U.S. Indexes Lower, Chesapeake Completes Permian Basin Assets Sale

Arthi Gupta
23 Oct, 2012
New York City

U.S. indexes edged lower and investors focus on the two-day FOMC meeting starting today. Chesapeake completed the sale of its Permian Basin asset sales. DuPont plans eliminating about 1,500 positions globally in the next 12 to 18 months.

[R]8:30 AM New York – U.S. indexes edged lower and investors focus on the two-day FOMC meeting starting today. Chesapeake completed the sale of its Permian Basin asset sales. DuPont plans eliminating about 1,500 positions globally in the next 12 to 18 months.[/R]

U.S. indexes edged lower in early morning trading as corporations report mix earnings and DuPont report a restructuring plan that will cut as many as 1,500 jobs in the next eighteen months.

The plan would deliver pre-tax cost savings of about $450 million by eliminating corporate costs.

Traders look to the two-day rate setting committee meeting beginning today and Fed is expected to hold its low interest rate target and focus on reviving employment.

European markets traded lower after confidence index in France declined and economy in Spain shrank for the second quarter in a row.

Bank of Spain said economy shrank 0.4% in three months to September from the previous quarter. The economy matched the quarterly decline with the previous quarter and shrank 1.7% from the quarter a year ago.

Separately, Spain sold 3.53 billion euros of debt, meeting the maximum target auction at a slightly higher yield as the nation struggles to avoid a larger bailout from the European authorities.

Chesapeake Completes Permian Basin Asset Sales

Chesapeake Energy Corporation sold its southern and northern Delaware Basin portion assets, and its producing assets in the Midland Basin portion of the Permian Basin for approximately $3.3 billion, of which Chesapeake received approximately $2.8 billion in cash at closing.

The company will reduce the total outstanding balance on its existing term loans from $4 billion to approximately $1.2 billion by the end of October with the net proceeds from the Permian transactions along with various other asset sale proceeds.

Earnings Review

3M Co. ((MMM)), the diversified technology company reported third quarter sales declined 0.4% annually to $7.5 billion. Net income attributable to the company increased to $1.161 billion or $1.65 a share, from $1.088 billion or $1.52 a share in the same quarter last year.

Coach, Inc. ((COH)), the accessories marketer reported first quarter sales rose 11% to $1.16 billion compared with the prior year. Net income for the quarter climbed to $221 million or 77 cents per diluted share compared to net income of $215 million or 73 cents per share in the prior year.

EI DuPont de Nemours And Co. ((D)), the chemicals giant reported third quarter consolidated net sales fell 9% to $7.4 billion. Net income attributable to the company plummeted to $10 million or 1 cent per diluted share, from $452 million or 48 cents per diluted share a year before.

Whirlpool Corporation ((WHR)), the home appliances manufacturer reported third quarter sales fell to $4.5 billion compared to $4.6 billion in 2011. Net earnings in the quarter plunged to $74 million or 94 cents per diluted share compared to net earnings of $177 million or $2.27 per diluted share during the same period last year.

Yahoo! Inc. ((YHOO)), the Internet portal operator reported third quarter revenues fell 1% to $1.202 billion, from last year. Net income in the quarter soared to $3.16 billion or $2.64 per share on one-time gains compared with $293 million or 23 cents per share last year.