4/29/07 Euphoria
Peru's largest miners union on Friday said a nationwide strike set for Monday looked increasingly inevitable, but it would meet again with government officials in the afternoon to try to reach a deal. Luis Castillo, president of the National Federation of Metallurgic and Steel Miners, told Reuters: "The decision has been made. There is no turning back on the strike." Castillo said another meeting with government officials was scheduled for 3 pm local time, "but we don't foresee anything (resulting) because our positions haven't grown any closer."
Bloomberg noted "the Federal Reserve’s trade-weighted dollar index fell to the lowest since its inception in 1971 amid expectations the currency will extend a slide against the euro." Trading at a record low against the euro, the dollar index declined to 81.35. Meanwhile, Barron's discussed the possibility of the dollar recovering later this year. Anything is possible, as there are rallies in a bear market; however, I prefer to keep the trend my friend, and being short the dollar for years has been a great decision for me.
The Bank of England: "The surge in cheap corporate lending, combined with looser credit standards, has increased the vulnerability of the [global financial] system."
Doug Noland: "When it comes to global imbalances, perceptions today differ greatly from reality. The optimists look to booming exports and relatively stable U.S. trade deficits as encouraging signs. But the massive U.S. current account deficit will again this year spurn meaningful improvement. Years of dollar weakness may have finally, if only at the margin, helped to stabilize our trade position. They have also given rise to heightened speculative flows seeking profits from the allure of stronger foreign currencies and inflating global securities markets. The bottom line is that total U.S. “Bubble dollar” flows to the world – the most destabilizing global imbalance – will further worsen this year. Attempts to rectify U.S. Credit Bubble excesses through a global inflation will fail miserably... It is certainly possible that we’ll see trillion dollar annual deficits within the next decade...Unprecedented gains in financial wealth come not predominantly from stock or asset prices shooting openly (and “vertically”) to the moon. Instead, the Mania Unique to this extraordinary phase of “Financial Arbitrage Capitalism” involves the enormous (and highly concentrated) accumulation of “small” spread profits on tens of Trillions of “dollars” of highly leveraged “structured” Credit instruments (expanding insidiously and “horizontally”). Pricing isn’t a critical issue and they don’t even need to trade, as gains are accumulated with the receipt of “payment in kind” spread profits through the issuance of only more debt instruments... For one thing, the associated financial flows are becoming increasingly unwieldy and its “reserve” currency an accident in the making. We should expect its eventual unraveling to be similarly exceptional. In the meantime, this Mania is an imbalance exacerbating and “currency”-debasing behemoth. And that concludes my bout of “defiance” for this week."
"The direct model has been a revolution, but is not a religion,'' Dell wrote in an e-mail to employees yesterday. "We will simplify our business model and go beyond it to give our customers what they need.'' It's a smart person who remains flexible in thinking. We should keep a vigilant eye on Dell's future progress
Bloomberg reported Venezuela's heavy oil deposits may rival Canada's tar sands as a source of crude to meet rising global demand should President Hugo Chavez convince foreign companies that their investments are secure in the country. Venezuela needs $200 billion to develop the heavy oil reserves in the Faja region, Ali Moshiri, head of Chevron Corp.'s Latin American exploration and production unit, said at a conference in Caracas last night. Heavy oil production could jump fivefold to as much as 3 million barrels a day, Moshiri said.
Randall Tobias, the deputy secretary of state responsible for U.S. foreign aid, abruptly resigned Friday after his name surfaced in an investigation into a high-priced call-girl ring, U.S. government sources said. He might better be described as the under secretary.
Dendreon shares are being sold short at a record pace as some investors bet the company's experimental prostate-cancer drug will fail to win approval from U.S. regulators. About 44 percent of Dendreon shares as of mid-April were sold short, according to Nasdaq Stock Market data compiled by Bloomberg News. It's not enough that the shares jumped 10 points overnight just a few weeks ago. The masochists are at it again.
The sharp decline of the sub-prime housing market offering high-cost mortgages hasn't yet hit bottom, the head of home mortgage buyer Freddie Mac said Friday.
"I don't think it's troughed yet, because of the class of 2006," Syron, chairman and chief executive of Freddie Mac, said before speaking at a housing conference. "The mortgages written in 2006 in the subprime market are probably the most troublesome. They haven't hit the reset point yet on interest rates."
The Oil Drum: "Russia's giant Shtokman gas field, one of the world's most challenging offshore projects, will face even greater problems as global warming unleashes vast icebergs into the Arctic, a senior scientist says. Even if icebergs are unlikely to halt the world's largest single energy development, as the global hunger for resources grows, they would make the $30 billion-plus project by Russia's gas monopoly Gazprom yet more expensive."
The Bush administration will roll out a plan Monday to open new acreage offshore that for decades has been off-limits to drilling.
For all my Jewish friends. What do they call a Roman Catholic? A sleep-walking Nun.
Nouriel Roubini: "Currently the most sophisticated "soft landing" commentators do recognize that Q1 was weak - hard to deny it given the fact of a near growth recession 1.3% - but then argue that Q1 will turn out to be the bottom of the US growth deceleration with a recovery of the economy in Q2 and H2. The economy may well turn out to surprise on the upside if there is a recovery of corporate capex and a resilience of the US consumer. But actual and forward looking data suggest that the growth deceleration is continuing in Q2 and that Q2 - as argued extensively before in this blog - will turn out worse than Q1. Thus the risk of a hard landing is increasing."
U.S. first-quarter 2007 drilling estimates hit a 21-year high and were nearly twice the level of first quarter drilling activity recorded during the 1990s, API said.
Axel Merk: "What a weaker dollar may do is provide temporary relief. But unless the U.S. turns into a society of savers and investors, a weaker dollar will only be a pause to an even weaker dollar as imbalances are built up yet again."
The WSJ opines "tighter credit and a growing glut of properties are depressing an already weak U.S. housing market, wrecking the industry's hopes for an early rebound. That leaves buyers in a strong position to negotiate for bargains during the spring home-shopping season, the busiest time of the year for housing sales."
Jeremy Grantham says we are now seeing the first worldwide bubble in history covering all asset classes. Everything is in bubble territory.
Stanley Elkin: “Life's tallest order is to keep the feelings up, to make two dollars' worth of euphoria go the distance. And life can't do that. So fiction does.”
Saturday, April 28, 2007
Friday, April 27, 2007
Never A Serious Debate
4/28/07 Never A Serious Debate
George Tenet: "There was never a serious debate that I know of within the administration about the imminence of the Iraqi threat."
Henry Miller: “One can be absolutely truthful and sincere even though admittedly the most outrageous liar. Fiction and invention are of the very fabric of life.” His words could apply to 43, Dick, and/or Condi.
Cummins lifted its outlook for 2007 to earnings of $6 to $6.50 a share from a prior projection of $5.50 to $5.75 a share.
Coventry Health Care said that it's expecting sales in a range of $9.22 billion to $9.55 billion for 2007, and earnings per share in a range of $3.92 to $3.98 a share.
Japanese consumer prices fell 0.3%, slightly faster than the consensus forecast for a 0.2% fall. Bank of Japan Gov. Toshihiko Fukui said Friday the central bank did not exclude the possibility of lifting interest rates in an environment where the core consumer price index declines on year. "Even if prices stay weak, or fall on year, rate hikes may be needed when consumer prices continue moving in line with our forecast."
Statoil agreed to buy North American Oil Sands for C$2.2 billion (US$2 billion). It's paying C$20 a share for the Calgary-based company that's 69% held by the Paramount Resources Ltd, funds managed by affiliates of ARC Financial Corporation and Ontario Teachers' Pension Plan, which all back the deal.
Standard Pacific's quarterly results, excluding the impairment charges, were 62 cents a share. Revenue for the three months ended March 31 fell to $698.3 million from $879 million, the company said. The first-quarter backlog of 2,712 presold homes, valued at $983 million, a decrease of 58% from a year ago. The backlog figures exclude joint-venture homes. Additionally, Standard Pacific said it now expects 2007 home-building revenue of $3.1 billion and 8,150 deliveries.
IPCS Inc. declared a special cash dividend of $11 a share, payable on May 16 to shareholders of record as of May 8. Schaumburg, Ill.-based iPCS is the Sprint PCS Affiliate of Sprint Nextel Corp.
Citigroup cemented its biggest-ever Asian acquisition for $7.7 billion after a majority of shareholders in Japanese brokerage Nikko Cordial Corp. accepted a buyout offer. Citigroup said it secured 61 percent of Nikko's voting stock in a tender bid that expired on Thursday.
GM suspended development work at two U.S. plants after talks between the union and management on cost cutting ended, the Wall Street Journal reported on its Web site on Friday. United Auto Workers leaders ended talks at facilities in Fairfax, Kansas and Lordstown, Ohio after disagreements with the company, the Journal reported, citing unnamed sources.
Brett Steenbarger: "We need to see price highs and an expansion in the number of stocks registering fresh 20 day highs to sustain the uptrend. I'm alert to the possibility of continued consolidation, given that the rally is not broadening."
A group led by Royal Bank of Scotland Group Plc plans to make an unsolicited offer for ABN Amro Holding NV, escalating the fight with Barclays Plc for control of the biggest Dutch bank.
WTRG: "The U.S. rotary rig count was up 11 rigs to 1,769 for the week of April 20, 2007 and is 11.2 percent higher than last year. The number of rotary rigs drilling for oil is up 10 at 292. The number of rigs targeting oil is 33 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 16.5% percent of total drilling activity. Rigs directed toward natural gas were up 1 at 1,473. The number of rigs currently drilling for gas is 142 greater than last year's level of 1,331. Year-over-year oil exploration in the US is up 12.7 percent. Gas exploration is up 10.7 percent. The weekly average of crude oil spot prices is 11.9 percent lower than last year and natural gas spot prices are 1.1 percent lower. Canadian rig activity* was up 1 at 98 for the week of April 20, 2007 and is 78 lower than last year's rig count.
Richard Daughty: "
But somebody is still buying things; like the Fed, for instance, which bought up $1.4 billion in government debt last week! Hahaha! In fact, the Federal Reserve (which is, if you recall, just a private bank that, in an almost-deserted Congress on an infamous Christmas Eve in 1913, was given extraordinary powers to create debt and money), now admits to owning $782 billion in U.S. government securities! So, it looks like the Federal Reserve created more credit in the banking system, which they themselves borrowed to buy government debt for themselves! Hahaha! What a scam!
But this little Fed flimflam aside (which is hard to say five times quickly!), without new money coming into the system through the banks, the only way that the stock market, or the bond market, or the housing market, or any market, can go up, is for the new buyers to get the money by selling something else - or if some other country's central bank is supplying the new money. Either way, this is definitely not how to achieve "economic nirvana"."
Cardinal Health Inc. forecast fiscal 2007 profit from continuing operations in a range of $3.32 to $3.40 a share, in the upper half of the range it previously provided. For fiscal 2008, the company expects earnings from continuing operations to be above its long-term goal of 12% to 15% growth and in a range of $3.95 to $4.15 a share.
Chevron Q1 earns $2.18 vs. $1.80. Revenue fell to $48.23 billion from $54.6 billion.
U.S. employment costs increased 0.8% in the first quarter after a 0.9% gain in the last three months of 2006, the Labor Department reported Friday. Wages and salaries rose 1.1% in the quarter, the biggest gain since the first quarter of 2001. Benefits rose 0.1%, the slowest pace since March 1999. Over the past year, employment costs have increased 3.5%, up from 3.3% in the fourth quarter. This is the largest year-over-year gain since the first quarter of 2005. Wages and salary costs have increased 3.6% in the past year, while benefit costs increased 3.1%.
The U.S. economy slowed to 1.3% real annualized growth in the first quarter, the weakest expansion in four years, the Commerce Department estimated Friday.
Growth was led by consumer spending, state and local government spending, and business investments, offsetting drags from housing, foreign trade, inventories and federal government spending. Final sales of domestic product increased 1.6%, the weakest in five quarters. Led by higher energy costs, the GDP price index increased 4%, the most in 16 years. Meanwhile, core consumer prices - which exclude food and energy costs - increased at a more moderate 2.2% annual pace. Unfortunately, living does not occur at core prices.
Mazda Motor Corp., Japan's fourth biggest automaker, posted a 24 percent jump in profit for its fourth fiscal quarter and record annual earnings for the third straight year amid strong U.S. demand for a new sport utility vehicle and other models. Mazda, which is 33.4 percent owned by Ford Motor Co., said Friday it had a group profit of 31.6 billion yen ($264 million) in the three months ended March 31, up from 25.4 billion yen the same period a year earlier. Sales climbed 16 percent to 957.9 billion yen ($8 billion) for the quarter from 826.4 billion yen a year ago.
Financial Sense: "In this week of technology celebration, the relationship between technology stocks and all stocks is nearing a critical technical juncture. Why is this important? This relationship has been a useful tool with regard to picking important tops and bottoms in the stock market. Bull markets and rallies have been accompanied by out performance of technology stocks. This trend has reversed for bear markets and corrections against the bull trend. Yet in the last couple of months, something seems to have changed where the latest bull run is accompanied by underperformance of tech stocks."
The Daily Reckoning: "For the decline of the dollar - against euros, gold, and financial assets generally - undermines Americans' wealth even as they see themselves living in the lap of prosperity. The decline of the dollar could also push forward the day on which the world's big holders of the greenback look at their piles and begin to worry that they have a trillion or two too many. At that point (which we have been attending for so long we often forget what we are waiting for) you should see some real excitement in the world's investment markets.The most obvious consequences will be a further sell-off of the dollar, sparking an increase in U.S. dollar-yields. This, in turn, would disrupt millions of financial decisions, making lenders more wary and borrowers more prudent."
The euro surged to a new record high vs. the dollar above $1.3680 early Friday after a Commerce Department report showed the U.S. economy slowed to 1.3% annualized growth in the first quarter.
Asian Times: "Russia, officially listed as holder of 27% of the world's proven natural-gas reserves, but soon to be upgraded to 35%, and Iran hold more than 51% of the world's reserves. When Algeria, Qatar and Indonesia, the world's leaders in the export of liquefied natural gas (LNG), and the rest of the 16-member group comprising the Gas Exporting Countries Forum (GECF) are added in, then the grouping accounts for more than three-fourths of the world's
reserves and at least 60% of world production."
National Oilwell Varco, Inc. reported that for its first quarter ended March 31, 2007 it earned net income of $275.9 million, or $1.55 per fully diluted share, compared to fourth quarter ended December 31, 2006 net income of $239.2 million, or $1.35 per fully diluted share. Earnings per share more than doubled from the first quarter of 2006, when the Company earned $120.3 million or $0.68 per fully diluted share. Reported revenues for the first quarter were $2,165.7 million, an increase of 4 percent from the fourth quarter of 2006 and an increase of 43 percent from the first quarter of 2006.
The Justice Department released a list of internal documents Thursday focusing on lawmakers' concerns and media questions about the firings of eight federal prosecutors, but the department resisted congressional demands for copies of the memos.
The Reuters/University of Michigan Surveys of Consumers said the final April reading of its consumer sentiment index slipped to 87.1 from from 88.4 in March. It was the third straight monthly fall in the index.April's final result was the lowest since 85.4 in September 2006.
The vacancy rate for owner-occupied homes rose to a record 2.8% in the first quarter from 2.7% in the fourth quarter, the Commerce Department reported Friday. A year ago, the vacancy rate was 2.1%, a record at the time. The vacancy rate for rental homes rose to 10.1% from 9.8%, the highest in two years.
Lubrizol now expects earnings in the range of $3.70 per share to $3.90 per share on revenue of between $4.32 billion and $4.36 billion, compared with a forecast in February that called for a profit of between $3.30 per share to $3.50 on revenue of between $4.28 billion and $4.32 billion.
ZMAN reports Pemex sees Cantarell field production off 15% in 2007.
OPEC said in its monthly magazine published Thursday
"...in the light of the recent developments regarding the stated move away from traditional fossil fuels - and oil in particular - OPEC member countries feel they ought to review their future expansion plans," the magazine said.The magazine went on to say: "It would, in fact, make no sense for them to spend money unnecessarily on building or improving facilities when their customers are telling them they intend to minimize dependence on OPEC supplies."
Ford Motor Co. said on Friday that U.S. auto industry sales to date in April were "terrible" as consumer confidence was hit by a slow housing market and rising gas prices."This month is terrible," Ford chief sales analyst George Pipas said in an interview. "We are not even close to where we expected to be in April."
June gold closed at $681.80 an ounce Friday, up $3.80 for the session, but down 2% for the week.
June crude up $1.40 to close at $66.46/brl and up 3.7% for the week.
Workers at Brazil's state-owned oil and gas company, Petrobras, announced Thursday that they will go on strike halting operations in all of the giant's production units.
Lukoil has reduced its 2007 production growth target to 4.5-5.0 percent from 8.2 percent following delays in the Yuzhno-Khylchuyuskoye (YK) field development project in Northern Russia.
A mild winter hampered the development of the field, which is now expected to come on stream at the end of this year, company officials told analysts at a briefing in London.
Rep. Ron Paul: "Real conservatives have always supported low taxes and low spending. But today, too many politicians and lobbyists are spending America into ruin. We are nine trillion dollars in debt as a nation... If we don't cut spending now, higher taxes and economic disaster will be in their future - and yours. In addition, the Federal Reserve, our central bank, fosters runaway debt by increasing the money supply - making each dollar in your pocket worth less."
George Tenet: "There was never a serious debate that I know of within the administration about the imminence of the Iraqi threat."
Henry Miller: “One can be absolutely truthful and sincere even though admittedly the most outrageous liar. Fiction and invention are of the very fabric of life.” His words could apply to 43, Dick, and/or Condi.
Cummins lifted its outlook for 2007 to earnings of $6 to $6.50 a share from a prior projection of $5.50 to $5.75 a share.
Coventry Health Care said that it's expecting sales in a range of $9.22 billion to $9.55 billion for 2007, and earnings per share in a range of $3.92 to $3.98 a share.
Japanese consumer prices fell 0.3%, slightly faster than the consensus forecast for a 0.2% fall. Bank of Japan Gov. Toshihiko Fukui said Friday the central bank did not exclude the possibility of lifting interest rates in an environment where the core consumer price index declines on year. "Even if prices stay weak, or fall on year, rate hikes may be needed when consumer prices continue moving in line with our forecast."
Statoil agreed to buy North American Oil Sands for C$2.2 billion (US$2 billion). It's paying C$20 a share for the Calgary-based company that's 69% held by the Paramount Resources Ltd, funds managed by affiliates of ARC Financial Corporation and Ontario Teachers' Pension Plan, which all back the deal.
Standard Pacific's quarterly results, excluding the impairment charges, were 62 cents a share. Revenue for the three months ended March 31 fell to $698.3 million from $879 million, the company said. The first-quarter backlog of 2,712 presold homes, valued at $983 million, a decrease of 58% from a year ago. The backlog figures exclude joint-venture homes. Additionally, Standard Pacific said it now expects 2007 home-building revenue of $3.1 billion and 8,150 deliveries.
IPCS Inc. declared a special cash dividend of $11 a share, payable on May 16 to shareholders of record as of May 8. Schaumburg, Ill.-based iPCS is the Sprint PCS Affiliate of Sprint Nextel Corp.
Citigroup cemented its biggest-ever Asian acquisition for $7.7 billion after a majority of shareholders in Japanese brokerage Nikko Cordial Corp. accepted a buyout offer. Citigroup said it secured 61 percent of Nikko's voting stock in a tender bid that expired on Thursday.
GM suspended development work at two U.S. plants after talks between the union and management on cost cutting ended, the Wall Street Journal reported on its Web site on Friday. United Auto Workers leaders ended talks at facilities in Fairfax, Kansas and Lordstown, Ohio after disagreements with the company, the Journal reported, citing unnamed sources.
Brett Steenbarger: "We need to see price highs and an expansion in the number of stocks registering fresh 20 day highs to sustain the uptrend. I'm alert to the possibility of continued consolidation, given that the rally is not broadening."
A group led by Royal Bank of Scotland Group Plc plans to make an unsolicited offer for ABN Amro Holding NV, escalating the fight with Barclays Plc for control of the biggest Dutch bank.
WTRG: "The U.S. rotary rig count was up 11 rigs to 1,769 for the week of April 20, 2007 and is 11.2 percent higher than last year. The number of rotary rigs drilling for oil is up 10 at 292. The number of rigs targeting oil is 33 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 16.5% percent of total drilling activity. Rigs directed toward natural gas were up 1 at 1,473. The number of rigs currently drilling for gas is 142 greater than last year's level of 1,331. Year-over-year oil exploration in the US is up 12.7 percent. Gas exploration is up 10.7 percent. The weekly average of crude oil spot prices is 11.9 percent lower than last year and natural gas spot prices are 1.1 percent lower. Canadian rig activity* was up 1 at 98 for the week of April 20, 2007 and is 78 lower than last year's rig count.
Richard Daughty: "
But somebody is still buying things; like the Fed, for instance, which bought up $1.4 billion in government debt last week! Hahaha! In fact, the Federal Reserve (which is, if you recall, just a private bank that, in an almost-deserted Congress on an infamous Christmas Eve in 1913, was given extraordinary powers to create debt and money), now admits to owning $782 billion in U.S. government securities! So, it looks like the Federal Reserve created more credit in the banking system, which they themselves borrowed to buy government debt for themselves! Hahaha! What a scam!
But this little Fed flimflam aside (which is hard to say five times quickly!), without new money coming into the system through the banks, the only way that the stock market, or the bond market, or the housing market, or any market, can go up, is for the new buyers to get the money by selling something else - or if some other country's central bank is supplying the new money. Either way, this is definitely not how to achieve "economic nirvana"."
Cardinal Health Inc. forecast fiscal 2007 profit from continuing operations in a range of $3.32 to $3.40 a share, in the upper half of the range it previously provided. For fiscal 2008, the company expects earnings from continuing operations to be above its long-term goal of 12% to 15% growth and in a range of $3.95 to $4.15 a share.
Chevron Q1 earns $2.18 vs. $1.80. Revenue fell to $48.23 billion from $54.6 billion.
U.S. employment costs increased 0.8% in the first quarter after a 0.9% gain in the last three months of 2006, the Labor Department reported Friday. Wages and salaries rose 1.1% in the quarter, the biggest gain since the first quarter of 2001. Benefits rose 0.1%, the slowest pace since March 1999. Over the past year, employment costs have increased 3.5%, up from 3.3% in the fourth quarter. This is the largest year-over-year gain since the first quarter of 2005. Wages and salary costs have increased 3.6% in the past year, while benefit costs increased 3.1%.
The U.S. economy slowed to 1.3% real annualized growth in the first quarter, the weakest expansion in four years, the Commerce Department estimated Friday.
Growth was led by consumer spending, state and local government spending, and business investments, offsetting drags from housing, foreign trade, inventories and federal government spending. Final sales of domestic product increased 1.6%, the weakest in five quarters. Led by higher energy costs, the GDP price index increased 4%, the most in 16 years. Meanwhile, core consumer prices - which exclude food and energy costs - increased at a more moderate 2.2% annual pace. Unfortunately, living does not occur at core prices.
Mazda Motor Corp., Japan's fourth biggest automaker, posted a 24 percent jump in profit for its fourth fiscal quarter and record annual earnings for the third straight year amid strong U.S. demand for a new sport utility vehicle and other models. Mazda, which is 33.4 percent owned by Ford Motor Co., said Friday it had a group profit of 31.6 billion yen ($264 million) in the three months ended March 31, up from 25.4 billion yen the same period a year earlier. Sales climbed 16 percent to 957.9 billion yen ($8 billion) for the quarter from 826.4 billion yen a year ago.
Financial Sense: "In this week of technology celebration, the relationship between technology stocks and all stocks is nearing a critical technical juncture. Why is this important? This relationship has been a useful tool with regard to picking important tops and bottoms in the stock market. Bull markets and rallies have been accompanied by out performance of technology stocks. This trend has reversed for bear markets and corrections against the bull trend. Yet in the last couple of months, something seems to have changed where the latest bull run is accompanied by underperformance of tech stocks."
The Daily Reckoning: "For the decline of the dollar - against euros, gold, and financial assets generally - undermines Americans' wealth even as they see themselves living in the lap of prosperity. The decline of the dollar could also push forward the day on which the world's big holders of the greenback look at their piles and begin to worry that they have a trillion or two too many. At that point (which we have been attending for so long we often forget what we are waiting for) you should see some real excitement in the world's investment markets.The most obvious consequences will be a further sell-off of the dollar, sparking an increase in U.S. dollar-yields. This, in turn, would disrupt millions of financial decisions, making lenders more wary and borrowers more prudent."
The euro surged to a new record high vs. the dollar above $1.3680 early Friday after a Commerce Department report showed the U.S. economy slowed to 1.3% annualized growth in the first quarter.
Asian Times: "Russia, officially listed as holder of 27% of the world's proven natural-gas reserves, but soon to be upgraded to 35%, and Iran hold more than 51% of the world's reserves. When Algeria, Qatar and Indonesia, the world's leaders in the export of liquefied natural gas (LNG), and the rest of the 16-member group comprising the Gas Exporting Countries Forum (GECF) are added in, then the grouping accounts for more than three-fourths of the world's
reserves and at least 60% of world production."
National Oilwell Varco, Inc. reported that for its first quarter ended March 31, 2007 it earned net income of $275.9 million, or $1.55 per fully diluted share, compared to fourth quarter ended December 31, 2006 net income of $239.2 million, or $1.35 per fully diluted share. Earnings per share more than doubled from the first quarter of 2006, when the Company earned $120.3 million or $0.68 per fully diluted share. Reported revenues for the first quarter were $2,165.7 million, an increase of 4 percent from the fourth quarter of 2006 and an increase of 43 percent from the first quarter of 2006.
The Justice Department released a list of internal documents Thursday focusing on lawmakers' concerns and media questions about the firings of eight federal prosecutors, but the department resisted congressional demands for copies of the memos.
The Reuters/University of Michigan Surveys of Consumers said the final April reading of its consumer sentiment index slipped to 87.1 from from 88.4 in March. It was the third straight monthly fall in the index.April's final result was the lowest since 85.4 in September 2006.
The vacancy rate for owner-occupied homes rose to a record 2.8% in the first quarter from 2.7% in the fourth quarter, the Commerce Department reported Friday. A year ago, the vacancy rate was 2.1%, a record at the time. The vacancy rate for rental homes rose to 10.1% from 9.8%, the highest in two years.
Lubrizol now expects earnings in the range of $3.70 per share to $3.90 per share on revenue of between $4.32 billion and $4.36 billion, compared with a forecast in February that called for a profit of between $3.30 per share to $3.50 on revenue of between $4.28 billion and $4.32 billion.
ZMAN reports Pemex sees Cantarell field production off 15% in 2007.
OPEC said in its monthly magazine published Thursday
"...in the light of the recent developments regarding the stated move away from traditional fossil fuels - and oil in particular - OPEC member countries feel they ought to review their future expansion plans," the magazine said.The magazine went on to say: "It would, in fact, make no sense for them to spend money unnecessarily on building or improving facilities when their customers are telling them they intend to minimize dependence on OPEC supplies."
Ford Motor Co. said on Friday that U.S. auto industry sales to date in April were "terrible" as consumer confidence was hit by a slow housing market and rising gas prices."This month is terrible," Ford chief sales analyst George Pipas said in an interview. "We are not even close to where we expected to be in April."
June gold closed at $681.80 an ounce Friday, up $3.80 for the session, but down 2% for the week.
June crude up $1.40 to close at $66.46/brl and up 3.7% for the week.
Workers at Brazil's state-owned oil and gas company, Petrobras, announced Thursday that they will go on strike halting operations in all of the giant's production units.
Lukoil has reduced its 2007 production growth target to 4.5-5.0 percent from 8.2 percent following delays in the Yuzhno-Khylchuyuskoye (YK) field development project in Northern Russia.
A mild winter hampered the development of the field, which is now expected to come on stream at the end of this year, company officials told analysts at a briefing in London.
Rep. Ron Paul: "Real conservatives have always supported low taxes and low spending. But today, too many politicians and lobbyists are spending America into ruin. We are nine trillion dollars in debt as a nation... If we don't cut spending now, higher taxes and economic disaster will be in their future - and yours. In addition, the Federal Reserve, our central bank, fosters runaway debt by increasing the money supply - making each dollar in your pocket worth less."
Thursday, April 26, 2007
Will $4 Gas Impact Consumer Spending?
Will $4 Gas Impact Consumer Spending?
Chevron Corp. increased its quarterly dividend 11.5% to 58 cents a share. The dividend is payable on June 11 to shareholders of record as May 18, the San Ramon, Calif.-based energy company said.
Wendy's said it has formed a special committee of independent directors to review strategic options to enhance shareholder value, among them revisions to the Wendy's strategic plan, changes to its capital structure, a possible sale, merger or other business combination. Wendy's also backed its full-year per-share earnings forecast range of $1.26 to $1.32.
Exxon's first-quarter earnings rose more than 10 percent as higher profits from its refineries outweighed lower crude oil prices.
Ford Motor Co. posted a narrower quarterly loss Thursday as cost-cutting and improved results from its European and luxury vehicle operations partially offset weaker sales and charges for restructuring. "Our first-quarter results came in somewhat stronger than expected, but there are many uncertainties going forward," Chief Executive Alan Mulally said in a statement. Ford's loss from continuing operations, excluding one-time items, was 9 cents per share.
3M reported net profit of $1.37 billion, or $1.85 a share, for the first quarter, up 52% from net profit of $899 million, or $1.17 a share, in the same quarter a year ago. Revenues rose 6.1% to $5.94 billion from $5.59 billion in the year-ago period. Excluding the sale of the European drug business, the company earned $1.28 a share.Looking ahead, the company said it expects full-year earnings per share of $4.50 to $4.85.
Iran's chief nuclear negotiator Ali Larijani said differences with the European Union over its nuclear program were gradually narrowing.
Boeing earned $877 million, or $1.13 a share, for the quarter ending March 31 compared with $692 million, or 88 cents a share, a year earlier. Revenue climbed 8% to $15.4 billion, beating Wall Street expectations.
The Labor Department reported Thursday that applications for jobless benefits totaled 321,000 last week, a decline of 20,000 from the previous week. Some of the improvement reflected trouble adjusting the weekly claims data around Easter, which does not fall in the same week every year.
For the full year, Bristol-Myers boosted its forecast for net income to $1.24 to $1.34 a share from $1.12 to $1.22 a share. Excluding one-time items, Bristol-Myers predicts a profit of $1.30 to $.140 a share, up from earlier guidance of $1.20 to $1.30 a share.
Excluding charges for inventory impairments, impairments of investments in joint ventures and abandonment of land option contracts, Beazer's adjusted net income was $11.2 million, or 30 cents per diluted share. "Most housing markets across the country continue to experience lower levels of demand coupled with higher levels of inventory, resulting in increased competition and continued significant discounting," Beazer President and CEO Ian J. McCarthy said in a press release. "While we were pleased with the level of new orders we achieved this quarter, at this point in the traditional spring selling season we still have yet to see any meaningful evidence of a sustainable recovery in the housing market, and we expect current conditions will continue to put pressure on homebuilders' operating results." The company also said that given "low visibility as to when conditions may improve" it is not comfortable at this time updating its earnings-per-share outlook for fiscal 2007.
Halliburton reported earnings of $552 million, or 54 cents a share, for the first quarter, up from earnings of $488 million, or 46 cents a share, in the same quarter a year ago. Revenues rose 17% to $3.4 billion.
Dow Chemical, for the three months ended March 31, had net income after paying preferred dividends dipped to $973 million, or $1 a share, from $1.21 billion, or $1.24 a share, a year ago. Sales grew 3% to $12.43 billion from $12.02 billion last year, as double-digit sales growth in Europe, Asia Pacific and Latin America more than offset continued weakness in North America, particularly in the housing and automotive sectors.
A majority of Americans believe the nation is headed in the wrong direction, according to a recent NBC News/Wall Street Journal survey. Sixty-six percent of individuals polled believe things in the nation have veered off onto the wrong track, up from 57% at the start of the year. Meanwhile, 22% of individuals surveyed believe the nation is headed in the right direction while 12% had mixed feelings.
Lenders to highly indebted companies are making many of the same mistakes that undermined the US subprime mortgage market, suggesting that leveraged loans will become “tomorrow’s problem”, says the chief executive of BlackRock, the $1,000bn-plus fund management group. “If I was the chairman of the Federal Reserve, I’d be paying more attention to that because, to me, this is going to be tomorrow’s problem,” Mr Fink said in an interview with the Financial Times. “Standards have deteriorated to levels that we never even dreamed that we would see.”
Qualcomm also boosted its projections for earnings and revenue for the fiscal year ending in September.
The WSJ reported that Applebee's received several bids to be acquired and agreed to give activist investor Richard Breeden and one of his nominees board seats.
The WSJ also reported that the amount borrowers owe on home-equity lines of credit fell for the first time since 1999.
Comcast Corp said first-quarter profit soared 80% as customers continued to snap up bundled packages of TV, phone and Internet services.
Pulte, the fourth-largest U.S. homebuilder by revenue, reported a first-quarter net loss of $85.7 million, or 33 cents a share, compared with a profit of $262.6 million, or $1.01, a year earlier. Revenue fell 37 percent to $1.87 billion.
The company forecast break-even results to a loss of 10 cents a share in the second quarter, excluding land charges.
"Overall, the homebuilding environment remained challenging during the first quarter of 2007, as elevated inventory levels combined with weak consumer confidence for housing continue to place pressure on results,'' Pulte Chief Executive Officer Richard Dugas said in the statement.
New orders tumbled 21 percent in the quarter. The average sales price of a Pulte home fell 1.8 percent to $330,000.
Ryland, the biggest U.S. homebuilder for first-time buyers, reported a net loss in the three months ended March 31 of $24.4 million, or 58 cents a share. That compared with a profit of $90 million, or $1.86, a year earlier.
First-quarter revenue fell 34 percent to $706.4 million, the Calabasas, California-based company said in a statement. New orders in the quarter plunged 26 percent to 2,989. The company had forecast earnings in January of $3.75 to $4.25 a share for 2007.
At least 50 companies have stopped lending, gone into bankruptcy or sought buyers since the start of 2006, according to Bloomberg data.
New Zealand's central bank raised the benchmark interest rate to a record 7.75 percent, the second- highest after Iceland among AAA-rated nations, saying housing demand and consumer spending may fan inflation.
Technitrol Inc.said it's withdrawn an offer to purchase Bel Fuse Inc. for $43 per share.
Harman International Industries agreed to by acquired by private-equity firms Kohlberg Kravis Roberts and GS Capital in a deal valued at $8 billion. Under terms of the deal, Harman shareholders can elect to exchange their shares for $120 a share in cash, or shares of the company after the closing of the deal, which is expected to occur in the third quarter of 2007.
Valero Energy Corp.reported first-quarter net income for the three months ended March 31 rose 30% to $1.1 billion, or $1.86 a share from $849 million, or $1.32 a share in the year-ago period. Revenue fell to $19.7 billion from $20.9 billion. Operating income rose to $1.8 billion from $1.3 billion. Analysts surveyed by Thomson Financial forecast earnings of $1.81 a share, on average.
Qatar investment group Delta Two confirmed that it bought 302 million shares in J Sainsbury on Wednesday.
For the year Bunge expects to earn $4.56 to $4.71 a share, including around 23 cents a share form the sale of assets.
In the latest quarter Apple sold 10.5 million iPods and 1.5 million Macs.
The number of help-wanted ads in major U.S. newspapers dipped in March, signaling that job growth may be modest this summer, the Conference Board said Thursday. The help-wanted index fell by one point to 30 in March. It was 37 a year ago. Ads fell in eight of nine U.S. regions over the past three months. Online help-wanted postings fell by 2% in March.
Self-service regular unleaded gas averages $3.16 a gallon, said Janet Ray, spokeswoman for AAA-Washington. That's less than 2 cents below the state's record-high average, $3.174 a gallon, which was set last May 29. "There's every indication that we'll set a new record, probably sometime this week," Ray said. "The question is, how much higher will they go?"
Natural-gas inventories rose by 18 billion cubic feet for the week ended April 20, the Energy Department said Thursday. Total stocks now stand at 1.564 trillion cubic feet, down 276 billion cubic feet from the year-ago level, but 233 billion cubic feet above the five-year average, the government data said.
Gen. David Petraeus, the top U.S. commander in Iraq, depicted the situation there as "exceedingly complex and very tough" Thursday and said the U.S. effort might become more difficult before it gets easier.
The Pentagon's new intelligence undersecretary is recommending the Defense Department shut down a controversial classified database that has been criticized for improperly collecting information on anti-war groups and citizens.
June crude fell 78 cents to close at $65.06 a barrel Thursday. May reformulated gas pared gains to close at $2.2903 a gallon, up 0.77. May natural gas fell 18.1 cents to end at $7.508 per million British thermal units. June become the lead-month contract at the close of trading. June natural gas fell 17.9 cents to finish at $7.602.
June gold fell $9.40 to close at $678 an ounce Thursday. May silver dropped 3.2%, or 44 cents, to end at $13.325 an ounce.
The Senate voted Thursday to send President Bush a $124.2 billion war-spending bill that urges the withdrawal of U.S. troops from Iraq beginning this fall. Divided along party lines, the Senate voted 51-46 in favor of the Democratic measure, which the House approved Wednesday night.
Broadcom's non-GAAP earnings came in at $175.1 million, or 29 cents a share. Revenue was up slightly to $901.5 million compared to $900.6 million last year. Analysts were expecting earnings of 27 cents a share on revenue of $897.2 million, according to Thomson Financial.
Let's take a close look at the Microsoft numbers. The company announced revenue of $14.40 billion for the quarter ended March 31, 2007, a 32% increase over the same period of the prior year. Diluted earnings per share for the quarter grew 72% to $0.50, and included $0.02 in tax benefits and $0.01 in legal charges. In addition, these results reflect $1.67 billion of revenue and operating income, $1.14 billion of net income and $0.12 of diluted earnings per share that were previously deferred primarily related to the technology guarantee programs for Windows Vista(TM) and the 2007 Microsoft® Office release. Net cash flow from operations was $7.29 billion and Microsoft returned $7.72 billion in cash to shareholders through share buybacks and dividends this quarter.
Management offers the following preliminary guidance for the full fiscal year ending June 30, 2008:
-- Revenue is expected to be in the range of $56.5 billion to $57.5
billion.
-- Operating income is expected to be in the range of $22.0 billion to
$22.5 billion.
-- Diluted earnings per share are expected to be in the range of $1.68 to
$1.72.
The current market cap is about $281 billion or 5 times estimated 2008 sales and about 13 times operating income for 2008. In my view, only the company's buyback of shares is keeping the stock close to the $30 level. For the past seven years I have viewed these shares as a poor investment choice. In addition, I have very little confidence in the CEO.
SanDisk posted a loss of $575,000, or break-even on a per-share basis, compared with a profit of $35 million, or 17 cents a share a year ago. For the three months ended April 1, SanDisk said sales rose 26% to $786 million, outpacing Wall
Street's forecast. The company said weak prices for flash memory chips will persist into the summer months, further pressuring margins, which were cut in half in the first quarter compared to a year ago. SanDisk forecast that demand for its products will increase as the year unfolds.
Over the past month gasoline consumption in the U.S. grew 2.3% and 2.2% over the past year. In the latest weekly figures the nation's refineries are operating at 87.8% of capacity. It is not surprising that U.S. gasoline inventories are at a 20-year low, and this represents less than 21 days of national use. I just put 10 gallons of gas into my car and it cost $35. On a nationwide basis one must believe that record gasoline prices will cut into consumers' disposable income and impact, for example, restaurants, entertainment, and many other non-essential areas. If you disagree, then maybe you can suggest where the extra money will come from for the consumers to maintain their spending habit. It won't come from the ATM machine on their home equity.
Epictetus: "God has entrusted me with myself."
Chevron Corp. increased its quarterly dividend 11.5% to 58 cents a share. The dividend is payable on June 11 to shareholders of record as May 18, the San Ramon, Calif.-based energy company said.
Wendy's said it has formed a special committee of independent directors to review strategic options to enhance shareholder value, among them revisions to the Wendy's strategic plan, changes to its capital structure, a possible sale, merger or other business combination. Wendy's also backed its full-year per-share earnings forecast range of $1.26 to $1.32.
Exxon's first-quarter earnings rose more than 10 percent as higher profits from its refineries outweighed lower crude oil prices.
Ford Motor Co. posted a narrower quarterly loss Thursday as cost-cutting and improved results from its European and luxury vehicle operations partially offset weaker sales and charges for restructuring. "Our first-quarter results came in somewhat stronger than expected, but there are many uncertainties going forward," Chief Executive Alan Mulally said in a statement. Ford's loss from continuing operations, excluding one-time items, was 9 cents per share.
3M reported net profit of $1.37 billion, or $1.85 a share, for the first quarter, up 52% from net profit of $899 million, or $1.17 a share, in the same quarter a year ago. Revenues rose 6.1% to $5.94 billion from $5.59 billion in the year-ago period. Excluding the sale of the European drug business, the company earned $1.28 a share.Looking ahead, the company said it expects full-year earnings per share of $4.50 to $4.85.
Iran's chief nuclear negotiator Ali Larijani said differences with the European Union over its nuclear program were gradually narrowing.
Boeing earned $877 million, or $1.13 a share, for the quarter ending March 31 compared with $692 million, or 88 cents a share, a year earlier. Revenue climbed 8% to $15.4 billion, beating Wall Street expectations.
The Labor Department reported Thursday that applications for jobless benefits totaled 321,000 last week, a decline of 20,000 from the previous week. Some of the improvement reflected trouble adjusting the weekly claims data around Easter, which does not fall in the same week every year.
For the full year, Bristol-Myers boosted its forecast for net income to $1.24 to $1.34 a share from $1.12 to $1.22 a share. Excluding one-time items, Bristol-Myers predicts a profit of $1.30 to $.140 a share, up from earlier guidance of $1.20 to $1.30 a share.
Excluding charges for inventory impairments, impairments of investments in joint ventures and abandonment of land option contracts, Beazer's adjusted net income was $11.2 million, or 30 cents per diluted share. "Most housing markets across the country continue to experience lower levels of demand coupled with higher levels of inventory, resulting in increased competition and continued significant discounting," Beazer President and CEO Ian J. McCarthy said in a press release. "While we were pleased with the level of new orders we achieved this quarter, at this point in the traditional spring selling season we still have yet to see any meaningful evidence of a sustainable recovery in the housing market, and we expect current conditions will continue to put pressure on homebuilders' operating results." The company also said that given "low visibility as to when conditions may improve" it is not comfortable at this time updating its earnings-per-share outlook for fiscal 2007.
Halliburton reported earnings of $552 million, or 54 cents a share, for the first quarter, up from earnings of $488 million, or 46 cents a share, in the same quarter a year ago. Revenues rose 17% to $3.4 billion.
Dow Chemical, for the three months ended March 31, had net income after paying preferred dividends dipped to $973 million, or $1 a share, from $1.21 billion, or $1.24 a share, a year ago. Sales grew 3% to $12.43 billion from $12.02 billion last year, as double-digit sales growth in Europe, Asia Pacific and Latin America more than offset continued weakness in North America, particularly in the housing and automotive sectors.
A majority of Americans believe the nation is headed in the wrong direction, according to a recent NBC News/Wall Street Journal survey. Sixty-six percent of individuals polled believe things in the nation have veered off onto the wrong track, up from 57% at the start of the year. Meanwhile, 22% of individuals surveyed believe the nation is headed in the right direction while 12% had mixed feelings.
Lenders to highly indebted companies are making many of the same mistakes that undermined the US subprime mortgage market, suggesting that leveraged loans will become “tomorrow’s problem”, says the chief executive of BlackRock, the $1,000bn-plus fund management group. “If I was the chairman of the Federal Reserve, I’d be paying more attention to that because, to me, this is going to be tomorrow’s problem,” Mr Fink said in an interview with the Financial Times. “Standards have deteriorated to levels that we never even dreamed that we would see.”
Qualcomm also boosted its projections for earnings and revenue for the fiscal year ending in September.
The WSJ reported that Applebee's received several bids to be acquired and agreed to give activist investor Richard Breeden and one of his nominees board seats.
The WSJ also reported that the amount borrowers owe on home-equity lines of credit fell for the first time since 1999.
Comcast Corp said first-quarter profit soared 80% as customers continued to snap up bundled packages of TV, phone and Internet services.
Pulte, the fourth-largest U.S. homebuilder by revenue, reported a first-quarter net loss of $85.7 million, or 33 cents a share, compared with a profit of $262.6 million, or $1.01, a year earlier. Revenue fell 37 percent to $1.87 billion.
The company forecast break-even results to a loss of 10 cents a share in the second quarter, excluding land charges.
"Overall, the homebuilding environment remained challenging during the first quarter of 2007, as elevated inventory levels combined with weak consumer confidence for housing continue to place pressure on results,'' Pulte Chief Executive Officer Richard Dugas said in the statement.
New orders tumbled 21 percent in the quarter. The average sales price of a Pulte home fell 1.8 percent to $330,000.
Ryland, the biggest U.S. homebuilder for first-time buyers, reported a net loss in the three months ended March 31 of $24.4 million, or 58 cents a share. That compared with a profit of $90 million, or $1.86, a year earlier.
First-quarter revenue fell 34 percent to $706.4 million, the Calabasas, California-based company said in a statement. New orders in the quarter plunged 26 percent to 2,989. The company had forecast earnings in January of $3.75 to $4.25 a share for 2007.
At least 50 companies have stopped lending, gone into bankruptcy or sought buyers since the start of 2006, according to Bloomberg data.
New Zealand's central bank raised the benchmark interest rate to a record 7.75 percent, the second- highest after Iceland among AAA-rated nations, saying housing demand and consumer spending may fan inflation.
Technitrol Inc.said it's withdrawn an offer to purchase Bel Fuse Inc. for $43 per share.
Harman International Industries agreed to by acquired by private-equity firms Kohlberg Kravis Roberts and GS Capital in a deal valued at $8 billion. Under terms of the deal, Harman shareholders can elect to exchange their shares for $120 a share in cash, or shares of the company after the closing of the deal, which is expected to occur in the third quarter of 2007.
Valero Energy Corp.reported first-quarter net income for the three months ended March 31 rose 30% to $1.1 billion, or $1.86 a share from $849 million, or $1.32 a share in the year-ago period. Revenue fell to $19.7 billion from $20.9 billion. Operating income rose to $1.8 billion from $1.3 billion. Analysts surveyed by Thomson Financial forecast earnings of $1.81 a share, on average.
Qatar investment group Delta Two confirmed that it bought 302 million shares in J Sainsbury on Wednesday.
For the year Bunge expects to earn $4.56 to $4.71 a share, including around 23 cents a share form the sale of assets.
In the latest quarter Apple sold 10.5 million iPods and 1.5 million Macs.
The number of help-wanted ads in major U.S. newspapers dipped in March, signaling that job growth may be modest this summer, the Conference Board said Thursday. The help-wanted index fell by one point to 30 in March. It was 37 a year ago. Ads fell in eight of nine U.S. regions over the past three months. Online help-wanted postings fell by 2% in March.
Self-service regular unleaded gas averages $3.16 a gallon, said Janet Ray, spokeswoman for AAA-Washington. That's less than 2 cents below the state's record-high average, $3.174 a gallon, which was set last May 29. "There's every indication that we'll set a new record, probably sometime this week," Ray said. "The question is, how much higher will they go?"
Natural-gas inventories rose by 18 billion cubic feet for the week ended April 20, the Energy Department said Thursday. Total stocks now stand at 1.564 trillion cubic feet, down 276 billion cubic feet from the year-ago level, but 233 billion cubic feet above the five-year average, the government data said.
Gen. David Petraeus, the top U.S. commander in Iraq, depicted the situation there as "exceedingly complex and very tough" Thursday and said the U.S. effort might become more difficult before it gets easier.
The Pentagon's new intelligence undersecretary is recommending the Defense Department shut down a controversial classified database that has been criticized for improperly collecting information on anti-war groups and citizens.
June crude fell 78 cents to close at $65.06 a barrel Thursday. May reformulated gas pared gains to close at $2.2903 a gallon, up 0.77. May natural gas fell 18.1 cents to end at $7.508 per million British thermal units. June become the lead-month contract at the close of trading. June natural gas fell 17.9 cents to finish at $7.602.
June gold fell $9.40 to close at $678 an ounce Thursday. May silver dropped 3.2%, or 44 cents, to end at $13.325 an ounce.
The Senate voted Thursday to send President Bush a $124.2 billion war-spending bill that urges the withdrawal of U.S. troops from Iraq beginning this fall. Divided along party lines, the Senate voted 51-46 in favor of the Democratic measure, which the House approved Wednesday night.
Broadcom's non-GAAP earnings came in at $175.1 million, or 29 cents a share. Revenue was up slightly to $901.5 million compared to $900.6 million last year. Analysts were expecting earnings of 27 cents a share on revenue of $897.2 million, according to Thomson Financial.
Let's take a close look at the Microsoft numbers. The company announced revenue of $14.40 billion for the quarter ended March 31, 2007, a 32% increase over the same period of the prior year. Diluted earnings per share for the quarter grew 72% to $0.50, and included $0.02 in tax benefits and $0.01 in legal charges. In addition, these results reflect $1.67 billion of revenue and operating income, $1.14 billion of net income and $0.12 of diluted earnings per share that were previously deferred primarily related to the technology guarantee programs for Windows Vista(TM) and the 2007 Microsoft® Office release. Net cash flow from operations was $7.29 billion and Microsoft returned $7.72 billion in cash to shareholders through share buybacks and dividends this quarter.
Management offers the following preliminary guidance for the full fiscal year ending June 30, 2008:
-- Revenue is expected to be in the range of $56.5 billion to $57.5
billion.
-- Operating income is expected to be in the range of $22.0 billion to
$22.5 billion.
-- Diluted earnings per share are expected to be in the range of $1.68 to
$1.72.
The current market cap is about $281 billion or 5 times estimated 2008 sales and about 13 times operating income for 2008. In my view, only the company's buyback of shares is keeping the stock close to the $30 level. For the past seven years I have viewed these shares as a poor investment choice. In addition, I have very little confidence in the CEO.
SanDisk posted a loss of $575,000, or break-even on a per-share basis, compared with a profit of $35 million, or 17 cents a share a year ago. For the three months ended April 1, SanDisk said sales rose 26% to $786 million, outpacing Wall
Street's forecast. The company said weak prices for flash memory chips will persist into the summer months, further pressuring margins, which were cut in half in the first quarter compared to a year ago. SanDisk forecast that demand for its products will increase as the year unfolds.
Over the past month gasoline consumption in the U.S. grew 2.3% and 2.2% over the past year. In the latest weekly figures the nation's refineries are operating at 87.8% of capacity. It is not surprising that U.S. gasoline inventories are at a 20-year low, and this represents less than 21 days of national use. I just put 10 gallons of gas into my car and it cost $35. On a nationwide basis one must believe that record gasoline prices will cut into consumers' disposable income and impact, for example, restaurants, entertainment, and many other non-essential areas. If you disagree, then maybe you can suggest where the extra money will come from for the consumers to maintain their spending habit. It won't come from the ATM machine on their home equity.
Epictetus: "God has entrusted me with myself."
Wednesday, April 25, 2007
More Earnings And More Deals
4/26/07 More Earnings And More Deals
Boeing affirmed its earnings outlook for 2007 $4.55 -$4.75 a share and for 2008 of $5.55 -$5.75 a share; sales in 2007 are forecast at $64.5-$65 billion and in 2008 are forecast at $71-$72 billion. Boeing estimated 440-445 commercial airplane deliveries in 2007 and 515-520 deliveries in 2008.
Jarden will pay $10.85 a share cash plus 0.1086 of its shares for each K2 share. They valued the deal at $1.2 billion, including Jarden's assumption of K2's debt.
Freeport expects sales for 2007 of 3.9 billion pounds of copper, 1.9 million ounces of gold and 70 million pounds of molybdenum. Based on that projection, it expects to generate cash flow of more than $5.3 billion in 2007. Capex is forecast at about $1.6 billion.
Weatherford International Ltd's first-quarter net income for the three months ended March 31 rose 39% to $281.6 million, or 81 cents a share, from $203.3 million, or 57 cents a share in the year-ago period. Revenue increased to $1.9 billion from $1.5 million. Adjusted earnings were 76 cents a share.
Tribune Company will repurchase up to 126 million common shares for $34 each in deal worth about $4.3 billion. Shareholders will have the opportunity to tender some or all of their shares at a price of $34 per share in cash. The tender offer is being made as part of the merger agreement between Tribune, the Tribune Employee Stock Ownership Plan, the ESOP's merger subsidiary and an affiliate of Sam Zell. The tender offer commenced Wednesday and will expire on May 24.
Plato: “People are like dirt. They can either nourish you and help you grow as a person or they can stunt your growth and make you wilt and die.”
Management also affirmed PepsiCo's 2007 profit outlook, forecasting earnings of at least $3.30 a share; Wall Street's average stands at $3.32 a share.
Becton, Dickinson said it expects earnings per share from continuing operations for fiscal 2007 to be in the range of $3.76 to $3.80 a share.
Amazon's new tax guidance of 23% is significantly lower than previous guidance of "below 35%" and the company's original 2007 guidance given in February implied much lower operating-margin levels.
The Ifo Institute's German business climate poll in April rose to 108.6 from 107.7 in March, with improving subcomponents in both current conditions and expectations.
J Sainsbury shares jumped 6.7% to 565.5 pence after a massive 250 million share trade was traded in the stock, leading to speculation that a stake has been taken in the U.K. supermarket chain.
Union leaders have told DaimlerChrysler that they would only accept an offer from Canadian auto supplier Magna International for Chrysler, The Detroit News reported Wednesday.
Baker Hughes said its first-quarter net income rose 10% to $365 million, or $1.17 a share, with revenue up 20% to $2.47 billion. Analysts polled by Thomson Financial expected earnings of $1.10 a share. The oil services group said revenue outside North America should grow between 19% and 21% in 2007, while U.S. revenue is expected to rise 7%. Capital spending is expected to be between $1.0 billion and $1.2 billion, it added.
A consortium of banks led by the U.K.'s Royal Bank of Scotland said Wednesday that it may bid 39 euros a share for ABN Amro. The consortium, which also includes Banco Santander and Fortis, said their offer is worth around 13% more than the deal ABN Amro agreed with Barclays at Tuesday's closing prices. The potential offer also represents an 11.4% premium to ABN Amro's Tuesday closing price of 35.00 euros. RBS said its proposal is contingent on LaSalle Bank remaining within the ABN Amro group and on receiving limited due diligence.
C.H. Robinson Worldwide posted first-quarter net income of $73.0 million, or 42 cents a share, up from $58.1 million, or 33 cents a share, a year earlier. Sales rose to $1.62 billion from $1.50 billion a year ago with the trucking side benefiting from higher margins and increased volumes. Analysts polled by Thomson Financial had expected the transportation company to post a profit of 38 cents a share on sales of $1.61 billion.
Black & Decker Co. said Wednesday it remains "cautious" on its outlook for the year, as housing market weakness is expected to reduce demand for some products. The company also said it is facing higher commodity inflation, reflecting rising nickel prices.
UPS reiterated its full-year forecast for adjusted earnings per share growth in a range of 6 percent to 10%.
U.S. mortgage applications rose last week after five straight weekly declines, as lower loan rates fostered home purchases and refinancings, data from an industry trade group said on Wednesday. The Mortgage Bankers Association said its mortgage applications index climbed by a seasonally adjusted 3.6% in the week ended April 20 to 653.3, its highest level since the week ended March 23 when it hit 671.0.
Japan's trade surplus widened to a record in March, buoyed by a weaker yen and exports to China, which replaced the U.S. as the nation's largest trading partner. The surplus rose 74 percent to 1.633 trillion yen ($14 billion) from a year earlier, the Ministry of Finance said today in Tokyo.
Orders for U.S. durable goods increased 3.4 percent after a 2.4 percent gain in February that was larger than previously estimated, the Commerce Department said in Washington. Orders excluding transportation equipment rose 1.5 percent after a 0.4 percent drop. The other big story in March: Demand for core capital equipment increased a robust 4.7% after a cumulative 8.5% decline in January and February. It was the biggest gain in this key gauge of business investment since September 2004.
Moody's has projected ``low-teens percent revenue growth'' for 2007 and ``low-double-digit percent growth'' in diluted earnings per share.
Merrill Lynch & Co. said Wednesday it will acquire a $2.9 billion stake in Resona Holdings Inc., Japan's fourth-largest bank by revenue.
The deal marks the largest investment ever by a foreign company in a Japanese bank and is more than twice the size of rival Goldman Sachs Group Inc.'s $1.3-billion stake in Sumitomo Mitsui Financial Group Inc. in 2003.
Nouriel Roubini: "The growth slowdown in Q1 - likely to be sharply down relative to the already weak Q4 - will persist and get worse in the current Q2 quarter. Q1 will turned out not to be the bottom of the growth slowdown (as argued by the consensus); Q2 looks - based on current data - on a trajectory to show an even worse growth rate than Q1. Thus, the chances of a U.S. hard landing are clearly increasing." Should Nouriel's forecast be correct, when will U.S. equities wake up to economic reality?
Steve Saville: "In a nutshell: the potential significance of a substantial across-the-board rise in food prices occurring alongside continued firmness in most other prices is that it could catalyse widespread RECOGNITION of an inflation problem in an otherwise inflation-blind world."
For the first time, Google has edged ahead of Microsoft as the world's most visited Internet property. Online measurement firm comScore Networks found that Google had just over a million more unique users in March than its arch-rival.
Google had 528 million unique visitors in March, up 5 percent from the previous month, according to comScore. Microsoft had 527 million visitors during the same month, up 3.7 percent. Separately, Google was named the most powerful brand in 2007 in an annual survey released Monday by Millward Brown, a British market research company. The company's brand was valued at $66.4 billion, ahead of GE, Microsoft and Coca-Cola.
Boosted by warmer weather in the Northeast and Midwest, sales of new homes increased by 2.6% in March to a seasonally adjusted annual rate of 858,000, the Commerce Department reported Wednesday. Sales of new homes were off 23.5% compared with March 2006. The inventory of unsold homes rose by 1,000 to 545,000 in March, representing a 7.8-month supply. The median sales price rose 6.4% year-over-year to $254,000, as luxury homes continued to increase their market share.
The American Petroleum Institute reported a climb of 5.5 million barrels in crude supplies for the week ended April 20. The Energy Department had reported an increase of 2.1 million barrels. Motor gasoline supplies were down 82,000 barrels, the API said. The government reported a drop of 2.8 million barrels. Distillate supplies were down 1.8 million barrels, the API said, though the government said supplies were unchanged for the week.
Chaparral Steel Co. announced that its board has initiated a review of strategic alternatives, including a possible sale of the company, and has hired Goldman, Sachs & Co. to assist in the review.
Thursday will be an earnings update and forecast day for Microsoft. Remember that the third quarter ended March 31 includes a one-time accounting credit of 12 cents. Looking at the fiscal year beginning July 1, the forecast will be about $1.70 a share. Why should the shares sell higher than its present price based on that number, underwhelming Vista software, and the fact Google is coming out with a free office product?
Desert Community Bank agreed to be acquired by East West Bancorp Inc. for $24 a share, or $142.6 million. The shareholders of DCB will receive 55% of the merger consideration in shares of East West common stock and the remainder in cash.
Leo Tolstoy: “Everyone thinks of changing the world, but no one thinks of changing himself.”
The benchmark 10-year Treasury note closed down 4/32 at 99-28/32 with a yield of 4.642%, up from 4.619% at Tuesday's close.
May reformulated gas futures climbed 3.3%, or 7.37 cents, to close Wednesday at $2.2837. The Energy Department reported that gasoline supplies dropped for an 11th week, lifting futures prices to the highest level since Aug. 11. June crude climbed $1.26 to close at $65.84 a barrel.
Genesis Healthcare Corp. has received $64.75-per-share acquisition offer from Fillmore Capital Partners LLC. Genesis said last week it had agreed to an amended acquisition offer of $64.25 a share from Formation Capital LLC and JER Partners.
The U.S. economy is only growing at a modest or moderate pace in most regions, the Federal Reserve reported Wednesday in its Beige Book.
An Indian proverb: “Blaming your faults on your nature does not change the nature of your faults."
Gold for June delivery closed down 30 cents at $687.40 an ounce on the New York Mercantile Exchange. May silver fell 1.7 cents at $13.765 an ounce. July platinum ended up $5.70 at $1,317.20 an ounce, June palladium rose $4.05 at $383.05 an ounce and May copper rose 3.35 cents at $3.5860 a pound.
The Dow ripped through the 13,000 level for the first time to close with a 135-point gain. We have progressed from inflating real estate prices to inflating stock prices. We're back to nifty-fifty times. Meanwhile, the dollar fell to a two-year low against a basket of major currencies on Wednesday and came within a whisker of its record low against the euro.
A House panel voted to subpoena Secretary of State Condoleezza Rice to testify about the administration's false claim before the 2003 invasion of Iraq that Saddam Hussein sought uranium from Africa for a weapons program. The House Committee on Oversight and Government Reform also agreed to subpoena Republican National Committee Chairman Mike Duncan to answer questions about whether White House aides improperly used a Republican Party e-mail system for government business.
Late payments on subprime mortgages drove up U.S. foreclosure filings in the first quarter of 2007 by more than a third over the same period last year, according to research company RealtyTrac Inc. Almost 437,500 foreclosure filings were reported, a jump of 35 percent from the first three months of 2006, Irvine, California-based RealtyTrac said.
LSI offered a weak second-quarter sales forecast. The chip-maker pegged sales in the range of $715 million and $745 million. Analysts expected $834 million.
ConocoPhillips said asset sales pushed its first-quarter profits up 7.7 percent, but the oil major's key exploration and production arm was hurt by lower commodity prices and the company warned of lower production. Net income for the Houston-based company rose to $3.55 billion, or $2.12 a share, for the January-March period, from $3.29 billion, or $2.34 a share, in the year-ago quarter. ConocoPhillips said its profit included a one-time net benefit of 29 cents a share from the sale of assets. Revenue fell 12 percent to $41.3 billion from $46.9 billion a year ago.
Apple's earnings for the quarter came in at $770 million, or 87 cents a share, compared to earnings of $410 million, or 47 cents a share, for the same period last year. Sales for the quarter grew more than 20% to $5.26 billion. Analysts were expecting earnings of 64 cents a share on revenue of $5.17 billion for the quarter, according to estimates from Thomson Financial.
Excluding certain items, Ryland said first quarter 2007 earnings came in at 70 cents a share and revenue in the three months ended March fell 34% to $706.4 million from $1.06 billion the comparable period last year. Analysts polled by Thomson Financial were expecting, on average, a per-share loss of 47 cents on revenue of $637 million. New orders in the first quarter decreased 25.7% to 2,989 units, while closings totaled 2,302, down 35.2% from a year ago. Ryland also said it does not expect to achieve its prior earnings guidance and can't provide a new forecast at this time. The company had forecast 2007 earnings of $3.75 to $4.25 a share.
Boeing affirmed its earnings outlook for 2007 $4.55 -$4.75 a share and for 2008 of $5.55 -$5.75 a share; sales in 2007 are forecast at $64.5-$65 billion and in 2008 are forecast at $71-$72 billion. Boeing estimated 440-445 commercial airplane deliveries in 2007 and 515-520 deliveries in 2008.
Jarden will pay $10.85 a share cash plus 0.1086 of its shares for each K2 share. They valued the deal at $1.2 billion, including Jarden's assumption of K2's debt.
Freeport expects sales for 2007 of 3.9 billion pounds of copper, 1.9 million ounces of gold and 70 million pounds of molybdenum. Based on that projection, it expects to generate cash flow of more than $5.3 billion in 2007. Capex is forecast at about $1.6 billion.
Weatherford International Ltd's first-quarter net income for the three months ended March 31 rose 39% to $281.6 million, or 81 cents a share, from $203.3 million, or 57 cents a share in the year-ago period. Revenue increased to $1.9 billion from $1.5 million. Adjusted earnings were 76 cents a share.
Tribune Company will repurchase up to 126 million common shares for $34 each in deal worth about $4.3 billion. Shareholders will have the opportunity to tender some or all of their shares at a price of $34 per share in cash. The tender offer is being made as part of the merger agreement between Tribune, the Tribune Employee Stock Ownership Plan, the ESOP's merger subsidiary and an affiliate of Sam Zell. The tender offer commenced Wednesday and will expire on May 24.
Plato: “People are like dirt. They can either nourish you and help you grow as a person or they can stunt your growth and make you wilt and die.”
Management also affirmed PepsiCo's 2007 profit outlook, forecasting earnings of at least $3.30 a share; Wall Street's average stands at $3.32 a share.
Becton, Dickinson said it expects earnings per share from continuing operations for fiscal 2007 to be in the range of $3.76 to $3.80 a share.
Amazon's new tax guidance of 23% is significantly lower than previous guidance of "below 35%" and the company's original 2007 guidance given in February implied much lower operating-margin levels.
The Ifo Institute's German business climate poll in April rose to 108.6 from 107.7 in March, with improving subcomponents in both current conditions and expectations.
J Sainsbury shares jumped 6.7% to 565.5 pence after a massive 250 million share trade was traded in the stock, leading to speculation that a stake has been taken in the U.K. supermarket chain.
Union leaders have told DaimlerChrysler that they would only accept an offer from Canadian auto supplier Magna International for Chrysler, The Detroit News reported Wednesday.
Baker Hughes said its first-quarter net income rose 10% to $365 million, or $1.17 a share, with revenue up 20% to $2.47 billion. Analysts polled by Thomson Financial expected earnings of $1.10 a share. The oil services group said revenue outside North America should grow between 19% and 21% in 2007, while U.S. revenue is expected to rise 7%. Capital spending is expected to be between $1.0 billion and $1.2 billion, it added.
A consortium of banks led by the U.K.'s Royal Bank of Scotland said Wednesday that it may bid 39 euros a share for ABN Amro. The consortium, which also includes Banco Santander and Fortis, said their offer is worth around 13% more than the deal ABN Amro agreed with Barclays at Tuesday's closing prices. The potential offer also represents an 11.4% premium to ABN Amro's Tuesday closing price of 35.00 euros. RBS said its proposal is contingent on LaSalle Bank remaining within the ABN Amro group and on receiving limited due diligence.
C.H. Robinson Worldwide posted first-quarter net income of $73.0 million, or 42 cents a share, up from $58.1 million, or 33 cents a share, a year earlier. Sales rose to $1.62 billion from $1.50 billion a year ago with the trucking side benefiting from higher margins and increased volumes. Analysts polled by Thomson Financial had expected the transportation company to post a profit of 38 cents a share on sales of $1.61 billion.
Black & Decker Co. said Wednesday it remains "cautious" on its outlook for the year, as housing market weakness is expected to reduce demand for some products. The company also said it is facing higher commodity inflation, reflecting rising nickel prices.
UPS reiterated its full-year forecast for adjusted earnings per share growth in a range of 6 percent to 10%.
U.S. mortgage applications rose last week after five straight weekly declines, as lower loan rates fostered home purchases and refinancings, data from an industry trade group said on Wednesday. The Mortgage Bankers Association said its mortgage applications index climbed by a seasonally adjusted 3.6% in the week ended April 20 to 653.3, its highest level since the week ended March 23 when it hit 671.0.
Japan's trade surplus widened to a record in March, buoyed by a weaker yen and exports to China, which replaced the U.S. as the nation's largest trading partner. The surplus rose 74 percent to 1.633 trillion yen ($14 billion) from a year earlier, the Ministry of Finance said today in Tokyo.
Orders for U.S. durable goods increased 3.4 percent after a 2.4 percent gain in February that was larger than previously estimated, the Commerce Department said in Washington. Orders excluding transportation equipment rose 1.5 percent after a 0.4 percent drop. The other big story in March: Demand for core capital equipment increased a robust 4.7% after a cumulative 8.5% decline in January and February. It was the biggest gain in this key gauge of business investment since September 2004.
Moody's has projected ``low-teens percent revenue growth'' for 2007 and ``low-double-digit percent growth'' in diluted earnings per share.
Merrill Lynch & Co. said Wednesday it will acquire a $2.9 billion stake in Resona Holdings Inc., Japan's fourth-largest bank by revenue.
The deal marks the largest investment ever by a foreign company in a Japanese bank and is more than twice the size of rival Goldman Sachs Group Inc.'s $1.3-billion stake in Sumitomo Mitsui Financial Group Inc. in 2003.
Nouriel Roubini: "The growth slowdown in Q1 - likely to be sharply down relative to the already weak Q4 - will persist and get worse in the current Q2 quarter. Q1 will turned out not to be the bottom of the growth slowdown (as argued by the consensus); Q2 looks - based on current data - on a trajectory to show an even worse growth rate than Q1. Thus, the chances of a U.S. hard landing are clearly increasing." Should Nouriel's forecast be correct, when will U.S. equities wake up to economic reality?
Steve Saville: "In a nutshell: the potential significance of a substantial across-the-board rise in food prices occurring alongside continued firmness in most other prices is that it could catalyse widespread RECOGNITION of an inflation problem in an otherwise inflation-blind world."
For the first time, Google has edged ahead of Microsoft as the world's most visited Internet property. Online measurement firm comScore Networks found that Google had just over a million more unique users in March than its arch-rival.
Google had 528 million unique visitors in March, up 5 percent from the previous month, according to comScore. Microsoft had 527 million visitors during the same month, up 3.7 percent. Separately, Google was named the most powerful brand in 2007 in an annual survey released Monday by Millward Brown, a British market research company. The company's brand was valued at $66.4 billion, ahead of GE, Microsoft and Coca-Cola.
Boosted by warmer weather in the Northeast and Midwest, sales of new homes increased by 2.6% in March to a seasonally adjusted annual rate of 858,000, the Commerce Department reported Wednesday. Sales of new homes were off 23.5% compared with March 2006. The inventory of unsold homes rose by 1,000 to 545,000 in March, representing a 7.8-month supply. The median sales price rose 6.4% year-over-year to $254,000, as luxury homes continued to increase their market share.
The American Petroleum Institute reported a climb of 5.5 million barrels in crude supplies for the week ended April 20. The Energy Department had reported an increase of 2.1 million barrels. Motor gasoline supplies were down 82,000 barrels, the API said. The government reported a drop of 2.8 million barrels. Distillate supplies were down 1.8 million barrels, the API said, though the government said supplies were unchanged for the week.
Chaparral Steel Co. announced that its board has initiated a review of strategic alternatives, including a possible sale of the company, and has hired Goldman, Sachs & Co. to assist in the review.
Thursday will be an earnings update and forecast day for Microsoft. Remember that the third quarter ended March 31 includes a one-time accounting credit of 12 cents. Looking at the fiscal year beginning July 1, the forecast will be about $1.70 a share. Why should the shares sell higher than its present price based on that number, underwhelming Vista software, and the fact Google is coming out with a free office product?
Desert Community Bank agreed to be acquired by East West Bancorp Inc. for $24 a share, or $142.6 million. The shareholders of DCB will receive 55% of the merger consideration in shares of East West common stock and the remainder in cash.
Leo Tolstoy: “Everyone thinks of changing the world, but no one thinks of changing himself.”
The benchmark 10-year Treasury note closed down 4/32 at 99-28/32 with a yield of 4.642%, up from 4.619% at Tuesday's close.
May reformulated gas futures climbed 3.3%, or 7.37 cents, to close Wednesday at $2.2837. The Energy Department reported that gasoline supplies dropped for an 11th week, lifting futures prices to the highest level since Aug. 11. June crude climbed $1.26 to close at $65.84 a barrel.
Genesis Healthcare Corp. has received $64.75-per-share acquisition offer from Fillmore Capital Partners LLC. Genesis said last week it had agreed to an amended acquisition offer of $64.25 a share from Formation Capital LLC and JER Partners.
The U.S. economy is only growing at a modest or moderate pace in most regions, the Federal Reserve reported Wednesday in its Beige Book.
An Indian proverb: “Blaming your faults on your nature does not change the nature of your faults."
Gold for June delivery closed down 30 cents at $687.40 an ounce on the New York Mercantile Exchange. May silver fell 1.7 cents at $13.765 an ounce. July platinum ended up $5.70 at $1,317.20 an ounce, June palladium rose $4.05 at $383.05 an ounce and May copper rose 3.35 cents at $3.5860 a pound.
The Dow ripped through the 13,000 level for the first time to close with a 135-point gain. We have progressed from inflating real estate prices to inflating stock prices. We're back to nifty-fifty times. Meanwhile, the dollar fell to a two-year low against a basket of major currencies on Wednesday and came within a whisker of its record low against the euro.
A House panel voted to subpoena Secretary of State Condoleezza Rice to testify about the administration's false claim before the 2003 invasion of Iraq that Saddam Hussein sought uranium from Africa for a weapons program. The House Committee on Oversight and Government Reform also agreed to subpoena Republican National Committee Chairman Mike Duncan to answer questions about whether White House aides improperly used a Republican Party e-mail system for government business.
Late payments on subprime mortgages drove up U.S. foreclosure filings in the first quarter of 2007 by more than a third over the same period last year, according to research company RealtyTrac Inc. Almost 437,500 foreclosure filings were reported, a jump of 35 percent from the first three months of 2006, Irvine, California-based RealtyTrac said.
LSI offered a weak second-quarter sales forecast. The chip-maker pegged sales in the range of $715 million and $745 million. Analysts expected $834 million.
ConocoPhillips said asset sales pushed its first-quarter profits up 7.7 percent, but the oil major's key exploration and production arm was hurt by lower commodity prices and the company warned of lower production. Net income for the Houston-based company rose to $3.55 billion, or $2.12 a share, for the January-March period, from $3.29 billion, or $2.34 a share, in the year-ago quarter. ConocoPhillips said its profit included a one-time net benefit of 29 cents a share from the sale of assets. Revenue fell 12 percent to $41.3 billion from $46.9 billion a year ago.
Apple's earnings for the quarter came in at $770 million, or 87 cents a share, compared to earnings of $410 million, or 47 cents a share, for the same period last year. Sales for the quarter grew more than 20% to $5.26 billion. Analysts were expecting earnings of 64 cents a share on revenue of $5.17 billion for the quarter, according to estimates from Thomson Financial.
Excluding certain items, Ryland said first quarter 2007 earnings came in at 70 cents a share and revenue in the three months ended March fell 34% to $706.4 million from $1.06 billion the comparable period last year. Analysts polled by Thomson Financial were expecting, on average, a per-share loss of 47 cents on revenue of $637 million. New orders in the first quarter decreased 25.7% to 2,989 units, while closings totaled 2,302, down 35.2% from a year ago. Ryland also said it does not expect to achieve its prior earnings guidance and can't provide a new forecast at this time. The company had forecast 2007 earnings of $3.75 to $4.25 a share.
Tuesday, April 24, 2007
More Quarterly Results
4/25/07 More Quarterly Results
BJ Services Company reported net income of $188.9 million for the second fiscal quarter ended March 31, 2007, or $0.64 per diluted share. The quarter's diluted earnings per share improved 3% compared to the $0.62 per diluted share for the second quarter of fiscal 2006 and decreased 9% compared to the $0.70 per diluted share reported in the previous quarter. Consolidated revenue in the second quarter of fiscal 2007 was $1,186.6 million, up 10% compared to $1,078.8 million in prior year's March quarter and slightly up compared to $1,183.9 million reported in the previous quarter. Consolidated operating income for the quarter was $290.2 million, a 2% decrease compared to $295.3 million for the same quarter last year and an 8% decrease compared to $316.3 million reported in the previous quarter. Chairman and CEO Bill Stewart said "looking at the business near term, U.S. drilling activity is expected to be up slightly for our fiscal third quarter. However, pricing pressures are expected to continue in this market. Canada is in full Spring break-up with activity levels significantly below last year, resulting in a projected sequential activity decline of approximately 60% for our fiscal third quarter and a year over year decline of approximately 20%. Our international pressure pumping business is expected to recover from project delays experienced in fiscal second quarter and our Oilfield Services Group is projected to improve as our process and pipeline business enters its seasonal market increase. As such, we expect earnings for our third fiscal quarter to be $0.58 to $0.60 per diluted share." I expect earnings for the year ending Sept. 30 to approximate $2.61 per share.
Toyota Motor Corp. became the world's top auto seller in the first three months of the year, passing rival General Motors Corp. for the first time, the Japanese automaker said Tuesday.
Texas Instruments Inc. said it is emerging from an inventory glut and expects stronger growth in the coming months due to rebounding demand for its chips, which are used in a variety of electronic gadgets such as cell phones.
In one of the deadliest attacks on American ground forces since the Iraq war started more than four years ago, a suicide car bomber struck a patrol base northeast of Baghdad and killed nine U.S. soldiers and wounded 20, officials said. That brings the number of U.S. troops who have died in the conflict to approximately 3,313. This war has gone on longer than WW II.
Adjusted for onetime costs, AT&T said it would have earned $4.1 billion, or 65 cents a share, vs. $2 billion, or 52 cents a share, a year earlier.
Lockheed lifted its outlook for the full year to earnings of $6.20 to $6.35 a share on net sales of between $40.35 billion and $41.35 billion. Its previous forecast was for earnings of $5.80 to $6 a share in 2007 on sales ranging from $40.25 billion to $41.25 billion.
USG, the Chicago-based building products provider, said it expects the housing market to remain weak for the balance of the year. It said it believes the downturn in the residential construction market is likely to continue throughout 2007, and that industry demand for gypsum wallboard will be down 10% for the year from 2006 levels.
U.S. Steel Corp. reported first-quarter earnings of $273 million, or $2.30 a share, up from a year-ago profit of $256 million, or $2.04 a share. The latest results include a charge of $2 million, or 2 cents a share, related to the early redemption of its 10% senior quarterly income debt securities. Net sales rose in the latest three months to $3.76 billion from $3.73 billion in the same period a year earlier.
China will pass the United States as the world's biggest source of greenhouse gases this year, an official with the International Energy Agency was quoted as saying.
Avery Dennison forecast earnings in 2007, excluding restructuring items, of $4.05 to $4.30 a share.
House and Senate Democratic appropriators agreed Monday on a $124 billion bill that would fund the Iraq war but order troops to begin leaving by Oct. 1 with the goal of completing the pullout six months later.
Target said on Monday April sales at established stores would be "much weaker" than an earlier forecast, sending its shares down 3% in extended trading. The company now anticipates same-store sales -- a key measure of retail performance that measures sales at stores open at least a year -- to rise between 3% and 4% for the combined March-April period, below an earlier forecast for a rise of 4% to 6%.
Private equity firm Kohlberg Kravis Roberts moved closer to winning a $22 billion bid battle for Alliance Boots on Tuesday, by raising its agreed offer 4.5% and securing a quarter of the company shares.
In early Tuesday trading, London Brent crude, currently seen as more representative of global oil prices than U.S. crude, rose 22 cents to $68.37, after jumping $1.66 on Monday. U.S. crude was up 11 cents at just above $66.
BP, Europe's second-largest oil company, reported a 17% drop in first-quarter earnings Tuesday on lower oil prices and declining production.
Declines in home prices in 20 U.S. metropolitan areas accelerated in the 12 months ended in February, a private survey showed today. Values fell 1 percent from February 2006 after dropping 0.1 percent in the year ended January, according to the S&P/Case- Shiller home-price index. January's decrease was the first since the group started keeping year-over-year records in 2001.
International Business Machines said it raising its quarterly dividend by 10 cents, or 33%, to 40 cents a share. The new dividend will be paid out on June 9 to shareholders of record on May 10. The Knoxville, Tenn. said it increased its stock buyback program by $15 billion.
Highland Hospitality Corp. agreed to be acquired by affiliates of JER Partners Acquisitions IV LLC for about $2 billion, including the assumption of roughly $260 million in debt. The deal values Highland shares at $19.50 per share, a premium of about 15% above its average closing price over the last three months.
DuPont reaffirmed its 2007 earnings outlook of about $3.15 per share, excluding the 6-cent-per-share charge for elastomer antitrust litigation. Wall Street is looking for a profit of $3.18 per share.
U.S. consumer confidence weakened for the second straight month in April, the Conference Board said Tuesday. The consumer confidence index fell to 104.0 in April from a revised 108.2 in March. Economists expected the index to slip to 104.9 from the initial reading of 107.2 in the previous month. Both reports on present-day conditions and the short-term declined in April. It was the first decline in the present-situation index in six months.
Sales of existing homes plunged 8.4% in March to a seasonally adjusted annual rate of 6.12 million, the lowest in nearly four years, the National Association of Realtors reported Tuesday. It was the largest percentage decline in sales since January 1989. The median price of an existing home fell 0.3% year-over-year to $217,000. The inventory of unsold homes on the market fell 1.6% to 3.75 million, representing a 7.3-month supply. Sales of condos were unchanged, while sales of single-family homes dropped 9.5%. Sales fell in all four regions.
Akzo Nobel, the world's biggest paint maker, on Tuesday said it was willing to spend "a considerable amount of money" on an acquisition, sparking renewed speculation that it may be mulling a move for ICI, of the UK.
Executives from Mexican cement maker Cemex SA said Tuesday they expect earnings to increase slightly in 2007, despite a slump in the U.S. housing market. The world's No. 3 cement maker estimated it will make about $4.3 billion in earnings before interest, taxes, depreciation and amortization, or Ebitda, compared with $4.1 billion in 2006.
June crude fell $1.31 to clsoe at $64.58 a barrel Tuesday. May natural gas gained 3.6 cents to close at $7.598 per million British thermal units.
June gold fell $6.50 to close at $687.70 an ounce Tuesday. May silver fell 1.9%, or 26.8 cents, to end at $13.782 an ounce and May copper lost 8 cents to finish at $3.5525 a pound.
Wal-Mart Stores Inc. plans to contract with local hospitals and other organizations to open as many as 400 in-store health clinics over the next two to three years. The company also said that, if current market forces continue, the company could open up to 2,000 clinics over the next five to seven years.
Paccar reported earnings of $365.6 million, or $1.46 a share, up from $342 million, or $1.35, in the year-earlier period. Analysts polled by Thomson Financial had expected profit of $1.20 a share. Revenue, including contributions from both trucking and financial-services operations, reached $3.98 billion in the three-month period, up 3% from $3.85 billion. More than half Paccar's sales come from outside the U.S. Strong first-quarter international demand more than made up for a rough business climate in North America.
The stock made a new all-time high and rose about $8 a share to roughly $88. The upside surprise blind-sided the short sellers. Fortunately, I was not in that camp.
The Liberty Papers: "Military and other administration officials created a heroic story about the death of Cpl. Pat Tillman to distract attention from setbacks in Iraq and the mistreatment of prisoners at Abu Ghraib, the slain man’s younger brother, Kevin Tillman, said today.Testifying before the House Committee on Oversight and Government Reform, Mr. Tillman said the military knew almost immediately that Corporal Tillman, an Army Ranger who left a career as a pro football player to enlist, had been killed accidentally in Afghanistan in April 2004 by fire from his own unit. But officials chose to put a “patriotic glow” on his death, he said. Mr. Tillman said the decision to award his brother a Silver Star and to say that he died heroically fighting the enemy was “utter fiction” that was intended to “exploit Pat’s death.”... Former Pvt. Jessica Lynch leveled similar criticism today at the hearing about the initial accounts given by the Army of her capture in Iraq. Ms. Lynch was rescued from an Iraqi hospital in dramatic fashion by American troops after she suffered serious injuries and was captured in an ambush of her truck convoy in March 2003. In her testimony Tuesday morning, she said she did not understand why the Army put out a story that she went down firing at the enemy. “I’m confused why they lied,” she said. Ms. Lynch said she could not know why she was depicted as a “Rambo from West Virginia,” when in fact she was riding in a truck, not fighting, when she was injured. For her part, Ms. Lynch said in her testimony that other members of her unit had acted with genuine heroism that deserved the attention she received. “The bottom line is the American people are capable of determining their own ideas of heroes, and they don’t need to be told elaborate tales,” she said.
Kucinich plans to hold his news conference announcing articles of impeachment against the vice president at 5 p.m. ET Tuesday.
The Office of Special Counsel is an independent federal investigative unit and prosecutorial agency of 106 people. One of its primary missions has been to enforce the Civil Service Reform Act, the Whistleblower Protection Act and the Hatch Act, a law enacted in 1939 to preserve the integrity of the civil service by separating patronage from bureaucracy. The Office of Special Counsel will take a close look at the last six years of White House political operations under the oversight of President Bush's adviser Karl Rove.
Even Mr Bush's father has conceded that his son is in political trouble, saying that, in different times, his son Jeb would probably be a candidate for the Republican Party presidential nomination. "He has a future in politics but not just now," he said. "There might be a little Bush fatigue right now."
For the quarter ended March 31, Amazon reported a profit of $111 million, or 26 cents a share, compared to the $51 million or 12 cents a share a year ago. Sales rose 28% to $3 billion, compared to the $2.28 billion from a year ago. Wall Street was expecting earnings of 15 cents a share on sales of $2.92 billion.
BJ Services Company reported net income of $188.9 million for the second fiscal quarter ended March 31, 2007, or $0.64 per diluted share. The quarter's diluted earnings per share improved 3% compared to the $0.62 per diluted share for the second quarter of fiscal 2006 and decreased 9% compared to the $0.70 per diluted share reported in the previous quarter. Consolidated revenue in the second quarter of fiscal 2007 was $1,186.6 million, up 10% compared to $1,078.8 million in prior year's March quarter and slightly up compared to $1,183.9 million reported in the previous quarter. Consolidated operating income for the quarter was $290.2 million, a 2% decrease compared to $295.3 million for the same quarter last year and an 8% decrease compared to $316.3 million reported in the previous quarter. Chairman and CEO Bill Stewart said "looking at the business near term, U.S. drilling activity is expected to be up slightly for our fiscal third quarter. However, pricing pressures are expected to continue in this market. Canada is in full Spring break-up with activity levels significantly below last year, resulting in a projected sequential activity decline of approximately 60% for our fiscal third quarter and a year over year decline of approximately 20%. Our international pressure pumping business is expected to recover from project delays experienced in fiscal second quarter and our Oilfield Services Group is projected to improve as our process and pipeline business enters its seasonal market increase. As such, we expect earnings for our third fiscal quarter to be $0.58 to $0.60 per diluted share." I expect earnings for the year ending Sept. 30 to approximate $2.61 per share.
Toyota Motor Corp. became the world's top auto seller in the first three months of the year, passing rival General Motors Corp. for the first time, the Japanese automaker said Tuesday.
Texas Instruments Inc. said it is emerging from an inventory glut and expects stronger growth in the coming months due to rebounding demand for its chips, which are used in a variety of electronic gadgets such as cell phones.
In one of the deadliest attacks on American ground forces since the Iraq war started more than four years ago, a suicide car bomber struck a patrol base northeast of Baghdad and killed nine U.S. soldiers and wounded 20, officials said. That brings the number of U.S. troops who have died in the conflict to approximately 3,313. This war has gone on longer than WW II.
Adjusted for onetime costs, AT&T said it would have earned $4.1 billion, or 65 cents a share, vs. $2 billion, or 52 cents a share, a year earlier.
Lockheed lifted its outlook for the full year to earnings of $6.20 to $6.35 a share on net sales of between $40.35 billion and $41.35 billion. Its previous forecast was for earnings of $5.80 to $6 a share in 2007 on sales ranging from $40.25 billion to $41.25 billion.
USG, the Chicago-based building products provider, said it expects the housing market to remain weak for the balance of the year. It said it believes the downturn in the residential construction market is likely to continue throughout 2007, and that industry demand for gypsum wallboard will be down 10% for the year from 2006 levels.
U.S. Steel Corp. reported first-quarter earnings of $273 million, or $2.30 a share, up from a year-ago profit of $256 million, or $2.04 a share. The latest results include a charge of $2 million, or 2 cents a share, related to the early redemption of its 10% senior quarterly income debt securities. Net sales rose in the latest three months to $3.76 billion from $3.73 billion in the same period a year earlier.
China will pass the United States as the world's biggest source of greenhouse gases this year, an official with the International Energy Agency was quoted as saying.
Avery Dennison forecast earnings in 2007, excluding restructuring items, of $4.05 to $4.30 a share.
House and Senate Democratic appropriators agreed Monday on a $124 billion bill that would fund the Iraq war but order troops to begin leaving by Oct. 1 with the goal of completing the pullout six months later.
Target said on Monday April sales at established stores would be "much weaker" than an earlier forecast, sending its shares down 3% in extended trading. The company now anticipates same-store sales -- a key measure of retail performance that measures sales at stores open at least a year -- to rise between 3% and 4% for the combined March-April period, below an earlier forecast for a rise of 4% to 6%.
Private equity firm Kohlberg Kravis Roberts moved closer to winning a $22 billion bid battle for Alliance Boots on Tuesday, by raising its agreed offer 4.5% and securing a quarter of the company shares.
In early Tuesday trading, London Brent crude, currently seen as more representative of global oil prices than U.S. crude, rose 22 cents to $68.37, after jumping $1.66 on Monday. U.S. crude was up 11 cents at just above $66.
BP, Europe's second-largest oil company, reported a 17% drop in first-quarter earnings Tuesday on lower oil prices and declining production.
Declines in home prices in 20 U.S. metropolitan areas accelerated in the 12 months ended in February, a private survey showed today. Values fell 1 percent from February 2006 after dropping 0.1 percent in the year ended January, according to the S&P/Case- Shiller home-price index. January's decrease was the first since the group started keeping year-over-year records in 2001.
International Business Machines said it raising its quarterly dividend by 10 cents, or 33%, to 40 cents a share. The new dividend will be paid out on June 9 to shareholders of record on May 10. The Knoxville, Tenn. said it increased its stock buyback program by $15 billion.
Highland Hospitality Corp. agreed to be acquired by affiliates of JER Partners Acquisitions IV LLC for about $2 billion, including the assumption of roughly $260 million in debt. The deal values Highland shares at $19.50 per share, a premium of about 15% above its average closing price over the last three months.
DuPont reaffirmed its 2007 earnings outlook of about $3.15 per share, excluding the 6-cent-per-share charge for elastomer antitrust litigation. Wall Street is looking for a profit of $3.18 per share.
U.S. consumer confidence weakened for the second straight month in April, the Conference Board said Tuesday. The consumer confidence index fell to 104.0 in April from a revised 108.2 in March. Economists expected the index to slip to 104.9 from the initial reading of 107.2 in the previous month. Both reports on present-day conditions and the short-term declined in April. It was the first decline in the present-situation index in six months.
Sales of existing homes plunged 8.4% in March to a seasonally adjusted annual rate of 6.12 million, the lowest in nearly four years, the National Association of Realtors reported Tuesday. It was the largest percentage decline in sales since January 1989. The median price of an existing home fell 0.3% year-over-year to $217,000. The inventory of unsold homes on the market fell 1.6% to 3.75 million, representing a 7.3-month supply. Sales of condos were unchanged, while sales of single-family homes dropped 9.5%. Sales fell in all four regions.
Akzo Nobel, the world's biggest paint maker, on Tuesday said it was willing to spend "a considerable amount of money" on an acquisition, sparking renewed speculation that it may be mulling a move for ICI, of the UK.
Executives from Mexican cement maker Cemex SA said Tuesday they expect earnings to increase slightly in 2007, despite a slump in the U.S. housing market. The world's No. 3 cement maker estimated it will make about $4.3 billion in earnings before interest, taxes, depreciation and amortization, or Ebitda, compared with $4.1 billion in 2006.
June crude fell $1.31 to clsoe at $64.58 a barrel Tuesday. May natural gas gained 3.6 cents to close at $7.598 per million British thermal units.
June gold fell $6.50 to close at $687.70 an ounce Tuesday. May silver fell 1.9%, or 26.8 cents, to end at $13.782 an ounce and May copper lost 8 cents to finish at $3.5525 a pound.
Wal-Mart Stores Inc. plans to contract with local hospitals and other organizations to open as many as 400 in-store health clinics over the next two to three years. The company also said that, if current market forces continue, the company could open up to 2,000 clinics over the next five to seven years.
Paccar reported earnings of $365.6 million, or $1.46 a share, up from $342 million, or $1.35, in the year-earlier period. Analysts polled by Thomson Financial had expected profit of $1.20 a share. Revenue, including contributions from both trucking and financial-services operations, reached $3.98 billion in the three-month period, up 3% from $3.85 billion. More than half Paccar's sales come from outside the U.S. Strong first-quarter international demand more than made up for a rough business climate in North America.
The stock made a new all-time high and rose about $8 a share to roughly $88. The upside surprise blind-sided the short sellers. Fortunately, I was not in that camp.
The Liberty Papers: "Military and other administration officials created a heroic story about the death of Cpl. Pat Tillman to distract attention from setbacks in Iraq and the mistreatment of prisoners at Abu Ghraib, the slain man’s younger brother, Kevin Tillman, said today.Testifying before the House Committee on Oversight and Government Reform, Mr. Tillman said the military knew almost immediately that Corporal Tillman, an Army Ranger who left a career as a pro football player to enlist, had been killed accidentally in Afghanistan in April 2004 by fire from his own unit. But officials chose to put a “patriotic glow” on his death, he said. Mr. Tillman said the decision to award his brother a Silver Star and to say that he died heroically fighting the enemy was “utter fiction” that was intended to “exploit Pat’s death.”... Former Pvt. Jessica Lynch leveled similar criticism today at the hearing about the initial accounts given by the Army of her capture in Iraq. Ms. Lynch was rescued from an Iraqi hospital in dramatic fashion by American troops after she suffered serious injuries and was captured in an ambush of her truck convoy in March 2003. In her testimony Tuesday morning, she said she did not understand why the Army put out a story that she went down firing at the enemy. “I’m confused why they lied,” she said. Ms. Lynch said she could not know why she was depicted as a “Rambo from West Virginia,” when in fact she was riding in a truck, not fighting, when she was injured. For her part, Ms. Lynch said in her testimony that other members of her unit had acted with genuine heroism that deserved the attention she received. “The bottom line is the American people are capable of determining their own ideas of heroes, and they don’t need to be told elaborate tales,” she said.
Kucinich plans to hold his news conference announcing articles of impeachment against the vice president at 5 p.m. ET Tuesday.
The Office of Special Counsel is an independent federal investigative unit and prosecutorial agency of 106 people. One of its primary missions has been to enforce the Civil Service Reform Act, the Whistleblower Protection Act and the Hatch Act, a law enacted in 1939 to preserve the integrity of the civil service by separating patronage from bureaucracy. The Office of Special Counsel will take a close look at the last six years of White House political operations under the oversight of President Bush's adviser Karl Rove.
Even Mr Bush's father has conceded that his son is in political trouble, saying that, in different times, his son Jeb would probably be a candidate for the Republican Party presidential nomination. "He has a future in politics but not just now," he said. "There might be a little Bush fatigue right now."
For the quarter ended March 31, Amazon reported a profit of $111 million, or 26 cents a share, compared to the $51 million or 12 cents a share a year ago. Sales rose 28% to $3 billion, compared to the $2.28 billion from a year ago. Wall Street was expecting earnings of 15 cents a share on sales of $2.92 billion.
Monday, April 23, 2007
More Deals
4/24/07 More Deals
"I don't think the market is stabilizing,'' Donald Tomnitz, chief executive officer of D.R. Horton Inc., said on a conference call last week. The housing markets in California, Florida and Arizona ``are becoming tougher,'' he said.
The Chicago Tribune will cut 100 jobs and the LA Times 150 jobs.
Bank of America will buy LaSalle National Bank from ABN Amro for $21 billion.
Motorola Inc. agreed to acquire Terayon Communication Systems Inc, a video processing technology provider based in Santa Clara, Calif., for $1.80 per share in cash.
Barclays and ABN Amro said they expect to reduce headcount by around 23,000 or 10% if their combination goes ahead. ABN Amro agreed to back a 36.25 euros-a-share takeover offer from Barclays. The offer values the Dutch bank at around 69.3 billion euros ($94.3 billion). Under the deal, ABN Amro shareholders would receive 3.225 Barclays shares for every ABN Amro share.
AstraZeneca agreed to buy MedImmune for $15.6 billion cash, or $58 a share. In my view, that is a ridiculously high price. The last time I made that statement was Boston Scientific's acquisition of Guidant.
John Hussman: "Has anybody noticed that the favorite leveraged buyout targets are increasingly ones tied to governments that can't afford to let them fail? Why do you think they're going after BCE, the largest telephone company in Canada , or Sallie Mae, the source of countless student loans that have at least the implicit backing of the U.S. government? This is a recipe for government bailouts. Don't investors realize how much of this LBO activity is implicitly being done on somebody else's dime?...the valuation tools upon which Wall Street analysts increasingly base their analysis are, in fact, pure unadulterated garbage. Over time, investors will discover this along with a good deal of pain. Ultimately, stocks are a claim on a stream of payments that will be delivered to investors over time, and investors re-price stocks when they realize those payments aren't coming. The unfortunate aspect of the “operating earnings” culture is that it deceives investors to believe that they have larger claims to future payments than they actually have...we are once again at a condition that I've called “Hazardous Ovoboby” – overvalued, overbought, overbullish, yields rising. It has historically made sense to hedge against market fluctuations based on much less restrictive definitions of market conditions, but at present, the market is in a set of conditions that has almost invariably been followed by deep and abrupt losses, though often only after a further marginal advance over a small number of trading sessions. Not a forecast, as usual, but the risk should not be taken lightly."
The national average for self-serve, regular unleaded gas was $2.8737 a gallon on April 20, up 8.43 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of some 7,000 gas stations.
Business Objects is acquiring private Cartesis for about $300 million.
Condoleezza Rice is urging Iran to join her at a high-level conference on the future of Iraq next week.
The WSJ writes the mighty Texas crude-oil benchmark -- the per-barrel price watched obsessively by the markets and quoted by the media -- has diverged so drastically from prices of other grades of crude in recent weeks that some market participants are calling it a "broken benchmark."
Billions of dollars' worth of foreign ingredients that Americans eat in everything from salad dressing to ice cream get a pass from overwhelmed inspectors, despite a rising tide of imports from countries with spotty records, according to an Associated Press analysis of federal trade and food data.
Mining giant Anglo American has agreed to buy Centennial Asset Participacoes Minas-Rio S.A. and subscribe for additional shares of MMX Minas-Rio Mineracao e Logistica in a deal that will result in Anglo American owning a consolidated 49% ownership interest in MMX Minas-Rio. Anglo American will acquire the interest in MMX Minas-Rio for an economic value and effective price of $1.15 billion.
Genesco Inc. said on Monday that the board unanimously rejected Foot Locker Inc.'s unsolicited bid for the company at $46 a share, or $1.2 billion.
Carl Icahn's American Real Estate Partners LP agreed to sell four Nevada casinos and 17 undeveloped acres of land on the Las Vegas Strip for $1.3 billion to Goldman Sachs Group Inc. real estate funds.
Sen. Harry Reid: "The military mission has long since been accomplished. The failure has been political. It has been policy. It has been presidential."
Crain's Chicago Business said Houston steel distributor Metals USA Inc., which is owned by private equity firm Apollo Management LP, is offering a cash and stock deal for Ryerson, the Chicago steel distributor.
According to a Federal Trade Commission notice, the government has completed its antitrust investigation of an initial investment by Zell of $250 million into the company, which owns the Chicago Tribune, Los Angeles Times and several other newspapers, as well as 23 television stations. The complex transaction still requires a second step, in which Tribune will merge with an employee stock ownership plan, or ESOP, and become a private company. That merger is subject to separate Federal Communications Commission and other regulatory approvals, as well as shareholder approval, Tribune said when it announced the deal April 2.
Amgen said it now expects full-year 2007 adjusted earnings to come in at the low end of its $4.30 to $4.50 per-share forecast range.
Affiliated Computer Services Inc. confirmed it received a higher buyout offer from Darwin Deason, chairman of ACS, and investment partner Cerberus Capital Management L.P. Deason and Cerberus boosted their bid to $62 a share in cash from $59.25 a share.
June crude climbed 2.8%, or $1.78, to close at $65.89 a barrel Monday. May natural gas also climbed, adding 18.1 cents to finish at $7.562 per million British thermal units.
June gold fell $1.60 to close at $694.20 an ounce.
Caterpillar Inc. said it's "well-positioned" to reach its goals "of top-line sales of more than $50 billion and profit growth in the top half of the S&P 500" by 2010.
"I don't think the market is stabilizing,'' Donald Tomnitz, chief executive officer of D.R. Horton Inc., said on a conference call last week. The housing markets in California, Florida and Arizona ``are becoming tougher,'' he said.
The Chicago Tribune will cut 100 jobs and the LA Times 150 jobs.
Bank of America will buy LaSalle National Bank from ABN Amro for $21 billion.
Motorola Inc. agreed to acquire Terayon Communication Systems Inc, a video processing technology provider based in Santa Clara, Calif., for $1.80 per share in cash.
Barclays and ABN Amro said they expect to reduce headcount by around 23,000 or 10% if their combination goes ahead. ABN Amro agreed to back a 36.25 euros-a-share takeover offer from Barclays. The offer values the Dutch bank at around 69.3 billion euros ($94.3 billion). Under the deal, ABN Amro shareholders would receive 3.225 Barclays shares for every ABN Amro share.
AstraZeneca agreed to buy MedImmune for $15.6 billion cash, or $58 a share. In my view, that is a ridiculously high price. The last time I made that statement was Boston Scientific's acquisition of Guidant.
John Hussman: "Has anybody noticed that the favorite leveraged buyout targets are increasingly ones tied to governments that can't afford to let them fail? Why do you think they're going after BCE, the largest telephone company in Canada , or Sallie Mae, the source of countless student loans that have at least the implicit backing of the U.S. government? This is a recipe for government bailouts. Don't investors realize how much of this LBO activity is implicitly being done on somebody else's dime?...the valuation tools upon which Wall Street analysts increasingly base their analysis are, in fact, pure unadulterated garbage. Over time, investors will discover this along with a good deal of pain. Ultimately, stocks are a claim on a stream of payments that will be delivered to investors over time, and investors re-price stocks when they realize those payments aren't coming. The unfortunate aspect of the “operating earnings” culture is that it deceives investors to believe that they have larger claims to future payments than they actually have...we are once again at a condition that I've called “Hazardous Ovoboby” – overvalued, overbought, overbullish, yields rising. It has historically made sense to hedge against market fluctuations based on much less restrictive definitions of market conditions, but at present, the market is in a set of conditions that has almost invariably been followed by deep and abrupt losses, though often only after a further marginal advance over a small number of trading sessions. Not a forecast, as usual, but the risk should not be taken lightly."
The national average for self-serve, regular unleaded gas was $2.8737 a gallon on April 20, up 8.43 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of some 7,000 gas stations.
Business Objects is acquiring private Cartesis for about $300 million.
Condoleezza Rice is urging Iran to join her at a high-level conference on the future of Iraq next week.
The WSJ writes the mighty Texas crude-oil benchmark -- the per-barrel price watched obsessively by the markets and quoted by the media -- has diverged so drastically from prices of other grades of crude in recent weeks that some market participants are calling it a "broken benchmark."
Billions of dollars' worth of foreign ingredients that Americans eat in everything from salad dressing to ice cream get a pass from overwhelmed inspectors, despite a rising tide of imports from countries with spotty records, according to an Associated Press analysis of federal trade and food data.
Mining giant Anglo American has agreed to buy Centennial Asset Participacoes Minas-Rio S.A. and subscribe for additional shares of MMX Minas-Rio Mineracao e Logistica in a deal that will result in Anglo American owning a consolidated 49% ownership interest in MMX Minas-Rio. Anglo American will acquire the interest in MMX Minas-Rio for an economic value and effective price of $1.15 billion.
Genesco Inc. said on Monday that the board unanimously rejected Foot Locker Inc.'s unsolicited bid for the company at $46 a share, or $1.2 billion.
Carl Icahn's American Real Estate Partners LP agreed to sell four Nevada casinos and 17 undeveloped acres of land on the Las Vegas Strip for $1.3 billion to Goldman Sachs Group Inc. real estate funds.
Sen. Harry Reid: "The military mission has long since been accomplished. The failure has been political. It has been policy. It has been presidential."
Crain's Chicago Business said Houston steel distributor Metals USA Inc., which is owned by private equity firm Apollo Management LP, is offering a cash and stock deal for Ryerson, the Chicago steel distributor.
According to a Federal Trade Commission notice, the government has completed its antitrust investigation of an initial investment by Zell of $250 million into the company, which owns the Chicago Tribune, Los Angeles Times and several other newspapers, as well as 23 television stations. The complex transaction still requires a second step, in which Tribune will merge with an employee stock ownership plan, or ESOP, and become a private company. That merger is subject to separate Federal Communications Commission and other regulatory approvals, as well as shareholder approval, Tribune said when it announced the deal April 2.
Amgen said it now expects full-year 2007 adjusted earnings to come in at the low end of its $4.30 to $4.50 per-share forecast range.
Affiliated Computer Services Inc. confirmed it received a higher buyout offer from Darwin Deason, chairman of ACS, and investment partner Cerberus Capital Management L.P. Deason and Cerberus boosted their bid to $62 a share in cash from $59.25 a share.
June crude climbed 2.8%, or $1.78, to close at $65.89 a barrel Monday. May natural gas also climbed, adding 18.1 cents to finish at $7.562 per million British thermal units.
June gold fell $1.60 to close at $694.20 an ounce.
Caterpillar Inc. said it's "well-positioned" to reach its goals "of top-line sales of more than $50 billion and profit growth in the top half of the S&P 500" by 2010.
Sunday, April 22, 2007
Dow Winning Streaks
4/23/07 Dow Winning Streaks
Mike Burk: "The Dow Jones Industrial Average (DJIA) completed the 7th of 7 consecutive up days on Friday for the second time this month...The DJIA has risen for 7 or more consecutive days about once every two years and that rise has usually been followed by a brief but sharp decline...Since December, progressively higher highs in the SPX have been accompanied by fewer new highs...Since the early March lows there has been a sharp expansion of new highs among the component issues of the SPX...The relatively greater expansion of new highs in the blue chip SPX compared to the broader market and smaller capitalization indices suggests we are entering a late phase of this bull market that will be led by the blue chips...The market is overbought and seasonality offers only a modestly positive bias. I expect the major indices to be lower on Friday April 27 than they were on Friday April 20."
Peter Schiff: "Wall Street's power to make high inflation disappear before our very eyes will not last forever. If a magician repeats the same trick over and over, his audience is bound to get wise. The idea that the "core CPI" should trump the actual "headline number" is an example of a lie being repeated often enough that it becomes the truth. Originally, the emphasis on the core was supposed to smooth out month-to-month volatility. But putting primary weight on "year-over-year core CPI" is another matter entirely. Year-over-year changes are not volatility, they are reality! Of course, your typical Wall Street strategist could have figured this out, if they only had a brain."
International Business Times: "The dollar's decline has taken place over a period of years, but more recent pullbacks have tested historical benchmarks. The dollar, which began to weaken broadly in early 2002, has fallen more than 50 percent from its October 2000 trading peak against the euro. It has recently come close to hitting its record low against the 13-nation currency and is near a 26-year low against the British pound.
"Over the long term, having your currency fall 50 percent is another force for change in the economy and that will create social pain. There are slices of the economy that will have to get restructured, that will have to go away. They'll have to get replaced with other ones," Robert Brown, chief investment officer at Genworth Financial Asset Management, said.
From Forbes: "Even wealthier households use ARM products to finance the purchase of luxury homes in expensive areas," says Anthony Sanders, real estate finance chair at Ohio State University, of adjustable rate mortgages at the center of the subprime saga. "The rate resets combined with declining house values are creating a problem even in this sector of the housing market." Homeowners' desire to rapidly liquidate real estate holdings has made real estate auctions the fastest growing auction category, according to the National Auctioneers Association. A quick sale may mean less money, but bankers and homeowners are increasingly willing to accept that caveat, according to J. Craig King, president of J.P. King Auction Company, an auctioneer of luxury homes. "If the bank forecloses, they have to take it into inventory and figure out how to sell it," he says. "Foreclosing just makes it the bank's problem, and they've got enough problems."
Riverside County appears to have been most badly hit by the subprime collapse, with mortgage defaults in the first three months of the year up 168 per cent on the same period of 2006, according to DataQuick. Delinquencies on prime and sub-prime adjustable-rate mortgages in California have soared by 78% and 60% respectively.
Michael Kahn points out that "Barron's Online's Randall Forsyth wrote in his Up and Down Wall Street Daily column that the falling dollar is inflating the value of stocks as assets (see "Is the Dow's Recovery a Mere Illusion?," April 17). In other words, it takes more depreciated dollars to buy a piece of Microsoft than it did with a stronger dollar, and this is what is propping up the market. We see the same phenomenon occurring in commodities priced in dollars, too. Gold is the most well known example of a commodity that typically stays strong when the dollar is weak."
International Herald Tribune: "Oil, after all, is the mainstay of the Nigerian economy, providing 65 percent of its revenue. The events in Nigeria, the world's eighth-largest oil exporter, have rippled across energy markets, contributing to higher prices and tighter supplies...The United States imports more than a million barrels of crude oil from Nigeria every day. Many analysts warn that tensions here could derail plans to lift oil production in this country of 140 million people. Already, a quarter of Nigeria's oil output has been shut down, costing an estimated $12 billion in lost sales last year. Some foreign operators have abandoned oil fields or left the country altogether. "I can't think of anything worse right now," said Larry Johnson, a former U.S. Army officer who was recently hired to toughen security at a Nigerian site operated by Eni, an Italian oil producer. "Even Angola during the civil war wasn't as bad."
Paul Kasriel :"The bulls on the economy had better hope it's different this time because both the index of Leading Economic Indicators (LEI) and the Kasriel Recession Warning Indicator (KRWI) are sending out recession warning signals now that March data are available...the KRWI is now sending out a recession warning as of the first quarter of this year in that the yield spread is negative and the real monetary base is contracting...I am not aware that any recession has been predicted by a consensus of economic prognosticators. Two reliable recession indicators are now flashing a warning signal and private domestic demand is showing weakness. Maybe it's different this time? Perhaps it isn't. Only the National Bureau of Economic Research will know for sure."
Jay DeVincentis: "This weekend holds our current key reversal date. We've been seeing a lot of bullishness in the Qs lately, so we'll see what the market holds in store for us Monday and Tuesday. With May 6th coming quickly, and a gap up reversal in the Qs, the likelihood of a move lower into 5/6 increases...We remain in Buy Mode as the Qs continue to push and push at the door of the February highs. We actually saw action on Friday that broke the previous high, but the bulls weren't able to sustain their momentum so the Qs settled back in slightly below the highs. However, given the high level of complacency as evidenced by the put/call ratio, we are likely seeing a top of hope. With everyone bullish, everyone's pretty much bought into the advance. When an advance runs out of liquidity, it's doomed to fail. And that's what we'll be looking for early next week."
On Friday, April option expiration day, there was a spike in trading in the BJ Services May call options. The stock closed at $29.73. The May calls with a $27.50 strike price traded 9,485 contracts with the outstanding contracts prior to Friday amounting to only 2,140.
Mike Burk: "The Dow Jones Industrial Average (DJIA) completed the 7th of 7 consecutive up days on Friday for the second time this month...The DJIA has risen for 7 or more consecutive days about once every two years and that rise has usually been followed by a brief but sharp decline...Since December, progressively higher highs in the SPX have been accompanied by fewer new highs...Since the early March lows there has been a sharp expansion of new highs among the component issues of the SPX...The relatively greater expansion of new highs in the blue chip SPX compared to the broader market and smaller capitalization indices suggests we are entering a late phase of this bull market that will be led by the blue chips...The market is overbought and seasonality offers only a modestly positive bias. I expect the major indices to be lower on Friday April 27 than they were on Friday April 20."
Peter Schiff: "Wall Street's power to make high inflation disappear before our very eyes will not last forever. If a magician repeats the same trick over and over, his audience is bound to get wise. The idea that the "core CPI" should trump the actual "headline number" is an example of a lie being repeated often enough that it becomes the truth. Originally, the emphasis on the core was supposed to smooth out month-to-month volatility. But putting primary weight on "year-over-year core CPI" is another matter entirely. Year-over-year changes are not volatility, they are reality! Of course, your typical Wall Street strategist could have figured this out, if they only had a brain."
International Business Times: "The dollar's decline has taken place over a period of years, but more recent pullbacks have tested historical benchmarks. The dollar, which began to weaken broadly in early 2002, has fallen more than 50 percent from its October 2000 trading peak against the euro. It has recently come close to hitting its record low against the 13-nation currency and is near a 26-year low against the British pound.
"Over the long term, having your currency fall 50 percent is another force for change in the economy and that will create social pain. There are slices of the economy that will have to get restructured, that will have to go away. They'll have to get replaced with other ones," Robert Brown, chief investment officer at Genworth Financial Asset Management, said.
From Forbes: "Even wealthier households use ARM products to finance the purchase of luxury homes in expensive areas," says Anthony Sanders, real estate finance chair at Ohio State University, of adjustable rate mortgages at the center of the subprime saga. "The rate resets combined with declining house values are creating a problem even in this sector of the housing market." Homeowners' desire to rapidly liquidate real estate holdings has made real estate auctions the fastest growing auction category, according to the National Auctioneers Association. A quick sale may mean less money, but bankers and homeowners are increasingly willing to accept that caveat, according to J. Craig King, president of J.P. King Auction Company, an auctioneer of luxury homes. "If the bank forecloses, they have to take it into inventory and figure out how to sell it," he says. "Foreclosing just makes it the bank's problem, and they've got enough problems."
Riverside County appears to have been most badly hit by the subprime collapse, with mortgage defaults in the first three months of the year up 168 per cent on the same period of 2006, according to DataQuick. Delinquencies on prime and sub-prime adjustable-rate mortgages in California have soared by 78% and 60% respectively.
Michael Kahn points out that "Barron's Online's Randall Forsyth wrote in his Up and Down Wall Street Daily column that the falling dollar is inflating the value of stocks as assets (see "Is the Dow's Recovery a Mere Illusion?," April 17). In other words, it takes more depreciated dollars to buy a piece of Microsoft than it did with a stronger dollar, and this is what is propping up the market. We see the same phenomenon occurring in commodities priced in dollars, too. Gold is the most well known example of a commodity that typically stays strong when the dollar is weak."
International Herald Tribune: "Oil, after all, is the mainstay of the Nigerian economy, providing 65 percent of its revenue. The events in Nigeria, the world's eighth-largest oil exporter, have rippled across energy markets, contributing to higher prices and tighter supplies...The United States imports more than a million barrels of crude oil from Nigeria every day. Many analysts warn that tensions here could derail plans to lift oil production in this country of 140 million people. Already, a quarter of Nigeria's oil output has been shut down, costing an estimated $12 billion in lost sales last year. Some foreign operators have abandoned oil fields or left the country altogether. "I can't think of anything worse right now," said Larry Johnson, a former U.S. Army officer who was recently hired to toughen security at a Nigerian site operated by Eni, an Italian oil producer. "Even Angola during the civil war wasn't as bad."
Paul Kasriel :"The bulls on the economy had better hope it's different this time because both the index of Leading Economic Indicators (LEI) and the Kasriel Recession Warning Indicator (KRWI) are sending out recession warning signals now that March data are available...the KRWI is now sending out a recession warning as of the first quarter of this year in that the yield spread is negative and the real monetary base is contracting...I am not aware that any recession has been predicted by a consensus of economic prognosticators. Two reliable recession indicators are now flashing a warning signal and private domestic demand is showing weakness. Maybe it's different this time? Perhaps it isn't. Only the National Bureau of Economic Research will know for sure."
Jay DeVincentis: "This weekend holds our current key reversal date. We've been seeing a lot of bullishness in the Qs lately, so we'll see what the market holds in store for us Monday and Tuesday. With May 6th coming quickly, and a gap up reversal in the Qs, the likelihood of a move lower into 5/6 increases...We remain in Buy Mode as the Qs continue to push and push at the door of the February highs. We actually saw action on Friday that broke the previous high, but the bulls weren't able to sustain their momentum so the Qs settled back in slightly below the highs. However, given the high level of complacency as evidenced by the put/call ratio, we are likely seeing a top of hope. With everyone bullish, everyone's pretty much bought into the advance. When an advance runs out of liquidity, it's doomed to fail. And that's what we'll be looking for early next week."
On Friday, April option expiration day, there was a spike in trading in the BJ Services May call options. The stock closed at $29.73. The May calls with a $27.50 strike price traded 9,485 contracts with the outstanding contracts prior to Friday amounting to only 2,140.
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