JDfn Daily Digest - August 26, 2008
The August consumer confidence index rose to 56.9 from a July reading of 51.9. Economists expected an August reading of 53. The percentage of consumers saying jobs are "hard to get" increased to 32% in August from 30.2% in July. Meanwhile, the percentage of consumers expecting business conditions to worsen over the next six months fell to 25.8% from 32.4%.
U.S. home sales rose 2.4% in July, but large downward revisions to prior months showed a weaker home sales market than previously estimated. New-home sales rose to a seasonally adjusted annual rate of 503,000 in July. This was well below the 521,000 pace expected by economists.
The Standard & Poor's/Case-Shiller U.S. National Home Price Index dropped a record 15.4 percent during the quarter. The monthly indices also showed record declines. The 20-city index fell by 15.9 percent in June compared with a year ago, the largest drop since its inception in 2000. The 10-city index fell 17 percent, its biggest decline in its 21-year history.
Freddie Mac (FRE) said its total mortgage portfolio rose an annualized 4.2% in July, and 8.7% in the year to date. However, the lender's total mortgage portfolio purchases and issuances were lower than the same month last year, at $34.6 billion compared to $40.5 billion in July 2007.
The Mortgage Asset Research Institute said reported incidents of mortgage fraud jumped 42 percent nationwide, with Florida reporting the highest number of cases. Florida properties accounted for nearly a quarter of all mortgage fraud incidents. California ranked second, followed by a three-way tie for third among Illinois, Maryland and Michigan.
According to a survey released by the International Council of Shopping Centers, chain-store sales for the week ended August 23rd rose 2.3% from the year-earlier period. On a week-over-week basis, sales climbed 0.2%, their biggest gain this month.
General Motors (GM) has received interest from two separate investors from the Gulf Arab region to buy its Hummer brand. General Motors is preparing sales documents for its Hummer brand and has initial expressions of interest from potential buyers that it hopes to develop into formal sale talks.
Credit Suisse Group (CS) has acquired a majority stake in Asset Management Finance Corporation for $384 million of newly issued Credit Suisse stock. The Swiss bank said the deal for over 80 percent of AMF has cleared all regulatory approvals and will close Tuesday. It acquires the stake from National Bank Financial of Canada.
Metro-Goldwyn-Mayer Studios Inc. (MGM) said it is "not for sale" following a report that MGM's owners were looking to sell the movie company for $5.2 billion. The studio was taken private for nearly $5 billion in 2005 by Providence Equity Partners, TPG, Sony Corp. of America and Comcast Corp.
Scheduled U.S. Economic Reports (Wednesday)
Durable Goods Orders (July)
In Earnings News
Smithfield Foods (SFD) reported a loss in its fiscal first-quarter due in part to a $20.1 million write-down in the value of commodity contracts. The nation's largest hog producer and pork processor says it lost $12.6 million, or 9 cents per share. Wall Street analysts expected a loss of 4 cents per share on $2.87 billion in sales.
Rio Tinto Ltd. (RTP), the world's third-largest mining company, said that half-year profit more than doubled to a record on strong demand from China for iron ore and other metals. Profit for the six months through June 30 surged 112.5 percent to $6.91 billion from $3.25 billion the year before, largely due to higher commodity prices and production, particularly iron ore.
Corinthian Colleges (COCO), which provides for-profit secondary education, posted a narrower fiscal fourth-quarter loss as revenue and student enrollment rose. Corinthian said its loss for the quarter declined to $620,000, or a penny per share. Analysts expected fourth-quarter earnings of 9 cents per share.
Chicos FAS (CHS) earned $6.7 million or 4 cents per share for the quarter. Chico's earned $38.7 million, or 22 cents per share, in the year-ago quarter. Wall Street analysts expected a per-share profit of 3 cents and $405 million in sales.
American Eagle Outfitters Inc. (AEO) reported a 26 percent drop in second-quarter profits as teens cut back on spending amid a weak economy. The retailer said that the company earned $59.8 million, or 29 cents per share. Analysts, on average, expected 28 cents per share.
Big Lots (BIG) reported an 11 percent rise in quarterly profit that beat market estimates, as shoppers headed to its stores for low prices on furniture, food and paper products, and raised its earnings forecast for the current financial year. Big Lots said profit rose to $26.0 million, or 32 cents per share. Analysts on average had been expecting a profit of 27 cents a share.
Scheduled Earnings Reports (Wednesday)
Men’s Wearhouse, Gander Mountain, Charming Shoppes, Benihana, Dollar Tree, TiVo, Jo-Ann Stores, Talbots
Stocks in the News
Thornburg Mortgage (TMA) reported second-quarter earnings increased to $412.3 million or 84 cents a share.
Anadarko Petroleum (APC) said it plans to buy back up to $5 billion, or 18%, of its shares outstanding.
Delta Air Lines (DAL) borrowed the $1 billion available on a revolving-credit facility, which it says will give it flexibility as it closes its Northwest merger.
Aetna Inc (AET) affirmed its earnings outlook of $1.12 a share for the third quarter and $4 a share for the year.
FTD Group (FTD) reported fiscal fourth-quarter net income rose 17% on 3% higher revenue.
Coach Inc (COH) said it plans to buy back up to $1 billion of its shares by June 2010.
Wausau Paper Corp (WPP) said it will reduce capacity at its specialty-products mill in Jay, Maine, by year's end.
U.S. home sales rose 2.4% in July, but large downward revisions to prior months showed a weaker home sales market than previously estimated. New-home sales rose to a seasonally adjusted annual rate of 503,000 in July. This was well below the 521,000 pace expected by economists.
The Standard & Poor's/Case-Shiller U.S. National Home Price Index dropped a record 15.4 percent during the quarter. The monthly indices also showed record declines. The 20-city index fell by 15.9 percent in June compared with a year ago, the largest drop since its inception in 2000. The 10-city index fell 17 percent, its biggest decline in its 21-year history.
Freddie Mac (FRE) said its total mortgage portfolio rose an annualized 4.2% in July, and 8.7% in the year to date. However, the lender's total mortgage portfolio purchases and issuances were lower than the same month last year, at $34.6 billion compared to $40.5 billion in July 2007.
The Mortgage Asset Research Institute said reported incidents of mortgage fraud jumped 42 percent nationwide, with Florida reporting the highest number of cases. Florida properties accounted for nearly a quarter of all mortgage fraud incidents. California ranked second, followed by a three-way tie for third among Illinois, Maryland and Michigan.
According to a survey released by the International Council of Shopping Centers, chain-store sales for the week ended August 23rd rose 2.3% from the year-earlier period. On a week-over-week basis, sales climbed 0.2%, their biggest gain this month.
General Motors (GM) has received interest from two separate investors from the Gulf Arab region to buy its Hummer brand. General Motors is preparing sales documents for its Hummer brand and has initial expressions of interest from potential buyers that it hopes to develop into formal sale talks.
Credit Suisse Group (CS) has acquired a majority stake in Asset Management Finance Corporation for $384 million of newly issued Credit Suisse stock. The Swiss bank said the deal for over 80 percent of AMF has cleared all regulatory approvals and will close Tuesday. It acquires the stake from National Bank Financial of Canada.
Metro-Goldwyn-Mayer Studios Inc. (MGM) said it is "not for sale" following a report that MGM's owners were looking to sell the movie company for $5.2 billion. The studio was taken private for nearly $5 billion in 2005 by Providence Equity Partners, TPG, Sony Corp. of America and Comcast Corp.
Scheduled U.S. Economic Reports (Wednesday)
Durable Goods Orders (July)
In Earnings News
Smithfield Foods (SFD) reported a loss in its fiscal first-quarter due in part to a $20.1 million write-down in the value of commodity contracts. The nation's largest hog producer and pork processor says it lost $12.6 million, or 9 cents per share. Wall Street analysts expected a loss of 4 cents per share on $2.87 billion in sales.
Rio Tinto Ltd. (RTP), the world's third-largest mining company, said that half-year profit more than doubled to a record on strong demand from China for iron ore and other metals. Profit for the six months through June 30 surged 112.5 percent to $6.91 billion from $3.25 billion the year before, largely due to higher commodity prices and production, particularly iron ore.
Corinthian Colleges (COCO), which provides for-profit secondary education, posted a narrower fiscal fourth-quarter loss as revenue and student enrollment rose. Corinthian said its loss for the quarter declined to $620,000, or a penny per share. Analysts expected fourth-quarter earnings of 9 cents per share.
Chicos FAS (CHS) earned $6.7 million or 4 cents per share for the quarter. Chico's earned $38.7 million, or 22 cents per share, in the year-ago quarter. Wall Street analysts expected a per-share profit of 3 cents and $405 million in sales.
American Eagle Outfitters Inc. (AEO) reported a 26 percent drop in second-quarter profits as teens cut back on spending amid a weak economy. The retailer said that the company earned $59.8 million, or 29 cents per share. Analysts, on average, expected 28 cents per share.
Big Lots (BIG) reported an 11 percent rise in quarterly profit that beat market estimates, as shoppers headed to its stores for low prices on furniture, food and paper products, and raised its earnings forecast for the current financial year. Big Lots said profit rose to $26.0 million, or 32 cents per share. Analysts on average had been expecting a profit of 27 cents a share.
Scheduled Earnings Reports (Wednesday)
Men’s Wearhouse, Gander Mountain, Charming Shoppes, Benihana, Dollar Tree, TiVo, Jo-Ann Stores, Talbots
Stocks in the News
Thornburg Mortgage (TMA) reported second-quarter earnings increased to $412.3 million or 84 cents a share.
Anadarko Petroleum (APC) said it plans to buy back up to $5 billion, or 18%, of its shares outstanding.
Delta Air Lines (DAL) borrowed the $1 billion available on a revolving-credit facility, which it says will give it flexibility as it closes its Northwest merger.
Aetna Inc (AET) affirmed its earnings outlook of $1.12 a share for the third quarter and $4 a share for the year.
FTD Group (FTD) reported fiscal fourth-quarter net income rose 17% on 3% higher revenue.
Coach Inc (COH) said it plans to buy back up to $1 billion of its shares by June 2010.
Wausau Paper Corp (WPP) said it will reduce capacity at its specialty-products mill in Jay, Maine, by year's end.
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