Google to Settle a Lawsuit

Elena
09 Mar, 2006
New York City

U.S. stock futures pointed to a positive opening on oil prices decline and easing inflation worries. Shares of Wind River Systems fell 16.3% on earnings that missed analyst estimates. Biogen Idec rose 8.5% after experts agreed to return its multiple sclerosis drug Tysabri to the U.S. market. Google announced it is close to a settlement of a class action lawsuit concerning click fraud under which it would pay up to $90 million.

9:00AM – Stock futures pointed to a higher opening on lower oil prices
U.S. stock futures were sitting above the flat level, indicating a higher start of Thursday session as investors’ inflation concerns got a relief from declining oil prices. Pre-market trading sentiment was positively influenced by solid gains in Japan after the Bank of Japan announced an end to its ultra-easy monetary policy. S&P 500 futures were up 3.7 points, above fair value. Dow Jones industrial average futures climbed 30 points, and Nasdaq 100 futures were up 5.00 points.

Google announced late Wednesday it is close to a settlement of a class action lawsuit concerning click fraud which refers to the act of purposely clicking ad listings without intending to buy from the advertiser. The lawsuit, dating back to 2001, was filed by Lane''s Gifts & Collectibles LLC and alleged that Google and Yahoo conspired with its advertising partners to conceal the magnitude of click fraud in order to avoid making refunds. Under the settlement Google would pay up to $90 million, including the total amount of credits and the attorney fees. Meanwhile, Yahoo said it stands firmly by its proprietary click protection system.

Crude oil prices hovered over $60 a barrel as OPEC decided to keep output levels steady and inventory report showed ample fuel supplies. Light sweet crude April delivery gained 25 cents to $60.27 a barrel. Gasoline gained was up $1.6567. Heating oil added nearly a cent to $1.7025. Natural gas rose 3 cents to $6.679 per 1,000 cubic feet. London Brent for April delivery added 45 cents to $60.48 a barrel. European gold prices gained ground Thursday, rebounding from recent decline. In London gold rose to $545.60 bid per troy ounce, up from $542.10. In Zurich the precious metal advanced to $546.50 from $542.50. In Hong Kong gold fell $3.80 to $546.80. Silver opened at $9.82, down from $9.90. The U.S. dollar traded lower against other major currencies. The euro traded at $1.1926, up from $1.1919. The dollar bought 117.28 yen, down from 117.88. The British pound was quoted at $1.7387, up from $1.7373.

8:30 AM A Couple of Companies Report Decline in Quarterly Profit
PanAmSat Holding Corp., ((PA)), satellite operator, reported Q4 earnings of 40 cents a share, up from 26 cents a share in the year-ago period. The results included a $6.9 million gain on an interest rate swap agreement. The company beat analysts’ expectations for earnings of 18 cents a share. Revenue increased 10% to $229.2 million from last year's $207.7 million.

Casella Waste Systems Inc, ((CWST)), solid waste hauler, reported Q3 net income of 2 cents a share, up a cent from 2 cents a share in the year-ago period. Revenue dropped 11%. The company beat analysts’ forecasts for earnings of 1 cent a share.

National Atlantic Holdings Corp, ((NAHC)), property-casualty insurer, reported Q4 net income of 19 cents a share, a decline from $1.28 a share in the year-ago period. Q4 profit reflected charges connected with losses in the company homeowners segment, due in part to what it called a disproportionate number of total losses resulting from fires. The effect of these losses amounted to 27 cents a share, the company added. The company missed analysts’ estimates for earnings of 31 cents a share. Revenues for Q4 dropped 23.2%, to $44.6 million from the prior year''s $58.1 million, as written premiums fell.

Methode Electronics Inc, ((METH)), manufacturer of electronic component and subsystem devices, reported Q3 net income of 8 cents a share, considerably down from 13 cents in the year-ago period. Analysts views were for earnings of 8 cents a share, in line with results. The company''s cost of products sold advanced to 81.6% of net sales in Q3 from previous year’s 77.8%.

Claire''s Stores Inc, ((CLE)), jewelry retailer, reported that Q4 net income gained 16.7% to 69 cents a share, as net sales advanced 5% to $414.7 million and same-store sales advanced 6% in Q4. The company topped analyst estimate by a penny. The company added that sales received a boost from its first stores in Spain, Holland and Belgium, which were opened during the last year, and added it intends to enter at least one other new country in the next 12 months.

EGL Inc, ((EAGL)), logistics firm, reported that Q4 net income jumped 48% to 47 cents a share on 9.6% revenue growth. Q4 included a number of charges and gains, including an overcharge penalty, a charge on a U.K. warehouse fire, and tax benefits.

Stage Stores Inc, ((STGS)), clothing retailer, reported Q4 net income rose 5.9% to 68 cents a share. Sales advanced 7.6% to $418.6 million. The company met analyst estimate for earnings of 68 cents a share. The company added that same-store sales advanced 5.6%, as same-store sales in Louisiana and Mississippi were particularly strong as customers hit by hurricanes Katrina and Rita replaced their lost belongings.

Hansen Natural Corp, ((HANS)), soft drink maker, reported that Q4 net income more than doubled to 75 cents a share, from owing to a substantial rise in the sale of Monster Energy drinks. The company''s net sales for Q4 increased 94.7% to $98 million.

8:00AM The Bank of Japan abandons easy monetary policy
Asian-Pacific benchmarks traded mostly higher after the Bank of Japan brought relief to regional markets, stating a decision to abandon its ultra-easy monetary policy. The bank concluded that the economic and price conditions are favorable for making a shift to a more normal monetary policy. The Nikkei soared 2.6% to 16,036.91 ending a five-session decline. The yen also got a boost on the news, rising to 117.44 against the dollar. Across the region, Taiwan Weighted index rose 0.4%, Hong Kong’s Hang Seng gained 0.1%, recovering from recent losses with the help of property stocks, while South Korea’s Kospi fell 0.2% for a third session in a row, dragged by Samsung Electronics decline.

European stocks advanced at mid-day, rebounding from two consecutive lower sessions. Stocks were boosted by a slide in oil prices, comparatively strong close on Wall Street, and upbeat earning reports from insurance and retail companies, such as Royal & Sun Alliance and Carrefour. A sharp 22% jump in the shares of drug maker Elan also lifted sentiment. The German DAX 30 climbed 0.9%, the French CAC 40 advanced 0.5%, and London FTSE 100 rose 0.6%.The Bank of England announced a decision to leave interest rates on hold at 4.5%, as expected.