JDfn Daily Digest - October 20, 2008
Fed Chairman Ben Bernanke told the House Budget Committee the country's economic weakness could last for a while and it was the right time for Congress to consider a new package. Earlier this year, most individuals and couples received tax rebate checks of $600-$1,200 through the $168 billion stimulus package enacted in February.
Treasury Secretary Henry Paulson said government purchases of stock in banks represent an investment that should eventually make money for the taxpayer. Paulson said the program's goal is to increase investors' confidence in banks while also boosting the confidence of the banks so they will "deploy, not hoard, their capital."
The economy's health improved for the first time in five months in September as supplier deliveries and new orders strengthened. The Conference Board’s Leading Economic Indicators rose 0.3 percent, a better reading than the 0.2 percent drop expected by Wall Street economists.
Consumers got another break at the gas pump, as prices dropped further below $3 a gallon and approached year-ago levels even as the near-certainty of an OPEC production cut pushed oil prices marginally higher.
CVS Caremark Corp. (CVS) said its buyout offer for Longs Drugs Stores Corp. (LDG) was successful, and it expects to close the deal by the end of October. CVS said about 27.7 million shares, or 76.5 percent of Longs stock, were voted in favor of its offer, which is worth $2.7 billion, or $71.50 per Longs share.
Antitrust officials at the U.S. Justice Department said Monday they won't block the sale of Smithfield Foods (SFD) beef unit to Brazil's JBS. The deal, when it closes, will give Smithfield $565 million in much needed cash to pay down debt and fund feed-grain purchases.
Circuit City Stores Inc. (CC) is reportedly looking to store closures to help save the struggling home-electronics retailer and get it through the holiday season intact. Circuit City is evaluating closing at least 150 of its stores and slashing thousands of jobs to free up cash as it tries to avoid a bankruptcy filing.
SanDisk (SNDK) said it's reached a non-binding memorandum of understanding with Toshiba to sell 30% of its manufacturing capacity in flash memory joint ventures. SanDisk expects to receive cash and reduce equipment lease obligations by approximately $1 billion through this transaction.
Scheduled U.S. Economic Reports (Tuesday)
Retail Chain Index (Week of October 17)
In Earnings News
Halliburton Company (HAL) posted a quarterly net loss, hurt by an acquisition-related charge and costs from the cash settlement of a convertible senior notes premium. The third-quarter net loss was $21 million, or 2 cents a share, compared with a year-earlier profit of $727 million, or 79 cents a share.
Hasbro Inc (HAS) said profit for the quarter fell nearly 15 percent to $138.2 million, or 89 cents per share, from $161.6 million, or 95 cents, a year ago. The results topped analysts' average estimates for profit of 86 cents per share on revenue of $1.27 billion.
Eaton Corp. (ETN) posted a 22 percent rise in its third-quarter profit, beating Wall Street expectations because of strong revenue growth helped by acquisitions. For the quarter, net income rose to $315 million, or $1.87 per share.
LM Ericsson AB (ERIC) reported net profit fell 28 percent in the third quarter on heavy restructuring charges. The announcement was better than expected and sent the company's shares up 16 percent. Earnings fell to 2.8 billion kronor ($378 million) from 4 billion kronor a year earlier.
Scheduled Earnings Reports (Tuesday)
Yahoo, Apple, Pfizer, Caterpillar, Schering Plough, UAL Corp, 3M, Boston Scientific, Prudential, Lexmark International, Raymond James, DuPont
Stocks in the News
General Motors Corp (GM) will contribute about $1.6 billion to fund a retiree health-care trust and to offer buyouts at an assembly plant it plans to close at the end of the year.
Basic Energy Services (BAS) said it expects third-quarter earnings to be in the range of 60 cents to 63 cents a share on revenue of around $278 million.
Pacific Sunwear of California (PSUN) received a $4.50-per-share cash and stock bid from Adrenalina.
Weatherford International Ltd (WFT) said third-quarter income rose to $370.6 million, or 53 cents a share, from $292.7 million, or 42 cents a share in the year-ago period.
Novartis (NVS) said its third-quarter profit dropped 69%, as expenses to buy a stake in Alcon and higher taxes offset growing sales of its cancer and heart drugs.
Treasury Secretary Henry Paulson said government purchases of stock in banks represent an investment that should eventually make money for the taxpayer. Paulson said the program's goal is to increase investors' confidence in banks while also boosting the confidence of the banks so they will "deploy, not hoard, their capital."
The economy's health improved for the first time in five months in September as supplier deliveries and new orders strengthened. The Conference Board’s Leading Economic Indicators rose 0.3 percent, a better reading than the 0.2 percent drop expected by Wall Street economists.
Consumers got another break at the gas pump, as prices dropped further below $3 a gallon and approached year-ago levels even as the near-certainty of an OPEC production cut pushed oil prices marginally higher.
CVS Caremark Corp. (CVS) said its buyout offer for Longs Drugs Stores Corp. (LDG) was successful, and it expects to close the deal by the end of October. CVS said about 27.7 million shares, or 76.5 percent of Longs stock, were voted in favor of its offer, which is worth $2.7 billion, or $71.50 per Longs share.
Antitrust officials at the U.S. Justice Department said Monday they won't block the sale of Smithfield Foods (SFD) beef unit to Brazil's JBS. The deal, when it closes, will give Smithfield $565 million in much needed cash to pay down debt and fund feed-grain purchases.
Circuit City Stores Inc. (CC) is reportedly looking to store closures to help save the struggling home-electronics retailer and get it through the holiday season intact. Circuit City is evaluating closing at least 150 of its stores and slashing thousands of jobs to free up cash as it tries to avoid a bankruptcy filing.
SanDisk (SNDK) said it's reached a non-binding memorandum of understanding with Toshiba to sell 30% of its manufacturing capacity in flash memory joint ventures. SanDisk expects to receive cash and reduce equipment lease obligations by approximately $1 billion through this transaction.
Scheduled U.S. Economic Reports (Tuesday)
Retail Chain Index (Week of October 17)
In Earnings News
Halliburton Company (HAL) posted a quarterly net loss, hurt by an acquisition-related charge and costs from the cash settlement of a convertible senior notes premium. The third-quarter net loss was $21 million, or 2 cents a share, compared with a year-earlier profit of $727 million, or 79 cents a share.
Hasbro Inc (HAS) said profit for the quarter fell nearly 15 percent to $138.2 million, or 89 cents per share, from $161.6 million, or 95 cents, a year ago. The results topped analysts' average estimates for profit of 86 cents per share on revenue of $1.27 billion.
Eaton Corp. (ETN) posted a 22 percent rise in its third-quarter profit, beating Wall Street expectations because of strong revenue growth helped by acquisitions. For the quarter, net income rose to $315 million, or $1.87 per share.
LM Ericsson AB (ERIC) reported net profit fell 28 percent in the third quarter on heavy restructuring charges. The announcement was better than expected and sent the company's shares up 16 percent. Earnings fell to 2.8 billion kronor ($378 million) from 4 billion kronor a year earlier.
Scheduled Earnings Reports (Tuesday)
Yahoo, Apple, Pfizer, Caterpillar, Schering Plough, UAL Corp, 3M, Boston Scientific, Prudential, Lexmark International, Raymond James, DuPont
Stocks in the News
General Motors Corp (GM) will contribute about $1.6 billion to fund a retiree health-care trust and to offer buyouts at an assembly plant it plans to close at the end of the year.
Basic Energy Services (BAS) said it expects third-quarter earnings to be in the range of 60 cents to 63 cents a share on revenue of around $278 million.
Pacific Sunwear of California (PSUN) received a $4.50-per-share cash and stock bid from Adrenalina.
Weatherford International Ltd (WFT) said third-quarter income rose to $370.6 million, or 53 cents a share, from $292.7 million, or 42 cents a share in the year-ago period.
Novartis (NVS) said its third-quarter profit dropped 69%, as expenses to buy a stake in Alcon and higher taxes offset growing sales of its cancer and heart drugs.
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