Yum Brands Profit up on China

Elena
05 Oct, 2005
New York City

Asian-Pacific markets closed down on speculations of interest-rate increases with the Nikkei down 0.4%, South Korea falling 1.2%, and Hong Kong down 1.4%. European markets also traded lower at mid-day on U.S. market losses. Yum Brands, fast food restaurants operator, posted Q3 earnings rise of 72 cents a share vs. 61 cents a year ago on higher revenue, beating estimates. The company raised its full-year profit outlook to $2.64 a share.

U.S. MARKET AVERAGES

The futures point to a relatively flat start to Wednesday's trading session, reflecting concerns over interest-rate increases after three Fed Reserve officials gave indications of taking such measures against inflation. Negative earnings outlooks also weigh on the market sentiment. Investors are also waiting for the ISM services index, which is due out at the beginning of the session.

Oil steadied near $64 on Wednesday after losing more than $2 a barrel this week, but prices are expected to start rising after the release of weekly petroleum inventory statistics, a report which has a significant impact on the oil market.

ECONOMIC NEWS

The Mortgage Bankers Association revealed that its market composite index of mortgage loan application volume decreased by a seasonally-adjusted 1.1% for the week ended September 30. The MBA's purchase index fell by 1.9% for the period, adding to declines in the prior 2 weeks of 3.4% and 2.6%. The organization said its refinance index was basically flat in the most recent week, ticking up by just 0.1%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished broadly down, reflecting declines of U.S. markets after three Fed Reserve officials gave indications of a further interest-rate hike, used as a means to fight rising inflation. The Japanese Nikkei lost 0.4%, Hong Kong’s Hang Seng declined by 1.2%, South Korea’s Kospi also fell 1.2% as investors locked in recent gains. Australian shares slipped 2.1% on heavy losses in mining stocks.

European markets lost ground at mid-day trading on heavy losses, posted by U.S. equity markets after three Fed Reserve officials gave a signal of future interest-rate increases to combat inflation. Merger and acquisition deals of the day could not raise the sentiment. he German DAX 30 lost 1%, the French CAC 40 fell 0.9%, and London’s FTSE 100 slipped 1%.

ENERGY, METALS, CURRENCIES

Oil prices kept trading below $64 a barrel, but are expected to rise later in the day after the weekly petroleum report. Light sweet crude for November delivery inched up to $63.92 a barrel in electronic trading on the Nymex. Heating oil fell slightly to $2.045 a gallon, gasoline inched down to $2.0110 a gallon. Natural gas rose by nearly 5 cents to $14.270 per 1,000 cubic feet. London Brent lost 3 cents to $61.19.

Gold prices declined in European trading. In London the precious metal traded at $465.25 per troy ounce, down from $465.60. In Hong Kong gold fell $1.80 to close at $465.65. Silver opened at $7.36, down from $7.43.

In European trading the U.S. dollar lost ground against its major counterparts. The euro was quoted at $1.1963, up from $1.1918.The dollar changed hands at 113.64 yen, down from 114.30. The British pound was trading at $1.7648, up from $1.7587.

EARNINGS NEWS

Yum Brands ((YUM)), operator of fast food restaurants, posted Q3 earnings of 72 cents a share, up from a year-earlier profit of 61 cents a share on strong revenue growth. Excluding items, the company gained 71 cents a share, beating the analysts’ estimate for a profit of 70 cents a share. The company raised its full-year outlook to earnings of $2.64 a share, excluding items, slightly above the analysts’ forecasts for earnings of $2.63 a share.

Wolverine World Wide Inc.((WWW)) , footwear maker, posted a Q3 profit rise of12 % on strong sales for all three of its major brands. Quarterly profit advanced to 42 cents per share, up from 37 cents per share in the same period last year, topping analysts’ expectations of earnings of 41 cents per share. Sales increased 7 %.

Nu Horizons Electronics Corp. ((NUHC)), electronic components distributor, reported Q2 net income was down to 5 cents a share compared to 7 cents a share in the year-ago period despite a net sales increase to $128.3 million from $119.2 million in the same time last year.