Morning Earnings Disappointments

123jump.com Staff
30 Nov, -0001
New York City

Existing-home sales surpassed market expectations and reached another record in June as low mortgage interest rates drove June sales to 7.33 million homes and median home price rose to $216,000 from $209,000.Asian benchmarks closed mostly higher. Japan

U.S. MARKET AVERAGES

The morning opening in the market has been on a cautious note. The earnings releases before the market opening showed Xerox still lagging in its restructuring efforts and released earnings well below market expectations.

Other earnings negative surprises from the notable companies this morning include, Arch Coal, Bell South and Valero LP. Fording Canadian Coal Trust this morning reported earnings jump of nine fold to $123 million in the second quarter.

The coal company Fording Market is awaiting earnings from American Express.


ECONOMIC NEWS

Existing-home sales surpassed market expectations and reached another record in June as low mortgage interest rates and favorable market conditions continued to attract buyers, according to the National Association of Realtors.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.7 percent in June to a seasonally adjusted annual rate of 7.33 million from an upwardly revised pace of 7.14 million in May. Sales were 4.4 percent above the 7.02 million-unit level in June 2004; the previous record was 7.18 million in April of this year.

The national median existing-home price for all housing types was $219,000 in June, up 14.7 percent from June 2004 when the median price was $191,000; this is the strongest increase since November 1980 when annual appreciation was 15.6 percent.


INTERNATIONAL MARKET NEWS

Asian benchmarks closed mostly higher. Japan’s Nikkei rose 0.6%, lifted by top domestic companies ahead of the new-week earnings reports and U.S. markets gains Friday. Among the gainers were energy companies benefiting from strong crude-oil prices and commodity-based firms, such as Teikoku Oil which gained 1.6% and Nippon Mining which added 3.3%. Australia’s All Ordinaries advanced 0.3%, South Korea’s Kospi climbed 1.4%, and Taiwan’s Taiex was up 0.6%. Averages in China and Singapore ended down.

European stocks traded mixed at mid-day, reflecting positive corporate news and losses from tech companies and food producers which offset gains made by the oil and gas sector. U.K.’s FTSE made the strongest performance, climbing 0.4% as markets continue to recover from last week’s terrorist attacks and traders are in the process of digesting earnings updates from Vodafone and Pearson. The German DAX 30 was flat, trading amid a rise in import prices of 1.6%. The French CAC 40 added 0.1% with traders’ attention focused on France Telecom which is likely to win the auction for Spanish operator Amena and Danone which slid 8.3% after PepsiCo reported it wasn’t planning to bid for the French dairy company.

ENERGY, METALS AND CURRENCIES MARKETS

Crude-oil futures dropped after Friday’s intense rally as supply fears eased and are further expected to decrease and slip below $55 a barrel in the last quarter. Light sweet crude for September delivery declined 69 cents to $57.96 in electronic trading on the NYME after it rose $1.52 Friday. Heating oil dropped 1 cent to $1.5715 a gallon. London Brent September delivery lost 49 cents to trade at $57.09 on the International Petroleum Exchange.

Gold changed little after falling Friday as the dollar gained against the euro. Gold for immediate delivery rose 20 cents to $425.20 per ounce and 30 cents for August delivery to reach $425.30 per ounce in after-hours trading on the NYME.

China’s yuan gained against the U.S. dollar after currency limits were relaxed for the first time in a decade. The yuan ended trading at 8.1097 against the dollar, up from 8.11. Against other currencies the greenback was firm, trading at 111.55 yen and $1.2052 per euro.

EARNINGS AND CORPORATE NEWS

Pilgrim’s Pride, poultry producer, reported 2Q earnings jump of $1.28 per share compared with 15 cents a year earlier , beating expectations of $1.20 per share.

Veeco Instruments, semiconductor equipment maker, posted 2Q net loss of 2 cents a share vs. a loss of 6 cents a year ago on revenue growth of $103.4 million. Excluding non-recurring items earnings would have been 9 cents a share, beating estimates of 6 cents a share.

Quest Diagnostics, diagnostic services provider, reported 2Q profit increase of 72 cents a share vs. 59 for the comparable quarter last year on revenue of $1.38 billion, meeting analysts’ expectations.

BellSouth, telecommunication services provider, posted 2Q profit decline of 43 cents a share vs. 51 cents last year. On a normalized basis including the company’s share in the performance of the Cingular Wireless joint venture with SBC Communications, the company earned 46 cents a share on revenue of $8.52 billion.

Xerox, copier and printer maker, reported 2Q net income growth of 40 cents a share compared with 21 cents a year ago, boosted by a tax benefit of 33 cents a share.

Volvo, truck maker, posted 2Q 40% profit rise of SEK3.9 billion on sales increase of SEK61.1 billion. Earnings rose 45% to SEK9.67 per share.

Triad Hospitals, health care services provider, posted 2Q profit of 72 cents a share, reversing a year-ago loss of 7 cents a share on revenue growth of $66 million. The company lifted its 2005 outlook to $2.82 and $2.90 a share.

Silicom, server adapters maker, reported 2Q swung to profit of 7 cents a share vs. last-year net loss of 13 cents on sales increase of $2.64 million.

Smith International, oil and gas industry services provider, posted 2Q earnings rise of 67 cents per share against 27 cents last year on revenue growth of $1.35 billion. The company raised its full-year guidance to $1.40 and $1.45 per share.

Vodafone, U.K. mobile phone operator, announced 2Q 8.6% organic growth in mobile phone revenue and an increase in the total number of customers to 165 million.