Consumer Price Index Falls, Discovery to Buy SBS Nordic for $1.7 B

Arthi Gupta
14 Dec, 2012
New York City

The U.S. indexes traded higher and a survey of businesses in China indicated economic recovery but the euro zone growth rates are still shrinking. Discovery agreed to acquire SBS Nordic operations for $1.7 billion and PPG to buy the North American coatings business of AkzoNobel for $1 billion.

[R]9:35 AM New York – The U.S. indexes traded higher and a survey of businesses in China indicated economic recovery but the euro zone growth rates are still shrinking. Discovery agreed to acquire SBS Nordic operations for $1.7 billion and PPG to buy the North American coatings business of AkzoNobel for $1 billion.[/R]

Market indexes in early trading focused on the optimistic outcome on budget negotiations but both party leaders remain far apart in their negotiations.

Consumer price index declined in November, its first fall in six months after gasoline prices fell the most since December 2008.

Fiscal cliff talks between House Speaker John Boehner and U.S. President Barack Obama continue with the Democrats and Republicans showing no signs of compromise.

Private sector activity contraction in the euro area eased in December and annual inflation slowed to 2.2% in November.

In Asian news, the headline HSBC/Markit purchasing managers'' index for China rose to 50.9 in December from 50.5 in November. This was the highest reading in 14 months.

U.S. Consumer Prices Drop

The U.S. consumer price index declined 0.3% in November following a 0.1% increase in October, the U.S. Bureau of Labor Statistics reported today.

The gasoline index fell 7.4% in November; this decrease more than offset increases in other indexes, resulting in the decline in the seasonally adjusted all items index.

The index for all items less food and energy increased 0.1% in November after a 0.2% increase in October.

U.S. Output Rises

Industrial production in the U.S. increased 1.1% in November after falling 0.7% in October, driven from a recovery in production for industries that had been negatively affected by Hurricane Sandy.

Manufacturing output rose 1.1% in November following a decrease of 1% in October. The increase in November reflects a post- Hurricane Sandy rebound in production as well as the solid advance in the output of motor vehicles and parts.

The production of consumer goods rose 1.2% in November, reversing a decline of the same magnitude in October. The output of durable consumer goods increased 2.8% in November.

Capacity utilization for total industry increased 0.7 percentage point to 78.4% in November from 77.7% in October.

Discovery Communications to Acquire SBS Nordic Operations

Discovery Communications inked an agreement with ProSiebenSat.1 Group to purchase the company’s SBS Nordic operations for approximately $1.7 billion or €1.325 billion.

The acquisition of SBS Nordic includes 12 television networks in Norway, Sweden, Denmark and Finland, among other assets, and solidifies Discovery’s long-term growth in the strong Nordic TV markets.

PPG to Buy AkzoNobel Unit

PPG Industries agreed to acquire the North American architectural coatings business of AkzoNobel, N.V. in a deal valued at $1.05 billion. The transaction is expected to close in early second quarter of 2013.

Earnings Review

Adobe Systems Incorporated ((ADBE)), the publishing and design software maker said fourth quarter total revenue rose to $1.153 billion compared to $1.152 billion in the same quarter last year. Net income in the quarter rose to $222.3 million or 44 cents a diluted share compared to $173.7 million or 35 cents per share for the year-ago quarter.

For the fiscal year, Adobe achieved record revenue of $4.4 billion. Annual net income was $833 million and diluted earnings per share the period were $1.66.

Centene Corp. ((CNC)), the healthcare services provider estimates fiscal year premium and service revenues in the range of $8.1 billion to $8.3 billion; and earnings per share in the range of 10 cents to 20 cents.

Nordson Corporation ((NDSN)), the equipment maker reported fourth quarter sales surged 33% to $439 million. Net income in the quarter increased to $68 million or $1.04 per diluted share compared with $55 million or 81 cents per share a year ago.

VeriFone Systems Inc ((PAY)), the credit card payment terminals maker said fourth quarter revenues grew to $485.4 million from $410.7 million last year. Profit for the quarter plunged to $27 million or $24 cents per diluted share from $198.8 million or $1.84 per share last year.