Financials Decline, Guess Surges 10%

123jump.com Staff
04 Jun, 2008
New York City

U.S. stocks were on the decline after another rating agency analyst voiced his concern on adequacy of the capital ratios at Barclays, BNP Paribas, Societe Generale and Lehman Brothers. Home builders Hovnanian and Toll Brothers fell after reported wider than estimated losses. Guess surged nearly 10% after it reported sharply higher earnings. European markets fell more than 1% and in Asian trading India dropped 2.8%.

[R]9:40AM New York – U.S. stocks fell as credit market worries intensify. Lehman drops 4%.[/R]

U.S. stocks were on the decline after another rating agency analyst voiced his concern on adequacy of the capital ratios at Barclays, BNP Paribas, Societe Generale and Lehman Brothers.

Rating agency Fitch analyst Krishnan Ramadurani at a conference in Tokyo suggested that Barclays, BNP Paribas and Societe Generale need to raise capital. Lehman Brothers fell in the early market trading as the financial broker looks for additional capital.

Only two days ago S&P warned that more asset write downs are likely at Merrill Lynch, Morgan Stanley and Lehman Brothers.

Hovnanian Enterprises and Toll Brothers fell after they reported quarterly loss. Guess? Inc. rose 5% after it reported better than expected earnings.

Copart, Inc., provider of vehicle remarketing services reported third quarter revenue increased 51.8% to $221.2 million from $145.7 million for the same quarter of 2007. Net income increased 19.6% to $46.5 million or $0.52 cent compared to $$38.9 million or $0.41 cent for the same quarter of 2007.

Copart, Inc., ((CPRT)), in the last one year traded as low as $28.14 in July 2007 and as high as $35.41 in March of 2008.

Hovnanian Enterprises, Inc., a leading national homebuilder said that revenue for second quarter was $776.4 million compared to$1.1 billion in the same quarter a year ago. Net loss was $340.71 million or $5.29 cent per diluted share compared with loss of $28.06 million or $0.49 cent per diluted share for the same quarter of 2007.

Loss from unconsolidated joint ventures increased to $3.4 million from $2.16 million. Cost and expenses decreased to $1.12 billion from $1.15 billion.

Excluding unconsolidated joint ventures, the Company delivered 2,494 homes in the second quarter, a decrease of 21% from 3,150 home deliveries in the fiscal 2007. Net contracts excluding unconsolidated joint ventures declined 29% to 2,226 homes compared with last year''s second quarter.

The Company''s contract cancellation rate, excluding unconsolidated joint ventures, for the second quarter of fiscal 2008 was 29%, compared with the rate of 38% reported for the first quarter of fiscal 2008 and 32% in the second quarter of fiscal 2007.

Hovnanian Enterprises, Inc., ((HOV)), in the last one year traded as high as $6.93 in Nov 2007 and as low as $4.80 in Jan of 2008.

Toll Brothers, Inc., the largest US luxury-home builder, today reported revenue for second quarter ended April 2008 was declined 30% to 818.8 million compared to $1.17 billion for the same quarter of 2007. Net loss for the quarter was $93.7 million or $0.59 cent per diluted share compared with net income of $36.7 million or $0.22 cent per diluted share for the same period of last year.

Backlog for the quarter declined 50% to $2.08 billion compared to backlog of $4.15 billion for same quarter of 2007. Unconsolidated entities in which the Company had an interest had a backlog of $85.1 million. Gross contracts were declined 49% and 39% to $730.5 million and 1,237 homes respectively, than FY 2007’s second-quarter totals were $1.44 billion and 2,031 homes.

Toll Brothers, Inc., ((TOL)), in the last one year traded as high as $18.13 in Nov 2007 and as low as $16.04 in Jan of 2008.

Europe market update

European stocks fell to midday on falling retail volume and rising producer price index in the euro area. The key indices in Germany and France retreated.

The CAC 40 fell 1.79% to 4,894.67. In Germany the DAX 30-index dropped 88.41 points or 1.26% to 6,930.72. Stocks in Switzerland fell as the Swiss Market index retreated 1.34% to 7,488.75. The FTSE 100 lost 100.40 points or 1.66% to 5,957.30.

Asian markets review

In Tokyo Nikkei 225 Index closed higher 226.40 or 1.59% to 14,435.57, in Hong Kong Hang Seng index decreased 252.51 or 1.04% closed to 24,123.25. In Australia ASX 200 index higher 10.30 or 0.18% to close 5,584.50. In Malaysia KL Composite index decreased 4.45 or 0.35% closed to 1,253.12.

In South Korea Kospi Index increased 14.42 or 0.79% to close at 1,833.81, in Thailand SET index closed higher 2.06 or 0.26% to 808.92 and Indonesia JSE Index edged decreased 41.23 or 1.72% to 2,362.59. Sensex index in India decreased 447.77 or 2.81% to 15,514.79.