Futures Up Ahead of Earnings

albena
30 Nov, -0001
New York City

U.S. stock futures are poised to open higher Tuesday after IBM posted 2Q results that beat forecasts. The numerous blue-chip earnings releases scheduled Tuesday will be investors

U.S. MARKET AVERAGES

Dow Jones futures were recently up 22 points, while Nasdaq futures climbed 5 points and S&P futures edged up 1.3 point.

After the bell Monday, IBM reported that its 2Q net income rose 5.4% to $1.83 billion, or $1.12 a share, from $1.74 billion, or $1.01 a share, a year earlier. IBM's income from continuing operations came in at $1.14 a share, well above Wall Street's expectations of $1.03 a share.

After Monday's closing bell, IBM, the world's largest computer company, rose to $85.40 from a close of $81.81.

ECONOMIC NEWS

The Commerce Department is expected to release the June housing start report at 8:30 a.m. Economists are looking for a 2% jump to an annual rate of 2,050,000 for housing starts in June. Building permits are seen up by 1.8% to an annual rate of 2,100,000.

Greenspan is expected to testify before Congress on Wednesday and Thursday.

INTERNATIONAL MARKET NEWS

Asian markets closed mixed Tuesday, with Korean stocks advancing due to weakness in the won, Australian stocks sliding on resource stock retreat and Japanese shares ending slightly up ahead of earnings releases.

In Tokyo, the Japanese markets reopened after a national holiday with the Nikkei 225 ending the session up 6.16 points at 11,764. In Hong Kong, the Hang Seng index was up 0.05%, Australia's All Ordinaries lost 0.47% and the Seoul Composite advanced 1.2% due to weaker won vs. the U.S. dollar.

In Seoul, market leader Samsung Electronics ((SSNGY)) gained 2% and Hyundai Motors ((HYMLF)) jumped 3.6%.

Fresh merger and acquisition activity in the beverage sector, combined with the strong results from IBM overnight and a weaker euro gave a boost to European markets. Germany's DAX 30 index advanced 0.3% to 4,732.14, France's CAC 40 gained 0.4% to 4,379.83 and the U.K.'s FTSE 100 inched up 0.2% to 5,223.6.

Danone shares surged 12.3% to 89.30 euro a share on speculations that Groupe Danone ((DA)) will be acquired by PepsiCo ((PEP)). It was reported that Pepsi will bid 115 euro a share and also that Danone planned to counter a Pepsi bid.

SABMiller ((SAB)) added 4.2% after agreeing to acquire Colombian brewer Bavaria from Santo Domino Group.

ENERGY, METALS AND CURRENCIES MARKETS

Crude oil prices were steady Tuesday ahead of U.S. petroleum stocks data. Light, sweet crude for August delivery shed 15 cents to $57.17 a barrel on the New York Mercantile Exchange by midday in Europe. Heating oil and gasoline were almost flat at $1.6327 and $1.6440 a gallon.

On London's International Petroleum Exchange, September Brent crude oil futures were quoted at $56.97 a barrel, dropping 2 cents.

The U.S. dollar advanced versus major currencies in European trading Tuesday. The euro was quoted at $1.1991, down versus $1.2052 late Monday in New York. The greenback bought 112.65 Japanese yen, up versus 111.91, while the British pound was quoted at $1.7422, down versus $1.7480.

Gold in London was trading at $420.00 bid per troy ounce, down from $421.50 late Monday. In Zurich the bid price was $419.03, down vs. $420.90. Gold declined $1.30 in Hong Kong to finish at $420.35.

EARNINGS NEWS

Johnson & Johnson and Merrill Lynch are slated to report Tuesday. Bellwethers Intel, Motorola and Yahoo are expected to post their quarterly results after the closing bell.

Ford Motor Co. ((F)) posted a 19% drop in second-quarter earnings due to lower-than-expected sales of the company’s core sport-utility vehicles and surging gasoline prices. The auto maker said it earned $946 million, or 47 cents a share vs. $1.17 billion, or 57 cents a share, a year earlier. Ford also backed its full-year earnings forecast at $1.00-$1.25 a share, excluding special items.

Lucent Technologies ((LU)) posted 3Q earnings of $372 million, or 7 cents a share, down vs. $387 million, or 8 cents a share in the comparable quarter a year earlier. Excluding tax-related non-recurring items, earnings would have been 5 cents a share, beating views of 4 cents a share. Revenue jumped 6.8% to $2.34 billion vs. last year's $2.19 billion, below analyst estimates of $2.36 billion, as product revenue soared 5% and service revenue climbed 14%.

Avon Products Inc. ((AVP)) said second-quarter earnings advanced to $328.6 million, or 69 cents a share, versus $232.3 million, or 49 cents, including a 20 cent-per-share tax benefit. Analysts were looking for earnings of 66 cents per share.

KeyCorp ((KEY)) reported second-quarter net income of $291 million, or 70 cents a share, up versus $239 million, or 58 cents, last year. Revenue totaled $1.21 billion vs. $1.14 billion on growth in consumer banking. Analysts, had expected earnings of 64 cents a share on revenue of $1.15 billion.

U.S. Bancorp ((USB)) reported second-quarter net income of $1.12 billion, or 60 cents a share, up versus $1.04 billion, or 54 cents a year earlier. Total net revenue totaled $3.3 billion versus $3.02 billion. Analysts expected earnings of 59 cents a share on revenue of nearly $3.24 billion in the latest quarter.

SunTrust Banks Inc. ((STI)) said that second-quarter net income climbed to $465.7 million, or $1.28 a share, versus $386.6 million, or $1.36 a share, last year. Revenue rose to $1.9 billion vs. $1.5 billion a year ago. Operating income of $1.37 was in line with analysts’ forecasts.

Bedford Property Investors, real estate investment trust, reported 2Q earnings rise of 55 cents per share against 30 cents a year ago.

Brown & Brown, insurance company, posted 2Q profit increase of 53 cents a share vs. 46 cents last year on revenue growth, slightly missing expectations of 54 cents a share.

Compass Bancshares posted a record 2Q net income of 81 cents a share compared with 73 cents a year earlier.

Crown Holdings, maker of consumer packaging, posted a profit decrease of 16 cents a share vs. 22 cents last year reflecting foreign currency charges and higher expenses. The quarterly results missed estimates of 34 cents a share.

Exponent, engineering and scientific consulting firm, reported 2Q net income growth of 47 cents a share versus 40 cents a year ago.

Fidelity Bankshares, holding company, announced 2Q net income rise of 35 cents a share compared with 26 cents last year on increased net interest rate spread, beating forecasts of 30 cents a share.

First Busey Corporation reported 2Q income increase of 31 cents a share compared with 27 cents a year earlier on higher net income interest.

Firstt Charter, financial services company, reported 2Q profit rise to 37 cents a share, up from 34 cents last year on strong growth in loans, expense management and solid credit quality.

First Defiance, financial corporation, posted 2Q profit decline of 28 cents per share vs. 49 cents last-year same quarter, including after-tax-merger-related expenses.

Werner Enterprises, truckload freight company, posted 2Q net income growth of 31 cents a share, up from 27 cents a year ago due to effective cost management. Analysts had expected 33 cents a share.

CORPORATE NEWS

Hewlett Packard, a computer and peripheral maker, is planning to announce a restructuring at 8:45 a.m. Tuesday. Analysts expect around 25,000 job cuts.

Metro Inc. agreed to pay $1.2 billion cash and $500 million of Class A subordinate shares for Great Atlantic & Pacific Tea Co.'s A&P Canada. A&P Canada, with more than 32,000 employees and annual revenue of $4.4 billion, operates 236 food stores in Ontario under the names A&P, Dominion, Food Basics, the Barn and Ultra Food & Drug.