CarMax, Lindsay Drop; Stocks Struggle

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

U.S. stocks struggled after FedEx in the quarter reported loss and Morgan Stanley net income fell. The used car retailer CarMax, a used revenue rose 3% but earnings fell 55% to $29.6 million. Earnings per share fell to 13 cents from 30 cents. Lindsay Corp, irrigation system provider, third quarter revenue 54% to $143.6 million and net income in the quarter increased to 47% $14.1 million or $1.15 per share.

[R]12:15PM New York – FedEx swings to a loss and Morgan Stanley earnings dropped. Lindsay Corp dropped 30% before recovering.[/R]

U.S. stocks dropped in the morning hours after weaker than expected earnings from FedEx, Morgan Stanley and Fifth Third Bancorp plans to raise $2 billion.

FedEx reported loss in the fourth quarter on higher fuel costs and asset write down. Morgan Stanley earnings dropped 57% as revenues in the investment banking fell. Fifth Third Bancorp plans to raise $2 billion to maintain its capital reserve requirements above the required by the Fed.

FedEx Corporation provider of freight and parcel delivery services reported fourth quarter revenues increased 8% to $9.87 billion from $9.15 billion a year ago. Net loss in the quarter was $241 million or 78 cents per diluted share compared to net income of $610 million or $1.96 per share, a year ago.

Revenue in the year rose 8% to $38.0 billion from $35.2 billion the previous year. Operating income declined 37% in the period. Net income fell 44% to $1.13 billion from $2.02 billion a year ago. Earnings per share fell 44% to $3.60 from $6.48 per share a year ago. Capital spending for fiscal 2008 was $2.9 billion.

FedEx estimates lower earnings in the first quarter of fiscal 2009 on higher fuel prices and weaker U.S. economy. FedEx projects first quarter earnings between $0.80 and $1.00 compared to $1.58 per share a year ago when crude oil averaged about $70 a barrel. The company estimated fiscal 2009 earnings between $4.75 and $5.25 per share.

FedEx Corporation ((FDX)) in the last one year traded as high as $119.10 in July 2007 and as low as $80.00 in March 2008. Based on the yesterday’s closing price the company has a market cap of $26.15 billion.

Earnings Review

CarMax, Inc, a retailer of used cars reported first quarter sales increased 3% to $2.21 billion from $2.15 billion a year ago. Net income in the quarter decreased 55% to $29.6 million or 13 cents per diluted share compared to net income of $65.4 million or 30 cents per share, a year ago. Comparable store used sales rose 1% for the first quarter. Total vehicles unit sales grew 10% for the first quarter.

CarMax, Inc ((KMX)) in the last one year traded as high as $27.42 in July 2007 and as low as $15.81 in January 2008. Based on the yesterday’s closing price the company has a market cap of $4.01 billion. CarMax stock fell $2.41 to $16.15 in the morning trading.

Commercial Metals Company, a recycler and distributor of steel and metal products reported third quarter sales increased 24.13% to $2.9 billion from $2.2 billion a year ago. Net income in the quarter declined 67.05% to $59.5 million or 51 cents per diluted share compared to net income of $99.4 million or 82 cents per share, a year ago.

Commercial Metals Company ((CMC)) in the last one year traded as high as $38.39 in June 2008 and as low as $20.85 in January 2008. Based on the yesterday’s closing price the company has a market cap of $4.15 billion. In the morning trading Commercial Metals stock increased $1.29 to $37.72.

Lindsay Corporation, a provider of irrigation systems and infrastructure products reported third quarter revenues increased 54% to $143.6 million from $93.1 million a year ago. Net income in the quarter increased 47% to $14.1 million or $1.15 per diluted share compared to net income of $7.5 million or 62 cents per share, a year ago.

Lindsay Corporation ((LNN)) in the last one year traded as high as $131.14 in April 2008 and as low as $34.84 in June 2007. Based on the yesterday’s closing price the company has a market cap of $1.48 billion. In the morning trading stock fell $25.80 to $98.80.

Morgan Stanley, second largest investment bank reported second quarter revenues dropped 38% to $6.51 billion from $10.52 billion a year ago. Net income in the quarter plunged 61% to $1.01 billion or 95 cents per diluted share compared to net income of $2.57 billion or $2.45 per share, a year ago.

Morgan Stanley ((MS)) in the last one year traded as high as $76.79 in June 2007 and as low as $33.56 in March 2008. Based on the yesterday’s closing price the company has a market cap of $44.94 billion. Morgan Stanley stock dropped $1.82 to $38.81.

Cascal B.V, a leading provider of water and wastewater services in seven countries said fourth quarter revenues rose 19% to $40.4 million from $34.4 million a year ago. Net income in the quarter declined 62.07% $2.6 million or 9 cents per diluted share compared to net income of $4.2 million or 19 cents per share, a year ago.

For the fiscal year ending March 31, 2009, the company maintained its previously stated annual guidance of revenue between $179 million and $184 million and operating earnings between $68 million and $71 million.

Cascal B.V ((HOO)) in the last one year traded as high as $15.19 in April 2008 and as low as $9.82 in June 2008. Based on the yesterday’s closing price the company has a market cap of $365.35 million.

CLARCOR Inc, Filtration systems maker said second quarter revenues rose 14% to $267.1 million from $235.1 million a year ago. Net income in the quarter increased 18% $24.6 million or 48 cents per diluted share compared to net income of $20.9 million or 41 cents per share, a year ago.

CLARCOR Inc ((CLC)) in the last one year traded as high as $44.25 in June 2008 and as low as $32.90 in June 2007. Based on the yesterday’s closing price the company has a market cap of $2.21 billion. Clarcor stock dropped $3.76 to $40.02.

Tata Communications Limited, a global communications solutions company said fourth quarter revenues declined 22.40% to Rs. 850.24 crore from Rs. 1040.72 and versus Rs.1084.22 crore year on year basis. Net income in the quarter declined 83% to Rs.58.86 crore compared to net income of Rs.9.52 crore and versus Rs. 131.3 crore on years on year basis.

The company's operating margin improved from 14.74% to 17.34% due to lower costs due to demerger of the retail business on quarter on quarter basis. The wholesale voice segment made profits of Rs 66.55 crore versus loss of Rs 16.45 crore from a year ago. The company's wholesale voice segment grew at 14.87%, enterprise & carrier data Segment grew at 22.78%.

Tata Communications Limited ((TCL)) in the last one year traded as high as $30.78 in March 2008 and as low as $19.46 in June 2008. Based on the yesterday’s closing price the company has a market cap of $2.89 billion.

Asian markets review

In Tokyo Nikkei 225 Index closed higher 104.45 or 0.73% to 14,452.82, in Hong Kong Hang Seng index increased 267.81 or 1.16% closed to 23,325.80. In Australia ASX 200 index higher 20.50 or 0.38% to close 5,443.20. In Malaysia KL Composite index decreased 15.17 or 1.24% closed to 1,212.59.

In South Korea Kospi Index increased 23.42 or 1.34% to close at 1,774.13, in Thailand SET index closed lower 11.43 or 1.47% to 765.74 and Indonesia JSE Index edged decreased 13.40 or 0.56% to 2,364.58. Sensex index in India decreased 274.59 or 1.75% to 15,422.31.