U.S. Sells AIG Stake for $7.6 Billion, Delta Takes 49% Share in Virgin

Arthi Gupta
11 Dec, 2012
New York City

The U.S. Treasury sold its remaining stake in AIG. Belden agreed to acquire PPC for $515.7 million. Texas Instruments narrowed its estimated ranges for revenue and earnings per share.

[R]9:50 AM New York – The U.S. Treasury sold its remaining stake in AIG. Belden agreed to acquire PPC for $515.7 million. Texas Instruments narrowed its estimated ranges for revenue and earnings per share.[/R]

U.S. indexes gained in early trading as budget negotiation accelerated and lawmakers of both parties worked to narrow differences to avoid a steep rise in taxes and spending cuts.

Investors look ahead to the 2-day FOMC meeting starting today and the Fed is expected to keep its monthly program of buying Treasuries and mortgage bonds for $85 billion intact.

After the meeting the Fed is scheduled to release its estimate of economic growth, unemployment, inflation and interest rate direction.

The European indexes edged higher after German economic confidence rebounded in December. Yesterday, investors were rattled after the Italian premier Mario Monti resigned ahead of schedule.

Italy is scheduled for new elections in February and Democratic Party leader Pier Luigi Bersani is likely to lead the next government. Bersani said he will continue the policies put in place by Prime Minister Monti.

Traders look to the two-day European Union summit scheduled on December 13 and 14 in Brussels. In the last summit, the European leaders remained divided in setting up common banking supervisory authority across the euro zone.

Asian markets closed mixed.

Australia''s business confidence index fell to -9 in November from -1 in October. The business conditions index was unchanged at -5.

U.S. Deficit Widens

U.S. trade deficit widened 4.9% in October.

Total exports of $180.5 billion and imports of $222.8 billion in October resulted in a widened goods and services deficit of $42.2 billion from a revised $40.3 billion in September.

The goods and services deficit decreased $3.5 billion from October 2011 to October 2012. Exports were up $1.8 billion or 1%, and imports were down $1.7 billion or 0.8%.

U.S. Treasury to Sell Remaining AIG Shares

The U.S. Department of the Treasury agreed to sell all of its remaining 234.17 million common shares of American International Group, Inc. at $32.50 per share in an underwritten public offering.

The aggregate proceeds to Treasury are expected to total approximately $7.6 billion.

Delta Air to Acquire Stake in Virgin Atlantic

Delta Air Lines will acquire a 49% stake in Virgin Atlantic Airways Ltd.currently held by Singapore Airlines for $360 million. Virgin Group and Richard Branson will retain the majority 51% stake.

The acquisition will create an expanded trans-Atlantic network and enhance competition between the U.K. and North America.

Belden Acquires of PPC

Belden Inc. acquired privately held PPC, a provider of broadband connectivity solutions headquartered in New York, for $515.7 million.

Earnings Review

ABM Industries, Inc. ((ABM)), the integrated facility solutions provider reported fourth quarter revenues rose 0.8% to $1.09 billion from a year ago. Net income in the quarter surged 53.9% to $27.66 million or 50 cents per diluted share from $18.05 million or 33 cents per share in the year-ago period.

Casey''s General Stores, Inc. ((CASY)), the convenience stores operator reported second quarter total revenue rose to $1.91 billion compared to $1.78 billion last year. Net income in the quarter decreased to $32.86 million or 85 cents per diluted share from $37.63 million or 98 cents per diluted share in the year-ago quarter.

Dollar General Corp. ((DG)), the discount retailer reported third quarter sales advanced 10.3% to $3.96 billion on same-store sales rise of 4%. Net income rose to $208 million or 62 cents per diluted share compared to net income of $171 million or 50 cents per diluted share in the year-ago quarter.

Texas Instruments Incorporated ((TXN)), the semiconductors maker narrowed its fourth quarter revenue guidance to a range of $2.89 billion to $3.01 billion compared with the prior range of $2.83 billion to $3.07 billion.

The company estimates earnings to be in the range of 5 cents to 9 cents per share compared to its prior guidance of 23 cents to 31 cents per share.