Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:45 AM EST
S&P 500: +0.00; 1,453.90
NASDAQ 100: +0.25; 1,822.00
Dow: +2.00; 12,674.00
NIKKEI 225: +1.23%; 17,504.33 (+211.85)
HANG SENG: -0.28%; 20,677.66 (-57.39)
S&P/ASX 200: +0.47%; 5,927.20 (+27.70)
BSE SENSEX 30: -0.77%; 14,538.90 (-113.19)
FTSE 100: +0.52%; 6,379.10 (+32.70)
CAC 40: +0.54%; 5,695.90 (+30.80)
XETRA-DAX: +0.55%; 6,914.60 (+37.87)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.22%; $59.58 (-$0.13)
Gold: +0.00%; $662.80
Natural Gas: +0.37%; $7.90 (+$0.03)
Silver: +0.69%; $13.865 (+$0.095)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
MasterCard Posts Rock Solid Q4, Shares Soar
MasterCard Inc., the #2 U.S. credit-card company, said this morning EPS for Q4 2006 were $0.30 ($41 million) on revenues of $839.2m, reversing Q4 2005 in which MasterCard lost $0.39 ($53m) on revenues of $716 million. Analyst estimates were for EPS of $0.17 on revenues of $827m. Driving revenues vs. 2005 was growth in MasterCard's gross dollar volume (+13.8% to $532 billion) and an increase in transactions processed (+17.4% to 4.4 billion). As of year-end the company's customers had issued 817 million cards, an increase of 12.3%. Total operating expenses decreased 2.6%, to $793 million. MasterCard raised its quarterly dividend to $0.15 from $0.09. MasterCard shares have almost tripled since its May 24 IPO. It closed up 2.5% yesterday ($2.84 to $114.74), and is up another 4.6% ($5.29 to $120.05) in pre-market trading.
Sources: Press Release, MarketWatch, Bloomberg, TheStreet
Commentary: Jim Cramer's Take on MA • MasterCard's Story Continues To Impress • Mastercard: Better To Sell Early • MasterCard Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: MasterCard Inc. (MA). Competitors: American Express Company (AXP)
'Big 3' Analyst Upgrades Send Futures Higher
After starting the morning on a down note, U.S. futures broke into positive territory on word the 'Big 3' automakers have all been upgraded by major sell-side firms. Deutsche Bank upgraded both GM and Ford to 'buy' from 'hold,' anticipating a positive outcome from healthcare negotiations with the companies' respective unions could improve the firms' flexibility in restructuring. DaimlerChrysler also received a 'Buy' upgrade from Citigroup as the firm grows more optimistic in the lead up to the company reveling its new optimization plan. Both GM's and Ford's shares are trading higher by roughly 4% in pre-market action.
• Sources: MarketWatch (i), (ii), (iii)
• Commentary: Big 3's January U.S. Auto Sales Fall To Lowest Ever As Japanese Gain, Winners and Losers From January's U.S. Auto Sales Report, American Cars: No Rewards Under the Hood
• Stocks and ETFs to watch: General Motors (GM), Ford (F), DaimlerChrysler (DCX). Competitors: Toyota (TM), Honda (HMC), Nissan (OTCPK:NSANY)
Alcatel-Lucent: Q4 Earnings Disappoint as Expected, More Job Cuts Planned
Alcatel-Lucent reported Q4 earnings mostly in-line with its pre-announcement two weeks ago, with sales of €4.42 billion ($5.74b) and operating income of €21m ($27.3m), after expecting to breakeven. It is trading higher in Paris by 2%, but is down 1.6% ($13.45 on volume of approx. 300k) in U.S. pre-market activity as trading appears to be tracking Paris, following its 4.4% gain to $13.67 on the NYSE yesterday. Net income dropped deep into the red at €618m ($803m), compared to a €381m profit last Q4. Analysts reacted warmly to news Alcatel-Lucent will expand its planned job cuts by 39% to 12,500. As previously announced, Alcatel-Lucent sees sales growth in the mid-single digits in '07. Also, Alcatel-Lucent announced it will pay a dividend of 16 euro cents, the same as last year, which came as a surprise to some.
Sources: Press release, Bloomberg, Forbes-AP
Commentary: Alcatel Lucent: Weak Earnings Do Not a Merger Break - Barron's • Alcatel-Lucent's Big Miss Leaves Merrill 'Shocked' • Alcatel-Lucent's Shares Tank on Disappointing Preliminary Q4 Earnings • Alcatel-Lucent Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Alcatel-Lucent (ALU). Competitors: Cisco (CSCO), Ericsson (ERIC), Nokia (NOK), Nortel (NT), Siemens (SI). ETFs: Broadband HOLDRS (BDH), iShares Goldman Sachs Networking (IGN)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Rally to a Record, Fourth Weekly Gain; Mizuho, Kookmin Climb Asian stocks rallied to a record, led by banks after Merrill Lynch & Co. raised its rating on Mizuho Financial Group Inc. (MFG), saying the shares were too cheap given its profit growth.
• Singapore Air Net Rises 48 Percent to Record on Traffic Gain, Asset Sale Singapore Airlines Ltd., the world's largest carrier by market value, reported record third-quarter profit after it carried more passengers and gained from the sale of its stake in a leasing unit.
• Japan's Machinery Orders Fall 0.7 Percent, First Decline in Three Months Japan's machinery orders fell in December, signaling economic growth may slow this year as companies scale back spending on factories and equipment.
• China Central Bank Seeks `Reasonable' Yuan Value to Curb Trade Surplus China's central bank said it is seeking a ``reasonable'' value for the yuan to help reduce the nation's record trade surplus and slow an economy that grew at its fastest pace in more than a decade last year.
• ICBC and China Life to Join Hong Kong's Benchmark Hang Seng Index in March Industrial & Commercial Bank of China Ltd. and China Life Insurance Co. (LFC) will join Hong Kong's Hang Seng Index following a quarterly review of the stock benchmark.
European Headlines (via Bloomberg.com)
• European Stocks Advance, Paced by Alcatel-Lucent, DaimlerChrysler, Total European stocks rebounded from the steepest drop in two months on expectations technology and auto companies will eliminate jobs and close factories to improve earnings.
• Daimler Sells a Third of Stake in EADS, Airbus Parent, for $1.95 Billion DaimlerChrysler AG (DCX) sold a third of its stake in European Aeronautic Defence & Space Co., the parent of planemaker Airbus, for 1.5 billion euros ($1.95 billion) to focus on building cars and reorganize the Chrysler division.
• FirstGroup to Acquire U.S. Greyhound Bus Operator Laidlaw for $3.6 Billion Britain's FirstGroup Plc agreed to buy Laidlaw International Inc. (LI), owner of the largest U.S. school-bus company and the Greyhound bus service, for $3.6 billion to triple revenue in North America.
• U.K., French Trade Deficits Widened to Records in 2006 as Pound, Euro Rose Britain and France, the second and third-biggest European economies, racked up record trade deficits last year as an appreciation in the euro and the pound curbed export growth.