JDfn Daily Digest - December 19, 2008
The White House is prepared to extend $13.4 billion in loans to troubled Detroit auto makers, with an additional $4 billion likely available in February. General Motors (GM) and Chrysler will be able to survive into the New Year under the plan. The Bush administration is convinced the U.S. economy could not withstand the failure of Detroit's Big Three. Treasury Secretary Paulsen said President Bush wants to avoid bankruptcy -- "if it can be avoided."
In an effort to boost the job market, President-elect Barack Obama has proposed a massive stimulus package of up to $775 billion over two years as part of an unprecedented spending plan designed to overhaul the nation's infrastructure, schools, broadband networks and energy consumption.
Standard & Poor's lowered the credit ratings and outlooks for 12 major U.S. and European banks, including Goldman Sachs (GS) and Bank of America (BAC), citing increasing industry risk and a deepening economic slowdown.
The Japanese government approved an emergency stimulus package worth 43 trillion yen ($489 billion) to improve a worsening employment situation and ease financing worries in the corporate sector.
The Bank of Japan cut its key interest rate to 0.1% from 0.3% and said it would begin buying corporate debt and expand its purchases of government debt.
Retailers are still trying to get us all in the holiday spirit. Many of the nation’s major retail outlets began marking down their holiday and winter merchandise and added additional promotions to previously already discounted products, with bargains of more than 80% off.
Bristol-Myers Squibb Co. (BMY) filed a $1 billion initial public offering for its Mead Johnson Nutrition unit, with plans to list the pediatric nutrition company on the New York Stock Exchange under the symbol MJN.
Panasonic (PC) has begun a 800 billion yen ($9 billion) takeover of Japanese rival Sanyo (SANYY), hoping that transforming into one of the world's biggest electronics companies will help it weather the toughest business conditions in a century.
Scheduled U.S. Economic Reports (Next Week)
Gross Domestic Product (3Q) Consumer Sentiment (Dec), Existing Home Sales (Nov), New Home Sales (Nov), Personal Income and Spending (Nov), Durable Goods Orders (Nov), Chicago Purchasing Managers Index (Dec)
In Earnings News
Oracle Corp.'s (ORCL) earnings are weakening for the first time in years. The company said it earned $1.3 billion, or 25 cents per share. Their earnings, excluding items, matched analysts’ forecasts.
Research In Motion Ltd. (RIMM) saw its earnings climb 7% in its fiscal third quarter. RIM posted earnings of $396.3 million, or 69 cents a share. The results were in line with analysts' forecasts.
CarMax Inc. (KMX) reported a third-quarter loss of $21.9 million, or 10 cents a share, from a profit of $29.8 million, or 14 cents a share in the year-ago period. Analysts expected earnings of 2 cents a share.
Toyota's (TM) mainstay vehicle operations are likely to post their first ever loss for the fiscal year through March 2009. Toyota has never reported a full fiscal year loss since it began disclosing operating profit in 1941.
Cintas Corp. (CTAS), a supplier of corporate uniforms, reported its second-quarter profit slipped 13 percent as job cuts by clients slowed demand for the company's products. Net income for the quarter ended Nov. 30th fell 13 percent to $71.8 million, or 47 cents per share. Analysts forecast earnings of 54 cents per share.
Weyerhaeuser (WY) warned that its fourth-quarter earnings will be lower than current expectations and slashed its quarterly dividend by more than half, citing the ongoing slump in housing and a weak pulp market.
Ruby Tuesday Inc. (RT) said it will record restructuring and impairment charges in its second and third fiscal quarters due to restaurant closures. The company said it will report about $30 million to $40 million of non-cash asset impairments in the second fiscal quarter and $10 million to $15 million in lease-related costs in the third fiscal quarter.
Scheduled Earnings Reports (Next Week)
Red Hat, Steelcase, Walgreen, BankUnited, Comverse Technology, Shuffle Master, Micron Technology
Stocks in the News
Delta Air Lines (DAL) has fully integrated about 25% to 30% of its workforce since acquiring Northwest last month, with seniority lists in place for pilots, aircraft technicians, dispatchers, and meteorologists.
Stryker Corp. (SYK) lowered its full-year guidance due to a sales shortfall from the "rapid contraction" in hospital budgets.
Accenture Ltd (ACN) said that fiscal first-quarter net income came in at $479.9 million, up 26% from a year earlier.
Palm Inc (PALM) reported a fiscal second-quarter net loss of $506.2 million, or $4.64 a share, compared with a loss of $9.63 million, or 9 cents a share.
Polaroid Corp. announced it was filing for Chapter 11 bankruptcy protection.
3Com Corp (COMS) reported a fiscal second-quarter profit of $12.9 million, or 3 cents a share.
Centene Corp (CNC) reaffirmed its 2008 financial guidance.
Nike Inc (NIKE) reported a fiscal second-quarter profit of $391M, or 80 cents a share.
In an effort to boost the job market, President-elect Barack Obama has proposed a massive stimulus package of up to $775 billion over two years as part of an unprecedented spending plan designed to overhaul the nation's infrastructure, schools, broadband networks and energy consumption.
Standard & Poor's lowered the credit ratings and outlooks for 12 major U.S. and European banks, including Goldman Sachs (GS) and Bank of America (BAC), citing increasing industry risk and a deepening economic slowdown.
The Japanese government approved an emergency stimulus package worth 43 trillion yen ($489 billion) to improve a worsening employment situation and ease financing worries in the corporate sector.
The Bank of Japan cut its key interest rate to 0.1% from 0.3% and said it would begin buying corporate debt and expand its purchases of government debt.
Retailers are still trying to get us all in the holiday spirit. Many of the nation’s major retail outlets began marking down their holiday and winter merchandise and added additional promotions to previously already discounted products, with bargains of more than 80% off.
Bristol-Myers Squibb Co. (BMY) filed a $1 billion initial public offering for its Mead Johnson Nutrition unit, with plans to list the pediatric nutrition company on the New York Stock Exchange under the symbol MJN.
Panasonic (PC) has begun a 800 billion yen ($9 billion) takeover of Japanese rival Sanyo (SANYY), hoping that transforming into one of the world's biggest electronics companies will help it weather the toughest business conditions in a century.
Scheduled U.S. Economic Reports (Next Week)
Gross Domestic Product (3Q) Consumer Sentiment (Dec), Existing Home Sales (Nov), New Home Sales (Nov), Personal Income and Spending (Nov), Durable Goods Orders (Nov), Chicago Purchasing Managers Index (Dec)
In Earnings News
Oracle Corp.'s (ORCL) earnings are weakening for the first time in years. The company said it earned $1.3 billion, or 25 cents per share. Their earnings, excluding items, matched analysts’ forecasts.
Research In Motion Ltd. (RIMM) saw its earnings climb 7% in its fiscal third quarter. RIM posted earnings of $396.3 million, or 69 cents a share. The results were in line with analysts' forecasts.
CarMax Inc. (KMX) reported a third-quarter loss of $21.9 million, or 10 cents a share, from a profit of $29.8 million, or 14 cents a share in the year-ago period. Analysts expected earnings of 2 cents a share.
Toyota's (TM) mainstay vehicle operations are likely to post their first ever loss for the fiscal year through March 2009. Toyota has never reported a full fiscal year loss since it began disclosing operating profit in 1941.
Cintas Corp. (CTAS), a supplier of corporate uniforms, reported its second-quarter profit slipped 13 percent as job cuts by clients slowed demand for the company's products. Net income for the quarter ended Nov. 30th fell 13 percent to $71.8 million, or 47 cents per share. Analysts forecast earnings of 54 cents per share.
Weyerhaeuser (WY) warned that its fourth-quarter earnings will be lower than current expectations and slashed its quarterly dividend by more than half, citing the ongoing slump in housing and a weak pulp market.
Ruby Tuesday Inc. (RT) said it will record restructuring and impairment charges in its second and third fiscal quarters due to restaurant closures. The company said it will report about $30 million to $40 million of non-cash asset impairments in the second fiscal quarter and $10 million to $15 million in lease-related costs in the third fiscal quarter.
Scheduled Earnings Reports (Next Week)
Red Hat, Steelcase, Walgreen, BankUnited, Comverse Technology, Shuffle Master, Micron Technology
Stocks in the News
Delta Air Lines (DAL) has fully integrated about 25% to 30% of its workforce since acquiring Northwest last month, with seniority lists in place for pilots, aircraft technicians, dispatchers, and meteorologists.
Stryker Corp. (SYK) lowered its full-year guidance due to a sales shortfall from the "rapid contraction" in hospital budgets.
Accenture Ltd (ACN) said that fiscal first-quarter net income came in at $479.9 million, up 26% from a year earlier.
Palm Inc (PALM) reported a fiscal second-quarter net loss of $506.2 million, or $4.64 a share, compared with a loss of $9.63 million, or 9 cents a share.
Polaroid Corp. announced it was filing for Chapter 11 bankruptcy protection.
3Com Corp (COMS) reported a fiscal second-quarter profit of $12.9 million, or 3 cents a share.
Centene Corp (CNC) reaffirmed its 2008 financial guidance.
Nike Inc (NIKE) reported a fiscal second-quarter profit of $391M, or 80 cents a share.
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