U.S. Indexes Fall, Dell Net Slumps 47%

Arthi Gupta
16 Nov, 2012
New York City

U.S. indexes declined as law makers jostle for budget negotiations. Dell quarterly earnings slumped 47%.

[R]8:30 AM New York – U.S. indexes declined as law makers jostle for budget negotiations. Dell quarterly earnings slumped 47%.[/R]

U.S. indexes edged lower as lawmakers of both parties and President Barack Obama prepare for budget negotiations.

Investors focus on the meeting between the U.S. President Barack Obama and lawmakers on the so called “fiscal cliff” that is set to kick in automatically the spending cuts and tax increases of $600 billion from January 1.

The European indexes declined after euro area current account surplus declined in September and new car sales fell in October.

Asian markets closed mixed.

Traders are jittery after renewed tensions in the Middle East.

The Japanese Prime Minister Yoshihiko Noda dissolved the lower house of the Parliament for elections on December 16.

Graphic Packaging to Acquire Contego

Graphic Packaging Holding Company agreed to acquire Contego Cartons, the UK based food and consumer product packaging company to create a leading position in the European food and consumer products folding carton market.

Under the terms of the transaction, Graphic Packaging will pay approximately £71 million in cash and assume approximately £10 million in other net liabilities in an all cash transaction.

The company expects to generate $8 million to $10 million of synergies over next two years and be accretive to earnings in first full year after integration.

Earnings Review

Dell Inc. ((DELL)), the PC maker said third quarter revenue fell 11% $13.72 billion from the same quarter last year. Net income in the quarter dropped 47% to $475 million or 27 cents per diluted share compared to net income of $893 million or 49 cents per share for the year-ago quarter.

Foot Locker, Inc. ((FL)), the specialty athletic retailer reported third quarter sales increased 9.3% to $1.52 billion. Third quarter comparable-store sales increased 10.2%, which consisted of a 9.4% increase in store sales and an 18.3% increase in direct-to-customer sales.

Net income in the quarter rose to $106 million or 69 cents per diluted share compared to net income of $66 million or 43 cents per share last year.

Hibbett Sports, Inc. ((HIBB)), the sporting goods retailer reported third quarter net sales increased 9.6% to $202.9 million. Comparable store sales increased 6.4%. Net income for the quarter increased 18.8% to $19 million or 71 cents per diluted share compared with $16 million or 59 cents per share in the previous year.

The J. M. Smucker Company ((SJM)), the fruit spreads manufacturer reported second quarter net sales rose to $1.62 billion from $1.51 billion in the prior year quarter. Net income for the quarter increased 17% to $148.8 million or $1.36 per diluted share from $127.2 million or $1.12 per share a year-ago quarter.