JDfn Daily Digest - November 11, 2008
General Motors Corp. (GM), burning cash as U.S. sales drop, is being pushed closer to bankruptcy as it waits to learn whether the auto industry will win a new round of government loans. Analysts believe that only federal aid can prevent a collapse of the biggest U.S. automaker. Meantime, aides to President-elect Obama, say he spoke with President Bush yesterday about the urgency for aid to U.S. automakers.
Citigroup Inc. (C) released details of a plan that it said will help mortgage borrowers remain in their homes. The company said that under the Citi Homeowner Assistance program, it would preemptively contact 500,000 mortgage holders -- involving $20 billion of mortgage balances -- to try to ensure that they can pay their loans. It said it is focusing on borrowers who live in areas that are likely to face "extreme economic distress."
Citi also extended its moratorium on foreclosures, saying it won't begin or complete a foreclosure sale on a home on which it owns the mortgage if the borrower wants to stay in the home, which is his or her principal residence. Citi said it will also need to be sure the borrower is working in good faith with the bank and has enough income for affordable mortgage payments.
The Federal Reserve granted American Express’ (AXP) request to become a commercial bank, opening the door for the credit card giant to accept deposits and permanently access financing from the Fed. The approval represents the latest reshaping of the financial services industry, which is undergoing its worst credit crisis in decades.
According to the International Council of Shopping Centers and Goldman Sachs, chain-store sales for the week ended Nov. 8th rose 0.4% from the year-earlier period, the weakest sales growth since April 5th. On a week-over-week basis, sales dropped 1%.
Altria Group (MO), owner of the nation's biggest cigarette maker, confirmed that it has started to cut jobs to alleviate the risk from the widespread economic turmoil. A company spokesman declined to say how many cuts would be made.
Boeing (BA) engineers and technical workers said they have reached several tentative agreements with management over non-economic issues during the most recent round of contract talks. Union representatives said the latest round of negotiations will continue through at least Wednesday, with the focus now on wage increases, medical benefits and retirement issues.
Scheduled U.S. Economic Reports (Wednesday)
None Scheduled
In Earnings News
Toll Brothers Inc. (TOL) said its home building revenue dropped 41 percent in its fiscal fourth quarter. The company said preliminary home-building revenue declined to $691 million in the three months ended Oct. 31st from $1.17 billion, while backlog dropped 54 percent to $1.33 billion from $2.85 billion.
TJX (TJX), which operates the T.J. Maxx and Marshalls stores, says third-quarter profit slipped 5 percent. Earnings per share remained flat at 54 cents per share, while earnings from continuing operations rose to 58 cents per share from 54 cents a year ago. Analysts expected earnings of 55 cents per share.
Fossil Inc (FOSL) posted 20 percent growth in third-quarter profit, helped by overseas sales and a weak dollar. Profit rose to $36.5 million, or 54 cents per share. Analysts expected profit of 49 cents per share.
Thornburg Mortgage Inc. (TMA) reported a third-quarter profit from a year-earlier loss, boosted by a decrease in the value of some liabilities. For the quarter, the company reported net income of $140 million, or $1.23 per share. Analysts, on average, forecast earnings of 6 cents per share.
Sirius XM Radio Inc. (SIRI) affirmed its new 2008 and 2009 revenue guidance, which was issued last week to reflect a sharp slowdown in auto sales. Sirius XM was created by the combination of satellite-radio companies Sirius and XM in July. The company continues to expect revenue of $2.7 billion in 2009 and $3 billion in 2010.
Tyco International Ltd. (TYC) reported its fiscal fourth-quarter profit jumped on sales gains from each of its divisions, topping Wall Street expectations. Tyco earned $434 million, or 91 cents per share. Analysts expected profit of 73 cents per share.
Scheduled Earnings Reports (Wednesday)
Macys, Applied Materials, ING Group, Full House Resorts, ServiceMaster, G-Tech Holdings, Natuzzi Spa
Stocks in the News
Alcoa (AA) was downgraded to market perform from outperform by Friedman, Billings, Ramsey and the aluminum giant's price target was cut to $10 from $20.
Elbit Systems Ltd (ESLT) received a contract with a potential value of $187 million from Embraer.
Rockwell Automation Inc (ROK) fiscal fourth-quarter profit fell to $125.6 million or 87 cents a share.
Vodafone Group (VOD) reported first-half profit down 35%, lifted its outlook for free cash flow, said it would cut 1 billion pounds of costs.
MarineMax Inc. (HZO) reported a fiscal fourth-quarter net loss of $11.1 million, or 60 cents a share.
Citigroup Inc. (C) released details of a plan that it said will help mortgage borrowers remain in their homes. The company said that under the Citi Homeowner Assistance program, it would preemptively contact 500,000 mortgage holders -- involving $20 billion of mortgage balances -- to try to ensure that they can pay their loans. It said it is focusing on borrowers who live in areas that are likely to face "extreme economic distress."
Citi also extended its moratorium on foreclosures, saying it won't begin or complete a foreclosure sale on a home on which it owns the mortgage if the borrower wants to stay in the home, which is his or her principal residence. Citi said it will also need to be sure the borrower is working in good faith with the bank and has enough income for affordable mortgage payments.
The Federal Reserve granted American Express’ (AXP) request to become a commercial bank, opening the door for the credit card giant to accept deposits and permanently access financing from the Fed. The approval represents the latest reshaping of the financial services industry, which is undergoing its worst credit crisis in decades.
According to the International Council of Shopping Centers and Goldman Sachs, chain-store sales for the week ended Nov. 8th rose 0.4% from the year-earlier period, the weakest sales growth since April 5th. On a week-over-week basis, sales dropped 1%.
Altria Group (MO), owner of the nation's biggest cigarette maker, confirmed that it has started to cut jobs to alleviate the risk from the widespread economic turmoil. A company spokesman declined to say how many cuts would be made.
Boeing (BA) engineers and technical workers said they have reached several tentative agreements with management over non-economic issues during the most recent round of contract talks. Union representatives said the latest round of negotiations will continue through at least Wednesday, with the focus now on wage increases, medical benefits and retirement issues.
Scheduled U.S. Economic Reports (Wednesday)
None Scheduled
In Earnings News
Toll Brothers Inc. (TOL) said its home building revenue dropped 41 percent in its fiscal fourth quarter. The company said preliminary home-building revenue declined to $691 million in the three months ended Oct. 31st from $1.17 billion, while backlog dropped 54 percent to $1.33 billion from $2.85 billion.
TJX (TJX), which operates the T.J. Maxx and Marshalls stores, says third-quarter profit slipped 5 percent. Earnings per share remained flat at 54 cents per share, while earnings from continuing operations rose to 58 cents per share from 54 cents a year ago. Analysts expected earnings of 55 cents per share.
Fossil Inc (FOSL) posted 20 percent growth in third-quarter profit, helped by overseas sales and a weak dollar. Profit rose to $36.5 million, or 54 cents per share. Analysts expected profit of 49 cents per share.
Thornburg Mortgage Inc. (TMA) reported a third-quarter profit from a year-earlier loss, boosted by a decrease in the value of some liabilities. For the quarter, the company reported net income of $140 million, or $1.23 per share. Analysts, on average, forecast earnings of 6 cents per share.
Sirius XM Radio Inc. (SIRI) affirmed its new 2008 and 2009 revenue guidance, which was issued last week to reflect a sharp slowdown in auto sales. Sirius XM was created by the combination of satellite-radio companies Sirius and XM in July. The company continues to expect revenue of $2.7 billion in 2009 and $3 billion in 2010.
Tyco International Ltd. (TYC) reported its fiscal fourth-quarter profit jumped on sales gains from each of its divisions, topping Wall Street expectations. Tyco earned $434 million, or 91 cents per share. Analysts expected profit of 73 cents per share.
Scheduled Earnings Reports (Wednesday)
Macys, Applied Materials, ING Group, Full House Resorts, ServiceMaster, G-Tech Holdings, Natuzzi Spa
Stocks in the News
Alcoa (AA) was downgraded to market perform from outperform by Friedman, Billings, Ramsey and the aluminum giant's price target was cut to $10 from $20.
Elbit Systems Ltd (ESLT) received a contract with a potential value of $187 million from Embraer.
Rockwell Automation Inc (ROK) fiscal fourth-quarter profit fell to $125.6 million or 87 cents a share.
Vodafone Group (VOD) reported first-half profit down 35%, lifted its outlook for free cash flow, said it would cut 1 billion pounds of costs.
MarineMax Inc. (HZO) reported a fiscal fourth-quarter net loss of $11.1 million, or 60 cents a share.
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