Honeywell Profit and Forecast Up

Elena
20 Apr, 2007
New York City

Honeywell International rose over 3% on better-than-expected Q1 profit and lifted full-year forecast. Among other earnings-related movers, American Express rose 3% after posting stronger-than-expected quarterly earnings.

[R]9:45AM U.S. markets rallied on strong earnings from blue-chip stocks.[/R] U.S.
U.S. stock averages posted solid gains at opening Friday, with the Dow Jones hitting another record high, boosted by a sharp rebound in Asian markets, upbeat earnings at Caterpillar and Google, as well as an H&R Block deal to sell its mortgage lending unit. The Dow was sent 130 points higher by 26 of its 30 stocks. Among the most notable gainers, Caterpillar ((CAT)) rose 5% after the company said its Q1 net income fell below the year-earlier level, but exceeded estimates. Honeywell International ((HON)) also supported the index, rising 3.3% on stronger-than-expected earnings results.

However, Dow members Pfizer and McDonald''s posted losses. Pfizer ((PFE)) traded down 1.3%. Its earnings beat expectations and it announced a plan to franchise operations in Latin America and the Caribbean. In other corporate news, H&R Block Inc. ((HRB)) jumped 6% after the company agreed to sell its Option One Mortgage business to OOMC Acquisition Corp, a newly formed company affiliated with Cerberus Capital Management. H&R Block said it expects to report a 2007 loss. Clear Channel Communications ((CCU)) edged up after it agreed to sell its television station group to Providence Equity Partners for $1.2 billion. In the opening minutes, the Dow is up 134.90 to 12,943.53, the Nasdaq Composite has gained 25.28 to 2,530.63, and the Standard & Poor''s 500 index is up 12.77 at 1,483.50.


[R]9:00AM U.S. stock futures moved higher on strong tech and industrial earnings.[/R]
U.S. stock market futures advanced on Friday, boosted by a rebound in global markets, as well as strong earnings reports from technology bellwethers Google, Advanced Micro Devices and industrial companies Honeywell and Caterpillar. Google ((GOOG)) gained 4% in the pre-open on 69% profit jump in Q1 to $1 billion, or $3.18 a share from $592 million, or $1.95 a share a year earlier. Another tech giant, AMD ((AMD)) rose 2% although it swung to Q1 loss of $1.11 a share from a profit of 38 cents a share hurt by weaker prices for its PC server chips. The company added it is considering a major restructuring plan focused on reduction of costs. Dow members Caterpillar ((CAT)) and Honeywell ((HON)) rose 5.8% and 2.9%, respectively on better-than-expected Q1 profit and lifted full-year forecasts.

Caterpillar said its Q1 net income fell to $816 million from $840 million, but per-share profit rose to $1.23 from $1.20 a year ago, when there were about 34 million more shares outstanding. Analysts had expected earnings of $1.09 a share. Again among blue-chip stocks, McDonald''s ((MCD)) reported Q1 higher Q1 earnings and revenue. Earnings met forecasts, while revenue was slightly above estimates. Dow component Pfizer ((PFE)) lost 1% after it reported 18% profit drop in Q1 and cut its full-year outlook. S&P 500 futures rose 6.60 points to 1,486.90 and Nasdaq 100 futures ran up 12.00 points to 1,861.00. Dow industrials futures gained 69 points to 12,940.


[R]8:15AM Pfizer posted 18% profit drop, cut full-year earnings forecast.[/R]
Pfizer Inc. ((PFE)), the world''s largest drug maker, posted 18% decline in Q1 profit, hurt by one-time charges and disappointing sales of diabetes drug Exubera. Net income fell to $3.39 billion, or 48 cents per share, down from $4.11 billion, or 56 cents per share, a year ago. However, excluding one-time items, the company reported adjusted profit of $4.8 billion, or 68 cents per share, up from $4.35 billion, or 59 cents per share, beating estimates of 57 cents. Revenue rose 6% to $12.47 billion from $11.75 billion last year, boosted by 8% rise in the sales of the company''s best selling drug, cholesterol reducer Lipitor.

Pfizer also cut its adjusted earnings per share for 2007 by 10 cents to account for the loss of patent protection for its second best-selling drug, the blood pressure medication Norvasc. The company projected adjusted earnings per share of $2.08 to $2.15, down from a previous range of $2.18 to $2.25. Pfizer also estimates full-year revenue of $47 billion to $48 billion. Including all charges, Pfizer predicts 2007 earnings per share of $1.30 to $1.41. The stock dropped 1.4% in pre-market trading.


[R]8:00AM NY-7:00PM Mumbai Sensex surges Friday on strong results from Satyam.[/R]

The Sensex on BSE finished 277.71 points, or 2.04%, higher at 13,897.41.

The market-breadth was strong as there were three advancers for every two decliners. For 1,508 stocks which advanced, 1,072 declined and only 85 stocks which remained unchanged. Of the 30 stocks in the Sensex, there were only three decliners, while the all the other stocks advanced. The tutnover on BSE was Rs 4,301 crore, higher than Rs 4,170.51 crore on Thursday. On NSE, the turnover was Rs 8,857.73 crore, also higher than Rs 8,194.26 crore on Thursday.

Economic news

Wholesale inflation rose to 6.09% for the week ended April 7 from 5.74% for the week ended March 31. The rise is mainly on a sudden 23% surge in vegetable prices, increasing pressure on RBI to strenghten money supply next week. Finance Minister P Chidambaram said he expected inflation to decline to around 5.7% next week.

The government asked state-owned banks to slow down credit growth, which is advancing at a rate of 30%, as well as rebalance their portfolios. Finance minister P Chidambaram asked banks to check credit growth to high risk sectors and warned against mobilising bulk deposits at high costs. Banks have to keep interest rates low for home loans up to Rs 10 lakh, which make more than 80% of the home loan portfolio of these banks.

Trading highlights

Tata Steel was the most-active stock with a turnover of Rs 241.35 crore followed by Advanta and Reliance Industries.

Advancers

Satyam rallied 6.3% to Rs 476.2, supported by better-than-expected fourth-quarter results. Satyam Computer fourth-quarter net profit rose 38% to Rs 394 crore, compared with the same quarter a year earlier. Satyam forecast 27% to 29% growth in earning per ADS for fiscal 2008, between $1.16 and $1.18. The US GAAP revenue is expected to rise 28% to 30%, between $1.87 billion and $1.9 billion for fiscal 2008.

Tata Steel soared 5.8% to Rs 534, and HDFC surged 5.5% to Rs 1,651. Tata Steel had rebounded from the last two days of decline caused by equity dilution worries after unveiling funding plans for its $12 billion takeover of Corus Group. Other gainers included Reliance Communications which rallied 5% to Rs 456. Reliance Communications had made strong growth in new subscriptions for the month just gone by.

Bharti Airtel advanced 3.4% to Rs 846. The company has launched a new set of prepaid cards, waiving processing fees. Named Airtel Happy Recharge, the cards will come in three denominations of Rs 299, Rs 399 and Rs 499 having a validity of 30 days. Index heavy Reliance Industries gained 3.4% to Rs 1,543.75.

ONGC gained nearly 3% at Rs 921. Oil prices rose as OPEC member, Nigeria, is holding elections this weekend, ahead of the US May futures contract expiry later on Friday. Larsen & Toubro an SBI moved up 2% each to Rs 1,695 and Rs 1,075, respectively. SBI advanced after the it said it planned to borrow up to Rs 10000 crore during 2007/08. Gujarat Ambuja was up 1.8% at Rs 115.

Decliners

Wipro lost 1.4% to Rs 571. Wipro today posted 44% growth in net profit in the March 2007 quarter to Rs 861 crore as per US GAAP, compared with the same time a year ago. It also forecast strong growth on more outsourcing and higher billing rates.

Hindustan Lever and Hero Honda were the other two declining stocks in the Sensex. Hindustan Lever lost 0.8% to Rs 206 and Hero Honda dipped 0.7% to Rs 649.6.

[R]6:30AM European markets are higher Friday on M&A and bid speculation.[/R]
European markets were higher Friday. By mid-day, the U.K. FTSE 100 index rose 0.5% at 6,473.10, the German DAX Xetra 30 index advanced 0.6% at 7,286.73 and the French CAC-40 index increased 0.5% at 5,859.37. National benchmarks gained in all 16 western European markets that were open.

Advancers

Pharmacy chain Alliance Boots gained 5.4% after Kohlberg Kravis Roberts and Alliance Boots deputy chairman, Stefano Pessina, announced that they had agreed to pay 10.6 billion pounds, or $21.3 billion, to buy the company. In a statement accompanying the offer, Alliance Boots also said that Terra Firma and the Wellcome Trust also indicated that they were interested in the company.

Software consulting company SAP shares rose 1.9% after it said that its first-quarter net income rose 10% to 310 million euros from 282 million euros. Revenue for the quarter rose 6%, or 11% at constant currencies, to 2.2 billion euros.

BHP, the world largest mining company, added 1.2%. Anglo American, the world second-biggest mining company, climbed 1.2%.

Nokia, the world largest maker of mobile phones, advanced 2.1%. ABN Amro Holding NV raised its recommendation for the shares to buy from hold while WestLB lifted the stock to buy from reduce.

Decliners

Swedish telecommunications equipment maker Ericsson lost 0.6% after Sony Ericsson, its mobile phone joint venture with Sony, stated that its first quarter net income rose to 254 million euros, from 109 million euros a year ago, after sales grew to 2.93 billion euros, from 1.99 billion euros last year.

Volkswagen fell 1.2% as the shares trade without the right to their latest dividend.

Oil and precious metals

Crude oil for May delivery fell $1.80, or 2.8%, to $61.83 a barrel in the first four days of trading this week on the New York Mercantile Exchange.

Gold and silver climbed as the dollar plunged to its fourth consecutive weekly decline against the euro, making investors buy the precious metals as an alternative investment to U.S. stocks and bonds. Gold for immediate delivery in London rose $3.10, or 0.5%, to $686.05 an ounce. Silver for immediate delivery gained 12.5 cents, or 0.9%, to $13.805 an ounce. Platinum climbed $18.50, or 1.4%, to $1,315.50 an ounce, while palladium rose $4, or 1.1%, to $381 an ounce.

Currencies

The dollar was lower against most other major currencies in European trading Thursday morning. The euro traded at $1.3598, up from $1.3580 late Wednesday in New York. The British pound remained above the $2 mark, trading at $2.0021, down from $2.0057. The dollar fetched 117.84 Japanese yen, down from 118.61.