Earnings in the Focus

Elena
07 Nov, 2005
New York City

Asian-Pacific markets closed in the red led by Hong Kong''s Hang Seng, down 1.5%. The Nikkei lost 0.1% but held above key 14,000 points. The Indian markets surged 1.7%. European stocks traded mostly higher on deal talk and stronger dollar. Natural gas producer El Paso Corp. reported a larger third-quarter loss of 55 cents a share, hurt by charges and 30% revenue decrease, misses estimates of a profit of 15 cents per share.

U.S. MARKET AVERAGES

The U.S. stock futures predict a flat opening with a slew of earnings reports in the focus of investors’ attention. The market will be watching for signs of slower consumer spending and lower capital expenditures by companies on concerns about higher energy costs.

There will be only a few major economic data releases this week and the most significant of them are scheduled for Thursday when the U.S. trade balance, import prices and consumer sentiment survey are due.

S&P 500 futures were up 0.2 point, nearly even with their fair value. Dow Jones industrial average futures were down 4 points, while Nasdaq 100 futures were up 1.50 points. Last week the three major averages posted solid gains. The Dow rose 1.2%, while the S&P 500 advanced 1.8% and the Nasdaq jumped 3.8%.

El Paso Corp. ((EP)), natural gas producer, reported a larger third-quarter loss of 55 cents vs. 33 cents a year ago, hurt by a large charge and 30% revenue decrease. Analysts had expectted net income of 15 cents per share.

Dell Inc. ((DELL)), the world''s No. 1 personal computer maker, is expected to report results on Thursday, while Cisco Systems ((CSCO)), the world's largest maker of Internet equipment, is scheduled to report on Wednesday.

Dutch information and media company VNU said on Monday it is in talks with U.S. health-care data firm IMS Health that could terminate their $7 billion merger deal after a shareholder revolt.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks fell across the region on consolidation of last-week gains. The Nikkei declined 0.1% but still held above 14,000 on cautious trading. Among the other regional markets, Hong Kong’s Hang Seng was the biggest loser, down 1.5%, followed by Singapore’s Straits Times, falling by 0.6%, and South Korea’s Kospi, down 0.3%. China’s Shanghai Composite slightly advanced on a tentative agreement between China and U.S, while the Indian market rose 1.7%.

European markets gained at mid-day dealings, supported by deal talk, stronger dollar and falling oil prices. The German DAX 30 added 0.04%, London’s FTSE 100 advanced 0.1%, while the French CAC 40 lost 0.2%.The euro fell to an 18-month low below $1.18.

OIL, METALS, CURRENCIES

Crude oil prices further declined below $60 a barrel on unusually warm weather and easing worries about the winter season heating fuel demand. Light sweet crude December delivery fell 63 cents to $59.95 a barrel. Heating oil lost 3 cents to $1.7630 a gallon. Gasoline fell 2 cents to trade at $1.5835. London Brent dropped 61 cent to $58.64.

Gold traded higher in Europe. In London the precious metal was fixed at $457.03 per troy ounce, up from $456. In Zurich gold rose to $457.28 from $455.85. In Hong Kong gold fell $4 to close at $457.45. Silver opened at $7.48, down from $7.49.

The U.S. dollar traded mixed against its major counterparts. The euro was quoted at $1.1818, down from $1.1921. The dollar bought 117.76 yen, down from 118.24. The British pound traded at $1.7466, down from $1.7510.

EARNINGS NEWS

Radica Games ((RADA)), video-game maker, announced that Q3 net profit soared 67% to 51 cents a share from the year-ago period. Sales climbed 30% on continued strength in the electronic games category.

U.S. Concrete, Inc. ((RMX)), concrete and related products producer, reported that Q3 net profit advanced 13% to 31 cents a share from the year-ago quarter. Sales climbed 16.2% on higher ready-mix concrete prices and sales volumes. The company expects Q4 earnings in the range of 6 cents to 11 cents a share.

Sierra Pacific Resources ((SRP)) posted Q3 net earnings of 33 cents a share, down from 49 cents a share in the same period last year on revenue growth and improved sales and customer growth from its power subsidiaries, missing analyst estimate of 49 cents a share. The company incurred one-time charges for costs and fees connected with the early conversion of Sierra Pacific''s 7.25% convertible notes issued in 2003.

Pilgrim's Pride Corp ((PPC)), poultry producer, posted fiscal Q4 net income of $1.12 a share slightly down from $1.13 in the year-ago period on revenue decline and lower sales, beating analyst view of $1.08 a share If not for non-recurring items, the year-ago earnings were 99 cents a share.

Kerzner International Ltd ((KZL)), casino and destination-resorts operator, posted a Q3 net loss of 14 cents a share, up from last year's loss of 33 cents a share on revenue growth.. On an adjusted basis, the company would have gained 28 cents a share, up from 11 cents a year before, and beating on that basis analyst expectations of a net profit of 22 cents a share.