Humana Net Rises on Revenue

Elena
06 Feb, 2006
New York City

Asian-Pacific benchmarks rebounded from early weakness to close higher, led by Shanghai Composite rising 2.35%. The Nikkei hit a fresh 5 1/2-year high of 0.5% to 16,747.76 on economic data. European averages gained at midday on takeover talk with the Italian MIB 30 index up 0.9%. In earnings news, Humana Inc. posted 37% profit rise in Q4 on 14% revenue growth. Serono reported Q4 net income jump of 72%, despite revenue decline.

U.S. MARKET AVERAGES

U.S. stocks advanced, predicting a higher start of Monday session, lifted by strength in overseas markets and expectations of a settlement of fraud charges against insurance company AIG. Stock averages closed lower last week on the January employment report which raised concerns about the labor market and a report which showed a drop in fourth-quarter productivity and a rise in unit labor costs.

Although the storm of earnings releases has subsided, some quarterly reports will still draw attention during the week’s trading with Dow component Disney the most prominent of all companies scheduled to release news. The entertainment giant, which recently announced a $7.4 billion deal to acquire animated movie studio Pixar, is expected to earn 30 cents per share, down from 34 cents per share in the same period last year.

Building products company Louisiana-Pacific Corp and Yum! Brands are also due to release quarterly results on Monday.

In corporate news, shares of aluminum companies Alcoa Inc. ((AA)), a Dow component, and Alcan Inc. ((AL)) were upgraded by JP Morgan. Another broker, UBS, upgraded its rating on the shoe company Nike Inc ((NKE)).

In a week with very little economic news, no major economic indicators are due out on Monday.

Standard & Poor''s 500 futures were up 3.2 points, above fair value. Dow Jones industrial average futures were up 25 points, and Nasdaq 100 futures were up 4.5 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks reversed from morning weakness to rally in the afternoon, posting solid gains despite higher oil prices, pushed up by escalating tension in the Middle East. The leading gainer was Shanghai Composite, surging to 2.35% after an extended holiday. The Nikkei hit a fresh 5 1/2-year high rising 0.53% to 16,747.76 on strong economic data. Among other regional markets, Taiwan’s Weighted index climbed 1.9%, Hong Kong’s Hang Seng rose 0.6%, and South Korea’s Kospi gained 0.6%.

European stocks advanced at mid-day dealings as bid speculations in the bank sector offset some mixed corporate news. The German DAX 30 gained 0.4%, the Italian MIB 30 index rose 0.9%, and London’s FTSE 100 advanced 0.3%.

OIL, METALS, CURRENCIES

Crude oil prices advanced amid renewed political tension over Iran’s nuclear program. Light sweet crude for March delivery gained 71 cents to $66.08 a barrel. London Brent rose 70 cents to $64.09.

European gold prices gained ground. In London gold traded at the fixed price of $570 bid per troy ounce, up from $569. In Zurich the precious metal traded at $569.80, up from $568.50. In Hong Kong gold fell $2.90 to close at $570. Silver opened at $9.80, up from $9.74.

The U.S. dollar traded mixed against other major currencies. The euro was quoted at $1.9995, down from $1.2022. The dollar bought 118.63 yen, down from $118.93. The British pound stood at $1.7553, down from $1.7613.

EARNINGS NEWS

NeuStar Inc, ((NSR)), provider of clearinghouse services reported that Q4 net income more than tripled to 18 cents a share, up from 5 cents a share in the year-earlier period on 53.1% revenue growth, driven mainly by an increase in transactions under contracts to ensure telephone number portability services.

Ipsco Inc, ((IPS)), steelmaker, reported Q4 net income of $3.52 a share, down from $3.91 a share in the year-ago period, beating analyst estimate of $2.84 a share. Currency translations subtracted 15 cents a share from earnings in Q4, and costs of early debt retirement also had its bearing on earnings by another 9 cents a share. Additionally, a lower effective tax rate contributed 62 cents to earnings. Gross margin narrowed to 30.3% from 35.5%, due to higher costs for alloys, energy and consumables.

Humana Inc., ((HUM)), health benefits company, reported a 37% increase in Q4 net profit to 39 cents a share on 14% revenue growth due to a significant increase in Medicare business. If not for 7 cents a share, in Hurricane Katrina-related expenses, the company announced it would have earned 46 cents a share, beating analysts’ forecasts by a penny.

Ryanair Holdings, ((RYAAY)), low-cost airline, reported that Q3 profit increased 6% to 36.8 million euros, missing slightly analysts'' forecast of about 38 million euros. Sales climbed 27% to 370.7 million euros on 26% traffic growth. Unit costs rose 3% as fuel costs jumped 59%.

Serono, ((SRA)), biotech company, announced Q4 adjusted net income soared 72.2% to 25 cents per U.S.-listed share, despite 1.4% revenue decline. The company’s profit climbed on a fall in selling, general and administrative expenses as well as a decrease in research and developments costs. Serono plans to raise its annual dividend by 11.1%.