Time Warner Swings to $1 B Profit

Elena
02 Aug, 2006
New York City

U.S. stock futures pointed to a bullish start, with Time Warner and Procter & Gamble reporting higher-than-expected quarterly results. Time Warner Inc. reported a Q2 profit of $1 billion in contrast to a loss of $409 million a year earlier, citing cable TV business growth. Revenues edged up 1% to $10.7 billion. P&G said its Q4 profit grew 36% to 55 cents per share from 52 cents per share last year on 25% revenue increase.

[R]9:00AM Stock futures pointed to a strong opening on P&G, Time Warner.[/R]
U.S. stock futures pointed to a bullish start on Wednesday, with Time Warner and Procter & Gamble reporting higher-than-expected quarterly results. Technology shares are also expected to move higher as software maker Adobe Systems Inc. ((ADBE)) affirmed its quarterly outlook, helping to ease investors' concerns about tech companies after several high-profile disappointments.

Time Warner Inc. ((TWX)), the world's largest media company, posted a Q2 profit of $1 billion in contrast to a loss of $409 million a year earlier, citing cable TV business growth. Revenues edged up 1% to $10.7 billion. Procter & Gamble ((PG)) said its Q4 profit grew 36% to 55 cents per share from 52 cents per share last year on 25% revenue increase. Shares of Adobe rose 4.2% in Europe. Video game publisher Electronic Arts Inc. ((ERTS)) could also lend support, a day after it posted a smaller-than-expected loss and said this quarter''s revenue should top analyst estimates. S&P 500 futures were up 2.70 points, above fair value. Dow Jones industrial average futures rose 33 points, and Nasdaq 100 futures were up 6.25 points.

Allied Capital, ((ALD)), management investment company, reported that its Q2 net income fell to 24 cents a share from $2.29 a share a year ago. Net investment income per share came to 35 cents versus 11 cents a year ago.

MasterCard Inc, ((MA)), global payment solutions company, reported it lost $2.30 a share, compared to net income of 89 cents a share in the year-ago period. If not for items, earnings in the latest period were 74 cents a share. Revenue advanced 9.7%. The company beat analysts’ forecasts for earnings of 62 cents a share. Expenses jumped 93.4%, to $1.1 billion due to spending on its 2006 World Cup sponsorship as well as a contribution to the MasterCard Foundation and increased personnel costs.

PG&E Corp, ((PCG)), gas and electric utility, reported its Q2 net income fell to 65 cents a share, from 70 cents a share in the year-earlier period. Revenue at the company rose more than 20% to $3.02 billion from $2.5 billion. The company topped analysts’ forecasts for earnings by a penny.

Clorox Co, ((CLX)), consumer products company, reported Q4 profit fell, as the company raised prices to offset soaring commodity costs. The company earned 92 cents a share, down from $1 a share in the year-ago period. If not for costs related to stock-based compensation and severance charges, it earned $1.03 a share. Results also included a 5 cents a share charge related to the retirement of Chairman and Chief Executive Jerry Johnston. Net sales advanced to $1.32 billion from $1.25 billion. The company missed analysts’ expectations for it to earn $1.04 a share.

The Brink's Company, ((BCO)), transportation, teller machine servicing, currency and deposit processing company, reported Q2 net income doubled to 62 cents a share, from 27 cents a share in a year-ago period. Operating income was 42 cents a share, up from 4 cents a share in the year-ago period. Revenue grew to $697.5 million from $633.5 million. The company beat by wide margin analysts’ forecasts for earnings of 49 cents a share.

Gerdau Ameristeel Corp, ((GNA)), steel producer, reported Q2 earnings rose to 41 cents a share, from 24 cents a share a year earlier, topping analysts’ expectations for earnings of 35 cents a share. Revenue rose to $1.21 billion from last year's $961.1 million, with shipments of finished steel growing 13% and average mill prices rising 9.8%.


[R]8:00AM $10.26 billion offer for Philips Electronics NV''s chip unit.[/R]
Kohlberg Kravis Roberts & Co. and Silver Lake Partners are reportedly close to a deal with Philips Electronics NV''s chip unit. In its online edition the Wall Street Journal said the deal may be worth more than eight billion euros, or $10.26 billion, citing people familiar with the matter.

In July, Philips'' ((PHG)) shares advanced on news that three groups of private-equity firms were in the final stage of bidding more than $10 billion for the company''s semiconductor division. The other bidding groups were Blackstone Group, London-based Permira Advisors and Texas Pacific Group, and Apax Partners Worldwide LLC, Bain Capital and Francisco Partners.

In June Philips said it was planning to spin off its semiconductors unit in an initial public offering during the second half of the year as part of an effort to produce more predictable earnings.

Since 2005 Philips has been seeking a separate legal structure for its chip unit, which had 2005 sales of 4.62 billion euros, or $5.8 billion and makes products for mobile phones and cars. Company’s shares rose on Wednesday, with Dutch-listed shares rising 3.9%.


[R]7:30AM Asian markets recover from poor start on takeover battle.[/R]
Asian markets were higher Wednesday. The Nikkei 225 Average gained 0.15% to 15464.29. On the corporate front, shares of Toyota declined 0.5%. Sales data posted Tuesday revealed the auto maker has overtaken Ford to rank as the No. 2 selling brand in the U.S. behind General Motors. Mitsubishi shares shed 2% despite reporting its quarterly net loss narrowed. Shares of Hitachi sank 3.5% following reports it may face a lawsuit over possible design flaws in its nuclear power plant turbines. Sony lost 1%.

Hong Kong shares finished higher, led by property developers on hopes the U.S. interest rate-hike cycle is nearing an end. The Hang Seng Index gained 0.7% to 17032.75. Sun Hung Kai Properties climbed 1.9%. Cheung Kong rallied 1.1%, while Henderson Land Development gained 1.7%.

South Korean shares ended higher, with automobile and technology stocks leading gainers. Telecommunications stocks bucked the trend. The Korea Composite Stock Price Index, or Kospi, ended 0.6% higher at 1295.11. Turning to other markets around the region, the Weighted Price Index of the Taiwan Stock Exchange gained 0.5% to 6471.42 while Australia''s S&P ASX/200 shed 1% to 4931.5.


[R]6:30AM Upbeat earnings outlooks help Europe to a strong start.[/R]
European markets were higher on Wednesday morning. The U.K. FTSE 100 index gained 0.5% at 5,970, the German DAX Xetra 30 index rose 0.7% at 5,634 and the French CAC-40 index climbed 0.8% at 4,988. British Cadbury Schweppes climbed 3% stating that first-half net profit advanced to 819 million pounds from 237 million pounds on 22.5% revenue growth and in France, Danone gained 2.5% reporting that its first-half profit rose stronger than forecast and it upped its revenue growth view.

In the banking sector, French bank BNP Paribas advanced 2.4% reporting that its second-quarter net profit gained 30.6% Swiss Credit Suisse Group shed 3.5% as it disappointed the market, despite the unexpectedly strong growth after second-quarter profits came only in line with market expectations.

Oil prices rose Wednesday as traders nervously observed a tropical storm in the Caribbean and the fighting in the Middle East, fearing supply threats. Light sweet crude for September delivery added 38 cents to $75.29 a barrel. September Brent gained 43 cents to $76.32 a barrel at London''s ICE Futures exchange.

Gold hit a high of $649.75 an ounce as firm oil prices and a volatile US dollar sparked off speculative buying. The euro was slightly lower against the U.S. dollar Wednesday as markets awaited signals from the European Central Bank on its future interest rate course. The euro bought $1.2813 in early European trading, just below the $1.2817 it bought in New York late Tuesday. The British pound slid to $1.8752 from $1.8758. The dollar was barely lower against the Japanese currency, falling to 114.47 yen from 114.52 yen.