ExxonMobil Falls; Visa, MasterCard Raised

123jump.com Staff
01 May, 2008
New York City

U.S. stocks traded higher in the morning trading after the release of weekly jobless claims and personal income and expenditure data. Weekly jobless claims increased 35,000 at the end of last week and personal income in March rose 0.3% and personal consumption expenditure rose 0.4%. Exxon Mobil earnings fell short of expectations and stock fell 4%. UBS raised its price target for MasterCard to $350 from $275 and for Visa to $100 from $88.

[R]9:45AM New York – U.S. stocks edge higher after the release of jobless claims and price index for personal consumption. ExxonMobil earnings gain falls short of expectations.[/R]

U.S. stocks were mixed at the opening as jobless claims rise and personal income in March rose 0.3% and personal consumption expenditure rose 0.4%. Exxon Mobil earnings fell short of expectations and stock fell 4%.

UBS raised its price target for MasterCard to $350 from $275 and for Visa to $100 from $88.

Price index for personal consumption rises

Personal income increased $38.8 billion, or 0.3%, and disposable personal income increased $29.6 billion, or 0.3%, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $42.9 billion, or 0.4%.

In February, personal income increased $58.2 billion, or 0.5%, disposable personal income increased $50.3 billion, or 0.5 percent, and PCE increased $11.0 billion, or 0.1%, based on revised estimates.

Private wage and salary disbursements increased $26.1 billion in March, compared with an increase of $17.3 billion in February.

Goods-producing industries' payrolls increased $4.8 billion, compared with an increase of $3.3 billion; manufacturing payrolls increased $2.4 billion, compared with an increase of $1.9 billion. Services-producing industries' payrolls increased $21.3 billion, compared with an increase of $14.0 billion. Government wage and salary disbursements increased $3.6 billion, compared with an increase of $5.3 billion.

The price index for PCE increased 0.3% in March, compared with an increase of 0.1% in February. Prices, excluding food and energy, increased 0.2%, compared with an increase of 0.1%.

Initial claims of jobless claims rise

Initial claims of unemployment at the end of last week rose 35,000 to 380,000 from 345,000 claims two weeks ago. The advance seasonally adjusted insured unemployment rate was 2.3% for the week ending April 19, an increase of 0.1% point from the prior week's unrevised rate of 2.2%.

The advance number of actual initial claims under state programs, unadjusted, totaled 336,344 in the week ending April 26, an increase of 8,158 from the previous week. There were 267,672 initial claims in the comparable week in 2007.

Earnings review

Starbucks reported second quarter revenue rose 12% to $2.5 billion from $2.3 billion and earnings fell 28% to $108.7 million from $150.8 million a year ago. Earnings per share declined to 21% to 15 cents per share from 19 cents in the prior period. The store closing and costs associated with restructuring costs 3 cents per share.

Same store sales at the U.S. locations fell in mid-single digit but total sales in the U.S. in the quarter rose 8% to $1.9 billion. International sales increased 27% to $493.4 million.

For the current year Starbucks anticipates revenue gain between 13% and 14% and earnings per share to be “somewhat lower than 87 cents reported in fiscal 2007.”

The company lowered its U.S. store opening targets for fiscal 2008 to approximately 1,020 net new stores; 620 company-operated and 400 licensed stores. International store openings are expected to remain as previously announced at 975 stores. Capital expenditures for fiscal year 2008 are still expected to be approximately $1.1 billion.

ExxonMobil revenue and earnings rise but production falls

Exxon Mobil reported first quarter revenue increased 57% to $116.8 billion from $87.23 billion, earnings rose 19% to $10.9 billion from $9.2 billion and earnings per share increased to $2.05 from $1.64 a year ago.

The oil giant declared a dividend of 35 cents per share compared to 32 cents a year ago. In the quarter the company increased its share repurchase to $8 billion and issued dividend of $1.1 billion in dividends. ExxonMobil spent $5.5 billion on capital and exploration projects, up 30% from a year ago.

On oil equivalent basis production decreased 5.6% and excluding Venezuela divestments the production was down 3%.

Asian markets review

In Tokyo Nikkei 225 Index closed lower 83.13 or 0.60% to 13,766.86, in Australia ASX 200 index lower 9.60 or 0.17% to close 5,585.80. Markets in Hong Kong, Malaysia, South Korea, Thailand, Indonesia and India were closed today.