Market Gains on Positive Earnings

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

Market

U.S. MARKET AVERAGES

Investors remained focused on the earnings and details of the earnings. The weekly unemployment claims and passage of CAFTA and Energy bill did not get any attention.

Housing, Tech and HMOs are getting warmer welcome from investors and energy and hoteliers are not in demand for the day.

Crude oil, heating oil and propane are not trading with significant moves in either direction, but the metals markets are up. Copper, gold, and silver are trading better than 1.5% at mid-day.

Thursday is the heaviest day of corporate earnings of the quarter with nearly 500 companies slated to report. Most earnings released Thursday morning were largely positive and reassured traders. Daimler added 11% after reporting 2Q net income that jumped 28%.

Exxon’s shares traded up and down after the company reported a 32% increase in net income, fueled by soaring oil prices. Earnings excluding charges of $1.23 a share fell short of analysts’ projections by a cent. Exxon acquired back $3.7 billion shares in 2Q and it plans to buy $5 billion more of its own stock in 3Q.

Starbucks gained 7.5% after it reported that 3Q earnings added 29% on 7% same-store sales growth. Following the upbeat earnings, the coffee shop chain boosted its fiscal-year outlook.

The housing sector making considerable gains in the early trading, with Beazer Homes USA ((BZH)) adding more than 4% on its quarterly earnings release. Chemical, defense and drugs stocks are also posting gains.

Health care providers declined in the early trading, driven down by a 9.7% drop in Universal Health Services ((UHS)) after its earnings report. Computer hardware and semiconductor sectors are also among the decliners.

In the pharmaceuticals sector, Bristol-Myers Squibb posted 2Q earnings of 50 cents a share, up vs. 27 cents a share a year ago, beating forecasts of 36 cents a share. The company boosted its 2005 earnings outlook as it expected the sale of its consumer medicines business to go through. The company’s shares traded higher 1%.

Dow Chemical said 2Q net profit rose 85% a 16% rise in sales on higher prices for plastics and speciality chemicals. Despite the rosy earnings, the stock wasn’t getting much of a boost in the morning trading but at mid-day jumped 2%.

Of the recently listed IPOs, Spectrum Brands (SPC), Prestige Brands (PBH) and Great Wolf Resorts (WOLF) had disappointed earnings and market did not waste time in dumping these stocks.

ECONOMIC NEWS

In the week ending July 23, the advance figure for seasonally adjusted initial claims was 310,000, an increase of 5,000 from the previous week's revised figure of 305,000. The 4-week moving average was 318,250, a decrease of 250 from the previous week's revised average of 318,500.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending July 16, unchanged from the prior week's unrevised rate of 2.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending July 16 was 2,603,000, an increase of 32,000 from the preceding week's revised level of 2,571,000. The 4-week moving average was 2,590,750, an increase of 1,500 from the preceding week's revised average of 2,589,250.


INTERNATIONAL MARKET NEWS

European markets closed higher in a day of heavy earnings reports mainly on the back of French corporates such as telecoms-equipment maker Alcatel and France Telecom, alcoholic drinks group Pernod-Ricard, and German-American automaker DaimlerChrysler. Averages in Germany advanced 0.8%, in France added 0.7%, and in the U.K. rose 0.03%.

Asian-Pacific markets finished mostly higher on gains from exporter-related issues, boosted by currencies. The Nikkei advanced 0.2% on US data released yesterday, showing that the U.S. economy is shrugging off the effects of higher oil prices and is under little threat from inflation which proved to be good news for major exporter-related companies like Sony which closed higher 0.3%. The other regional markets were generally strong. Hong Kong’s Hang Seng added 0.1%, South Korea’s Kospi rose 1.1%, and Singapore’s Straits Times rose 0.5%. Among the losers were China’s Shanghai Composite, losing 0.3% and Sydney’s All Ordinaries down 0.4%. Crude for September delivery closed at $59.11 a barrel on the NYME, down 9 cents. In Tokyo the dollar traded at the lower end of 112-yen level and stood at 811.28 against the yuan.
ENERGY, METALS AND CURRENCIES MARKETS

Crude-oil futures rose after the U.S. Department of Energy presented a mixed picture of U.S. petroleum stocks but suggested it may lift its 2005 outlook for oil demand. Light sweet crude for September delivery rose 34 cents to $59.45 a barrel on the NYMEX.

Gold futures rose as the dollar traded mixed. Gold in London traded at $427.45 per ounce, up from $423.90. In Hong Kong gold gained $1.90 to close at $425.15. Silver traded at $7.08, up from $7.02.

The dollar was mixed against other major currencies. In mid-day NY trading the dollar quoted at $1.2122 per euro; it stood at 112.30 against the yen, and traded at $1.7546 per pound.

EARNINGS NEWS

GlaxoSmithKline,drug maker, posted 2Q profit increase of 1.19 billion pounds compared with 5.25 billion pounds a year ago on 6% sales rise despite factory closures. Company’s shares rose 14 cents to $47.07.

Goodrich Comopany, supplier of systems and services to aerospace markets, posted 2Q profit increase of 61 cents a share vs. 32 cents a year ago on sales growth of $1.35 billion

Ryder, management solutions supplier, posted 2Q net income of 98 cents per share vs. 97 cents a year ago on 10% rise in revenue. The quarterly results include a tax benefit of 12 cents per share.

Ricard, which has already acquired its British rival Allied Domecq, reported first-half 8% higher revenue at its core wines and spirits division. The growth translates to 1.65 billion euros, beating expectations of 1.60 billion euros.

Exxon Mobil, publicly traded oil company, posted 2Q net income growth of $1.20 per share vs. 88 cents per share last year on high oil and natural gas prices. Excluding one-time items the company would have reported earnings of $1.23, missing estimates of $1.24 a share.

WestJet, airline, reported 2Q net income of 2 cents per share vs. 6 cents a year ago on operating revenue of $326.4 million.

Phelps Dodge, producer of copper and molybdenum, reported 2Q record profit of $6.75 a share, up from $2.30 a share for the comparable last-year period, including special gains of $2.23 per share.

Timken Company reported 2Q more-than-doubled earnings of 73 cents per share vs. 28 cents a year ago on 17% higher sales of $1.3 billion. The quarterly results include special items of $3.7 million.

XM Satellite Radio Holdings, posted 2Q narrower net loss of $146.6 million compared with $166.1 million a year ago on increased subscriber number and 136% revenue growth.

Ikon, copier and printer retailer, posted 3Q more-than-doubled earnings of 17 cents per share vs. 6 cents last year on decline in debt-related charges. The company forecast 2005 earnings in the range of 60 to 63 cents a share, excluding items.

Sony announced 2Q net loss of 7.3 billion yen compared with a profit of 23.3 billion yen in the prior-year same period, citing a 3.3% sales drop, rising competition and falling prices. The company cut its 2005 profit guidance by 90% on lower TV prices and higher restructuring costs.

AstraZeneca, Anglo-Swedish drug maker, reported 2Q 50% profit rise of $1.22 billion compared with $811 million a year ago on sales growth of $6.13 billion. The company projected full-year earnings of $2.75 a share.

Loews, property, casualty and life insurance company, reported earnings of 82 cents per share compared with 70 cents in the same quarter last year on net income growth, topping forecasts.

Tetra, oil and gas service provider, posted 2Q net income of 63 cents a share, about triple vs. the-same-period-last-year figure of 21 cents a share on revenue growth, beating market forecasts..

Apache, natural gas and crude oil producer, posted 2Q profit of $1.76 a share, up vs. $1.16 a share in the same period last year, missing slightly analyst expectations.

Ameren, electricity and natural gas distributor, posted 2Q net income jump to 93 cents a share, vs. 65 cents a share for the same period a year ago on sales growth, beating analyst forecasts.

Cinergy, electric energy and gas producer, posted 2Q net income was down to 25 cents a share, vs. 32 cents a share a year earlier on costs and hedging contracts, missing analyst forecasts.

Lyondell, chemicals manufacturer, posted 2Q earnings rise to 48 cents a share, up vs. 2 cents a share the same period last year on revenue growth, missing market expectations.

Northrop Grumman, defense and commercial electronics manufacturer, posted 2Q earnings of $1 a share, up vs. 82 cents a share a year ago on sales growth, beating analyst expectations.

Hercules, chemicals manufacturer, posted 2Q earnings rise of 27 cents a share, up vs. 26 cents, in the same period last year on sales increase, missing slightly analyst expectations.

IDX posted 2Q net income of 16 cents a share, down vs. 26 cents a share in the quarter a year ago on revenue growth, missing analyst forecasts.

Bristol-Myers Squibb announced a 2Q non-GAAP profit of 47 cents per share, up vs. 46 cents per share last year. Analysts had expected earnings to drop to 36 cents per share. For the full year, the company sees a profit at the upper end of its earlier issued guidance range of $1.35-$1.45 per share.


Waste Management, waste services provider, announced 2Q earnings of 92 cents a share, up against 37 cents a share a year-ago on revenue growth, beating forecasts.

Coca-Cola Enterprises, nonalcoholic beverages bottler, posted 2Q earnings of 70 cents a share, up vs. 43 cents a share the-year-ago period, beating forecasts on revenue growth.

Watson Pharmaceuticals, generic drug maker, posted 2Q profit increase of 35 cents a share vs. 29 cents a year ago due to improved sales of its generic and branded products, exceeding estimates of 33 cents a share. The company sees its 2005 earnings between $1.35 and $1.43 a share.

McKesson, distributor of prescription drugs, reported 4% net income increase but flat earnings of 55 cents a share. The company is recovering from a damaging financial scandal, and excluding special charges it would have posted a quarterly income of 66 cents a share, beating estimates of 53 cents.

HCA, hospital operator, posted 2Q earnings of 90 cents per share vs. 72 last year on one-time gains, including office building sales and higher revenue of $46.07 billion. Excluding special items earnings per share would have been 74 a share, missing expectations of 76 cents a share.

Computer Associates International, posted 1Q net income more-than-doubled net income of 15 cents a share compared with 7 cents for the prior-year same period, boosted by a tax benefit and higher revenue. Excluding one-time gains the company would have posted earnings of 22 cents a share, in line with analysts’ estimates.

Applied Micro Circuits, chip maker, announced 1Q narrower net loss of a penny per share vs. a loss of 7 cents a share a year ago on revenue of $64.7 million. The company is planning to restructure its operations, cutting 5% of its workforce.

Daimler Chrysler, autocar maker, posted 2Q earnings of 88 cents a share, up from last year the same period, on net profit increase.

Alcatel, telecom equipment maker, posted 2Q earnings of 60 euro cents a share, beating forecasts by 14 euro cents a share on net profit growth.

Pernod Ricard, alcoholic drinks groups, reported a 2Q sales increase of 6.5% to 101.9 billion pounds compared with the same period last year on organic operating profit growth.

France Telecom, telecommunications company, posted 2Q net profit rise of up to 3.4 billion euros vs. 1 billion euros the year-ago period on growth in its mobile services base and consumer broadband Internet, well ahead of forecasts.

Dow Chemical, chemicals company, posted a 2Q earnings rise of up to $1.30 a share, missing expectations of $1.22 a share, after adjusting for a 10 cent a share benefit.

Hearst-Argyle, television and radio stations company, posted 2Q earnings of 68 cents a share, up vs. 37 cents a share in the same period last year, matching analyst expectations.

Marvel Enterprises, comic book and toy company, reported net profit for 2Q was down 24 cents a share, from 25 cents a share the year-ago period on sales losses.

EDO, electronic systems producer, posted 2Q earnings increase of 31 cents a share, beating analyst predictions by a penny on sales growth.

Beazer Homes, single family homes designer, reported 3Q net income of $2.50 a share, up vs. $1.42 a share in the year-ago fiscal period on revenue growth.

Precision Drilling, drilling and service rigs provider, reported 2Q earnings increased to 21 cents a share from 14 cents the same period last year on revenue growth, beating analyst expectations.

Aetna posted 2Q operating earnings of $1.20 per share, though excluding reserve development, the company met analysts' estimate with a profit of $1.08 per share. In the same period a year ago the company reported operating earnings of 89 cents per share, or 85 cents per share without favorable reserve development.

Taro Pharmaceutical, pharmaceutical company, posted 2Q earnings of 22 cents a share, down from 31 cents a share in the same period last year, missing forecasts.

CORPORATE NEWS

Daimler Chrysler's 2Q net rose 28%, despite further restructuring costs at the company’s Mercedes Car Group division, which reported a surprise profit. The German-U.S. auto maker added Chief Executive Jurgen Schrempp will leave by the end of the year, to be succeeded by Chrysler head Dieter Zetsche.

China's Cnooc is thinking about an agreement to sell all of Unocal's U.S. assets to cushion criticism of its proposed purchase of the California-based company among U.S. lawmakers. Cnooc already accepted to exclude itself of any assets required by the committee on foreign investment, the U.S. government panel that would review a purchase of Unocal on national security grounds. But after a series of setbacks in Washington, Cnooc was feeling pressure to make additional concessions.