James Dicks Daily Digest - January 29, 2009
The Commerce Department said that new orders for durable goods dropped by 2.6 percent last month, an even bigger decline than the 2 percent decline that economists expected. Orders fell 5.7 percent for the year, the second biggest drop on government records, exceeded only by a 10.7 percent plunge in 2001.
The number of new claims for state unemployment benefits increased, up 3,000 to a seasonally adjusted 588,000 in the week ended Jan. 24th. This put the number just 1,000 below the 26-year high for initial claims set a month ago.
The Commerce Department estimated that U.S. new home sales fell 14.7% in December to the lowest level on record. The decline in new-home sales to a seasonally adjusted annual rate of 331,000 was far below the 390,000 pace expected by economists. New-home sales in November were revised to a 388,000 level compared with the previous estimate of 407,000.
Freddie Mac said that U.S. fixed-rate mortgages held steady in the latest week. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 5.10% in the week ending Thursday, down from last week's 5.12% and the year-ago 5.68%.
President Obama's economic stimulus legislation is headed for the Senate after a surprisingly partisan vote in the House in which Republicans united in opposition and 11 mostly conservative Democrats defected. The $819 billion measure has attracted criticism from Republicans and, privately, from some Democrats for spending billions of dollars on Democratic projects despite questions as to whether they would really put people to work.
Eastman Kodak (EK) and truck maker Oshkosh (OSK) announced thousands of new job cuts, on top of their previously announced reductions. Kodak said it will cut 2,000 to 3,000 more jobs in 2009, bringing the total number of positions it will eliminate this year to 3,500 to 4,500. Oshkosh announced 1,050 new job cuts, in addition to reductions announced last year.
OPEC’s secretary general said at the World Economic Forum annual meeting in Davos, Switzerland said that the oil cartel is ready to make further cuts in oil production in coming months if prices and global demand don't stabilize.
Bank of America (BAC) plans to defer bonuses to some investment-banking staff this year. Bank of America employees, who normally would receive 2008 bonuses in February, will be paid the first third of the bonus in February 2010, with the remaining thirds paid in 2011 and then 2012.
Starbucks (SBUX), hit hard by the weak economy, plans to close 300 more coffee shops, further slow expansion, and cut more jobs. Its profit dropped 69% in the latest quarter, missing analysts' expectations. Starbucks now plans to close a total of 977 stores, including previously announced sites in Australia. The next round of closures will consist of 200 U.S. stores and another 100 overseas.
The U.S. Treasury agreed to commit as much as $60 billion to shore up the market for student loans and help reduce the illiquid assets clogging banks’ balance sheets. The department will use its Federal Financing Bank to provide a backstop for an initiative put together by Citigroup Inc. (C) and Morgan Stanley (MS). The so-called conduit will purchase existing and new student loans from banks, and issue asset-backed commercial paper to finance itself.
Scheduled U.S. Economic Reports (Friday)
Gross Domestic Product (4Q), Employment Cost Index (4Q), Chicago PMI (Jan), Consumer Sentiment (Jan)
In Earnings News
Ford Motor Co. (F) said it lost $5.9 billion in the fourth quarter. The company said it lost $2.46 per share, compared with a loss of $2.8 billion, or $1.13 per share, for the year-ago period. Analysts expected a fourth-quarter loss of $1.30 per share.
Royal Dutch Shell (RDS) reported a big drop in fourth-quarter net profits and missed analysts' forecasts, but the oil major eased investor fears about cash flows by raising its dividend while lifting planned investments. The Company said fourth-quarter net profit fell 28 percent to $4.79 billon.
Altria Group Inc. (MO) announced its fourth-quarter profit fell 69 percent. The company reported net income of $679 million, or 33 cents per share, in the quarter ending Dec. 31st. Profit excluding one-time charges was 37 cents, meeting a consensus estimate of analysts.
Sony (SNE) said its net profit fell 95 percent in the October-December quarter, as the holiday shopping season provided no respite for the struggling electronics giant and tepid sales of TVs, digital cameras and cell phones hit its bottom line.
Royal Caribbean Cruises Ltd. (RCL) said that fourth-quarter earnings tumbled 98 percent, missing Wall Street's expectations. For the quarter ended Dec. 31st, net income fell to $1.4 million, or 1 cent per share, from $70.8 million, or 33 cents per share, a year ago. Analysts forecast earnings of 7 cents per share on revenue of $1.46 billion.
3M Co.'s (MMM) fourth-quarter profit dropped 37 percent as the global economic slowdown lowered sales. The company said net income fell to $536 million, or 77 cents per share. Analysts expected 93 cents per share.
Colgate-Palmolive Co. (CL) says fourth-quarter profit increased nearly 20 percent. For the fourth-quarter, profit rose to $497 million, or 94 cents per share, from $414.9 million, or 77 cents per share, a year earlier.
US Airways Group Inc. (LCC) reported a loss of $541 million in the fourth quarter. The airline said it lost $4.74 per share, compared with a loss of $79 million, or 87 cents per share, during the same period in 2007. Analysts expected a loss of $2.15 per share on revenue of $2.78 billion.
Fortune Brands Inc. (FO), which owns the Jim Beam, Titlist and Moen brands, said it lost $275.3 million in the fourth quarter. The company said it loss amounted to $1.84 per share. Analysts expected earnings of 85 cents a share on sales of $1.85 billion.
Scheduled Earnings Reports (Friday)
Honeywell International, Chevron Corp, Exxon Mobil, Honda Motor Ltd., Gannett Inc., Johnson Outdoors, Procter & Gamble, American Axle
Stocks in the News
Continental Airlines (CAL) reported its fourth-quarter net loss widened to $266 million, or $2.33 a share, against $32 million or 33 cents a share.
Symantec Corp (SYMC) reported a third-quarter loss of $6.81 billion, or $8.23 a share, vs. a profit of 15 cents a share, a year ago.
Dominion Resources Inc (D) fourth-quarter net income rose to $348 million, or 60 cents a share, from $299 million, or 52 cents a share in the year-ago period.
International Paper (IP) had a loss of $452 million, or $1.07 a share, compared with earnings of $327 million, or 78 cents a share in the year-ago period.
AutoNation Inc (AN) reported fourth-quarter net income rose 30% on 34% lower revenue.
Occidental Petroleum (OXY) reported that their fourth-quarter net income fell 70% to $443 million, or 55 cents a share.
Raytheon Co. (RTN) reported that fourth-quarter net income fell to $421 million or $1.02 a share, from $598 million, or $1.37 a share, in the year-ago period.
The number of new claims for state unemployment benefits increased, up 3,000 to a seasonally adjusted 588,000 in the week ended Jan. 24th. This put the number just 1,000 below the 26-year high for initial claims set a month ago.
The Commerce Department estimated that U.S. new home sales fell 14.7% in December to the lowest level on record. The decline in new-home sales to a seasonally adjusted annual rate of 331,000 was far below the 390,000 pace expected by economists. New-home sales in November were revised to a 388,000 level compared with the previous estimate of 407,000.
Freddie Mac said that U.S. fixed-rate mortgages held steady in the latest week. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 5.10% in the week ending Thursday, down from last week's 5.12% and the year-ago 5.68%.
President Obama's economic stimulus legislation is headed for the Senate after a surprisingly partisan vote in the House in which Republicans united in opposition and 11 mostly conservative Democrats defected. The $819 billion measure has attracted criticism from Republicans and, privately, from some Democrats for spending billions of dollars on Democratic projects despite questions as to whether they would really put people to work.
Eastman Kodak (EK) and truck maker Oshkosh (OSK) announced thousands of new job cuts, on top of their previously announced reductions. Kodak said it will cut 2,000 to 3,000 more jobs in 2009, bringing the total number of positions it will eliminate this year to 3,500 to 4,500. Oshkosh announced 1,050 new job cuts, in addition to reductions announced last year.
OPEC’s secretary general said at the World Economic Forum annual meeting in Davos, Switzerland said that the oil cartel is ready to make further cuts in oil production in coming months if prices and global demand don't stabilize.
Bank of America (BAC) plans to defer bonuses to some investment-banking staff this year. Bank of America employees, who normally would receive 2008 bonuses in February, will be paid the first third of the bonus in February 2010, with the remaining thirds paid in 2011 and then 2012.
Starbucks (SBUX), hit hard by the weak economy, plans to close 300 more coffee shops, further slow expansion, and cut more jobs. Its profit dropped 69% in the latest quarter, missing analysts' expectations. Starbucks now plans to close a total of 977 stores, including previously announced sites in Australia. The next round of closures will consist of 200 U.S. stores and another 100 overseas.
The U.S. Treasury agreed to commit as much as $60 billion to shore up the market for student loans and help reduce the illiquid assets clogging banks’ balance sheets. The department will use its Federal Financing Bank to provide a backstop for an initiative put together by Citigroup Inc. (C) and Morgan Stanley (MS). The so-called conduit will purchase existing and new student loans from banks, and issue asset-backed commercial paper to finance itself.
Scheduled U.S. Economic Reports (Friday)
Gross Domestic Product (4Q), Employment Cost Index (4Q), Chicago PMI (Jan), Consumer Sentiment (Jan)
In Earnings News
Ford Motor Co. (F) said it lost $5.9 billion in the fourth quarter. The company said it lost $2.46 per share, compared with a loss of $2.8 billion, or $1.13 per share, for the year-ago period. Analysts expected a fourth-quarter loss of $1.30 per share.
Royal Dutch Shell (RDS) reported a big drop in fourth-quarter net profits and missed analysts' forecasts, but the oil major eased investor fears about cash flows by raising its dividend while lifting planned investments. The Company said fourth-quarter net profit fell 28 percent to $4.79 billon.
Altria Group Inc. (MO) announced its fourth-quarter profit fell 69 percent. The company reported net income of $679 million, or 33 cents per share, in the quarter ending Dec. 31st. Profit excluding one-time charges was 37 cents, meeting a consensus estimate of analysts.
Sony (SNE) said its net profit fell 95 percent in the October-December quarter, as the holiday shopping season provided no respite for the struggling electronics giant and tepid sales of TVs, digital cameras and cell phones hit its bottom line.
Royal Caribbean Cruises Ltd. (RCL) said that fourth-quarter earnings tumbled 98 percent, missing Wall Street's expectations. For the quarter ended Dec. 31st, net income fell to $1.4 million, or 1 cent per share, from $70.8 million, or 33 cents per share, a year ago. Analysts forecast earnings of 7 cents per share on revenue of $1.46 billion.
3M Co.'s (MMM) fourth-quarter profit dropped 37 percent as the global economic slowdown lowered sales. The company said net income fell to $536 million, or 77 cents per share. Analysts expected 93 cents per share.
Colgate-Palmolive Co. (CL) says fourth-quarter profit increased nearly 20 percent. For the fourth-quarter, profit rose to $497 million, or 94 cents per share, from $414.9 million, or 77 cents per share, a year earlier.
US Airways Group Inc. (LCC) reported a loss of $541 million in the fourth quarter. The airline said it lost $4.74 per share, compared with a loss of $79 million, or 87 cents per share, during the same period in 2007. Analysts expected a loss of $2.15 per share on revenue of $2.78 billion.
Fortune Brands Inc. (FO), which owns the Jim Beam, Titlist and Moen brands, said it lost $275.3 million in the fourth quarter. The company said it loss amounted to $1.84 per share. Analysts expected earnings of 85 cents a share on sales of $1.85 billion.
Scheduled Earnings Reports (Friday)
Honeywell International, Chevron Corp, Exxon Mobil, Honda Motor Ltd., Gannett Inc., Johnson Outdoors, Procter & Gamble, American Axle
Stocks in the News
Continental Airlines (CAL) reported its fourth-quarter net loss widened to $266 million, or $2.33 a share, against $32 million or 33 cents a share.
Symantec Corp (SYMC) reported a third-quarter loss of $6.81 billion, or $8.23 a share, vs. a profit of 15 cents a share, a year ago.
Dominion Resources Inc (D) fourth-quarter net income rose to $348 million, or 60 cents a share, from $299 million, or 52 cents a share in the year-ago period.
International Paper (IP) had a loss of $452 million, or $1.07 a share, compared with earnings of $327 million, or 78 cents a share in the year-ago period.
AutoNation Inc (AN) reported fourth-quarter net income rose 30% on 34% lower revenue.
Occidental Petroleum (OXY) reported that their fourth-quarter net income fell 70% to $443 million, or 55 cents a share.
Raytheon Co. (RTN) reported that fourth-quarter net income fell to $421 million or $1.02 a share, from $598 million, or $1.37 a share, in the year-ago period.
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