James Dicks Daily Digest - February 11, 2009
In The News
Facing a disgusted public and Congress, bank CEOs agreed with demands for greater accountability in the first testimony on how they're spending money from the taxpayer-funded $700 billion bailout. The eight top bankers appearing before a Congressional panel were contrite and conceded they have work to do to win over a bitter public and an exasperated Congress.
House and Senate negotiators agreed to pare economic stimulus legislation below $800 billion and reached for a final deal with the White House on a bill designed to create millions of jobs in a nation reeling from recession.
Treasury Secretary Timothy Geithner shrugged off the strong negative reaction to his bank rescue plan, saying that if he gave Wall Street what it really wanted, then taxpayers would be left holding the bag. Analysts said investors were looking for details of how the toxic assets on bank balance sheets would be sold.
A federal regulator has urged more than 800 thrift institutions to suspend all foreclosures while the Obama administration develops plans to keep borrowers in their homes. John Reich, director of the Office of Thrift Supervision, said that by doing so, thrifts "would be supporting the national imperative to combat the economic crisis." But cooperation with the request is voluntary.
The Commerce Department said that the U.S. trade deficit in December fell 4 percent to $39.9 billion, from $41.6 billion in November. It was slightly higher than the $36 billion deficit economists expected. For the year, the deficit shrank by 3.3 percent to $677.1 billion. It was the second straight annual decline after five straight years of record deficits.
The Treasury Department reported a trade deficit of $84.0 billion in January. This compares with a surplus of $17.84 billion in the same month one year ago. Experts are forecasting a deficit above $1.6 trillion in the fiscal year ending Sept. 30th.
Caterpillar Inc. (CAT) is offering voluntary early retirement packages to about 2,000 production workers, following a string of layoffs at the heavy equipment maker, as it struggles with lower demand amid the global economic downturn.
Sirius XM Radio Inc (SIRI) fell almost 30 percent on a report about the satellite radio provider's ability to meet its looming debt payments and the possibility that it might seek bankruptcy protection. Bankruptcy could put pressure on EchoStar Corp. (DISH) which reportedly owns a substantial amount of Sirius XM debt.
FedEx Express, a unit of shipper FedEx Corp. (FDX), said it is expanding its services in Mexico for both domestic and international business. FedEx is expanding its air cargo terminal and warehouse facility in Guadalajara, Jalisco, which is its hub of operations for shipments in Mexico.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims, Retail Sales (Jan), Inventories (Dec)
In Earnings News
Research In Motion Ltd. (RIMM) expects to report a higher-than-forecast number of new subscribers for the fourth fiscal quarter, but earnings, it said, will come in at the low end of expectations for the period. The news frightened investors, who have run up RIM's shares by more than 40% over the past six weeks.
Toll Brothers Inc. (TOL) reported its preliminary revenue fell 51 percent in the first quarter, failing to meet Wall Street expectations. Toll Brothers' homebuilding revenue was about $409.3 million, down from $842.3 million, a year earlier. Analysts expected revenue of $442.6 million.
Coca Cola Enterprises (CCE) reported a loss of $1.45 billion, or a loss of $2.99 per share, compared with profit of $158 million, or 32 cents per share, last year. Analysts predicted 19 cents per share.
Dean Foods (DF) announced its fourth-quarter profit more than doubled. Net income jumped to $66.4 million, or 42 cents per share, while analysts expected 39 cents.
Credit Suisse Group (CS) reported a fourth-quarter net loss of 6 billion Swiss francs ($5.61 billion), much worse than markets were expecting, as both asset management and investment banking lost money amid the financial turmoil.
Reynolds American (RAI) fourth-quarter income slipped to $258 million, or 89 cents per share, from $297 million, or $1.01 per share, in the same quarter a year earlier. Analysts had forecast profit of $1.16 per share.
CB Richard Ellis (CBG) said net income fell 95 percent to $6.5 million, or 3 cents per share, from $122.4 million, or 54 cents per share, in 2007's fourth quarter. Analysts expected net income of 27 cents per share.
Jones Apparel (JNY) reported a loss of $822.9 million, or $10.08 per share, compared with a loss of $89.8 million, or $1.06 per share, a year earlier. Analysts predicted a 5 cent per share.
Ingersoll-Rand Co. Ltd. (IR) said it expects to break even in the first quarter of this year due "to recent sharp declines in the world economy." Analysts expected earnings of 27 cents per share.
Level 3 Communications Inc. (LVLT) posted fourth-quarter results above Wall Street estimates as it reduced costs. The company said it earned $44 million in the quarter.
Scheduled Earnings Reports (Thursday)
Borg Warner, Coca Cola Co., McAfee, Revlon, Total SA, California Pizza Kitchen, Waste Management, BJ’s Restaurants, Marriott International, The Cheesecake Factory
Stocks in the News
Marsh & McLennan (MMC) reported net income of $80 million, or 15 cents a share.
XL Capital Ltd (XL) reported a fourth-quarter net loss of $1.43 billion, or $4.36 a share, late Tuesday. That compared to a net loss of $1.22 billion, or $6.88 a share, a year earlier.
Nike Inc (NKE) said a global restructuring may result in the loss of 1,400 jobs, or 4% of its global workforce.
DaVita Inc (DVA) said fourth-quarter net income rose 15% on 7.8% higher revenue.
Nvidia Corp (NVDA) reported a fiscal fourth-quarter loss of $147.7 million, or 27 cents a share.
Genzyme Corp (GENZ) said that its fourth-quarter net income increased to $86.7M, or 31 cents a share, from $78.9M, or 29 cents a share, in the year-ago period.
Facing a disgusted public and Congress, bank CEOs agreed with demands for greater accountability in the first testimony on how they're spending money from the taxpayer-funded $700 billion bailout. The eight top bankers appearing before a Congressional panel were contrite and conceded they have work to do to win over a bitter public and an exasperated Congress.
House and Senate negotiators agreed to pare economic stimulus legislation below $800 billion and reached for a final deal with the White House on a bill designed to create millions of jobs in a nation reeling from recession.
Treasury Secretary Timothy Geithner shrugged off the strong negative reaction to his bank rescue plan, saying that if he gave Wall Street what it really wanted, then taxpayers would be left holding the bag. Analysts said investors were looking for details of how the toxic assets on bank balance sheets would be sold.
A federal regulator has urged more than 800 thrift institutions to suspend all foreclosures while the Obama administration develops plans to keep borrowers in their homes. John Reich, director of the Office of Thrift Supervision, said that by doing so, thrifts "would be supporting the national imperative to combat the economic crisis." But cooperation with the request is voluntary.
The Commerce Department said that the U.S. trade deficit in December fell 4 percent to $39.9 billion, from $41.6 billion in November. It was slightly higher than the $36 billion deficit economists expected. For the year, the deficit shrank by 3.3 percent to $677.1 billion. It was the second straight annual decline after five straight years of record deficits.
The Treasury Department reported a trade deficit of $84.0 billion in January. This compares with a surplus of $17.84 billion in the same month one year ago. Experts are forecasting a deficit above $1.6 trillion in the fiscal year ending Sept. 30th.
Caterpillar Inc. (CAT) is offering voluntary early retirement packages to about 2,000 production workers, following a string of layoffs at the heavy equipment maker, as it struggles with lower demand amid the global economic downturn.
Sirius XM Radio Inc (SIRI) fell almost 30 percent on a report about the satellite radio provider's ability to meet its looming debt payments and the possibility that it might seek bankruptcy protection. Bankruptcy could put pressure on EchoStar Corp. (DISH) which reportedly owns a substantial amount of Sirius XM debt.
FedEx Express, a unit of shipper FedEx Corp. (FDX), said it is expanding its services in Mexico for both domestic and international business. FedEx is expanding its air cargo terminal and warehouse facility in Guadalajara, Jalisco, which is its hub of operations for shipments in Mexico.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims, Retail Sales (Jan), Inventories (Dec)
In Earnings News
Research In Motion Ltd. (RIMM) expects to report a higher-than-forecast number of new subscribers for the fourth fiscal quarter, but earnings, it said, will come in at the low end of expectations for the period. The news frightened investors, who have run up RIM's shares by more than 40% over the past six weeks.
Toll Brothers Inc. (TOL) reported its preliminary revenue fell 51 percent in the first quarter, failing to meet Wall Street expectations. Toll Brothers' homebuilding revenue was about $409.3 million, down from $842.3 million, a year earlier. Analysts expected revenue of $442.6 million.
Coca Cola Enterprises (CCE) reported a loss of $1.45 billion, or a loss of $2.99 per share, compared with profit of $158 million, or 32 cents per share, last year. Analysts predicted 19 cents per share.
Dean Foods (DF) announced its fourth-quarter profit more than doubled. Net income jumped to $66.4 million, or 42 cents per share, while analysts expected 39 cents.
Credit Suisse Group (CS) reported a fourth-quarter net loss of 6 billion Swiss francs ($5.61 billion), much worse than markets were expecting, as both asset management and investment banking lost money amid the financial turmoil.
Reynolds American (RAI) fourth-quarter income slipped to $258 million, or 89 cents per share, from $297 million, or $1.01 per share, in the same quarter a year earlier. Analysts had forecast profit of $1.16 per share.
CB Richard Ellis (CBG) said net income fell 95 percent to $6.5 million, or 3 cents per share, from $122.4 million, or 54 cents per share, in 2007's fourth quarter. Analysts expected net income of 27 cents per share.
Jones Apparel (JNY) reported a loss of $822.9 million, or $10.08 per share, compared with a loss of $89.8 million, or $1.06 per share, a year earlier. Analysts predicted a 5 cent per share.
Ingersoll-Rand Co. Ltd. (IR) said it expects to break even in the first quarter of this year due "to recent sharp declines in the world economy." Analysts expected earnings of 27 cents per share.
Level 3 Communications Inc. (LVLT) posted fourth-quarter results above Wall Street estimates as it reduced costs. The company said it earned $44 million in the quarter.
Scheduled Earnings Reports (Thursday)
Borg Warner, Coca Cola Co., McAfee, Revlon, Total SA, California Pizza Kitchen, Waste Management, BJ’s Restaurants, Marriott International, The Cheesecake Factory
Stocks in the News
Marsh & McLennan (MMC) reported net income of $80 million, or 15 cents a share.
XL Capital Ltd (XL) reported a fourth-quarter net loss of $1.43 billion, or $4.36 a share, late Tuesday. That compared to a net loss of $1.22 billion, or $6.88 a share, a year earlier.
Nike Inc (NKE) said a global restructuring may result in the loss of 1,400 jobs, or 4% of its global workforce.
DaVita Inc (DVA) said fourth-quarter net income rose 15% on 7.8% higher revenue.
Nvidia Corp (NVDA) reported a fiscal fourth-quarter loss of $147.7 million, or 27 cents a share.
Genzyme Corp (GENZ) said that its fourth-quarter net income increased to $86.7M, or 31 cents a share, from $78.9M, or 29 cents a share, in the year-ago period.
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