CIT Soars 24%, Oil Surges $3, Stocks Down

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

U.S. stocks struggle in the morning trading after crude oil increases $3 to $143 a barrel. The talks of possible military strike on Iranian installation lifted prices of oil and gold. U.S. stock fell as talks of lower than estimated earnings for the second quarter dominate trading. CIT soars 24% after it agreed to sell its home lending unit and record a pre-tax loss of $2.5 billion. Asian markets closed lower with India losing 3.7%.

[R]10:15AM New York – U.S. stocks in the early trading are struggling to gain ground as oil hovers near record levels. Gold surges. CIT soars 24% after it sells its home lending unit.[/R]

Rising tensions in the Middle East and talks of possible Israeli strike on Iranian nuclear installation spiked crude oil futures prices to $143 a barrel. The ABC News television show reported citing unidentified Pentagon sources that an attack from Israel is likely if Iran continues to pursue its nuclear ambitions.

Gold futures prices surged $12.30 to $940.60 per ounce and other precious metals rallied as well.

The economic uncertainty, rising estimates of losses at banks and probable consumer spending slow down dragged market averages sharply lower in the morning trading.

CIT Surges 24%

CIT Group surged 24% after it agreed to sell its loan portfolio of manufactured homes and decided to exit the business.

CIT Group Inc agreed to sell its manufactured housing loan portfolio to Dallas based Lone Star Funds for $1.5 billion. Lone Star will also assume liabilities of $4.4 billion. The home lending business has $9.3 billion in asset and employs 300 people in New Jersey and Oklahoma. In a separate transaction, CIT agreed to sell its $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc. for approximately $300 million. Net cash proceeds from the two transactions are expected to be approximately $1.8 billion.

In the second quarter CIT expects to record a pre-tax loss of $2.5 billion or after-tax loss of $2 billion for the sale of home lending business.

Asian Market Review

In Tokyo Nikkei 225 Index closed lower 18.18 or 0.13% to 13,463.20. In Australia ASX 200 index lower 76.40 or 1.46% to close 5,138.90. In Malaysia KL Composite index decreased 11.74 or 0.99% closed to 1,174.83. Market of Hong Kong was closed today.

In South Korea Kospi Index decreased 8.46 or 0.51% to close at 1,666.46 and Indonesia JSE Index edged increased 29.70 or 1.26% to 2,378.81. Sensex index in India plunged 499.92 or 3.71% to 12,961.68. Thailand markets were closed today.

Earnings Review

Advanced Photonix, Inc, engaged in the development and manufacture of optoelectronic devices said fourth quarter revenues decreased 1.6% to $5.2 million from $6.16 million a year ago. Net loss in the quarter was $3.1 million or 13 cents per diluted share compared to net loss of $1.3 million or 7 cents per share, a year ago. Revenues in the year dropped 1.6% to $23.2 million from $23.6 million.

Advanced Photonix, Inc ((API)) in the last one year traded as high as $2.90 in October 2007 and as low as $1.00 in May 2008. Based on the yesterday’s closing price the company has a market cap of $41.06 million.

Castle Brands Inc, an importer of premium spirits said fourth quarter revenues increased 5% to $6.4 million from $6.1 million a year ago. Net loss in the quarter was $13.0 million or 83 cents per diluted share compared to net loss of $4.5 million or 38 cents per share, a year ago.

U.S. case sales increased 6.2% year over year to 52,899 nine liter cases in the fourth quarter of fiscal 2008. International case sales declined 18.8% in the quarter to 18,347 cases.

Castle Brands Inc ((ROX)) in the last one year traded as high as $5.95 in July 2007 and as low as $0.17 in June 2008. Based on the yesterday’s closing price the company has a market cap of $3.13 million.

GenCorp Inc, an aerospace supplier and manager of a real-estate portfolio said second quarter revenues edged 1.23% to $194.7 million from $192.3 million a year ago. Net income in the quarter falls 45% to $6.9 million or 12 cents per diluted share compared to net income of $12.5 million or 21 cents per share, a year ago.

GenCorp Inc ((GY)) in the last one year traded as high as $13.97 in July 2007 and as low as $7.16 in June 2008. Based on the yesterday’s closing price the company has a market cap of $408.12 million.

Hartmarx Corporation, a holding company said second quarter revenues declined 16% to $131.5 million from $155.9 million a year ago. Net loss in the quarter was $1.5 million or 4 cents per diluted share compared to net income of $5.4 million or 15 cents per share, a year ago.

Hartmarx Corporation ((HMX)) in the last one year traded as high as $8.69 in July 2007 and as low as $1.97 in January 2008. Based on the yesterday’s closing price the company has a market cap of $77.00 million.

Mad Catz Interactive, Inc, an interactive entertainment accessory provider said fourth quarter sales increased 13.2% to $21.9 million from $19.3 million a year ago. Net loss in the quarter was $0.8 million or 2 cents per diluted share compared to net income of $0.7 million or 1 cent per share, a year ago.

Net sales for the fiscal year ended March 31, 2008 were $87.6 million, a 12.2% decrease from $99.7 million in fiscal 2007. Net income for the year ended March 31, 2008 was $3.2 million, or $0.06 per diluted share, compared to $3.7 million, or $0.07 per diluted share for the year ended March 31, 2007.

Mad Catz Interactive, Inc ((MCZ)) in the last one year traded as high as $1.50 in July 2007 and as low as $0.55 in April 2008. Based on the yesterday’s closing price the company has a market cap of $32.43 million.

Michael Baker Corporation provides engineering and energy services to public and private sector clients’ worldwide said fourth quarter revenues increased 10% to $195.9 million from $176.4 million a year ago. Net income in the quarter declined 15% to $7.1 million or 80 cents per diluted share compared to net income of $8.4 million or 98 cents per share, a year ago.

For 2007, the Company reported net income of $19.3 million, or $2.18 per diluted common share, on revenues of $727 million, compared to restated net income of $10.3 million, or $1.19 per diluted common share, on revenues of $647 million in 2006.

Michael Baker Corporation ((BKR)) in the last one year traded as high as $53.22 in October 2007 and as low as $19.36 in May 2008. Based on the yesterday’s closing price the company has a market cap of $193.56 million.

Constellation Brands, Inc, the alcohol beverage distributor reported first quarter sales increased 2.47% to $1.21 billion from $1.18 billion a year ago. Net income in the quarter increased 33.18% to $44.6 million or 19 cents per diluted share compared to net income of $29.8 million or 12 cents per share, a year ago.

Constellation Brands, Inc ((STZ)) in the last one year traded as high as $26.46 in June 2007 and as low as $17.21 in March 2008. Based on the yesterday’s closing price the company has a market cap of $4.32 billion.

MSC Industrial Direct Co., Inc, a distributor of maintenance supplies to industrial customers reported third quarter sales rose 6.1% to $457.2 million from $431.1 million a year ago. Net income in the quarter increased 12.3% to $51.4 million or 81 cents per diluted share compared to net income of $45.8 million or 69 cents per share, a year ago.

MSC Industrial Direct Co., Inc ((MSM)) in the last one year traded as high as $57.73 in July 2007 and as low as $34.39 in January 2008. Based on the yesterday’s closing price the company has a market cap of $2.79 billion.

Schnitzer Steel Industries, Inc, a metal recycler reported third quarter revenues increased 37% to $972 million from $709 million a year ago. Net income in the quarter increased 29.03% to $62 million or $2.14 per diluted share compared to net income of $44 million or $1.47 per share, a year ago.

Schnitzer Steel Industries, Inc ((SCHN)) in the last one year traded as high as $117.50 in June 2008 and as low as $45.10 in June 2007. Based on the yesterday’s closing price the company has a market cap of $3.22 billion.

Standard Microsystems Corporation designs and sells a variety of silicon-based integrated circuits reported first quarter revenues increased 13.8% to $92.8 million from $81.5 million a year ago. Net income in the quarter increased 29% to $4.5 million or 20 cents per diluted share compared to net income of $3.2 million or 14 cents per share, a year ago.

Standard Microsystems Corporation ((SMSC)) in the last one year traded as high as $39.95 in October 2007 and as low as $26.50 in March 2008. Based on the yesterday’s closing price the company has a market cap of $610.05 million.