Exxon Mobil - Record Profit

123jump.com Staff
30 Jan, 2006
New York City

Traders for the most part avoided taking sides a day before FOMC meeting. OPEC is likely to announce production cut after tomorrow''''s meeting. Oil stocks jumped as oil and natural gas prices rose in anticpation of production cuts and daily jitters related to Iran, Nigeria and Venezuela. Exxon Mobil reported largest corporate profit ever. Wal-Mart reported 4.7% rise in same-store sales in January.

U.S. MARKET AVERAGES

Merger Monday washed with oil profits.

While details of the deals are few but market is anticipating two bids for, GMAC, arm of General Motors Corp. One bid from Citigroup and Cerberus Capital and other from Wachovia and Kohlberg Kravis & Roberts. Citigroup is expected to bid $11.5 billion for a majority stake according to published reports. General Motors stock rose 2.3%.

Arcelor, European steel maker rejected $23 billion from largest steel company Mittal Steel ((MT)) on the grounds that two companies share different values, visions and priorities. It appears that politicians in Spain, France and Luxembourg, three government shareholders, are not ready to endorse this deal.

Privately several fund managers in Europe believe that if the offer price is raised from euro 27 to 34 for Arcelor, then the company may have difficulty in remaining independent. However this unsolicited bid has sparked a frenzy of speculation for more consolidation in steel industry.

Wal-Mart reported that same-store sales in January partly due to strong redemption of gift cards rose 4.7%, better than a previous guidance of 3% to 4%. Wal-Mart stock rose 1.3%.

Exxon Mobil reported that profit jumped 27% to over $10 billion on revenue of $99.66 billion. The company stock jumped 3%. The company reported largest profit ever recorded by any company.

On other earnings news, Sysco ((SYY)), Schering Plough ((SGP)), Cummins ((CMI)), Tyson foods ((TSN)) and Eastman Kodak ((EK)) reported disappointing earnings.


MOVERS AND SHAKERS

Lowrance Electronics ((LEIX)), marine electronics products company, agreed to be acquired by Simrad Yachting AS for $215 million, or $37 a share which represents a premium of 48% from a closing price of $25 for Lowrance stock on Friday. The stock surged 46.5%.

USG Corp ((USG)) agreed to resolve asbestos personal injury claims in a Chapter 11 agreement that paves the way for the company to exit bankruptcy in 2006. Berkshire Hathaway ((BRKA)) will backstop a $1.8 billion stockholder rights offering. After voting on the plan, the plan will require approval by both the Bankruptcy Court and the district court that oversees the cases. The company also reported a Q4 net loss of $1.8 billion or $39.94 a share, compared to earnings of $85 million, or $1.98 a share in the year-ago period, citing charges. Revenue rose to $1.34 billion from $1.17 billion. USG’s shares rose 16%.

FMC Technologies ((FTI)) raised its Q4 outlook to earnings of 7 to 17 cents a share, or 43 to 53 cents a share when excluding a tax charge for repatriating earnings. FMC added that it''s near a completion of an offshore oil loading project in Algeria. Analysts expected adjusted earnings of 53 cents a share. The stock gained 6%.


ECONOMIC NEWS

Monday morning, the Department of Commerce released its report on personal income and spending in the month of December. The report showed that spending rose slightly more than expected while income rose in line with economist estimates.

The Commerce Dept. said that personal spending rose 0.9 percent in December following an upwardly revised 0.5 percent increase in November. Economists had expected spending to rise 0.8 percent compared to the 0.3 percent growth originally reported for November.

The report also showed that personal income rose 0.4 percent in December, matching the increase seen in the previous month. As mentioned above, the personal income growth came in line with economist estimates.

With personal spending outpacing personal income, personal saving as a percentage of disposable personal income was a negative 0.7 percent in December, compared with a negative 0.2 percent in November.

Additionally, the Commerce Dept. said that its price index for consumers was unchanged in December after falling 0.4 percent in November. Excluding food and energy prices, the index rose 0.1 percent in December following a 0.2 percent increase in the previous month.

On an annual basis, the index rose 2.8 percent in December, the same as in November. The core index rose at an annual rate of 1.9 percent for the third consecutive month.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks closed in the positive with only four bourses actively trading on Monday as many regional markets were closed for the Lunar New Year holiday. The Nikkei continued to build on the strong Friday finish when it hit a five-year high of 3.6%. The index rose 1.3% in the morning but later rebounded to close up 0.55%. Australia’s All Ordinaries gained 0.5%, Manila’s PSE advanced 0.47%, while Singapore Straits Times ended flat.

European stocks finished mixed after earnings updates from two major French companies and higher opening on Wall Street, failed to impress investors. The German DAX 30 edged up 0.2%, the French CAC 40 declined 0.2%, and London’s FTSE 100 inched down to 0.1%.

OIL, METALS, CURRENCIES

Crude oil prices declined ahead of a closely watched OPEC meeting, despite the continuous tensions in Nigeria and Iran. Light sweet crude for March delivery rose 54 cents to $68.30 a barrel. Heating oil gained 3 cents to $1.84 a gallon, while natural gas gained 86 cents to $9.37 per 1,000 cubic feet. London Brent lost 29 cents to $65.95.

European gold prices climbed on political worries. In London gold traded at $563.30, up from $556.95. In Zurich the precious metal traded at $561.80, up from $557.30. Silver opened at $9.73, up from $9.57. In New York gold was up $8.00 per ounce and closed at $566.80.

The U.S. dollar traded mixed against other major currencies. The euro was quoted at $1.2092, down from $1.2105. The dollar bought 117.57 yen, up from 117.27. The British pound stood at $1.7704, up from $1.7678.

EARNINGS NEWS

Tyson Foods Inc, ((TSN)), chicken, beef and pork processor, reported Q1 income of 11 cents a share, down from 14 cents a share a year ago, missing analyst estimate of 16 cents a share. Sales were flat at $6.45 billion. The company forecast a net loss for Q2, and is targeting fiscal 2006 earnings to range from 50 cents to 80 cents a share.

J.B. Hunt Transport Services, ((JBHT)), trucking company, reported Q4 net income of 41 cents a share, nearly three times up from 12 cents a share in the year-ago period, beating analysts’ forecast for earnings of 36 cents a share.

Exxon Mobil, ((XOM)), oil company, reported Q4 net income of $1.71 a share, up from $1.30 a share a year ago on revenue growth. If not for special items, the company would have earned $1.65 a share.

Sealed Air Corp, ((SEE)), packaging company, reported Q4 net income of 77 cents a share, more than double from 33 cents a share in the year-earlier period, beating analyst estimate of 74 cents a share. The company said sales in Q4 advanced 6% to $1.08 billion from $1.02 billion. Sealed Air also initiated a quarterly cash dividend of 15 cents a share and added it expects 2006 earnings of $2.90 to $3.10 a share.

Schering-Plough, ((SGP)), manufacturer of pharmaceutical and health care products reported that it reversed to a Q4 profit of 7 cents a share, up 13% from a net loss of 58 cents a share in the year-ago on 6% revenue growth including sales from its cholesterol joint venture with Merck & Co. Analysts were expecting earnings of 8 cents a share.

Kinetic Concepts Inc, ((KCI)), healthcare device manufacturer, reported that Q4 net earnings advanced 36% to 64 cents a share on 18% revenue growth, beating analyst estimate of 61 cents a share. The company stated that increased revenue from its V.A.C. wound treatment was mainly responsible for the earnings growth.

Smith International Inc., ((SII)), oil and gas industry services company, reported an 11% rise in Q4 profit to 44 cents a share on 26% revenue growth. If not for a penny a share charge on a patent settlement, its results came in beat estimates of 43 cents a share.

Olin Corp, ((OLN)), metals and chemicals company, reported Q4 net income of 45 cents a share, up from 32 cents a share in the year-earlier quarter, topping analyst estimate of 28 cents a share. The company announced sales increase to $604.1 million from $487.3 million a year ago. The company said it beat its own projected forecast of earnings per share of 25 cents due primarily to the recovery of environmental expenses and related expense.

Eastman Kodak Co, ((EK)), consumer, professional, health and other imaging products company, reported a Q4 loss of 18 cents a share, narrower from a loss of 20 cents a year-ago, missing analysts’ expectations of a profit of 39 cents a share. On a continuing operations basis, company posted a loss of 50 cents a share. Sales in Q4 increased to $4.2 billion from $3.76 billion in Q4 last year.

[Cummins Inc, ((CMI)), engine manufacturer, reported Q4 net income of $3.31 a share, up from $2.41 a share in the year-ago period beating analyst estimate of $3.11 a share. Sales at the company in Q4 advanced 17% to $2.75 billion from $2.35 billion. In Q4 the company benefited 26 cents a share, a gain on a tax issue.

CORPORATE NEWS

The steel manufacturer Arcelor on Sunday rejected a takeover bid from its larger rival Mittal Steel. After a meeting at its headquarters in Luxembourg, Arcelor''s board unanimously snubbed Mittal''s $22.5 billion, hostile offer - which would have combined the top two global steel producers - on the ground that the companies do not share the same strategic vision, business model and values.