Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:51 AM EST
S&P 500: +2.50; 1,462.90
NASDAQ 100: +6.25; 1,850.75
Dow: +22.00; 12,780.00
NIKKEI 225: +1.09%; 18,108.79 (+195.58)
HANG SENG: +0.76%; 20,809.23 (+157.81)
S&P/ASX 200: +1.10%; 6,017.10 (+65.30)
BSE SENSEX 30: -1.18%; 14,021.31 (-167.18)
FTSE 100: +0.60%; 6,395.50 (+38.40)
CAC 40: +0.46% ; 5,720.98 (+26.42)
XETRA-DAX: +0.86%; 7,001.45 (+59.79)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.58%; $59.72 (-$0.35)
Gold: -0.22%; $682.50 (-$1.50)
Natural Gas: +0.05%; $7.65 (+$0.004)
Silver: -0.09%; $14.26 (-$0.013)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
J.C. Penney: Q4 Adjusted EPS Beats, But Q1 Guidance Disappoints
J.C. Penney reports Q4 net income declined 13.4% year-over-year to $477 million, or $2.09/share due to a tax benefit last year, but on a continuing basis, EPS totaled $2.00, compared to $1.92 last year, beating analysts' estimates of $1.96 (Bloomberg) to $1.97 (Thomson) per share. Net sales rose 7.4% to $6.66b, beating analysts' expectation of $6.64b. Same store sales increased 2.2% on the quarter. Continuing EPS in Q4 and for the full year 2006 set new company records. An analyst at PNC Wealth Management says, "They have a lot of momentum. I think they're doing a great job with getting some of these new fresh private-label brands in their stores." J.C. Penney reports it expects to earn $0.99/share in Q1, coming up short of analysts' average estimate of $1.05. Its full year EPS target of $5.44 however, is two cents ahead of analysts' forecast. Shares of J.C. Penney are trading about 1.6% lower ($84.97) than yesterday's close in light pre-market trading.
Sources: Press release, Bloomberg, MarketWatch
Commentary: Retailers Post January Same Store Sales • Is Prudence Passé? Private Equity and LBO Cyclical Sector Targets • J.C. Penney Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: J.C. Penney (JCP). Competitors: Target (TGT), Federated Department Stores (FD), Kohl's (KSS). ETFs: PowerShares Dynamic Retail (PMR), Retail HOLDRs (RTH)
Newmont Mining: Profits, Costs Rise Sharply
Newmont Mining Corp., the world's #2 gold producer, said this morning its Q4 2006 profits more than tripled from $62 million to $223m on a 13% rise in revenue from $1.29 billion to $1.46b. EPS were $0.48, up from Q4 2006 EPS of $0.16 -- beating analyst consensus estimates of $0.40. In the quarter, Newmont sold two million ounces of gold (-4.6%) at an average price of $619/ounce (up from $472) and at a cost of $322/ounce (up from $236 in 2005). The sharp increase in costs per ounce has some analysts concerned. Ian Nakamoto of MacDougall, MacDougall & Mactier Inc.: "Questions still remain in terms of their cost structure. Obviously costs are increasing and it's a matter of the price of gold outpacing the escalation in manpower and energy costs." Newmont raised its cost estimates twice in 2006, in April and July. The company estimates total 2007 gold sales of 5.2-5.6 million ounces, and costs to rise as much as 25%. Newmont shares closed up 2.4% yesterday to $46.98, and are up another 1.5% ($0.72) in pre-market trading to $47.70.
Sources: Press Release, Bloomberg, MarketWatch
Commentary: Gold Stock Earnings to Shine in 2007 • Gold Investing: Stock Picks for 2007 • Newmont Mining: A Golden Opportunity -- Barron's • Newmont Mining Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Newmont Mining Corp. (NEM). Competitors: AngloGold Ashanti Limited (AU), Barrick Gold Corp. (ABX), Gold Fields Ltd. (GFI). ETFs: Market Vectors Gold Miners ETF (GDX)
KeySpan Hikes Its Dividend Amid Rising Profits
Utility KeySpan Corp. reported fourth-quarter earnings rose 9% despite a revenue decrease of 24%. The company attributed the improved results to lower operating costs at its gas business and lower tax expenses. By the numbers, profit rose to $126.5 million, good for EPS of $0.71, versus profit of $114.8 million (EPS of $0.65) in the year earlier period. Revenue slid to $1.92 billion from $2.54 billion due to what the company termed "very unusual" weather. In other KeySpan news, the Company increased its quarterly common stock dividend to $0.475 per share making the new annual dividend rate $1.90 per share; the new yield is approximately 4.6%. It marks the third straight year the company has raised its dividend.
• Sources: Press Release, MarketWatch, Reuters
• Commentary: Highest Yielding Gas Utilities Stocks • Gas Utilities Stocks: 3Q06 Earnings Results
• Stocks and ETFs to watch: KeySpan Corp. (KSE). Competitors: Peoples Energy (PGL), Delta Natural Gas (DGAS), RGC Resources (RGCO), Energy West (OTCQB:EWST). ETFs: WisdomTree MidCap Dividend Fund (DON)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Advance, Nikkei Passing 18,000; Nomura, Developers Lead Gains Asian stocks rose to a record and the Nikkei 225 Stock Average surpassed 18,000 for the first time in six years after Bank of Japan Governor Toshihiko Fukui said interest rates will stay low.
• Kotak's Money-Managing Unit to Work With T. Rowe Price to Expand Overseas Kotak Mahindra Bank Ltd., an Indian lender that ended a partnership with Goldman Sachs Group Inc. last year, said its money managing unit will team up with T. Rowe Price Group Inc. to expand overseas.
• Hutchison Telecom to Invest $5 Billion, Pay Special Dividend on Unit Sale Hutchison Telecommunications International Ltd. (HTX) said it will invest $5 billion from the sale of its Indian unit in new and existing businesses and pay shareholders a special dividend of HK$6.75.
European Headlines (via Bloomberg.com)
• European Stocks Rise, Paced by BAE, Allianz, Nestle, After Profit Reports European stocks advanced for the first time in three days after earnings from BAE Systems Plc, BASF AG and Nestle SA beat analysts' estimates.
• Allianz, Axa Report Record Profits as Markets Rise, Disaster Claims Fall Allianz SE (AZ) and Axa SA (AXA), Europe's biggest insurers, reported record profits last year, helped by rising stock markets and fewer claims from natural disasters.
• Nestle Second-Half Profit Rises 16 Percent on Purchase of Nutrition Brands Nestle SA, the world's largest food company, increased second-half profit 16 percent after buying Jenny Craig, a supplier of diet programs, and cereal producer Uncle Toby's.
• BASF Says Fourth-Quarter Profit Rises 31 Percent After Making Acquisitions BASF AG (BF), the world's largest chemical maker, said fourth-quarter profit rose 31 percent on U.S. acquisitions and increased its dividend by 50 percent.
• French, Italian Business Confidence Rose More Than Forecast in February French and Italian business confidence rose more than expected in February, suggesting Europe's economic expansion may maintain its momentum.