Markets Gain on Industrials

123jump.com Staff
01 Feb, 2006
New York City

Volatile oil and a significant drop in Google stock failed to unnerve the market. Boeing and Time Warner reported strong earnings. Boeing stock found favors among several short-term traders. Goolge dropped 12% before market opening but closed lower 7%. Research in Motion, maker of wireless device BlackBerry, gained 9% on news that NTP Inc. patent was awarded non-final invalidation by U.S. Patent Office. U.S. auto makers lose market share in January.

U.S. MARKET AVERAGES

Google, Research in Motion, auto sales, Boeing and volatile oil were all part of today’s stock market.

Google, after reporting earnings of $1.54 per share for the fourth quarter missing some analysts’ estimates of $1.74 largely on the reasons of higher tax rate, dropped more than 11% at the opening but closed above $401 and dropping 7.1%.

Boeing stock rose 4.8% on earnings report of 58 cents vs. 23 cents a year ago. Defense and commercial aerospace company reported strong earnings on high orders from India and other Asian and Middle Eastern countries.

Maker of popular wireless email device, BlackBerry, Research in Motion stock jumped $6 or 9% on the news that U.S. Patent office issued Non-final rejection of one of the patents issued to NTP Inc. Two companies are in litigation for more than three years.

Oil price jumped up and down during the session. Crude oil futures jumped up more than a dollar during the day but closed lower by $1.36 to $66.56 per barrel.

U. S. auto makers suffered another month of market loss to Asian auto makers in January 2006. While auto sales for GM, Ford and Chrysler rose 6%, 2.7% and 5% respectively, sales at Toyota, Honda and Hyundai rose 16%, 21% and 16% respectively.

Overall domestic auto makers lost market to their foreign rivals in January of this year. There are no visible signs that domestic makers are likely to gain market share in the near future. Sales across the industry rose 7.6% to 1.14 million units in January according to industry sales data tracker Autodata. Asian makers gained 1.2% market share to 37.5% and U.S. makers lost 1.6% market share to 55.7%.

MOVERS AND SHAKERS

Monster Worldwide Inc ((MNST)) said Q4 net income jumped 49% to $36.5 million, or 29 cents a share, from the year-ago quarter, on strong international growth. Sales climbed 24% to $266.6 million. The company said it sees 2006 earnings from continuing operations in the range of $1.21 to $1.26 a share on revenue of $1.165 billion to $1.215 billion. The company’s shares climbed 13.4%.

Jones Lang LaSalle ((JLL)), real estate and money management services provider, reported Q4 net earnings of $66.9 million, or $2.11 a share, up 34% from $50 million, or $1.62 a share. Revenue rose 21% to $499 million from $412.4 million a year ago, said the real estate and money management services provider. The stock rose 12.5%.

Phoenix Cos ((PNX)), life insurance and asset management company, posted Q4 profit rise to $50.2 million, or 48 cents a share, from $48.3 million, or 48 cents, a year ago. Total segment income was $27.6 million, or 27 cents a share, up from $26 million, or 26 cents, in last year''s fourth quarter, beating estimates of 21 cents a share. The company affirmed its fiscal 2006 view for a double-digit percent gain in earnings growth. The stock gained 4.7%.

PPL Corp ((PPL)) said Q4 net income rose to $185 million, or 49 cents a share, from $177 million, or 47 cents a share, with revenue up 2.4% to $1.5 billion. Earnings from continuing operations of 53 cents a share topped analyst earnings forecasts of 50 cents a share. PPL confirmed its 2006 guidance of earnings of $2.15 to $2.25 a share and said it expects 11% compound annual earnings per share growth through 2010. The company’s shares rose 3.8%.

SigmaTel Inc ((SGTL)), semiconductor company, reported Q4 net earnings of $4.65 million, or 12 cents a share, down 76% from $19.5 million, or 52 cents a share, last year. Pro forma net income was $6 million, or 16 cents a share, while revenue rose to $82 million from $78.6 million. Analysts expected earnings of 15 cents a share on revenue of $84 million. The company forecast a Q1 loss of 10 cents to 17 cents a share, or a penny to 8 cents a share on a pro forma basis, on revenue of $52 million to $60 million. The stock slipped 11.5%.

Pixelworx Inc ((PXLW)), integrated circuits maker, posted Q4 net loss of $35.9 million, or 75 cents a share compared with a profit of $4 million, or 8 cents a share a year ago. Its loss on a pro forma basis was $32 million, or 67 cents a share. Revenue rose to $43.3 million from $38.5 million last year. Pixelworks projected Q1 net loss of 19 cents to 22 cents a share and a pro forma loss of 8 cents to 11 cents a share on revenue of $39 million to $43 million and a net gross profit margin of 40% to 42%. The company’s shares dropped 19.8%.

ECONOMIC NEWS

Crude oil inventories showed an advance in the latest week, according to government statistics released Wednesday, reversing a portion of the previous week''s decline. Stocks of gasoline recorded a sharp rise, while inventories of distillate fuel oil ticked down.

The Department of Energy''s Energy Information Administration revealed that crude oil inventories climbed by 1.9 million barrels for the week ended January 27, rising to 321.0 million barrels from the prior week''s level of 319.1 million barrels. This followed a decline of 2.3 million barrels in the previous week. Oil inventories were 11.4% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week increase of 4.2 million barrels, the government said, adding to the previous week''s increase of 3.2 million barrels. Gasoline stocks were 0.1% above their levels of last year, the first time they have shown a year-over-year increase in some time. Inventories of distillate fuel oil ticked down by 200,000 barrels in the most recent week.

The Department of Commerce released its report on construction spending in the month of December on Wednesday, showing that spending rose much more than economists had anticipated. The growth reflected a notable increase in spending on private construction.

The report showed that construction spending rose 1 percent in December after an upwardly revised increase of 0.5 percent in November. Economists had expected spending to increase 0.3 percent compared to the 0.2 percent increase originally reported for November.

With the growth in December, the value of construction spending came in at a record $1.12 trillion for 2005, which is up 8.9 percent from the $1.03 trillion spent in 2004.

As mentioned above, spending on private construction saw notable growth, increasing by 1.1 percent in December to a seasonally adjusted annual rate of $904.3 billion. Residential construction increased by 1 percent while non-residential construction rose by 1.3 percent.

Public construction spending also increased in December, rising by 0.7 percent to a seasonally adjusted annual rate of $256.3 billion. The growth came as a 1.5 percent increase in education construction spending more than offset a 0.6 percent decrease in highway construction spending.

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 closed higher, lifted by bid speculations involving Lloyds TSB and German ProSieben SAT 1, as well as positive news for U.K. satellite broadcaster BSkyB. The German DAX 30 rose 0.9%, the French CACV 40 gained 1%, and London’s FTSE 100 climbed 0.7%.

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 earnings of 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 Cor ((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.