JDfn Daily Digest - July 31, 2008
The U.S. economy expanded less than expected in the second quarter as the burden from housing and rising unemployment thwarted the impact of federal tax rebate checks. Gross Domestic Product grew at a 1.9 percent annualized rate after expanding 0.9 percent in the first quarter. The report also showed a recession may have begun in the final three months of 2007.
The Labor Department reported that the number of applications for initial jobless benefits soared to 448,000, which is an increase of 44,000 from last week. That was far worse than the decline of 8,000 that economists were expecting. The costs of employing a U.S. worker held steady in the June quarter. Overall compensation costs rose 0.7%, matching the prior quarter's gain.
According to the Chicago Purchasing Manager’s Index, businesses in the Chicago region expanded in July. The Chicago business barometer rose to 50.8% from 49.6% in June. The new-orders index rose to 53.5% from 52%.
Bristol-Myers Squibb Co. (BMY) offered $4.5 billion in cash for its cancer drug partner ImClone Systems Inc. (IMCL). The offer of $60 per share marks a 30 percent premium to ImClone's closing price of $46.44 on Wednesday.
Marathon Oil Corp. (MRO) announced that it may split the company into two publicly traded companies. One would focus on Marathon's exploration and production, integrated gas and oil sands mining businesses. The other would center on the company's refining, marketing and transportation business.
Scheduled Economic Reports (Friday)
Non-Farm Payrolls, Unemployment Rate, ISM Manufacturing Index, Construction Spending, Motor Vehicle Sales
In Earnings News
Exxon Mobil (XOM) reported second-quarter earnings of $11.68 billion, the biggest quarterly profit ever by any U.S. corporation. The company said net income for the quarter came to $2.22 a share, up from $10.26 billion or $1.83 a share, a year ago.
Royal Dutch Shell Plc (RDS-B) reported a 33 percent jump in second-quarter profits. The company reported earnings of $11.6 billion as a result of high oil prices and the weak dollar.
Motorola (MOT) reported a second-quarter gain of $4 million, or breakeven per share, from a loss of $28 million, or a penny a share in the year-ago period. The latest period included charges of 2 cents a share. Analysts expected a loss of 4 cents a share.
Altria Group (MO) reported its second-quarter profit fell 58 percent, as results from last year included the company's now-separate international cigarette unit. The company says it made $930 million, or 45 cents per share compared with profit of $1.05 per share last year. Analysts expected 45 cents.
International Paper Co. (IP) said its quarterly profit increased nearly 20% in the latest reporting period. Earnings from continuing operations and before special items totaled 56 cents a share. Analysts expected, on average, earnings of 50 cents a share.
Aetna (AET) reported that its second-quarter profit rose 6.4 percent on membership growth and a hike in premium rates. The company earned $480.5 million, or 97 cents per share. Analysts expected profit of 93 cents per share.
CVS Caremark (CVS) said its second-quarter profit grew 7 percent due to improved sales at its retail drug stores. Analysts expected 60 cents per share.
Scheduled Earnings Reports (Friday)
Chevron, British Airways, Nissan Motors, Sun Microsystems, Hearst-Argyle Television, Total SA, Washington Post, Cigna
Stocks in the News
Murphy Oil (MUR) reported second-quarter net income rose to $627 million, or $3.27 a share.
Avon Products (AVP) traded higher after Deutsche Bank downgraded the cosmetics company to hold from buy, citing valuation.
Walt Disney Company (DIS) reported fiscal third-quarter profit of $1.28 billion, or 66 cents a share, up from $1.18 billion, or 57 cents, in the year-earlier period.
Allied Waste (AW) second-quarter profit increased to $111.4 million or 25 cents a share.
DTE Energy (DTE) reported second-quarter net income fell to $28 million or 17 cents a share.
Automatic Data Processing (ADP) second-quarter profit totaled $234 million or 45 cents a share.
Goodyear Tire & Rubber (GT) reported second-quarter net income rose 34% on 6.5% higher sales.
Visa Inc (V) said fiscal third-quarter net income came in at $422 million or 51 cents per class A share, up 41% from a year earlier.
Tyco International (TYC) reported third-quarter net income of $476 million, or 98 cents a share.
Unum Group (UNM) said second-quarter net income came in at $240.3 million, or 69 cents per common share, up 57% from a year earlier.
Las Vegas Sands Corp (LVS) reported a net loss of $8.8 million, or 2 cents a share.
The Labor Department reported that the number of applications for initial jobless benefits soared to 448,000, which is an increase of 44,000 from last week. That was far worse than the decline of 8,000 that economists were expecting. The costs of employing a U.S. worker held steady in the June quarter. Overall compensation costs rose 0.7%, matching the prior quarter's gain.
According to the Chicago Purchasing Manager’s Index, businesses in the Chicago region expanded in July. The Chicago business barometer rose to 50.8% from 49.6% in June. The new-orders index rose to 53.5% from 52%.
Bristol-Myers Squibb Co. (BMY) offered $4.5 billion in cash for its cancer drug partner ImClone Systems Inc. (IMCL). The offer of $60 per share marks a 30 percent premium to ImClone's closing price of $46.44 on Wednesday.
Marathon Oil Corp. (MRO) announced that it may split the company into two publicly traded companies. One would focus on Marathon's exploration and production, integrated gas and oil sands mining businesses. The other would center on the company's refining, marketing and transportation business.
Scheduled Economic Reports (Friday)
Non-Farm Payrolls, Unemployment Rate, ISM Manufacturing Index, Construction Spending, Motor Vehicle Sales
In Earnings News
Exxon Mobil (XOM) reported second-quarter earnings of $11.68 billion, the biggest quarterly profit ever by any U.S. corporation. The company said net income for the quarter came to $2.22 a share, up from $10.26 billion or $1.83 a share, a year ago.
Royal Dutch Shell Plc (RDS-B) reported a 33 percent jump in second-quarter profits. The company reported earnings of $11.6 billion as a result of high oil prices and the weak dollar.
Motorola (MOT) reported a second-quarter gain of $4 million, or breakeven per share, from a loss of $28 million, or a penny a share in the year-ago period. The latest period included charges of 2 cents a share. Analysts expected a loss of 4 cents a share.
Altria Group (MO) reported its second-quarter profit fell 58 percent, as results from last year included the company's now-separate international cigarette unit. The company says it made $930 million, or 45 cents per share compared with profit of $1.05 per share last year. Analysts expected 45 cents.
International Paper Co. (IP) said its quarterly profit increased nearly 20% in the latest reporting period. Earnings from continuing operations and before special items totaled 56 cents a share. Analysts expected, on average, earnings of 50 cents a share.
Aetna (AET) reported that its second-quarter profit rose 6.4 percent on membership growth and a hike in premium rates. The company earned $480.5 million, or 97 cents per share. Analysts expected profit of 93 cents per share.
CVS Caremark (CVS) said its second-quarter profit grew 7 percent due to improved sales at its retail drug stores. Analysts expected 60 cents per share.
Scheduled Earnings Reports (Friday)
Chevron, British Airways, Nissan Motors, Sun Microsystems, Hearst-Argyle Television, Total SA, Washington Post, Cigna
Stocks in the News
Murphy Oil (MUR) reported second-quarter net income rose to $627 million, or $3.27 a share.
Avon Products (AVP) traded higher after Deutsche Bank downgraded the cosmetics company to hold from buy, citing valuation.
Walt Disney Company (DIS) reported fiscal third-quarter profit of $1.28 billion, or 66 cents a share, up from $1.18 billion, or 57 cents, in the year-earlier period.
Allied Waste (AW) second-quarter profit increased to $111.4 million or 25 cents a share.
DTE Energy (DTE) reported second-quarter net income fell to $28 million or 17 cents a share.
Automatic Data Processing (ADP) second-quarter profit totaled $234 million or 45 cents a share.
Goodyear Tire & Rubber (GT) reported second-quarter net income rose 34% on 6.5% higher sales.
Visa Inc (V) said fiscal third-quarter net income came in at $422 million or 51 cents per class A share, up 41% from a year earlier.
Tyco International (TYC) reported third-quarter net income of $476 million, or 98 cents a share.
Unum Group (UNM) said second-quarter net income came in at $240.3 million, or 69 cents per common share, up 57% from a year earlier.
Las Vegas Sands Corp (LVS) reported a net loss of $8.8 million, or 2 cents a share.
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