Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:45 AM EST
S&P 500: +2.10; 1,437.50
NASDAQ 100: +10.25; 1,797.25
Dow: +18.00; 12,610.00
NIKKEI 225: +0.57%; 17,507.40 (+98.83)
HANG SENG: +0.25%; 20,821.05 (+51.35)
S&P/ASX 200: +0.59%; 5,768.80 (+33.80)
BSE SENSEX 30: +0.49%; 14,110.46 (+69.22)
FTSE 100: +1.41%; 6,315.30 (+87.70)
CAC 40: +0.92%; 5,626.10 (+51.03)
XETRA-DAX: +0.72%; 6,727.23 (+48.30)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.58%; $54.72 (-$0.32)
Gold: -0.33%; $643.80 (-$2.10)
Natural Gas: -1.29%; $7.50 (-$0.10)
Silver: -0.19%; $13.275 (-$0.025)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
• Cingular Triples Profits On Addition of 2.4 Million New Subscribers
AT&T's wireless division, Cingular Wireless, reported that its fourth-quarter profits more than tripled with the addition of a record 2.4 million net subscribers. Profits rose to $782 million from $204 million a year earlier. The nation's biggest mobile-phone carrier in terms of customers ended the quarter with 61 million customers while reporting a 10.2% increase in revenue to $9.8 billion. Reuters estimates were for Cingular to add just 1.62 subscribers. Average monthly revenue per subscriber rose while the percentage of customers who cancel service (called 'churn') fell to 1.8% from 2.1% in the year-earlier period. AT&T is currently in the midst of a campaign to rebrand Cingular 'AT&T Wireless.'
• Sources: Press Release, MarketWatch, Reuters
• Related commentary: AT&T Undertakes Major Campaign To Rebrand Cingular 'AT&T Wireless', Time For Wireless Carriers to 'Unlock' Customer Handsets
• Potentially impacted stocks and ETFs: AT&T Inc. (NYSE:T). Competitors: Sprint Nextel Corp. (NYSE:S), Verizon Communications Inc. (NYSE:VZ), Vodafone (NASDAQ:VOD), Qwest Communications International Inc. (NYSE:Q). ETFs: iShares S&P Global Telecom ETF (NYSEARCA:IXP), iShares Dow Jones U.S. Telecom Sector Index ETF (NYSEARCA:IYZ), PowerShares Dynamic Telecom & Wireless ETF (PTE), PowerShares FTSE RAFI Telecommunications & Technology Portfolio (PRFQ), Vanguard Telecom Services ETF (NYSEARCA:VOX), Telecom HOLDRS ETF (NYSEARCA:TTH)
• Corning: Q4 Earnings Beat Street, But Q1 Guidance Disappoints
Corning reports Q4 net income of $646 million, or $0.41/share, after a $33m loss, or -$0.02/share last year. Excluding a $0.10/share tax gain, EPS is $0.31, beating analysts' average estimate of $0.28. Revenue increased 14% to $1.37b, beating analysts' estimate of $1.3b. Excluding special gains and charges Corning's full year net income grew 35% to $1.78b, or $1.12/share, on sales growth of 13% to $5.17b. It grew cash flow by $0.4b on the quarter and mentions share repurchases or the reinstatement of a dividend is possible after it repays near-term debt and earmarks funds for R&D. Corning says it expects the '07 overall LCD glass substrate market to grow in the mid-30% range. Global LCD TV penetration is seen reaching 33%, or 68m units this year, compared to 22%, or 43m units last year. Corning expects Q1 sales of $1.26b to $1.31b and EPS of $0.24 to $0.27, before special items. According to Thomson, analysts were looking for EPS of $0.28 on sales of $1.34b. Corning's shares lost 0.84% yesterday to close at $18.84, but are trading near $19.50 (+3.5%) in the pre-market on volume approaching 500k.
• Sources: Earnings press release, Bloomberg, MSN Money-AP
• Related commentary: Credit Suisse Cuts Corning Estimates But Remains Positive on Stock, The Long Case for Corning, iSuppli: More LCD Pain On The Way. Conference call transcripts: Corning Q3'06
• Potentially impacted stocks and ETFs: Corning (NYSE:GLW). ETFs: Broadband HOLDRs (NYSE:BDH), iShares Goldman Sachs Networking (NYSEARCA:IGN)
• General Dynamics Reports Higher Profits on Acquisitions and Order Increases
Tank and warship manufacturer General Dynamics today reported a 16.3% rise in Q4 earnings from continuing operations on the back of acquisitions and order increases for the war in Iraq. Earnings from continuing operations reached $463 million, or $1.13/share, versus $398 million, or $0.98/share, in 2005. Q4 revenue was $6.5 billion against $5.8 billion last year. Including a charge for anticipated sales of coal mining operations, net income rose less than 1% to $408 million, or $1/share, from $406 million, also $1/share, in 2005. The Street was forecasting EPS of $1.14. Full-year earnings from continuing operations rose 18.1% to $1.71 billion, or $4.20/share, versus $1.45 billion, or $3.58, a year ago. Full-year revenue was up 14.7% to $24.1 billion. Sales in the quarter rose 13% to $6.51 billion from $5.76 billion, just missing analyst forecasts of a 14% rise to $6.62 billion. GD made acquisitions worth $2 billion in 2006 for its secure computer and communications unit, giving a 20% boost to IT sales in the quarter. GD also benefited from growing demand for repairs and replacement of vehicles used in Iraq.
• Sources: Press release, Bloomberg, MarketWatch
• Related commentary: General Dynamics Inks $1.27 Billion Contract Addition With U.S. Navy, Defense Sector Bests the S&P 500 for a Seventh Consecutive Year, Defense Stocks Should Continue to Outperform in 2007
• Potentially impacted stocks and ETFs: General Dynamics Co. (NYSE:GD). Competitors: Lockheed Martin Corp. (NYSE:LMT), Raytheon Co. (NYSE:RTN), Northrop Grumman Corp. (NYSE:NOC), The Boeing Company (NYSE:BA). ETFs: iShares Dow Jones US Aerospace & Defense (NYSEARCA:ITA), PowerShares Aerospace & Defense (NYSEARCA:PPA)
Asian Headlines (via Bloomberg.com)
• Asian Stocks Rise to Eight-Month High, Led by Toyota on U.S. Economic Data Asian stocks rose to an eight-month high, led by Toyota Motor Corp. (NYSE:TM) and Samsung Electronics Co., after U.S. economic reports suggested consumer spending will be sustained in the region's largest export market.
• Goldman Sachs Seeks to Sell $329 Million Sanyo Credit Stake, People Say Goldman Sachs Group Inc. (NYSE:GS) is selling a controlling stake valued at 43 billion yen ($350 million) in Japanese leasing and finance company Sanyo Electric Credit Co. (OTC:SANYY), two people with direct knowledge of the plan said.
• Hong Kong Dollar's Decline, Yuan's Advance Were `Stage-Managed,' UBS Says The Hong Kong dollar's drop to the lowest since 1991 was ``stage-managed'' to deter speculators from betting the city's 23-year-old link to the U.S. dollar will end, said Jonathan Anderson, UBS AG's chief Asia economist.
• Bush's Doubling of Oil Stockpile May Support Prices as China, India Buy President George W. Bush's decision to double the emergency oil stockpile in the U.S. may help to stem a six-month slide in prices as China, India and South Korea bolster their defenses against shortages as well.
• Nanya Technology Reports Third Straight Record Profit on Computer Demand Nanya Technology Corp., Taiwan's second-biggest memory-chip maker, posted record profit for a third straight quarter as limited supplies of the devices drove up prices for personal-computer makers including Dell Inc.
European Headlines (via Bloomberg.com)
• European Stocks Advance to Six-Year High, Paced by Statoil, BHP Billiton European stocks rallied to a six-year high, led by commodity producers and utility companies as oil, metals and power prices increased.
• U.K. Economy Grew 0.8 Percent, Fastest Since 2004 on Service Industries The U.K. economy grew at the fastest pace since 2004 in the fourth quarter as the financial-services boom in London created jobs and pushed house prices to a record.
• Bank of England Voted 5-4 for Surprise Interest-Rate Increase in January Bank of England policy makers voted 5- 4 for a surprise increase in the benchmark interest rate this month to quell inflation, with David Blanchflower, Rachel Lomax, Charles Bean and Paul Tucker in favor of no change.
• EU Fines Siemens, Areva, Alstom for Fixing Prices of Electricity Equipment Siemens AG (SI), Areva SA, and eight other makers of electricity network equipment were fined 750.7 million euros ($977 million) for fixing prices, the second-biggest penalty imposed by European antitrust regulators.
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