Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:52 AM EST
S&P 500: -1.20; 1,445.00
NASDAQ 100: +3.50; 1,818.75
Dow: -6.00; 12,655.00
NIKKEI 225: -0.28%; 17,458.30 (-49.10)
HANG SENG: -0.73%; 20,669.83 (-151.22)
S&P/ASX 200: +0.02%; 5,769.90 (+1.10)
BSE SENSEX 30: +1.22%; 14,282.72 (+172.26)
FTSE 100: -0.22%; 6,301.20 (-13.60)
CAC 40: -0.36%; 5,617.64 (-20.44)
XETRA-DAX: -0.00%; 6,748.15 (-0.22)
Commodity Futures (Reuters/Jefferies CRB)
Oil: +0.49%; $55.64 (+$0.27)
Gold: +0.46%; $657.50 (+$3.00)
Natural Gas: -2.28%; $7.25 (-$0.17)
Silver: +1.75%; $13.505 (+$0.232)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
• AT&T Boosts Earnings, Revenue On Strong Cingular Growth
AT&T Inc., the largest U.S. telecommunications company by market cap, reported profits in its recently-ended quarter rose 17%, helped by record gains at AT&T-owned Cingular Wireless which reported tripled profits yesterday. By the numbers, profits climbed to $1.9 billion (EPS of $0.50), up from $1.7 billion (EPS of $0.46) during the year-earlier period. Revenue rose 23.1% to $15.9 billion from $12.9 billion, mostly owing to the acquisition of the old AT&T last year. The results mainly exclude sales and profits from BellSouth, acquired in the last days of the quarter. Omitting merger-related costs and other one-time items, AT&T earned $2.4 billion good for EPS of $0.61; Thomson analyst estimates called for EPS of $0.59 before additional items were removed. Looking to 2007, AT&T said it expects significantly greater savings from its $87 billion purchase of BellSouth; the company expects overall revenue, adjusted for recent BellSouth acquisition, to post moderate growth in the coming year.
• Sources: Press Release, TheStreet.com, Reuters, MarketWatch. Conference Call Transcripts: scheduled for 10:00 AM EST. Check back later today.
• Related commentary: Cingular Triples Profits On Addition of 2.4 Million New Subscribers, AT&T: Optimism On Cingular Growth, Cramer's Take on T
• 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)
• Ford's Losses Mount, Exceeding Street Forecasts
Ford Motor Co. reported this morning its Q4 losses exceeded analyst forecasts. The auto maker said it lost $5.8 billion ($3.05/share), vs. losses of $0.04/share in Q4 2005. Excluding one-time costs the loss was $2.08 billion, or $1.10 a share. Analyst consensus was for a loss of $1.01. Contributing to the loss was a 24% percent production cut in North America, a result of its 11th straight year of market share loss. Ford's full-year loss was $12.75 billion. CEO Alan Mulally, who came aboard in September, wants to revive the company through innovation and job cuts: "We fully recognize our business reality and are dealing with it." The company expects smaller losses in 2007, but didn't provide an estimate. It doesn't expect to turn profitable until 2009. Bloomberg, quoting Pete Hastings, an analyst at Morgan Keegan & Co.: "We knew it was going to be bad. They told us it would be bad. It's bad." Shares traded down to $7.90 (-$0.30) in pre-market trading, and have bounced back to $8.28.
• Sources: Press Release, MarketWatch, Bloomberg
• Related commentary: Throwing More Money At Fickle U.S. Consumers Won't Fix Ford's (or GM's) Problems, GM, Ford And Clean Car Hype, Jim Cramer's Take on Ford, Check for Ford's Earnings Conference Call Transcript later today.
• Potentially impacted stocks and ETFs: Ford Motor Co. (NYSE:F), General Motors Corp. (NYSE:GM), DaimlerChrysler (DCX), Toyota Motor Corp. (NYSE:TM), Honda Motor Co. (NYSE:HMC), Diamonds Trust Series 1 ETF (NYSEARCA:DIA), Rydex S&P 500 Pure Value (NYSEARCA:RPV), iShares NYSE Composite Index ETF (NYSEARCA:NYC)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Fall From Eight-Month High, Led by Toyota; LG.Philips Climbs Asian stocks fell from an eight-month high, led by Toyota Motor Corp. (TM) and Nissan Motor Co. (OTCPK:NSANY), as the yen strengthened against the dollar and the euro, eroding the value of overseas sales at Japanese carmakers.
• China's Economy Grows 10.4 Percent; Prices Spur Interest-Rate Speculation China's economy grew 10.4 percent in the fourth quarter from a year earlier and inflation accelerated, prompting speculation the central bank will raise interest rates for the first time since August.
• Taiwan Semiconductor Profit Drops 18 Percent on Slowing Electronics Demand Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), the world's largest custom-chip maker, posted its first profit decline in five quarters as sales growth slowed for Motorola Inc. (MOT) cell phones and Texas Instruments Inc. (NYSE:TXN) handset components.
• Yen Rises for Third Day After Suda Says BOJ Must Avoid Rate-Increase Delay The yen rose the most in two months against the dollar after Bank of Japan board member Miyako Suda said policy makers shouldn't delay an interest-rate increase.
• Multiplex, Australian Builder of Wembley, Says It Gets Takeover Approach Multiplex Group, the Australian builder struggling to complete London's Wembley stadium, received a takeover approach, sparking a record gain in its shares.
European Headlines (via Bloomberg.com)
• German Business Optimism Unexpectedly Drops on Concern Tax to Sap Spending German business confidence unexpectedly fell from a record in January on concern an increase in sales taxes will depress consumer spending and limit growth in Europe's largest economy.
• European Technology Stocks Rise on Nokia Profit; DaimlerChrysler Declines European technology stocks rose after Nokia Oyj (NYSE:NOK), the world's largest mobile phone maker, reported earnings that topped analysts' estimates. STMicroelectronics NV (NYSE:STM) and CSR Plc paced gains.
• H&M Net Climbs 18 Percent, Beating Estimates, on Less Marketing, Discount Hennes & Mauritz AB, Europe's second-largest clothing retailer, said profit rose 18 percent, beating analysts' estimates, as reduced spending on textiles and fewer discounts pushed the company's margin to a record.