Boeing Doubles Profit

Elena
01 Feb, 2006
New York City

Asian-Pacific benchmarks closed mostly down on volatile trade. South Korean Kospi extended losses to drop 1.7%. The Nikkei ended its six-session winning streak, falling by 1%. European stocks gained ground on corporate news with London''s FTSE 100 making the biggest advance,up 0.5%. In earnings news, Time Warner posted Q4 income rise of 29 cents a share, above estimates. Boeing beat expectations, posting more than doubled Q4 profit of 58 cents a share. The company also raised its 2006 guidance.

U.S. MARKET AVERAGES

U.S. stock futures declined Wednesday, predicting a lower start after web search company Google reported disappointing quarterly results which sent the whole tech sector in the negative. On Tuesday the three market averages finished weak, following the Fed Reserve’s decision to raise interest rate.

The central bank's Federal Open Market Committee raised the fed funds rate by a quarter percentage point to 4.5% from 4.25% which was the Fed's 14th consecutive rate increase since the beginning of interst-rate hikes on June 30, 2004.

Earnings reports drew back the attention of investors. Google's disappointing Q4 performance raised concerns among investors and in particular, those investing in Internet companies.

Google ((GOOG)) tumbled 16%, citing a higher-than-expected tax rate as the reason why its profit missed the consensus forecast. UBS lowered its rating on Google to neutral from buy.

Among major companies releasing strong quarterly results were Time Warner Inc. ((TWX)), posting a higher fourth-quarter profit above analysts' forecasts, power company Duke Energy Corp. ((DUK)) which posted a 69% income growth in fourth-quarter. Media group Tribune Corp ((TRB)) announced 38% net income drop in Q4 on 4.5% revenue decline, missing estimates.

Standard & Poor's 500 index futures were down 4.30 points, below fair value. Nasdaq 100 index futures were down 18.50 points, and Dow Jones industrial average futures were down 10 points.

On the economic front, a reading on manufacturing, the ISM index, is expected to show a decline to 55.4 in January from 55.6 in the prior month. The report is due at 10 a.m.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks ended mostly lower on volatile trade, reflecting heavy corporate news release and growing uncertainty over the direction of U.S. interest rates. A 13% drop of Google’s shares overnight also weighed on sentiment. The Nikkei ended its winning streak, falling 1% for the first time after six strong sessions. South Korea’s Kospi extended losses to drop 1.7%, Hong Kong’s Hang Seng fell 0.3%, while Singapore Straits Times gained 0.8%.

European stocks gained ground Wednesday, lifted by solid sales growth for Roche Holding and bid speculations involving Lloyds TSB. Inspired by the positive news, stock markets ignored Wall Street weakness and the disappointing report from Google. The German DAX 30 added 0.1%, the French CACV 40 gained 0.4%, and London’s FTSE 100 rose 0.5%.

OIL, METALS, CURRENCIES

Crude oil prices slightly declined on OPEC’s decision to keep production levels. The slide was limited by concerns over Iran’s standoff with the West. Light sweet crude for March delivery fell 12 cents to $67.80 a barrel. Heating oil lost 1 cent to $1.8406 a gallon, while gasoline inched down to $1.7970. Natural gas gained 17 cents to $9.487 per 1,000 cubic feet. London Brent lost 2 cents to $65.97.

European gold prices declined on strengthening dollar. In London gold traded at the fixed price of $567.20 bid per troy ounce, down from $569. In Zurich the precious metal traded at $567.60, down from $569.80. In Hong Kong gold rose $7.45 to close at $567.05. Silver opened at $9.76, down from $9.82.

The U.S. dollar grew stronger against other major currencies. The euro was quoted at $1.2110, down from $1.2160. The dollar bought 117.68 yen, up from 117.23. The British pound stood at $1.7757, down from $1.7805.

EARNINGS NEWS

Boeing Co, ((BA)), aircraft manufacturer, reported Q4 net income of 58 cents a share, more than double from 23 cents a share in the same period a year ago. Total revenue advanced more than 6%. Analysts forecast earningsof 44 cents a share before items. Boeing announced 2006 revenue would be about $60 billion, below previous estimates as a result of a previously disclosed accounting change in its commercial airplane business.

Pinnacle West Capital Corp, ((PNW)), electricity provider, reported Q4 earnings of 22 cents a share, down from a year-earlier profit of 37 cents a share, topping analyst estimate of 15 cents a share. Revenue fell in Q4 to $691.7 million from $713.3 million in the same period a year ago. On a continuing operations basis, the company earned 24 cents a share in Q4.

Unitrin Inc, ((UTR)), insurance company, reported Q4 earnings of $1.26 a share, up from $1.07 a share in the year-ago period. Revenue dropped to $755.9 million from last year's $759.7 million The results include a tax benefit of $14 million, a favorable loss adjustment reserve development of $13.9 million and $4.2 million in higher catastrophe losses.

JetBlue Airways Corp, ((JBLU)), airline company, reported a Q4 net loss of 25 cents a share, down from a profit of 1 cent a share in the year earlier period on record-high fuel prices and a tough revenue environment, compounded by the impact of two hurricanes, missing analyst forecasts of a net loss of 16 cents a share. If not for two unusual items, the company said net loss would have been 19 cents a share in Q4.

Duke Energy, ((DUK)), energy company, posted Q4 net income of 63 cents a share, up vs. 36 cents a share in the year ago period, beating analyst estimate for earnings of 36 cents a share. Earnings from continuing operations were 43 cents a share, compared to 30 cents a share.

American Electric Power, ((AEP)), utility company, reported a Q4 loss of 38 cents a share, down from a profit of 45 cents a share a year-ago. On an ongoing basis, the company generated quarterly earnings of 29 cents a share, down from the previous year''s 42 cents, beating on that basis analyst views for earnings of 25 cents a share. American Electric stated it incurred $261 million in one-time charges during the 2005 quarter. Revenue dropped to $2.9 billion from $3.5 billion.

Devon Energy Corp, ((DVN)), oil and gas company, reported Q4 net earnings of $2.14 a share, up from $1.35 a share in the same period last year, missing analyst estimate of $2.29 a share. On an adjusted basis, the company announced it would have earned $2.33 a share for Q4. Revenue reached nearly $3.22 billion from $2.47 billion. On a combined basis, daily oil, gas and natural-gas liquids output averaged 619,000 barrels of oil equivalent in 2005, down 10% from company''s 2004 average daily production as a result of hurricane-related disruptions.

Greater Bay Bancorp, ((GBBK)), financial-services holding company, announced that Q4 net income increased 8.2% to 39 cents a share, up from 33 cents in the year-ago. Revenue from interest on loans in the quarter dropped 0.5% to $67.7 million from $68.1 million. Annualized return on equity for the quarter advanced to 13.5% from 12.69% while return on assets was 1.27% against 1.19%.

Time Warner Inc, ((TWX)), media company, reported Q4 net income of 29 cents a share, up from 24 cents in the year-ago period on 7% revenue growth. On an adjusted basis, the latest quarter''s profit was 25 cents a share, topping analysts view for earnings of 22 cents a share. Time Warner''s operating income came in at $2.2 billion, up from the previous year''s $1.6 billion.

Tribune Co, ((TRB)), media group, reported that Q4 net income dropped 38% to 43 cents a share on 4.7% revenue decline, missing analysts’ forecasts for earnings of 56 cents a share. Tribune''s profit figures incorporated net charges of 10 cents a share for eliminating 900 positions and closing a printing facility and a net non-operating loss of 4 cents a share.

PepsiAmericas Inc, ((PAS)), Pepsi bottler, reported that Q4 net income advanced 6.2% to 28 cents a share, up from 25 cents in the year-ago period on 9.9% higher sales, in line with analyst forecasts. Sales advanced to $894.3 million from $814.1 million. In Q4, a number of special items taken together cut 1 cent from per-share earnings.