U.S. Output Rebounds, Goldman Sachs Swings to Profit

Arthi Gupta
16 Oct, 2012
New York City

U.S. indexes advanced after consumer prices rose and output rebounded in September. Upbeat corporate earnings lifted investor sentiment. Goldman Sachs swung to quarterly profit.

[R]10:10 AM New York – U.S. indexes advanced after consumer prices rose and output rebounded in September. Upbeat corporate earnings lifted investor sentiment. Goldman Sachs swung to quarterly profit.[/R]

U.S. indexes extended gains in the world markets after earnings were ahead of expectations and German confidence rebounded and on increased hopes of debt agreement for Spain and Greece.

U.S. consumer prices rose more than estimated and industrial production rebounded in September.

Goldman Sachs swung to quarterly profit after revenues doubled on investment gains. Coca-Cola earnings rose 4% but J&J net declined in the quarter.

The European indexes gained more than 1% after German sentiment improved and expectations of a Spanish bailout request increased. S&P cut ratings on 11 Spanish banks and borrowing costs fell at a bond auction today. Portugal unveiled a tough budget for 2013.

U.S. Consumer Prices Rise

Consumer prices in the U.S. rose more than estimated in September.

The Consumer Price Index increased 0.6% in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today.

Gasoline prices increased 7% in September following 9% rise in August, and drove the all price index higher.

The food index increased 0.1% in September.

U.S. Output Rebounds

U.S. industrial production rebounded in September.

The Fed said industrial production increased 0.4% in September, from a revised 1.4% drop in August.

Capacity utilization climbed to 78.3% in September from a revised 78% in August.

Amazon to Hire Personnel

Amazon is hiring for more than 50,000 seasonal positions at its fulfillment centers across the U.S. this holiday season. The company estimates thousands of temporary associates will stay on in full-time positions.

Ingram Micro Completes Acquisition of BrightPoint

Ingram Micro Inc. completed its acquisition of Brightpoint, Inc. for $9 a share in cash.

The acquisition is expected to be accretive to earnings per share by 18 cents in 2013 and 35 cents in 2014, excluding one-time charges and integration costs.

Hillenbrand to Acquire Coperion Capital

Hillenbrand, Inc. agreed to acquire privately held Coperion Capital GmbH, a portfolio company of Deutsche Beteiligungs AG, for €408 million or $530 million at current exchange rates. This includes the assumption of an estimated €76 million of net debt and €100 million pension liability.

The transaction is expected to close in December or January.

Earnings Review

Goldman Sachs Group, Inc. ((GS)), the investment bank reported third quarter net revenues surged to $8.35 billion from the prior-year period. Net earnings in the quarter swung to $1.46 billion or $2.85 per share compared to loss of $428 million or 84 cents per share in the year-ago period.

Johnson & Johnson ((JNJ)), the healthcare products maker reported third quarter sales increased 6.5% from year ago to $17.1 billion. Domestic sales increased 13.4%. Net earnings attributable to the company declined to $2.97 billion or $1.05 per diluted share, from $3.20 billion or $1.15 per share a year before.

Mattel, Inc. ((MAT)), the toy maker reported third quarter net sales rose 4% to $2.08 billion. Net income in the quarter climbed to $365.9 million or $1.04 per diluted share compared to net income of $300.8 million or 86 cents per share last year.

The Coca-Cola Company ((KO)), the beverages maker reported third quarter net operating revenues rose 1% to $12.34 billion from the same quarter last year. Net income in the quarter climbed 4% to $2.31 billion or 50 cents per diluted share compared to the $2.22 billion or 48 cents per share in the prior-year quarter.