Autodesk up 10% on Earnings

Elena
01 Mar, 2006
New York City

Stocks advanced Wednesday morning on speculations that consumer income and spending data would give the Fed Reserve reason to end its interest-rate hikes. Design software maker Autodesk posted Q4 profit rise of 33 cents a share, beating estimates and raised its financial forecast for 2007. Luxury retailer Saks posted Q4 profit loss of 2 cents a share vs. profit of 68 cents a year ago, blaming charges. Saks plans to pay a special $4 cash dividend.

U.S. MARKET AVERAGES

U.S. stocks opened higher on strong consumer spending data. The jump in stock prices follows a selloff Tuesday that sent the Dow Jones industrial average down more than 100 points.

The Commerce Department revealed that personal income rose in January by 0.7%, following a revised 0.5% increase in December with the gains attributed to a variety of factors including cost-of-living adjustments for Social Security benefits and the new prescription drug benefit for Medicare recipients. The report also said that personal spending advanced by 0.9%, following the December's revised gain of 0.7%.

Google regained some ground, following a sharp decline Tuesday after CFO said the company's key revenue source would see slower growth.

Medco Health Solutions Inc., one of the nation's biggest pharmacy benefits management companies, reported Q4 earnings jump of 33% on volume from new clients and higher prices.

In the first hour of trading, the Dow rose 36.10, or 0.33%. The Standard & Poor's 500 index rose 3.59, or 0.28%, and the Nasdaq composite index rose 8.58, or 0.38%.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.57% from 4.55% late Tuesday.

MOVERS AND SHAKERS

Joy Global ((JOYG)) said Q1 net profit surged to $60 million, or 48 cents a share, from $22 million, or 18 cents a share a year ago. Revenue jumped 48% to $553.3 million. It predicted revenue between $2.35 billion and $2.55 billion for the year. The company’s shares rose 11%.

Altera ((ALTR)), semiconductor maker, was upgraded at Bear Stearns to outperform from peer perform, citing the belief that the company will raise its revenue outlook during its mid-quarter update on March 6. The broker introduced a year-end 2006 stock price target of $25. The stock gained 4.2%.

HouseValues ((SOLD)) reported net income increase of 15 cents a share from 8 cents in the year-earlier period. Revenue rose to $25.2 million from $14.4 million. Analysts expected per-share earnings of 14 cents on revenue of $29 million. The stock slipped 26%.

Cogent Systems ((COGT)), provider of fingerprint biometric solutions, reported Q4 net income per share doubled from the year-earlier period to 22 cents, beating estimates of 20 cents. Revenue rose 46% to $46.2 million. The company’s shares fell 19.2%.

Hedrick & Struggles ((HSII)), human-resources consulting firm, reported Q4 net income drop of 36 cents a share against 44 cents in the year-earlier period, citing higher tax rate. Earnings for the quarter failed to meet estimate of 50 cents per share. Revenue rose 2.1% to $100.7 million. The stock dropped 11%.

ECONOMIC NEWS

Personal income and spending showed notable growth in the month of January, according to a report from the Department of Commerce. At the same time, the report also showed an acceleration in the pace of inflation.

The report said personal income rose 0.7 percent in January following an upwardly revised increase of 0.5 percent in December. Economists had expected income to increase by 0.6 percent compared to the 0.4 percent growth originally reported for December.

The Commerce Dept. noted that the increase in personal income reflected several special factors, including new Medicare prescription drug plan payments and cost-of-living adjustments to several federal transfer payment programs.

The report also showed that personal spending grew by 0.9 percent in January after a downwardly revised increase of 0.7 percent in December.

The growth in personal spending came in slightly below the expectations of economists, who had expected growth of 1.0 percent compared to the 0.9 percent growth originally reported for December.

With personal spending growth outpacing the increase in personal income, the personal savings rate came in at a negative 0.7 percent in January compared with a negative 0.4 percent savings rate in December.

As mentioned above, the report also showed that the price index for consumer spending rose 0.5 percent in January after coming in unchanged in December. Excluding food and energy prices, the index rose 0.2 percent following a 0.1 percent increase in the previous month.

Additionally, the price index showed an annual rate of growth of 3.1 percent in January compared to the 2.8 percent year-over-year growth seen in the two previous months. Core prices rose 1.8 percent year-over-year.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks finished mixed, reflecting positive fund flows and easing political tensions. The Nikkei slid 1.5% on disappointing U.S. economic data and a sharp drop of Google’s shares which hurt the auto and tech sectors. Across the region, Hong Kong’s Hang Seng fell 0.6% on profit taking, Australia’s All Ordinaries tumbled 1.3%, while India’s Stock Exchange Sensitive index surged 1.9% on gains in automobile shares.

European stocks recovered from recent losses to trade higher at mid-day. The German DAX 30 gained 0.5% lifted by deal talk involving BASF. The French CAC 40 rose 0.6% on strong earnings from media and telecommunications conglomerate Vivendi Universal. London’s FTSE 100 climbed 0.6% on miners, including Xstrata.

OIL, METALS, CURRENCIES

Crude oil prices neared $62 ahead of petroleum report, expected to show another rise in U.S. oil inventories. Light sweet crude April delivery gained 49 cents to $61.90 a barrel. London Brent for April delivery added 65 cents to $62.41 a barrel.

European gold prices continued to advance. In London gold traded at the fixed price of $562.60 bid per troy ounce, up from $559.30. In Zurich the precious metal traded at $562, up from $558.40. In Hong Kong gold rose $7.40 to $562.70. Silver opened at $9.73, down from $9.75.

The U.S. dollar gained vs. the yen, fell against the euro and pound. The euro traded at $1.1938, up from $1.1921. The dollar bought 116.13, up from 115.73. The British pound stood at $1.7557, up from $1.7536.

EARNINGS NEWS

Saks Inc, ((SKS)), retailer, reported a Q4 net loss of 2 cents a share, compared to net income of 71 cents a share in the year-earlier period. The company also okayed a special cash dividend of $4 a share, immediately following the expected closing on March 13 of the sale of its Northern Department Store Group. Q4 results incorporated net after-tax charges of $56.3 million, or 42 cents a share related to goodwill and other asset impairments. Revenue decline to $1.77 billion from $2.1 billion, reflecting the sale of the Proffitt''s/McRae''s business. The company missed analysts’ forecasts for earnings of 58 cents a share and revenue of $1.78 billion.

The Houston Exploration Co, ((THX)), oil and gas company, reported Q4 earnings of 68 cents a share, down from a profit of $1.21 a share a year-ago due to revenue decline. The company stated that declines in production more than offset improvements in average realized prices for the quarter. Production for Q4 dropped to 26.3 billion cubic feet of natural gas equivalent, or bcfe, from 30.3 bcfe in last year''s period. The company missed analysts’ estimates by a penny.

William Lyon Homes, ((WLS)), single family home builder, reported that Q4 net income advanced to $10.11 a share, up from $8.58 a share last year. Net new home orders, a predictor of future activity, dropped 7% to 460 homes. The company announced that the softening of some of its markets it experienced in late 2005 is continuing into 2006 as orders are lower and cancellation rates are higher for the first eight weeks of 2006 relative to the year-ago period.

American Eagle Outfitters Inc, ((AEOS)), apparel company, reported Q4 income of 71 cents a share, up from 66 cents a share in the year-earlier period on 13.4% total sales and 7.8%. same-store sales growth. Operating income rose to $174.2 million from $171.7 million last year.

SciClone Pharmaceuticals, Inc, ((SCLN)), pharmaceutical company, reported a Q4 net loss of 4 cents a share, up from a loss of 5 cents a share in the year-ago period on revenue growth and a 22% jump in sales of Zadaxin, SciClone''s lead product. The company predicted Zadaxin sales will advance to about $32 million in 2006, driven by continued growth in China.

Aristotle Corp, ((ARTL)), manufacturer of products for the education, medical and agricultural markets, reported that Q4 net earnings advanced 54.7% to 9 cents a share on 5.9% net sales growth. Aristotle, announced that reductions in administrative and selling costs had more than offset higher energy prices and sluggish spending in the education market.

Fargo Electronics, Inc, ((FRGO)), provider of sercure identity-card technologies, reported that Q4 net income increased 12% to 19 cents a share from the year-ago period on 7% sales growth. Gross profit margins advanced to 44% from 39%. The company predicted it will earn 13 cents to 15 cents a share in Q1, including one cent for the expensing of stock options.

Walter Industries Inc, ((WLT)), diversified infrastructure company, posted a Q4 net loss of $1.88 a share, three times more than earned in the same period a year ago. Total revenue at the company advanced to $801.2 million from $391 million a year ago. Walter Industries beat analysts’ forecasts of $1.44 a share.