JDfn Daily Digest - October 23, 2008
Former Federal Reserve Chairman Alan Greenspan said financial companies and markets should be more heavily regulated to prevent a repeat of a "once-in-a-century credit tsunami." Greenspan, testifying at the House Oversight Committee, said he reluctantly supports requiring securities firms that structure new investments to maintain some ownership of those securities to put their own capital at risk. He also said he was "in a state of shocked disbelief" over the failure of banks and other financial companies to police each other, as he and other regulators had counted on.
Iran called on OPEC to cut oil production by a daily 2 million barrels to stop a steep slide in prices that has left crude at its cheapest since last summer. Other oil ministers of the Organization of Petroleum Exporting Countries also said output cuts had to be discussed at their meeting tomorrow.
The Labor Department reported that new claims for jobless benefits increased by more than expected last week as companies cut jobs due to the slow economy. The department said new applications for unemployment benefits rose 15,000 to a seasonally adjusted 478,000, slightly above analysts' estimates of 470,000.
Goldman Sachs (GS) will cut about 3,260 jobs. Goldman's work force, which was at record high levels at the end of the third quarter, will be pared back close to 2006 and 2007 levels. No additional cuts are planned.
General Motors (GM) says it plans to cut more jobs than it previously expected among its U.S. salaried and contract workforce. GM will also cut some benefits, including suspension of the stock-savings match and other reimbursement programs.
Chrysler announced that it will cut 1,825 jobs by eliminating one shift at a Jeep plant in Ohio as well as accelerating the closure of its sport utility vehicle factory in Delaware because of the slowing global economy and a shift toward smaller vehicles.
Freddie Mac said U.S. fixed-rate mortgages declined in the latest week. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 6.04%, down from last week's 6.46% and the year-ago 6.33%.
And according to the Federal Housing Finance Administration, U.S. home prices fell 0.6% in August and 5.9% in the past year. The August decline in the FHFA index was less than the 0.8% drop in July.
Listing service RealtyTrac said the number of homeowners trapped in the foreclosure crisis increased by more than 70 percent in the third quarter compared with the same period last year. Nationwide, nearly 766,000 homes received at least one foreclosure-related notice from July through September, up 71 percent from a year earlier.
Scheduled U.S. Economic Reports (Friday)
Existing Home Sales (Sep)
In Earnings News
Bristol Myers Squibb (BMY) reported its third-quarter profit tripled. The company reported that net income for the July-September quarter tripled to $2.58 billion, or $1.29 per share.
Dow Chemical (DOW) reported earnings of $428 million, or 46 cents per share, in the quarter, up from $403 million, or 42 cents per share, a year ago. Analysts expected earnings of 57 cents.
Eli Lilly and Co. (LLY) said it lost $465.6 million, or 43 cents per share. Last year it earned $926.3 million, or 85 cents per share, in the third quarter. Excluding the settlement, Lilly says it earned $1.04 per share. Analysts were expecting a profit of $1.02 per share.
Xerox (XRX) said it earned $258 million, or 29 cents per share, in the July-September quarter. That was a penny per share higher than the average estimate of analysts.
Altria Group Inc. (MO) said net income was $867 million, or 42 cents per share, compared with $2.63 billion, or $1.24 per share, a year earlier. Analysts surveyed expected earnings of 44 cents per share.
US Airways (LCC) said it lost $8.45 per share, compared with a profit of $177 million, or $1.87 per share, in the same period last year. Analysts expected a loss of $2.54 per share.
Raytheon (RTN), which makes missiles and other defense electronics, said it earned $427 million or $1.01 per share, compared with $299 million, or 68 cents per share, a year earlier. Analysts expected 96 cents.
Coca Cola Enterprises’ (CCE) quarterly profit fell to $214 million, or 44 cents per share, from $268 million, or 55 cents per share, in the same quarter last year. Analysts, on average, predicted a profit of 46 cents per share.
UPS (UPS) said it earned $970 million, or 96 cents a share, for the quarter, a 9.9 percent decline from profit of $1.08 billion, or $1.02 a share, a year ago. Analysts expected earnings of 89 cents a share on revenue of $13 billion.
JetBlue Airways (JBLU) said it lost $4 million, or 2 cents per share, compared with a profit of $23 million, or 12 cents per share, in the year-ago period. Analysts expected a loss of 4 cents per share.
SunTrust's (STI) earnings slipped to $307.3 million, or 88 cents per share, from $412.6 million, or $1.18 per share, during the third quarter last year. Analysts forecast earnings of 60 cents per share.
Scheduled Earnings Reports (Friday)
Fortune Brands, Exelon Corp, Gannett, Overstock.com, Johnson Outdoors
Stocks in the News
TD Ameritrade (AMTD) fiscal fourth quarter net income fell 14%, to $172 million, or 29 cents a share, from $200.4 million, or 33 cents, in the year ago period.
R.H. Donnelley Corp (RHD) third-quarter profit totaled $26.1 million, or 38 cents a share, from $18.1 million, or 25 cents a share, in the year-ago period.
Seagate Technology (STX) reported fiscal first-quarter profit of $60 million, or 12 cents a share, against $355 million, or 64 cents a share, in the year-earlier period.
Union Pacific (UNP) third-quarter earnings increased to $703 million, or $1.38 a share, from $532 million, or $1 a share, in the year-ago period.
Amerigroup Corp (AGP) third-quarter net income was $39.4 million, or 74 cents a share, compared with $31.2 million, or 58 cents a share, in the year-earlier period.
Teck Cominco (TCK) third-quarter net profit dropped to C$424 million ($337 million) from C$490 million, hurt by declining copper and zinc prices.
Alliance Data Systems (ADS) third-quarter profit fell to $85 million from $85.7 million in the year-earlier period.
Citrix Systems (CTXS) fiscal third-quarter net income fell to $49.1 million or 26 cents a share, from $60.7 million, or 33 cents, in the year-earlier period.
Iran called on OPEC to cut oil production by a daily 2 million barrels to stop a steep slide in prices that has left crude at its cheapest since last summer. Other oil ministers of the Organization of Petroleum Exporting Countries also said output cuts had to be discussed at their meeting tomorrow.
The Labor Department reported that new claims for jobless benefits increased by more than expected last week as companies cut jobs due to the slow economy. The department said new applications for unemployment benefits rose 15,000 to a seasonally adjusted 478,000, slightly above analysts' estimates of 470,000.
Goldman Sachs (GS) will cut about 3,260 jobs. Goldman's work force, which was at record high levels at the end of the third quarter, will be pared back close to 2006 and 2007 levels. No additional cuts are planned.
General Motors (GM) says it plans to cut more jobs than it previously expected among its U.S. salaried and contract workforce. GM will also cut some benefits, including suspension of the stock-savings match and other reimbursement programs.
Chrysler announced that it will cut 1,825 jobs by eliminating one shift at a Jeep plant in Ohio as well as accelerating the closure of its sport utility vehicle factory in Delaware because of the slowing global economy and a shift toward smaller vehicles.
Freddie Mac said U.S. fixed-rate mortgages declined in the latest week. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 6.04%, down from last week's 6.46% and the year-ago 6.33%.
And according to the Federal Housing Finance Administration, U.S. home prices fell 0.6% in August and 5.9% in the past year. The August decline in the FHFA index was less than the 0.8% drop in July.
Listing service RealtyTrac said the number of homeowners trapped in the foreclosure crisis increased by more than 70 percent in the third quarter compared with the same period last year. Nationwide, nearly 766,000 homes received at least one foreclosure-related notice from July through September, up 71 percent from a year earlier.
Scheduled U.S. Economic Reports (Friday)
Existing Home Sales (Sep)
In Earnings News
Bristol Myers Squibb (BMY) reported its third-quarter profit tripled. The company reported that net income for the July-September quarter tripled to $2.58 billion, or $1.29 per share.
Dow Chemical (DOW) reported earnings of $428 million, or 46 cents per share, in the quarter, up from $403 million, or 42 cents per share, a year ago. Analysts expected earnings of 57 cents.
Eli Lilly and Co. (LLY) said it lost $465.6 million, or 43 cents per share. Last year it earned $926.3 million, or 85 cents per share, in the third quarter. Excluding the settlement, Lilly says it earned $1.04 per share. Analysts were expecting a profit of $1.02 per share.
Xerox (XRX) said it earned $258 million, or 29 cents per share, in the July-September quarter. That was a penny per share higher than the average estimate of analysts.
Altria Group Inc. (MO) said net income was $867 million, or 42 cents per share, compared with $2.63 billion, or $1.24 per share, a year earlier. Analysts surveyed expected earnings of 44 cents per share.
US Airways (LCC) said it lost $8.45 per share, compared with a profit of $177 million, or $1.87 per share, in the same period last year. Analysts expected a loss of $2.54 per share.
Raytheon (RTN), which makes missiles and other defense electronics, said it earned $427 million or $1.01 per share, compared with $299 million, or 68 cents per share, a year earlier. Analysts expected 96 cents.
Coca Cola Enterprises’ (CCE) quarterly profit fell to $214 million, or 44 cents per share, from $268 million, or 55 cents per share, in the same quarter last year. Analysts, on average, predicted a profit of 46 cents per share.
UPS (UPS) said it earned $970 million, or 96 cents a share, for the quarter, a 9.9 percent decline from profit of $1.08 billion, or $1.02 a share, a year ago. Analysts expected earnings of 89 cents a share on revenue of $13 billion.
JetBlue Airways (JBLU) said it lost $4 million, or 2 cents per share, compared with a profit of $23 million, or 12 cents per share, in the year-ago period. Analysts expected a loss of 4 cents per share.
SunTrust's (STI) earnings slipped to $307.3 million, or 88 cents per share, from $412.6 million, or $1.18 per share, during the third quarter last year. Analysts forecast earnings of 60 cents per share.
Scheduled Earnings Reports (Friday)
Fortune Brands, Exelon Corp, Gannett, Overstock.com, Johnson Outdoors
Stocks in the News
TD Ameritrade (AMTD) fiscal fourth quarter net income fell 14%, to $172 million, or 29 cents a share, from $200.4 million, or 33 cents, in the year ago period.
R.H. Donnelley Corp (RHD) third-quarter profit totaled $26.1 million, or 38 cents a share, from $18.1 million, or 25 cents a share, in the year-ago period.
Seagate Technology (STX) reported fiscal first-quarter profit of $60 million, or 12 cents a share, against $355 million, or 64 cents a share, in the year-earlier period.
Union Pacific (UNP) third-quarter earnings increased to $703 million, or $1.38 a share, from $532 million, or $1 a share, in the year-ago period.
Amerigroup Corp (AGP) third-quarter net income was $39.4 million, or 74 cents a share, compared with $31.2 million, or 58 cents a share, in the year-earlier period.
Teck Cominco (TCK) third-quarter net profit dropped to C$424 million ($337 million) from C$490 million, hurt by declining copper and zinc prices.
Alliance Data Systems (ADS) third-quarter profit fell to $85 million from $85.7 million in the year-earlier period.
Citrix Systems (CTXS) fiscal third-quarter net income fell to $49.1 million or 26 cents a share, from $60.7 million, or 33 cents, in the year-earlier period.
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