Merck and Altria Profits Decline

Elena
31 Jan, 2006
New York City

Asian-Pacific benchmarks finished largely up, led by South Korean Kospi, up 1.1% and the Nikkei, rising 0.6% to 16,649.82. European stocks reversed from losses to rise on oil and gas shares with the German DAX 30 and the French CAC 40 up 0.5%. Constellation Energy reported Q4 profit rise of $1.09 a share, beating estimates. Knight Ridder posted earnings decline to $1.24, exceeding estimates of $1.22. Tupperware Brands adjusted Q4 earnings of 54 cents a share met expectations.

U.S. MARKET AVERAGES

U.S. futures were sitting near the flat line with traders continuing the waiting game ahead of the Fed Reserve meeting and awaiting earnings reports from two Dow components. Market was cautious Monday, keeping away from significant moves before the announcement on interest rates and finished with a mixed performance. January consumer confidence figures are also due out Tuesday.

A pair of Dow components lead the earnings charge before the opening bell. Drug giant Merck is expected to report profit rise of 62 cents per share, Altria, parent company of cigarette maker Philip Morris, is expected to see earnings growth to a level of $1.18 per share. American Standard, Hilton Hotels, Phelps Dodge and Kellogg are among the other major companies due to report before the start of Tuesday''s session.

Google’s fourth-quarter earnings report is due at the close of trading. Analysts expect Google to post nearly 100% profit rise, or $1.76 a share on sales of $1.29 billion. Separately, the company is considering an alliance with Napster Inc. that could lead to an outright acquisition.

Late Monday Kraft Foods Inc. delivered Q4 earnings above forecast and announced plans to cut about 8% of its workforce, or 8,000 people.

Dow Jones futures were recently lower 2 points, S&P 500 futures fell 0.5 point, and Nasdaq 100 futures were up 2 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks finished mostly higher with only four bourses actively trading Tuesday as many regional markets were closed for an extended Lunar New Year holiday. The Nikkei continued its march upward with an advance of 0.6% to 16,649.82, lifted by expectations of strong earnings from key industrial stocks. South Korea’s Kospi climbed 1.1%, Thailand’s SET index gained 0.4%, while Australia’s All Ordinaries lost 0.3%.

European stocks rebounded from yesterday’s declines, supported by oil and gas shares and mixed corporate news from telecoms and banking sectors. Investors were also awaiting the Fed Reserve’s decision on U.S. interest rates. The German DAX 30 rose 0.5%, the French CAC 40 advanced 0.5%, and London’s FTSE 100 added 0.2%.

OIL, METALS, CURRENCIES

Crude oil prices hovered over $68 a barrel ahead of the closely watched OPEC meeting. Light sweet crude for March delivery gained 10 cents to $68.45 a barrel. Heating oil slightly advanced to $1.8374 a gallon, while gasoline inched down to $1.7730. Natural gas lost over 1 cent to $9.375 per 1,000 cubic feet. London Brent lost 9 cents to $66.50.

European gold prices climbed. In London gold traded at the fixed price of $569.80, up from $563.30. In Zurich the precious metal traded at $569.88, up from $561.80. Silver opened at $9.85, up from $9.73.

The U.S. dollar traded lower against other major currencies. The euro was quoted at $1.2098, up from $1.2083. The dollar bought 117.14 yen, down from 117.59. The British pound stood at $1.7718, up from $1.7666.

EARNINGS NEWS

Kellogg Co., ((K)), cereal and packaged-food maker, reported that Q4 profit advanced to 47 cents a share, from 45 cents a year ago, beating analyst estimate by a penny. Sales for Q4 increased fractionally to $2.39 billion.

Station Casinos, ((STN)), casino properties operator, reported Q4 earnings of 61 cents a share, up from 55 cents a share in the same period a year ago. If not for non-recurring items, earnings would have been 69 cents a share, beating on that basis analyst estimate of 64 cents a share. Revenue rose to $285.1 million from last year's $264.7 million, just shy of analyst forecasts of $286.5 million.

American Standard, ((ASD)), manufacturer of control systems, reported Q4 earnings of 30 cents a share, up from a loss of 41 cents a share a year ago, missing analyst estimate of 46 cents a share. Total sales in Q4 advanced to $2.55 billion from $2.35 billion a year ago. If not for consolidation expenses and tax items, net income per share was 46 cents, the same as Q4 of 2004. Analysts polled by Thomson First Call had, on average, expected the company to earn 46 cents a share.

Wyeth, ((WYE)), manufacturer of pharmaceutical products, reported Q4 income of 54 cents a share, up from a loss of $1.32 in the year-ago period, missing analyst view of 60 cents a share. The year-ago period included $124 million of licensing costs, primarily for collaborations with Progenics and Trubion. The latest quarter also included charges of $94.8 million related to productivity initiatives. If not for the negative impact of foreign exchange, worldwide net revenue increased 5%.

Constellation Energy Group Inc., ((CEG)), energy provider, reported Q4 net income of $1.09 a share, up from 76 cents in the same time the previous year, beating analyst forecasts of $1 a share. On an adjusted basis, the company posted a profit of $1.07 a share for Q4. Revenue increased to $5.16 billion from the prior year Constellation Energy expects 2006 earnings at $3.65 to $3.95 a share, while reaffirming its 2007 profit range at $4.75 to $5 a share, excluding any effects of the company's planned merger with FPL Group.

Waddell & Reed Financial Inc., ((WDR)), financial-services company reported Q4 net income of 24 cents a share, down from 31 cents, earned in the year-ago period, beating on that basis analyst estimate of 30 cents a share. If not for items, the company would have earned 29 cents a share. Revenue rose 11.1%, paced by growth in investment-management fees.

ARM Holdings, ((ARM)), chipmaker, reported that Q4 net income reached 13 million pounds ($23.1 million) or 9 pence a share, up from 4.5 million pounds a year ago. Revenue for Q4 advanced 51.4% to 62.9 million pounds with an operating margin of 35%. The company announced that its processor division performed particularly well in Q4 and the company has begun shipping its two latest processors to key partners.

Steris Corp., ((STE)), medical equipment maker, reported Q3 net income advanced 14.8% to 41 cents a share on 5%. revenue growth. Earnings from continuing operations were steady at 34 cents, in line with analyst forecasts. The group is planning to take a 27 cent Q4 charge connected with its previously announced relocation of a plant. The company expects earnings of 16 cents to 18 cents in Q4. Revenue should rise 5% to 6%.

Knight Ridder Inc., ((KRI)), newspaper publisher, reported that net income fell 22.2% to $1.24 a share as operating revenue went up 3.1% at $820 million, beating analyst estimate of $1.22 a share