JDfn Daily Digest - November 14, 2008
President Bush and other world leaders are gathering in Washington to explore options for relief and to work on ways to prevent similar credit and financial problems from happening again. Bush is hopeful that some common ground for action can be found at the extraordinary summit, which begins with a dinner this evening followed by closed-door deliberations tomorrow.
Japan said it is ready to lend up to $100 billion to the International Monetary Fund to support nations reeling from the global financial crisis. The pledge by Prime Minister Taro Aso was among proposals outlined in a statement released ahead of a two-day Group of 20 meeting this weekend in Washington.
The Commerce Department said that retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year. It marked the fourth consecutive monthly decline in retail sales and was much bigger than the 2 percent fall economists expected.
The Labor Department reported that prices of imported goods fell the most in two decades, the third consecutive month of declines as petroleum prices plunged. The 4.7% decline in the import price index is the largest since the monthly data started in 1988. Analysts were looking for a decline of 4.8%.
U.S. consumer sentiment was up in early November from the previous month, although it remains at relatively low levels. The index rose to 57.9 in early November from a reading of 57.6 in late October. Economists were expecting a November reading of 56.5.
Fed Chairman Bernanke has pledged to work closely with other central banks to fix global financial problems and left open the door to a fresh interest rate cut to help brace the sinking U.S. economy.
Citigroup (C) is cutting at least 10,000 jobs in its investment bank and other divisions throughout the world. Citigroup Chief Executive Vikram Pandit has instructed managers to slash their budgets for employee compensation by at least 25 percent.
Sun Microsystems (JAVA) announced it will cut 5,000 to 6,000 jobs, as the economic crisis has compounded the company's struggles with depressed demand for its high-end computers. Sun said the job cuts represent 15 percent to 18 percent of its workforce, and are part of a broader restructuring plan it has undertaken in hopes of saving $700 to $800 million.
Royal Bank of Scotland (RBS) will cut around 3,000 jobs worldwide over the next several weeks to reduce costs amid the global financial crisis.
Charles Schwab Corp. (SCHW) reported that total client assets at the brokerage firm fell in October amid continued turbulence in the credit and equity markets. Total client assets fell 22 percent in October to $1.16 trillion from $1.48 trillion at the end of the same month last year.
Freddie Mac (FRE) is asking for $13.8 billion out of a potential $100 billion in government aid after posting a massive quarterly loss. The company, seized by federal regulators more than two months ago, said it expects to receive the money by Nov. 29th. Freddie Mac posted a loss of $25.3 billion, or $19.44 per share, for the third quarter.
Boeing Co. (BA) announced it is delaying the production and delivery of 747-8 freighter and intercontinental airplanes. The first deliveries will be completed in the third quarter of 2010 instead of late 2009 as previously forecast.
President-elect Barack Obama will be meeting with his former opponent, Sen. John McCain, on Monday in Chicago. A spokesman for the president-elect said that Obama and McCain "share an important belief that Americans want and deserve a more effective and efficient government, and will discuss ways to work together to make that a reality."
Scheduled U.S. Economic Reports (Next Week)
Empire State Index (Nov), Industrial Production (Oct), Producer Price Index (Oct), Home Builders Index (Nov), Consumer Price Index (Oct), Housing Starts (Oct), Philadelphia Fed Index (Nov), Leading Indicators (Oct)
In Earnings News
Abercrombie & Fitch Co. (ANF) said the pullback in consumer spending drove its third-quarter profit down 46 percent. The company's profit slid to $63.9 million, or 72 cents per share, from $117.6 million, or $1.29 per share, last year. Analysts expected profit of 71 cents per share.
J.C. Penney Co. (JCP) said its third-quarter profit fell by more than half as consumers cut back on spending and took fewer trips to the mall amid the deteriorating economy. The company said profit for the three months ended Nov. 1st fell 52 percent to $124 million or 56 cents a share. Analysts were expecting 53 cents.
Agilent Technologies Inc. (A) said that its fiscal fourth-quarter profit rose 28 percent. Agilent earned $231 million, or 64 cents per share, compared with $180 million, or 46 cents per share, in the year-ago quarter. On an adjusted basis, the company earned 62 cents per share. Analysts expected a profit of 59 cents per share.
Hewitt Associates Inc. (HEW) reported a profit in its fiscal fourth-quarter from a year ago. Hewitt earned $31.6 million, or 32 cents per share. Analysts expected 50 cents per share and revenue of $792.4 million.
Nokia Corp. (NOK) downgraded its outlook for industry wide mobile device volumes for the fourth quarter. It also announced it planned further cost cuts in 2009 "to respond appropriately to the market conditions."
Scheduled Earnings Reports (Next Week)
Target, Intuit, Dell, Univision Communications, Benihana, Home Depot, Saks, Hot Topic, Gymboree, PetSmart, Brocade Communications, Perry Ellis International, HJ Heinz, JM Smucker, Kirklands Inc
Stocks in the News
OfficeMax Inc (OMX) said it will cut 245 jobs from its corporate staff and field management in North America.
Lee Enterprises Inc (LEE) said fiscal fourth-quarter earnings declined 70% as advertising sales fell.
E-Trade Financial Corp (ETFC) said it will retire all $450M of its 6.125% subordinated notes due 2018.
Kohls Corp (KSS) reported a third-quarter profit of $160.2M down from $194M a year ago. Sales fell less than 1% to $3.8B.
MGM Mirage (MGM) announced that Chairman and Chief Executive J. Terrence Lanni, would step down from his executive posts.
Estee Lauder Companies (EL) was cut to “sell” from “neutral” at Goldman Sachs.
Japan said it is ready to lend up to $100 billion to the International Monetary Fund to support nations reeling from the global financial crisis. The pledge by Prime Minister Taro Aso was among proposals outlined in a statement released ahead of a two-day Group of 20 meeting this weekend in Washington.
The Commerce Department said that retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year. It marked the fourth consecutive monthly decline in retail sales and was much bigger than the 2 percent fall economists expected.
The Labor Department reported that prices of imported goods fell the most in two decades, the third consecutive month of declines as petroleum prices plunged. The 4.7% decline in the import price index is the largest since the monthly data started in 1988. Analysts were looking for a decline of 4.8%.
U.S. consumer sentiment was up in early November from the previous month, although it remains at relatively low levels. The index rose to 57.9 in early November from a reading of 57.6 in late October. Economists were expecting a November reading of 56.5.
Fed Chairman Bernanke has pledged to work closely with other central banks to fix global financial problems and left open the door to a fresh interest rate cut to help brace the sinking U.S. economy.
Citigroup (C) is cutting at least 10,000 jobs in its investment bank and other divisions throughout the world. Citigroup Chief Executive Vikram Pandit has instructed managers to slash their budgets for employee compensation by at least 25 percent.
Sun Microsystems (JAVA) announced it will cut 5,000 to 6,000 jobs, as the economic crisis has compounded the company's struggles with depressed demand for its high-end computers. Sun said the job cuts represent 15 percent to 18 percent of its workforce, and are part of a broader restructuring plan it has undertaken in hopes of saving $700 to $800 million.
Royal Bank of Scotland (RBS) will cut around 3,000 jobs worldwide over the next several weeks to reduce costs amid the global financial crisis.
Charles Schwab Corp. (SCHW) reported that total client assets at the brokerage firm fell in October amid continued turbulence in the credit and equity markets. Total client assets fell 22 percent in October to $1.16 trillion from $1.48 trillion at the end of the same month last year.
Freddie Mac (FRE) is asking for $13.8 billion out of a potential $100 billion in government aid after posting a massive quarterly loss. The company, seized by federal regulators more than two months ago, said it expects to receive the money by Nov. 29th. Freddie Mac posted a loss of $25.3 billion, or $19.44 per share, for the third quarter.
Boeing Co. (BA) announced it is delaying the production and delivery of 747-8 freighter and intercontinental airplanes. The first deliveries will be completed in the third quarter of 2010 instead of late 2009 as previously forecast.
President-elect Barack Obama will be meeting with his former opponent, Sen. John McCain, on Monday in Chicago. A spokesman for the president-elect said that Obama and McCain "share an important belief that Americans want and deserve a more effective and efficient government, and will discuss ways to work together to make that a reality."
Scheduled U.S. Economic Reports (Next Week)
Empire State Index (Nov), Industrial Production (Oct), Producer Price Index (Oct), Home Builders Index (Nov), Consumer Price Index (Oct), Housing Starts (Oct), Philadelphia Fed Index (Nov), Leading Indicators (Oct)
In Earnings News
Abercrombie & Fitch Co. (ANF) said the pullback in consumer spending drove its third-quarter profit down 46 percent. The company's profit slid to $63.9 million, or 72 cents per share, from $117.6 million, or $1.29 per share, last year. Analysts expected profit of 71 cents per share.
J.C. Penney Co. (JCP) said its third-quarter profit fell by more than half as consumers cut back on spending and took fewer trips to the mall amid the deteriorating economy. The company said profit for the three months ended Nov. 1st fell 52 percent to $124 million or 56 cents a share. Analysts were expecting 53 cents.
Agilent Technologies Inc. (A) said that its fiscal fourth-quarter profit rose 28 percent. Agilent earned $231 million, or 64 cents per share, compared with $180 million, or 46 cents per share, in the year-ago quarter. On an adjusted basis, the company earned 62 cents per share. Analysts expected a profit of 59 cents per share.
Hewitt Associates Inc. (HEW) reported a profit in its fiscal fourth-quarter from a year ago. Hewitt earned $31.6 million, or 32 cents per share. Analysts expected 50 cents per share and revenue of $792.4 million.
Nokia Corp. (NOK) downgraded its outlook for industry wide mobile device volumes for the fourth quarter. It also announced it planned further cost cuts in 2009 "to respond appropriately to the market conditions."
Scheduled Earnings Reports (Next Week)
Target, Intuit, Dell, Univision Communications, Benihana, Home Depot, Saks, Hot Topic, Gymboree, PetSmart, Brocade Communications, Perry Ellis International, HJ Heinz, JM Smucker, Kirklands Inc
Stocks in the News
OfficeMax Inc (OMX) said it will cut 245 jobs from its corporate staff and field management in North America.
Lee Enterprises Inc (LEE) said fiscal fourth-quarter earnings declined 70% as advertising sales fell.
E-Trade Financial Corp (ETFC) said it will retire all $450M of its 6.125% subordinated notes due 2018.
Kohls Corp (KSS) reported a third-quarter profit of $160.2M down from $194M a year ago. Sales fell less than 1% to $3.8B.
MGM Mirage (MGM) announced that Chairman and Chief Executive J. Terrence Lanni, would step down from his executive posts.
Estee Lauder Companies (EL) was cut to “sell” from “neutral” at Goldman Sachs.
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