GE and Citigroup Disappoint

Elena
20 Jan, 2006
New York City

Asian markets closed largely higher, lifted by strong close of U.S. markets. The Nikkei rose 0.8%, South Korean Kospi climbed 0.8%, Singapore Straits Times gained 0.55%. European averages traded mostly higher at mid-day, led by London''s FTSE 100 with an advance of 0.6%. The German DAX 30 slipped 0.1%. Motorola reported Q4 better-than-expected profit, but missed sales growth estimates. GE posted adjusted earnings of 55 cents a share, matching estimates, but revenue figures disappointed.

U.S. MARKET AVERAGES

U.S. stock futures traded lower, pointing to a weak start, hurt by slightly disappointing results from Dow industrials components General Electric Co. and Citigroup Inc., Motorola Inc., and surging crude oil. Thursday stock markets advanced, driven higher by better-than-expected results from Pfizer and AMD, following a day of sharp declines with disappointing results from Intel and Yahoo to blame.

GE ((GE)) posted adjusted quarterly earnings of 55 cents per share, up from 54 cents per share last year, matching expectations. Revenues for the period came in at $40.7 billion, a 3% increase compared to last year''s mark of $39.7 billion, below the estimates for revenue of a little more than $42 billion. GE also lifted the low end of its 2006 earnings forecast.

Citigroup ((C)) reported a 30% rise in Q4 net profit to $6.93 billion, or $1.37 a share, though adjusted earnings of 98 cents a share missed forecasts of $1 a share.

After Thursday's close, Motorola ((MOT)) reported Q4 earnings of 47 cents per share, up from 26 cents per share last year, including a gain of 12 cents per share for special items. Analysts had expected earnings of 34 cents per share. The company reported sales growth of $10.4 billion, missing estimates of $10.5 billion increase. Motorola predicted earnings of 27 to 29 cents per share for the next fiscal period on sales of between $9.3 and $9.5 billion.

On the data front, January consumer sentiment reprt is expected to show a rise to 92.6 from last month''s 91.5 reading. That survey will be released shortly after U.S. markets open.

Dow Jones futures recently declined 24 points, S&P 500 futures fell 3.3 points, and Nasdaq 100 futures were off 7.5 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks closed in the positive Friday, despite the rising oil prices. Stocks were boosted by gains on Wall Street on the back of strong quarterly results, released by major companies. The Nikkei rose 0.8% to 15,820.96,lifted by broad-buying of bank, tech and mining stocks. Across the region, South Korea’s Kospi gained 0.8%, Taiwan’s Weighted index added 0.3%, and Singapore’s Straits Times climbed 0.55%.

European stocks traded largely higher at mid-day, supported by higher close of U.S. markets overnight, gains in the oil and gas sectors, as well as updates from Swisscom and LVMH. The leading gainer was London’s FTSE 100, up 0.6%, followed by the French CAC 40 rising 0.5%. The German DAX 30 slipped 0.1%.

OIL, METALS, CURRENCIES

Crude oil prices climbed over $67 a barrel on supply concerns, raised by continuous tensions in Nigeria and Iran. Light sweet crude for February delivery gained 27 cents to $67.10 a barrel. London Brent climbed 56 cents to $65.79.

EARNINGS NEWS

Schlumberger Ltd, ((SLB)), provider of oilfield services, reported that Q4 net income doubled to $1.08 a share, up from 55 cents a share in the same period a year ago, topping analysts’ forecasts for earnings of 96 cents a share. Operating revenue jumped 31% to $4.02 billion.

Citigroup, ((C)), banking firm, reported Q4 earnings advanced 30% to $1.37 a share on a $2.1 billion after-tax gain on the sale of its asset-management lines. Profit from continuing operations dropped 3% to 98 cents a share. Analysts’ estimates for $1 a share for the quarter. Revenue came in at $20.78 billion.

General Electric Co, ((GE)), conglomerate, reported Q4 net income of 29 cents a share, compared with 53 cents a share in the year-ago period. After adjustments, the company’s profit came to 55 cents a share, matching the average analyst estimate. GE stated revenue in Q4 advanced 3%. GE also lifted the bottom end of its 2006 earnings outlook, based partly on strong growth in Asia and developing markets, to $1.94 to $2.02 a share from $1.92 to $2.02 a share.

KeyCorp, ((KEY)), multi-line financial services provider, reported Q4 net income of 72 cents a share, up from 51 cents in the year-ago period on 11.2%, revenue growth, beating analyst estimate of 67 cents a share. The company expects earnings to be in ranges of 67 cents to 71 cents a share for the first quarter and $2.80 to $2.90 a share for all of 2006, as opposed to analysts'' averages of 66 cents and $2.80 a share, respectively.

Alltel Inc ((AT)), telecommunications carrier, reported Q4 net income of 66 cents a share, down from 89 cents earned in the same period the previous year despite 21% revenue growth. On an adjusted basis, the company earned 77 cents a share in Q4, missing analyst estimate of 83 cents a share.

Regions Financial Corp, ((RF)), banking services, posted Q4 earnings of 55 cents a share, including after-tax merger-related and other costs of 7 cents a share, up from 50 cents a share in the year ago period. If not for items, the company posted Q4 earnings of 62 cents a share, in line with analyst estimate.