Disappointing Q4 Outlooks

Elena
25 Oct, 2005
New York City

Asian-Pacific markets closed largely higher on Wall Street gains and the new Fed Reserve Chairman nomination of Ben Bernanke. The Nikkei surged 1.3%. European stock markets also advanced at mid-day, led by the German DAX 30, up 0.4%. On the earnings news front, semiconductor Texas Instruments posted a disappointing fourth-quarter outlook. Chemical maker DuPont Corp. reported a third-quarter loss, citing tax and hurricane-related charges. Lockheed Marin released Q3 39% net income jump.

U.S. MARKET AVERAGES

Following Monday session of a huge U.S. markets advance with the three major averages up more than 1.6%, the stock futures point to a lower Tuesday opening. The pre-market sentiment was largely overshadowed by disappointing fourth-quarter outlook from chip maker Texas Instruments, which set a gloomy tone on a busy reporting day, including quarterly releases from Lockheed Martin Corp. ((LMT)), BellSouth Corp. ((BLS)), International Paper Co. ((IP)), Lexmark International Inc. ((LXK)) and Northrop Grumman Corp. ((NOC)).

S&P 500 futures were down 3.7 points, below their fair value. Dow Jones industrial average futures were down 23 points, while the Nasdaq 100 futures dropped 5 points.

Chemical maker DuPont Co. ((DD)) posted a quarterly loss of 9 cents a share vs. a profit of 33 cents a year ago, citing a tax charge. DuPont's fourth-quarter outlook came below Reuters estimates.

On the economic news front, the Conference Board is due to release its consumer confidence index for October. Economists expect the index to rebound to 89.0 in October after falling sharply to 86.6 in September.

The National Association of Realtors is also due to release its report on existing home sales in the month of September. Existing home sales are expected to slip to a 7.25 million unit rate in September from a 7.29 million unit rate in August.

In corporate news, an investor group led by Merrill Lynch ((MER)) is said to be interested in acquiring bankrupt Refco's futures brokerage.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished higher, boosted by solid gains on Wall Street overnight and the announcement of Ben Bernanke’s nomination to succeed Alan Greenspan at the Federal Reserve. The Nikkei rose 1.3%, Hong Kong’s Hang Seng climbed 0.5%, and Australia’s All Ordinaries gained 0.8%. The only decliner across the region was South Korea’s Kospi, losing 0.3%.

European markets traded generally in the positive at mid-day, lifted by sharply higher close of U.S. markets Monday and news that Ben Bernanke was nominated to take over as the next Fed Reserve Chairman. The German DAX 30 gained 0.4%, the French CAC 40 added 0.3%, and London’s FTSE edged up 0.1%.

ENERGY, METALS, CURRENCIES

Crude oil steadied round $60 a barrel on tightened U.S. markets outlook ahead of winter season. Light sweet crude December contract lost 27 cents to $60.05 a barrel on the Nymex. London Brent fell 25 cents to $57.99.

Gold prices advanced in European trading. In London gold traded at the recommended price of $467 per troy ounce, up from $466.20. In Zurich it climbed to $467.05, up from $466.75. In Hong Kong the precious metal rose $3.30 to close at $467.05. Silver traded at $7.66, down from $7.68.

In European trading the U.S. dollar fell against other major currencies. The euro was quoted at $1.2024, up from $1.1979. The dollar changed hands at 115.33 yen, down from 115.40. The British pound was trading at $1.7770, up from $1.7675.

EARNINGS NEWS

Chicago Mercantile Exchange Holdings ((CME)), stock exchange, reported that Q3 net income advanced 30% to $1.72 a share on revenue growth, including securities lending interest expenses up 22%. Average daily volumes totaled 4.2 million contracts in Q3, up 30%, on considerable volume growth on foreign exchange, interest rate and equity products.

DuPont ((DD)), chemical producer, reversed to a Q3 net loss of 9 cents a share, down vs. a profit of 33 cents a share, including a one-time tax gain of 8 cents a share, on tax and hurricane-related charges of 42 cents a share. If not for one-time items, DuPont would have gained 33 cents a share in Q3, beating analyst estimate of 29 cents per share. Revenue for Q3 rose to $6.3 billion from $6 billion in the year-ago period.

Inco Ltd ((N)), metals producer, announced that Q3 net income dropped 56% to30 cents a share, down from 69 cents per share in the year-ago period, stating that nickel prices declined in Q3, missing analysts’ forecasts of 59 cents per share. Revenue advanced 2.2% to $1.07 billion.

Pentair, Inc. ((PNR)), power-tool manufacturer, reported that Q3 net income fell to 46 cents a share, a cent down from the year-ago period despite 18% revenue growth. Earnings from continuing operations advanced 44% to 47 cents a share from 33 cents a share in the same time last year.

United Auto Group ((UAG)), automotive retailer, reported that Q3 net profit advanced 1.2% to 70 cents a share on 10.8% revenue growth, in line with analyst estimate. The company, which had a 7% increase in same-store retail sales, announced that the year-ago quarter benefited from the sale of investment, a reduction in its effective tax rate, a refund of U.K. consumption taxes and costs from the relocation of U.K. franchises.

Sonic Automotive Inc.((SAH)), automotive retailer, announced that earnings from continuing operations in Q3 were 65 cents per share, up from 51 cents in the same period last year on 9.5% revenue growth. Results included charges of 7 cents to 9 cents a share due to hurricane disruption. On a same-store basis, revenue increased 6%.

Ameritrade Holding Corp. ((AMTD)), securities brokerage services firm, announced its Q4 net income jumped to 23 cents a share, up from 14 cents a share a year ago on revenue growth, beating analyst estimate by a penny. Average client trades per day amounted to 146,000. The company stated it is in discussions with the SEC concerning """"""""accounting for and disclosure of its prepaid variable forward contracts with respect to its investment in approximately 7.9 million shares of Knight Capital Group, Inc.

Coventry Health Care Inc. ((CVH)), care products and services provider, posted Q3 earnings of 81 cents a share, up from 64 cents per share in the year-ago period on revenue growth, in line with analyst estimate for a profit of 81 cents a share.. The company stated that, as of Sept. 30, its total health plan membership stood at 2.51 million, a rise of 61,000 members over the year-ago period.