Costco Joins Others to Declare Special Dividend, Indexes Trade Lower

Arthi Gupta
28 Nov, 2012
New York City

U.S. indexes edged lower after the deadlock on the fiscal cliff continues. Kirby agreed to acquire Penn Maritime for $295 million. Costco November net sales rose 9% to $8.15 billion.

[R]9:35 AM New York – U.S. indexes edged lower after the deadlock on the fiscal cliff continues. Kirby agreed to acquire Penn Maritime for $295 million. Costco November net sales rose 9% to $8.15 billion.[/R]

Stocks struggled in early trading as investors focused on the lack of progress in budget negotiations.

Lawmakers returned to work after Thanksgiving holiday but little progress was cited by both party leaders. A compromise is not likely to be struck until the last hour of the deadline when tax increase and spending cuts are scheduled to kick in.

Costco joined several other companies in releasing special dividend ahead of probable increase in taxes in 2013. Costco declared one-time special dividend of $3 billion saving shareholders from a big increase in tax next year.

Costco will pay one-time dividend of $7 a share.

The euro and the markets in Europe traded lower a day after ministers agreed to cut Greek debt and offer interest free loans to the struggling Mediterranean nation. However, investors are not convinced that Greece is out of crisis and most debt waiver many be needed if economy does not stabilize in the next two years.

Kirby to Acquire Penn Maritime

Kirby Corporation agreed to acquire Penn Maritime Inc. and Maritime Investments LLC for approximately $295 million for cash, Kirby common stock and the retirement of Penn''s debt.

Under terms, the total value of transaction consisting of $180 million for all of voting and nonvoting equity interests in Penn Maritime Inc and Maritime Investments and about $115 million for retirement of Penn''s debt.

Earnings Review

Costco Wholesale Corporation ((COST)), the membership warehouses operator reported net sales for November rose 9% to $8.15 billion and comparable sales rose 6% from the same period last year.

Jos. A Bank Clothiers Inc. ((JOSB)), the apparel stores operator reported third quarter total sales increased 11.1% to $232.9 million. Comparable-store sales increased 4.8% and direct marketing sales rose 25.8% in the quarter.

Net income decreased 11.2% to $13.3 million or 47 cents per diluted share from $15 million or 54 cents per share, for the third quarter of fiscal year 2011.

Movado Group, Inc. ((MOV)), the fine watches distributor reported third quarter net sales increased 12.3% to $160.2 million. Net income for the quarter soared to $34.5 million or $1.34 per diluted share compared to net income of $16.4 million or 65 cents per share in the same period last year.

Yingli Green Energy Holding Co. Ltd. ((YGE)), the photovoltaic manufacturer reported third quarter total net revenues fell to RMB 2.24 billion from RMB 4.26 billion in the 2011 third quarter. Net loss in the quarter widened to RMB 959.2 million compared with RMB 180.5 million last year. Loss per ordinary share and per American depositary share soared to RMB 6.13 from RMB 1.14 a year ago.