Harley Davidson Earnings Up 18%

123jump.com Staff
12 Oct, 2006
New York City

Market averages manitanied a positive bias when less than two hours of trading is left. Advancers led the decliners by a marging of two to one on NYSE. Costco gained on 8% on earnings news. Harley Davidson beat the earnings estimates of $1.10, stock jumped 2%.

[R]2:00PM Harley Davidson reported earnings growth of 18%.[/R]

Harley Davidson Inc ((HOG)) reported third quarter earnings of $1.20 per share, a rise of 18% from a year ago earnings of 96 per share. The company reported profit in the quarter of $312.7 million compared to $265 million a year ago. The revenue in the period rose 14.3% to $1.64 billion from a year ago, beating the estimates of $1.58 billion. Analysts were looking for revenue of $1.5 billion and earnings per share of $1.10.

The company introduced four new bikes and new engines for Dyna, softail and Touring Bike. International sales rose 19% supported by a sales momentum in Canada and Japan and domestic sales rose 6.7%.

[R]12:30PM PepsiCo Q3 profit up 71% on revenue rise of 9.4%.[/R]

PepsiCo ((PEP)), second largest beverage and snack maker, reported third quarter profit of 88 cents per share compared to 51 cents a share a year ago. The company reported profit in the quarter of $1.48 billion in the period, a rise from $864 million from a year ago. Revenue rose $8.95 billion from $8.18 billion a year ago.

The company raised its earnings guidance for the full year to at least $2.98 per share from $2.95 a share. Analysts were looking for $2.99 per share of earnings for the year. The company stock recovered from early loss of 2.2% on the news.

PepsiCo also mentioned in the conference call that it is confident of its outlook and earnings guidance for the year. Pepsi International which accounts for 37% of revenue of the company said that recent pesticide controversy relating to the company in India has affected sales in August and improved in September, but declined to reveal numbers. Several media reports in India have suggested that Pepsi sales may have declined between 35% and 45%. The company CEO also said that it has increased prices for its Tropicana brand orange juice and blamed it on the “more structural price increase in oranges”.


[R]11:30PM August trade deficit rose to $69.9 billion. Goods deficit increased $1.9 billion.[/R]

The familiar trade deficit with the rest of the world rose in August. China and OPEC, two of the largest trading partners accounted for $33.2 billion in goods deficit of the total August month goods deficit of $75.5 billion. In August export rose to $122.4 billion and import rose to $192.3 billion accounting for goods and service deficit of $69.9 billion. The U.S. is set to record rising and record trade deficit for the fifth year in a row.

Crude oil imports in August jumped to $20.8 billion and natural gas import rose to $2.5 billion. For the year so far crude and natural gas imports are running at 34% higher than a year ago to $148.7 billion. Record deficit in August is likely to take the annual deficit for the year above $780 billion, at least 9% higher than a year ago deficit of $716 billion. Deficit with China for the year is likely to grow 10% from a year ago deficit of $202 billion.

In the month of August, U.S. recorded $22 billion deficit with China, $11.2 billion with OPEC, $7.5 billion with Japan, $6.5 billion with Mexico and $6.08 billion with Canada. U.S. also recorded $8.9 billion deficit with Europe and $1.1 billion with India.

[R]10:30AM The Sensex adds 185 points as industrial production was reported at 9.7%[/R]

The Sensex on BSE finished 184.49 points, or 1.4%, to end at 12,537.98. The market-breadth was very strong. Against 1,388 shares that advanced, 1,085 declined and 72 shares remained unchanged. Advancers outpaced decliners by 5 to 4. From the 30-Sensex stocks, 27 advanced while the rest declined. The turnover on BSE was Rs 3,404 crore, compared to Rs 3,689 crore on Wednesday. The turnover on NSE was Rs 6,719.53 crore.

Economic news

The industrial production of India in August advanced 9.7% from a year earlier, weaker than the previous month, as floods in the industrialised belt in the west of the country disrupted output.

Advancers

Reliance Industries gained 2.6% to Rs 1,173.70, following reports that it had again reduced retail prices of petrol and diesel. State-run oil marketing firms soared on weaker global crude oil price. HPCL surged 7% to Rs 329, BPCL gained 3% to Rs 413.90 and Indian Oil Corporation rose nearly 1.1% to Rs 567.

Infosys rose 2% to Rs 2,022. The company posted on Wednesday strong second-quarter September 2006 results, and has also revised upwards earnings and revenue guidance for 2007 fiscal year. Other IT stocks took their cue from Infosys. HCL Tech surged 4.7% to Rs 583, TCS rose 3.8% to Rs 1,085, Wipro advanced 3.3% to Rs 546.50 and Satyam Computer gained 1.9% to Rs 423.

Auto shares also rose on hopes of strong earnings results. Bajaj Auto gained 2.6% to Rs 3,147.80, car large-cap Maruti Udyog moved up 2.7% to Rs 960 and Tata Motors rose 2% to Rs 899.

Bank shares also jumped on the bandwagon of strong earnings results. SBI rose 2.7% to Rs 1,032. ICICI Bank edged up 0.4% to Rs 690, higher than an early low of Rs 672.50.

Cement shares also rose by the same token. ACC advanced 1.8% to Rs 989, Gujarat Ambuja Cements gained 1.5% to Rs 121.80, Grasim rose 2.6% to Rs 2,640 and UltraTech Cement notched up 1.2% to Rs 890.

Decliners

Hindustan Lever led the decline. The company declined 0.83% to Rs 233.20 and HDFC Bank fell 0.52% to Rs 959.95. Although down 0.5%, HDFC Bank was up from an early low of Rs 947.20.

Corporate news

Granules India Ltd today announced that it has signed a Memorandum of Understanding with Hubei Biocause Heilen Pharmaceutical Company of China. Granules has acquired a 50% stake in the company.

[R]9:30AM London benchmark index advanced by mid-day, nearing 6,100 level.[/R]
The FTSE 100 in London, by mid-day on Thursday, advanced 15.5 points, or 0.3%, to 6,088.2, its highest level since May 2006.

Advancers

Miners benefited from higher gold and copper and from further takeover speculation around Anglo American which rose 2.3%, and pulled others up with it, traders said. Rio Tinto rose 2.4%, while Vedanta Resources added 2%.

Financial stocks are still doing well, with the bid talk surrounding fund managers Man Group and Amvescap keeping both in demand. Man Group rose 2.5% on further takeover talk that Goldman Sachs may make a bid. Amvescap also rose 0.8%.

Bradford and Bingley rose 1.6% on continued takeover speculation, traders said. In media, ITV rose 0.5% after media executive Roger Parry said late on Wednesday he did not intend to launch a takeover bid for Britain''s largest commercial broadcaster.

Decliners

Drax led the decliners, falling 2.7% on the weaker oil price and after Goldman Sachs cut the price target. Corus slipped 0.1% after Rabo cut the stock from hold to reduce, saying the current share price more than reflected a possible takeover premium.

Reports suggested that Corus had held talks with India Tata Steel but Corus had yet to receive a firm bid proposal. SABMiller shed 0.9%, losing early gains after the global brewing company announced on Thursday its first-half underlying beer volumes advanced more than expected but it suffered a slowdown in South Africa.

Among midcaps, Carphone Warehouse shares fell 13.8% after the company lost a contract with Vodafone.

Corporate news

Lloyds TSB is close to its long-awaited first sale of bonds backed by residential mortgages with a 5.62 billion pounds deal that is set to add to a booming market for such securitisations in Europe this year.

[R]6:30AM Asian markets close mixed Thursday, Japan falls, S. Korea rises.[/R]
Asian markets closed mixed on Thursday. The Nikkei 225 Average finished the day 0.19% lower at 16368.81. Stocks declined, led by banking shares, as Sumitomo Trust & Banking fell 4.6% after Goldman Sachs downgraded the stock to sell from neutral. Mitsubishi UFJ, Japan largest bank by assets, shed 1.5%.

Pharmaceutical stocks also fell, with Astellas Pharma losing 2.5%. Taisho Pharmaceutical plunged 7.8% after the company revised down its earnings guidance for the second time this fiscal year.

The Hang Seng Index in Hong Kong ended 0.06% higher at 17873.09. China Construction Bank advanced 2.3%, and Bank of Communications rose 0.7%, after advancing 4.8% in the previous two sessions. Bank of China gained 1.5%.

South Korea Kospi Index gained 0.47% to 1331.78, while Shanghai Composite Index closed 0.7% lower at 1778.18. Korean Air climbed 3.7%, while rival Kosdaq-listed Asiana Airlines gained 1.6% on a continued decline in oil prices. Hyundai Engineering & Construction advanced 4.3%, and Daewoo Engineering & Construction closed up 4.1%.

In China, declines in defense-related firms, after recent gains, helped pull the benchmark stock index down. Aircraft engine manufacturer Sichuan Chengfa Aero-Science & Technology plunged 10%, satellite developer China Spacesat also lost 10% and spacecraft developer Harbin Fenghua-Aerospace Hi-tech slid 9%.

Taiwan sank 0.32% to 6984.58 and Australia S&P/ASX 200 dipped 0.44% to close at 5259.40. Advancers in Australia were led by Promina after rival Suncorp-Metway came with a 7.87 billion Australian dollars ($5.85 billion) offer to buy the home insurer, Promina, which shares rose 13%.

[R]6:30AM European stocks advance early Thursday on M&A deals.[/R]
European markets were higher by mid morning on Thursday. The FTSE 100 in London climbed 0.3% to 6,088.4, Frankfurt Xetra Dax rose 0.2% to 6,130.55, and the CAC 40 in Paris added 0.4% to 5,334.42.

Advancers

Scania shares rose 9.6% following its statement that its third-quarter net income rose 55%, reflecting substantially higher volumes. Deliveries rose to 14,959 from 12,226 a year ago. Shares in MAN shares gained 3.3%. STMicroelectronics also gained 2%.

Volvo, the domestic rival of Scania, added 2.9%. French technology company Thomson gained 4.5% after it said that its third-quarter core revenue rose 10% to 1.4 billion euros.

Decliners

Supermarket company, Carrefour SA, said third-quarter sales rose 7.3% at a constant exchange rate to 22.1 billion euros. The company shares sank 2.1% after rising sharply prior to the results.

Volkswagen, the single biggest shareholder in Scania, was flat, its gains restricted by a generally sluggish auto sector and Peugeot declined as Goldman Sachs cut its recommendation on the stock from neutral to sell. Peugeot shares fell 2.2%.

Other news

German EU harmonised inflation slowed to its lowest rate in more than two years and a half in September largely due to a sharp fall in oil prices, the Federal Statistics Office announced on Thursday.

Oil and gold

Oil prices advanced Thursday after hitting their lowest level this year in the previous session as market participants awaited the release of a weekly U.S. petroleum supply report. Light, sweet crude oil for November delivery rose 26 cents to $57.85 a barrel on the NYME.

Gold opened Thursday at a bid price of $574.70 a troy ounce, down from $576.00 late Wednesday.

Currencies

The euro against the U.S. dollar. The European currency rose to $1.2532, from $1.2521. The dollar was trading at 119.56 yen by mid-afternoon in Tokyo, down from 119.69 yen from late Wednesday in New York. Against the dollar, the British pound was at $1.8560 at 10:28 a.m. in London, from $1.8569 late yesterday.

[R]5:00AM Gold prices rose Wednesday but ended below $580 an ounce.[/R]
December gold rose by 30 cents to close at $576.50 an ounce on the NYME. Other metals followed gold lead higher on Nymex, with the exception of platinum, which January contract fell by $2.90 to close at $1,072.80 an ounce. December silver futures ended up 11 cents at $11.33 an ounce, December palladium added $7.35 to end at $308.95 an ounce and December copper put on 3.2 cents to close at $3.41 a pound.

The front-month November crude oil contract dropped 93 cents lower at $57.59 a barrel, after falling as low as $57.48, the lowest point in 2006. November heating oil settled down 0.89 cent to $1.6720 a gallon. November unleaded gasoline shed 1.65 cents to $1.4503 a gallon. October natural gas finished down 31.6 cents at $6.150 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures advanced 0.20 cent at $1.0305 a pound and March gained 0.20 cent to $1.07 a pound. Futures on raw sugar in foreign ports for March declined 0.52 cent at 11.09 cents a pound while May slipped 0.46 cent to 11.30 cents a pound.