million or $1.08 per diluted share compared to $40.88 million or 88 cents per share a year ago.

Paychex, Inc. ((PAYX)), the payroll provider reported first quarter total service revenue increased 3% to $578.2 million. Net income increased 3% to $153.1 million or 42 cents per diluted share compared with $148.9 million or 41 cents per share last year.

Red Hat, Inc. ((RHT)), the Linux software seller said second quarter total revenue rose 15% to $322.6 million from the year ago quarter. Net income for the quarter fell to $35 million or 18 cents per diluted share compared with $40 million or 20 cents per diluted share, in the year ago quarter.