Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:37 AM EST
S&P 500: -1.30; 1,457.90
NASDAQ 100: -1.50; 1,852.75
Dow: -4.00; 12,700.00
NIKKEI 225: +0.44%; 18,188.42 (+79.63)
HANG SENG: -0.47%; 20,711.65 (-97.58)
S&P/ASX 200: +0.32%; 6,036.10 (+19.00)
BSE SENSEX 30: -2.77%; 13,632.53 (-388.78)
FTSE 100: +0.02%; 6,382.40 (+1.50)
CAC 40: +0.13%; 5,715.17 (+7.31)
XETRA-DAX: +0.13%; 6,982.82 (+9.09)
Commodity Futures (Reuters/Jefferies CRB)
Oil: +0.15%; $61.04 (+$0.09)
Gold: -0.19%; $681.70 (-$1.30)
Natural Gas: -1.73%; $7.59 (-$0.13)
Silver: +0.46%; $14.315 (+$0.065)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
Lowe's Lower Profits Beat Estimates, Shares Up Strongly
Lowe's Cos., the world's #2 home-improvement retailer, said this morning Q4 2006 profits fell 12% from $693 million to $613 million, on a sales drop from $10.81 billion to $10.41 billion. EPS was down from $0.43 to $0.40, exceeding analyst estimates of $0.37. Sales at stores open at least one year were down 5.3%. Weak home sales in the U.S. cut demand for paint and lumber. The company gave Q1 2007 guidance of a 5-6% increase in sales, a 2-4% drop in same-store sales, and EPS of $0.49-0.51. For the year, the company expects a 10% increase in sales, a 0-2% increase in same-store sales, and EPS of $2.02-2.09 -- analyst forecasts are $0.50 for Q1 and $2.02 on the year. CEO Robert Niblock said housing weakness could keep earnings weak for another couple quarters, but thinks the overall sales decline has bottomed, and sales at older stores will "gradually improve throughout 2007." On Feb. 20 rival Home Depot said it lost market share last year, and Niblock today said Lowe's gained market share in a number of categories, without being specific. In pre-market trading this morning, shares are up $1.22 (3.6%) to $34.85.
Sources: Press Release, Bloomberg, MarketWatch
Commentary: Lowe's: Expect Superior Growth vs. Home Depot • David Strasser's Long Case For Lowe's Corp • Lowe's Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Lowe's Companies Inc. (LOW). Competitors: The Home Depot Inc. (HD), Wolseley plc (WOS), Sherwin Williams Co. (SHW), Builders FirstSource Inc. (BLDR), Building Materials Holding Corp. (BLG). ETFs: Retail HOLDRS ETF (RTH), Consumer Discretionary SPDR ETF (XLY)
Large Private Equity Firms Approached About Buying Chrysler
CNN Money is quoting a Financial Times report from this morning that at least four of the U.S.'s largest private equity groups, as well as several interested European parties have been approached about buying Chrysler's North American unit. Apollo Management, Blackstone Group, the Carlyle Group and Cerebus Capital, have all been contacted about their potential interest in buying Chrysler according to the report. As reported by the Wall Street Journal yesterday, the groups would possibly be in competition with GM in a potential bidding war. Chrysler lost $1.5 billion last year, even as its parent DaimlerChrysler reported a $7.3 billion operating profit.
• Sources: MarketWatch, CNN Money, Wall Street Journal
• Commentary: GM To Buy Chrysler? At Least It Hasn't Been Ruled Out • Renault CFO: 'We Want No Part in Chrysler' • DaimlerChrysler Is Disclosing Chrysler's Financial Information to Suitors
• Stocks and ETFs to watch: DaimlerChrysler (DCX). Competitors: Nissan (NSANY), Ford (F), Toyota (TM), Honda (HMC), Volkswagen (VLKAY.PK), General Motors (GM)
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Asian Headlines (via Bloomberg.com)
• Coles to Consider Sale Four Months After Rejecting $14.4 Billion Buyout Coles Group Ltd. put itself up for sale four months after rejecting a A$18.2 billion ($14.4 billion) offer by a Kohlberg, Kravis Roberts & Co.-led group, setting up a potential bidding war for Australia's second-largest retailer.
• Origin Rejects AGL's `Nil Premium' Merger, Says Offer Undervalues Company Origin Energy Ltd., Australia's second-biggest electricity and gas retailer, rejected a merger bid from rival AGL Energy Ltd. as too low.
• Rio to Invest $2 Billion in Indonesian Nickel Project, Government Says Rio Tinto Group (RTP), the world's third- largest mining company, may invest $2 billion, double an earlier estimate, developing its first nickel project in Indonesia to meet rising demand driven by steelmakers in China.
• Nissan Motor Joins Renault, Mahindra in Car Venture in India, People Say Nissan Motor Co. (NSANY), Japan's third- biggest automaker, will join Renault SA and Mahindra & Mahindra Ltd.'s venture to build cars in India, two people familiar with the plan said.
European Headlines (via Bloomberg.com)
• European Commodity Stocks Climb, Paced by BP; Lloyds, Bank Shares Decline European commodity stocks climbed to a record as a surge in metal and oil prices pushed BHP Billiton (BHP) and BP Plc (BP) higher. Benchmarks in the region were little changed.
• German Business Confidence Declines More Than Expected on Growth Outlook German business confidence fell more than economists forecast in February, providing further evidence economic growth is slowing from the fastest pace in six years.
• U.K. Economy Rises at Fastest Pace Since 2004 on Household Spending Surge The U.K. economy grew at the fastest pace in 2 1/2 years in the fourth quarter as household spending and investment surged.
• Capitalia Annual Profit Rises to Record $1.5 Billion as Lending Increases Capitalia SpA Chief Executive Officer Matteo Arpe, who yesterday rebuffed an effort to strip him of power, said profit at Italy's best-performing bank rose to a record last year on higher lending to consumers and companies.
• Lloyds TSB Second-Half Net Rises 22 Percent on Job Cuts, Insurance Sales Lloyds TSB Group Plc (LYG), the biggest provider of U.K. consumer loans, posted a 22 percent increase in second-half profit on job cuts and said lending growth slowed.