BofA Misses Estimates

Elena
23 Jan, 2006
New York City

Asian-Pacific benchmarks fell across the region on higher oil prices and U.S. markets decline. The Nikkei dropped 1.2%, followed by Taiwan Weighted index down 1.7% and Hong Kong''s Hang Seng, down 1.4%. Markets in Europe were also weak with the French CAC 40 the leading decliner, down 0.9%. In earnings news, Bank of America posted Q4 2% profit decline on loan losses and weak trading results. Ford Motor rose 7% following a better-than-expected earnings report.

U.S. MARKET AVERAGES

U.S. stock futures posted strength in pre-market trading, pointing to a slightly higher or flat market opening on retreating oil prices, better-than-expected earnings report from Ford Motor and deal news.

The previous week finished with a large-scale sell-off, driven by surging oil prices as well as disappointing reports from Citigroup, General Electric and Motorola. It marked the biggest loss in three years with the Dow down 2% and the Nasdaq falling 2.4%.

On Monday earnings reports will continue to be in focus with a special interest in guidance.

Ford Motor ((F)) posted Q4 profit increase on strength in its finance arm and the sale of its rental car unit Hertz Corp. Quarterly results exceeded analyst estimates.

Bank of America ((BAC)), the No. 2 U.S. bank, posted Q4 2% decline in net profit, reflecting loan losses and weaker trading results.

Credit card and travel services company American Express Co., a Dow component, is scheduled to report results.

In deal news, a group including grocery store operator Supervalu Inc ((SVU)) and drug store chain CVS Corp. ((CVS)) agreed to buy rival retailer Albertsons Inc. ((ABS)) for $17.4 billion in cash and stock.

Polo Ralph Lauren Corp. ((RL)) agreed to buy back its Polo jeans business from Jones Apparel Group Inc. ((JNY)).

Standard & Poor''s 500 index futures were up 1.90 points, but were nearly even with fair value. Nasdaq 100 index futures were up 2.50 points, and Dow Jones industrial average futures were up 8 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks fell across the region, reflecting an oil price rise to $69 a barrel and cautiousness following the steep declines on Wall Street. The Nikkei recovered from earlier lows to close down 1.2%. Among other regional markets, Taiwan’s Weighted index dropped 1.7%, Hong Kong’s Hang Seng slipped 1.4%, and South Korea’s Kospi fell 1%.

European stocks traded in the negative at mid-day, hurt by disappointing earnings reports, surging oil prices and heavy losses on Wall Street Friday. The German DAX 30 slipped 0.6%, the French CAC 40 dropped 0.9%, and London’s FTSE 100 fell 0.2%.

OIL, METALS, CURRENCIES

Crude oil prices retreated after hitting $69 a barrel on supply concerns, raised by problems with Russia’s natural gas exports and the continuous tensions in Nigeria and Iran. Light sweet crude for March delivery fell 88 cents to $67.60 a barrel. London Brent declined 61 cents to $65.82.

European gold prices declined after hitting fresh 25-year highs Friday. In London gold traded at $558.50, down from $559.80. In Zurich the precious metal traded at $558.25, down from $561.35. In Hong Kong gold fell $1 to close at $556. Silver opened at $9.04, down from $9.06.

The U.S. dollar traded lower against other major currencies. The euro was quoted at $1.2278, up from $1.2075. The dollar bought 114.25 yen, down from 115.40. The British pound was quoted at $1.7829, up from $1.7638.

EARNINGS NEWS

Ford Motor Co., ((F)), automotive company, reported Q4 earnings of 8 cents a share, up from 6 cents a share a year-ago, beating analyst estimate for a profit of penny a share. If not for a number of items, the company posted earnings from continuing operations of 26 cents a share, down from a year-earlier equivalent profit of 28 cents a share.

Bank of America Corp, ((BAC)), banking services, reported that its Q4 profit dropped to 93 cents a share, down from 94 cents a share in the year-ago period on costs related to its recent acquisition on credit card firm MBNA, increased provision expense and lower trading results. If not for merger and restructuring costs, it gained 94 cents a share, missing analyst estimate of $1.02 a share. The company earned $3.85 billion, or 94 cents a year ago in the year ago quarter. Quarterly revenue was $14.12 billion, up 3%.

Pilgrim''s Pride Corp., ((PPC)), chicken producer, reported Q1 net income fell 47% to 39 cents a share, down from 73 cents in the year-ago period on 1.8% lower sales. Sales dropped to $1.34 billion from $1.37 billion. The company cited weakness at its Mexico operations plus higher energy costs and lower sales prices for the decline.

Provident Financial Holdings Inc., ((PROV)), holding company, reported Q2 net income rose 67% to $1.23 a share, up from 77 cents a share in the year-ago period. In the latest period, the banking company sold a commercial office building, prompting an increase of 53 cents to earnings.

Eaton Corp., ((ETN)), industrial manufacturing company reported Q4 earnings of $1.38 a share, up from $1.16 a share a year-ago. Sales advanced in Q4 to $2.84 billion from $2.63 billion in the same period a year earlier. If not for restructuring charges in both periods, the company earned $1.43 a share, up from $1.23 a share a year ago, beating on that basis analysts’ expectations of $1.37 a share. The company also announced that it is increasing its quarterly dividend by 13% to 35 cents a share from 31 cents, and that it is making a voluntary contribution of $100 million to its qualified pension plan in the U.S.

Bank of Hawaii Corp., ((BOH)), banking services, reported Q4 net income of 86 cents a share, up from 82 cents, earned in the same period the previous year, beating analyst estimate by a penny. There were approximately 4 million fewer average shares outstanding in the latest quarter. Earnings for the year-earlier quarter included a return to income of 7 cents a share resulting from a release of reserves for loan and lease losses.

Energizer Holdings Inc., ((ENR)) batteries manufacturer, reported that Q1 profit was $1.77 a share, up vs. $1.60 in the year- ago period, topping analysts’ forecasts of $1.61 a share. Earnings included a 5-cent restructuring charge related to the company's European supply chain. Sales for Q1 advanced to $882.4 million from $875.9 million in last year's first quarter.

TD Banknorth, ((BNK)), banking services company, reported Q4 earnings of 32 cents a share, up from 12 cents a share in the year-ago period. Aside from non-recurring items, earnings would have been 62 cents a share, up from 59 cents in the same period last year and in line with the analyst estimate. Net interest income was flat with last year’s, while non-interest income fell to $60.1 million from $72.5 million.