Daimler Profit Slides 14%

Elena
29 Aug, 2007
New York City

Wall Street rallied at opening Wednesday, as investors took advantage of cheap buying after a heavy plunge in the previous session. The Dow Jones industrials jumped nearly 100 points. DaimlerChrysler released its first full earnings report without Chrysler. The car maker said its net income fell 14% to $2.5 billion, or $2.36 a share, with revenue down 3% to $32.24 billion. Daimler also said its financial services division produced a flat operating profit of $297 million. The stock rose 3.5%.

[R]09:45AM Wall Street rallied at opening, with Dow rising 100 points[/R]

Wall Street rallied at opening Wednesday, as investors took advantage of cheap buying after a heavy plunge in the previous session. The Dow Jones industrials jumped nearly 100 points. Leading gainers on the blue-chip average included General Motors Corp. ((GM)), up 2.3%, Intel Corp. ((INTC)), rising 2% and Alcoa Inc. ((AA)), moving up 1.6%. Altria Group ((MO)) also provided a boost with its shares rising 1.6%, as the company is expected to announce a spinoff of its cigarette business, Philip Morris International.

Among companies in focus, DaimlerChrysler ((DAI)) released its first full earnings report without Chrysler. The car maker said its net income fell 14% to $2.5 billion, or $2.36 a share, with revenue down 3% to $32.24 billion. It also noted that it will take a smaller charge that it had previously expected from selling most of the U.S. automaker. Daimler also said its financial services division produced a flat operating profit of $297 million. Company's shares rose 3.5%.

Further on the earnings news front, Big Lots ((BIG)) jumped 8.5% after it said its Q2 profit rose on higher same-store sales and lower costs, beating analyst estimates. The closeout retailer also lifted its full-year profit guidance. Williams-Sonoma ((WSM)), a household goods and decor retailer, reported better-than-expected Q2 earnings and raised its full-year profit target. The stock climbed 7.6%. Double Hull Tankers ((DHT)) posted 11% profit increase in Q2 on strong charter rates and continued demand for its vessels.

The Dow rose 91.04, or 0.70%, to 13.132.89, after falling 280 points on Tuesday. The Standard & Poor's 500 index added 10.76, or 0.75%, to 1,443.12, while the Nasdaq composite index gained 21.08, or 0.84%, to 2,521.72. Bonds fell slightly Wednesday, with the yield on the benchmark 10-year Treasury note at 4.53%, up from 4.52% late Tuesday.


[R]09:00AM U.S. stock futures pointed to a higher opening after Tuesday rout.[/R]

U.S. stock futures pointed to recovery Wednesday after a huge sell-off in the previous session, sparked by renewed concerns about economic growth and uncertainty whether the Fed Reserve will cut interest rates to stop credit turmoil from spreading further. On Wednesday, investors decided to take advantage of cheap buying on hopes that the stock market will soon overcome its volatility. as there are no major economy reports due out today, credit markets and corporate news will be in the spotlight.

Among companies in focus, Altria Group ((MO)) is expected to announce a spinoff of its cigarette business, Philip Morris International. Company’s shares rose 1.9% in the pre-open. Alltel Corp. ((AT)) also attracted attention, as its shareholders are scheduled to vote on a $24.7 billion takeover by private investors.

In earnings news, bookseller Borders Group ((BGP)) posted late Tuesday smaller-than-expected net income loss in Q2, blaming heavy charges which outweighed a boost in sales. DaimlerChrysler''s ((DAI)) U.S. shares gained after it said its Chrysler Group posted a 18% rise in profit.

In other corporate news, Google ((GOOG)) said that its chief financial officer George Reyes considers leaving the company. Google didn''t name a replacement. The stock gained 0.5% in pre-market trading.

In pre-market trading, Dow futures expiring in September rose 40, or 0.30%, to 13,135, while S&P''s 500 index futures rose 5.30, or 0.37%, to 1,443.60. Nasdaq 100 index futures rose 8.25, or 0.43%, to 1,916.00. Bonds were poised to open flat Wednesday, with the yield on the benchmark 10-year Treasury note at 4.52%, the same as late Tuesday.


[R]8:00AM Big Lots posted higher Q2 profit and lifted full-year forecast.[/R]

Big Lots ((BIG)), closeout retailer, said its Q2 profit jumped on higher same-store sales and lower costs, beating analyst estimates. The retailer reported net income rise to $23.4 million, or 22 cents per share, up from $4.3 million, or 4 cents per share a year ago. Income from continuing operations soared to $22.1 million, or 21 cents per share, from $4.7 million, or 4 cents per share.

Big Lots lifted its full-year forecast for profit of continuing operations, due to the upbeat Q2 financial results and current business trends. The company expects 2007 earnings from continuing operations to come in the range of $1.43 to $1.48 per share, up from earlier guidance of $1.25 to $1.30 per share. Analysts expect earnings of $1.31 per share.

The estimated figures are based on expectations of a same-store sales increase between 3% and 4%. Big Lots also released Q3 profit guidance in a range of 9 cents to 13 cents per share, assuming same-store sales will increase from 1% to 3%. At the same time, analysts anticipate a profit of 11 cents per share in the period. The retailer projected Q4 earnings between 87 cents and 92 cents per share, assuming the same increase in same-store sales as in Q3. Analysts expect Q4 earnings of 82 cents per share.