Exxon Mobil Tops View

Elena
26 Oct, 2006
New York City

U.S. stock futures indicated a higher opening on the back of stronger-than-expected earnings and steady interest rates. A bigger-than-expected jump in durable goods orders and higher weekly jobless claims had little effect on futures. Exxon Mobil reported Q3 earnings rise of $10.49 billion, or $1.77 per share, up from a year-ago profit of $9.92 billion, or $1.58 per share, exceeding expectations of $1.59.

[R]9:00AM Stock futures advanced on Exxon Mobil earnings and steady rates.[/R]
U.S. stock futures indicated a higher opening, with further gains expected on the back of stronger-than-expected earnings and steady interest rates. A bigger-than-expected jump in durable goods orders and higher weekly jobless claims had little effect on futures. U.S. durable goods orders soared 7.8% in September, as orders for new aircraft nearly tripled. This was the biggest jump in six years, above estimates of 2.8% increase. In another report, the Labor Department said that the number of newly laid-off workers filing claims for unemployment benefits rose by 8,000 to 308,000 last week.

Exxon Mobil ((XOM)) advanced 1.6% in pre-market trading after posting better-than-expected Q3 results. The oil giant reported Q3 earnings rise of $10.49 billion, or $1.77 per share, up from a year-ago profit of $9.92 billion, or $1.58 per share, exceeding expectations of $1.59. Revenue slipped to $99.59 billion from $100.72 billion a year earlier. Exxon attributed the higher earnings to the impact of its continuing share purchase program, higher crude oil and natural gas realizations, and improved marketing.

In other earnings news, Bristol-Myers Squibb Co. ((BMY)) said Q3 profit tumbled to 17 cents a share from 49 cents a year ago, hurt by generic competition to Plavix. Analysts had expected it to earn 20 cents a share on revenue of $4.2 billion. Bristol-Myers Squibb raised its 2006 earnings per share target to between $1.02 and $1.07 a share from no less than 95 cents a share on a non-GAAP basis. Comcast Corp. ((CMCSA)), cable television provider, reported Q3 earnings increase of 58 cents a share, up from 10 cents a share on 22% revenue jump, beating estimates of 19 cents a share. Symantec ((SYMC)) slipped 5.7% in the pre-open after the computer security software maker didn't meet analyst estimates with its quarterly results. In corporate news, Red Hat ((RHAT)) tumbled 17% after Oracle Systems ((ORCL)) said it would begin offering support for Red Hat's Linux operating system. S&P 500 futures rose 3.20 points at 1,392.40 and Nasdaq 100 futures gained 3.50 points at 1,744. Dow industrial futures climbed 14 points to 12,203.

[R]Initial jobless claims advanced 8,000.[/R]
The Department of Labor released its report on initial jobless claims in the week ended October 21 on Thursday, showing that jobless claims increased in line with economist estimates. The report showed that jobless claims rose to 308,000 from the previous week's revised figure of 300,000. Economists had expected jobless claims to rise to 308,000 compared to the 299,000 originally reported for the previous week. At the same time, the less volatile 4-week moving average fell to 305,250 from the previous week's revised average of 308,000. The report also showed that continuing claims in the week ended October 14 rose to 2.449 million from the preceding week's revised level of 2.446 million.

[R]Durable goods orders soared on strong aircraft orders.[/R]
Thursday morning, the Department of Commerce released its report on durable goods orders in the month of September, showing that orders increased by much more than economists had been expecting due largely to an increase in transportation equipment orders. The report showed that durable goods orders rose 7.8 percent in September after a revised 0.1 percent decrease in August. Economists had been expecting orders to increase by 2.3 percent compared to the unchanged reading previously reported for the previous month. The increase in durable goods orders was largely due to a significant increase in orders for transportation equipment, which surged up 27.6 percent in September following a 3.6 percent increase in August.

A sharp rise in orders for commercial aircraft and parts contributed to the increase in orders for transportation equipment, as Boeing ((BA)) recorded 175 aircraft orders in September compared with 30 in August. The report showed that orders for commercial aircraft and parts rose 183.2 percent in September after falling 19.9 percent in August. Excluding orders for transportation equipment, orders for durable goods edged up by only 0.1 percent in September compared to a 1.5 percent decrease in the previous month. The Commerce Department said that there was also significant growth in orders for defense capital goods, which rose 41.9 percent in September. Excluding defense, orders for durable goods increased 6.3 percent. The report also showed that shipments of durable goods fell 2.8 percent in September after rising 2.0 percent in August, while inventories of durable goods rose 1.0 following a 0.6 percent increase in the previous month.


[R]8:00AM Hewlett-Packard extended its offer for Mercury Interactive.[/R]
Hewlett-Packard Co. ((HPQ)) announced late Wednesday that it was further extending its tender offer for the shares of software-maker Mercury Interactive Corp. ((MERQ)). Hewlett-Packard agreed to acquire the software maker in late July for $4.5 billion, or $52 a share, with the offer being extended until Oct. 27. Now, H-P is extending the offer again, this time until Nov. 1. H-P said that approximately 38.9 million Mercury Interactive shares had been tendered as of October 24, short of the 50.1% majority it needs to complete the deal. The company also said it might waive certain conditions it had previously asked for to complete the tender offer, but it will not wave the ‘minimum condition’ of having a majority of the shares tendered. Mercury Interactive had 86.98 million shares outstanding for the year ended Dec. 31, 2005. For 2005, Mercury Interactive swung to a loss of $100 million, or $1.15 a share, from a profit of $53.8 million, or 53 cents a share, in 2004. The maker of software released Wednesday partial results for Q3, saying revenue rose between 20% and 22% from the same period a year earlier. The company didn''t report a quarterly profit.


[R]7:30AM HK, Japan surge, lead Asian markets higher on FOMC, oil stocks.[/R]
Asian markets finished higher on Thursday. In Tokyo, the Nikkei 225 Stock Average advanced 0.7% to 16811.60. As oil futures pulled back above the $60 mark overnight in U.S. trading, Inpex rallied 4.9%.

Exporters gained too. Honda closed up 2.2% after stating record first-half profits yesterday and Toyota finished 0.6% higher after hitting an all-time high in intraday trading. Nissan, which reported earnings after the market close, posted a 0.9% gain. There was a a mixed performance from consumer-electronic companies. Sharp finished down 0.2% despite reporting a 28% rise in its fiscal first-half net profit.

In Hong Kong, the Hang Seng Index set a record closing high, gaining 1.1% to 18353.74. China Mobile led the advance, the second-biggest stock in the index, which advanced 3.8%.Shares of CNOOC rose 1.7%. Australia S&P/ASX 200 finished 0.7% higher and New Zealand NZSX-50 advanced 1% and Taiwan Weighted Price Index gained 0.3%.

Telecommunication and tech stocks also led South Korean shares higher on expectations for more positive fourth-quarter earnings. The Korea Composite Stock Price Index, or Kospi, rose 0.2% to 1373.65. Hynix Semiconductor gained 0.6% despite reporting lower-than-expected numbers for the third quarter. SK Telecom shares rose 1%, despite posting a net profit decline of 22%.


[R]6:30AM European markets advance Thursday morning on earnings and oil.[/R]
European markets were higher in early morning on Thursday. The FTSE 100 in London climbed 0.4% to 6,239.2, Frankfurt Xetra Dax added 0.4% to 6,291.6, and the CAC 40 in Paris gained 0.5% to 5,448.52.

Advancers

Early advancers included Telenor, the Norwegian telecom operator, reporting forecast-topping earnings and announcing its agreement to sell its satellite services unit for a profit. Its shares added 5.9%.

Renault led European carmakers higher. Its 1.2% decline in nine-month sales was better than expected. Its shares gained 1.2%. The German carmaker US Chrysler unit made losses on the company, but these were counterbalanced by strong performances at Mercedes and its truck division. DaimlerChrysler shares added a further 0.8%.

Takeover talks gave German steelmaker ThyssenKrupp a boost after rumours that Nucor, the US steel manufacturer, was on the point of making an offer. Thyssen declined to comment, but the shares gained 3.2%.

Decliners

Chocolate and soda maker Cadbury Schweppes announced that the situation in Nigeria influenced its performance in the third quarter. Its shares dropped 1.3%

Another decliner was British drug company AstraZeneca, trading down 3.7%, following its statement that it no longer plans to develop NXY-059 in acute ischemic stroke.

Oil and gold

Light, sweet crude oil for December delivery was up 13 cents to $61.53 a barrel on the NYME. Prices at London ICE Futures exchange also moved modestly higher. Brent crude rose 18 cents to $62.23 a barrel.

Gold opened Thursday at a bid price of $592.60 a troy ounce, up from $587.40 late Wednesday.

Currencies

The euro rose slightly against the U.S. dollar Thursday after the U.S. Federal Reserve left interest rates unchanged and the president of the European Central Bank warned that the bank would adjust its own rates if needed. The euro bought $1.2657 in morning European trading, compared with $1.2615 in New York late Tuesday. The British pound advanced to $1.8839, up from $1.8793. The dollar was lower against the Japanese yen, falling to 118.71 yen from 118.98 ye