Google at Peak

123jump.com Staff
21 Oct, 2005
New York City

Stocks with news on earnings dominated day's trading. Google and Caterpillar led averages in the opposite direction on two exchanges. Google stock rose $36.70 and Caterpillar stock fell $5.10. Recently listed IPO of Chicago BOT added another $21. SanDisk rose $10 on strong earnings. Robert Half added $5.

U.S. MARKET AVERAGES

It was the day of Google.

Market was on the move at the opening and climbed higher by mid-day. The robustness of Google’s earnings surprised even the ardent fans of the company driving the stock to all-time new high followed with several upgrades from analysts. Google ((GOOG)) closed up $36.70 or 12% at the close. And there were two other notable stock moves in the market.

Shares of SanDisk ((SNDK)) rose 22% or $10.07 on a strong earnings performance. The trading volume on the stock was 31 million shares vs. daily average of 8.2 million shares.

Recently listed shares of holding company of Chicago Board of Options and Trade ((BOT)) were up on the third day in a row to a new high of $112, up $21.11 or 23.2% from yesterday’s close. The shares have been more than 100% from the IPO price of $54 and opening price of $80.50 three days ago.

Market faced parade of earnings during the day as AT&T ((T)), Alltel ((AT)), Xerox ((XRX)), Robert Half ((RHI)), and RadioShack ((RSH)), Wyeth, ((WYE)) and Schlumberger ((SLH)) reported earnings.

Cemex ((CX)) reported earnings soar of 87% on account of RMC acquisition. Earnings of $675 million was driven sales growth of 110% including results from RMC.

On heavy volume of 2.4 billion shares on New York Stock Exchange Order System and 1.773 billion shares on Nasdaq System 3,391 shares on NYSE and 3,137 shares on Nasdaq were exchanged.

MOVERS AND SHAKERS

Google Inc. ((GOOG)) reported third-quarter profit that rose sevenfold and nearly double revenue to go beyond $1 billion for the first time in the company's history. At least nine financial brokers raised their price targets on Google, including Lehman Bros., First Albany and RBC Capital Markets. The company’s stock jumped 12.5%.

Dow component Caterpillar Inc. ((CAT)) posted a third-quarter profit that was slightly up from analyst expectations. The company reported net income of $667 million, or 94 cents a share, up from $498 million, or 70 cents, for the same period a year ago. Revenue increased 17%, reaching $8.98 billion from $7.66 billion in 2004. The company’s stock fell by 9.1%.

SanDisk Corp. ((SNDK)) reported a third-quarter profit that rose nearly twofold on strong sales of its flash memory products. The company earned $107.5 million, or 55 cents a share, compared to $54.1 million, or 29 cents a share a year ago. Revenue surged to $589.6 million from $408 million. The company’s stock gained 19.1%.

Photocopy specialist Xerox Corp ((XRX)) commenced a $500 million share buyback program as the company reported third-quarter results that went alongside expectations. The stock added 5.8%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished mixed, reflecting heavy losses, posted on Wall Street overnight. The Nikkei traded lower in the morning, dragged by Toyota Motor and steel stocks, but later Toshiba helped the index rebound to the positive 0.1%. Across the region, South Korea’s Kospi climbed 1.8%, Hong Kong’s Hang Seng added 0.5%, while Australia’s All Ordinaries lost 0.5%.

European markets extended mid-day losses and closed lower, pressured by weak U.S. stocks, slightly disappointing earnings news from the Swedish Ericsson and corporate news from U.K. caterer Compass. The German DAX 30 lost 0.5%, The French CAC 40 declined 0.6%, and London’s FTSE 100 fell 0.4%.

ENERGY, METALS, CURRENCIES

Crude oil dipped below $60 a barrel before recovering to $60.63 up 61 cents and natural gas dropped 10 cents to a month-low to $12.87. The decline is attributable to a huge increase in natural gas and gasoline inventory stocks, lower fuel demand and eased worries over hurricane Wilma. Gasoline traded slightly down at $1.6075 a gallon, while heating oil was unchanged to $1.89. Natural gas slipped 17 cents to $12.82 per 1,000 cubic feet.

In European trading gold prices declined. In London gold closed at $464.80 per troy ounce, down from $465, while in Zurich it fell to $461.25, down from $461.50. In Hong Kong the precious metal lost $1.20 to close at $462.75. Silver finished unchanged at $7.58.

In European trading the U.S. dollar traded mixed against other major currencies. The euro was quoted at $1.2013, up from $1.1983. The dollar changed hands at 115.67 yen, up from 115.53. The British pound was trading at $1.7742, up from $1.7706.

EARNINGS NEWS

Google Inc. ((GOOG)), Internet search engine company, reported Q3 net income of $1.32 per share, sevenfold jump from a year ago. Last year's results included a $201 million charge to account for a legal settlement with rival Yahoo Inc. Excluding charges related to a recent acquisition and employee stock options issued before the company went public 14 months ago, Google stated it would have earned $1.51 per share, beating on that basis the analysts’ forecasts of $1.36 per share. The company's Q3 revenue totaled $1.58 billion, nearly doubling from $805.9 million last year.

RadioShack Corporation ((RSH)), consumer electronics retailer, announced Q3 net income of 75 cents per share, up vs. net income of 43 cents per share in the same time last year, on a non-cash, non-recurring gain of 39 cents per share due to the reversal of a tax contingency reserve. Q3 total sales were up 8% from the year-ago period. Q3 comparable store sales were up 1% vs. the prior year. Gross margin fell 300 basis points primarily due to an aggressive inventory clearance sale.

Xerox Corporation ((XRX)), document processing products manufacturer, reported Q3 earnings per share of 5 cents, including previously announced charges of 12 cents per share related to litigation matters and other items as well as a restructuring charge of 1 cent per share. If not for these items, Xerox delivered adjusted earnings per share of 18 cents. Xerox also announced plans to repurchase up to $500 million of the company's common stock. In Q3, total revenue advanced 1 % year over year. Equipment sales increased 2 %, while post-sale and financing revenue, which represents more than 70 % of the company's total revenue advanced 1 %.

Alltel ((AT)), wire-line and wireless communication provider, posted Q3 earnings of 98 cents a share, down vs. earnings of $1.05 a share in the year-ago period on 20% revenue growth. Excluding non-recurring items, earnings would have been 90 cents a share, topping analyst estimate of 86 cents a share. The company reported 30% rise in wireless revenue, a 2% drop in wire-line revenue at 16% growth in communications support revenue.

AT&T Corp ((T)), communication services provider, posted Q3 earnings of 64 cents a share, up from loss of $8.99 a share in the year-ago period despite revenue decline, beating analysts’ forecasts of 51 cents a share. The latest results include a charge of 6 cents a share, related to the company's aircraft lease investments, transaction costs of 2 cents a share, related to the company's pending merger with SBC and a $41 million gain from insurance proceeds. The year-ago performance reflects an asset impairment charge of $8.86 a share, restructuring charges of 84 cents a share, and a charge of 4 cents a share, from aircraft lease investments.

Caterpillar ((CAT)), maker of heavy machinery, posted Q3 earnings of 94 cents a share, up from a profit of 70 cents a share in the year-ago period on 17% sales and revenue growth, missing analyst estimate of $1.06 a share. The company attributed its excellent performance to strong customer demand worldwide and noted that it experienced continued pressure on its variable manufacturing costs during the quarter.

Weyerhaeuser Co., ((WY)), wood products company, posted Q3 net income of $1.16 a share, down vs. $2.45 a share in the year-earlier period. Adjusted earnings came to 93 cents a share, missing the analyst estimate of earnings of 98 cents a share. Sales in Q3 dropped 1% to $5.6 billion from $5.68 billion. Residual effects of several hurricanes would drive up chemical, energy and transportation costs in Q4, the company added.