Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:47 AM EST
S&P 500: +2.50; 1,447.50
NASDAQ 100: +2.00; 1,827.00
Dow: +31.00; 12,554.00
NIKKEI 225: +1.49%; 17,419.20 (+256.00)
HANG SENG: +0.89%; 19,690.25 (+173.84)
S&P/ASX 200: +1.60%; 5,955.70 (+93.80)
BSE SENSEX 30: +2.80%; 13,308.03 (+362.15)
FTSE 100: +0.71%; 6,301.00 (+44.20)
CAC 40: +1.68%; 5,594.74 (+92.56)
XETRA-DAX: +1.89%; 6,839.09 (+127.03)
Commodity Futures (Reuters/Jefferies CRB)
Oil: +1.59%; $60.56 (+$0.95)
Gold: +0.70%; $664.60 (+$4.60)
Natural Gas: +1.19%; $7.24 (+$0.08)
Silver: +1.09%; $13.465 (+$0.145)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
ConAgra Swings to Q3 Gain
ConAgra, #3 packaged food company in the U.S., said this morning its FQ3 2007 net income swung to $0.38/share, vs. a $0.05 loss in Q3 2006, and beating Street estimates of $0.35. EPS included $0.06/shares of costs related to the recent peanut butter recall. Sales revenue was up 2% to $2.92 billion, vs. consensus estimates of $2.79 billion. The company estimated total costs related to the peanut butter recall to be $50-60 million. ConAgra forecasts 2007 earnings at the high-end of a range of $1.28-1.33, and reiterated its projection of 8-10% annual growth between 2008-2010.
Sources: Press Release, MarketWatch
Commentary: Consumer Staples Far Below 50-DMA: Buying Opportunity? • ConAgra: Caught in the Act • ConAgra Looks Tasty For Profit-Hungry Investors
Stocks/ETFs to watch: ConAgra Foods Inc. (NYSE:CAG). Competitors: Kraft Foods Inc. (KFT), Unilever plc (NYSE:UL), Tyson Foods Inc. (NYSE:TSN), Groupe Danone (DA), Smithfield Foods Inc. (NYSE:SFD), General Mills Inc. (NYSE:GIS), Campbell Soup Co. (NYSE:CPB)
Tweeter to Close Stores, Cut Jobs
Tweeter Home Entertainment said this morning it plans to close 49 of its 153 stores and cut about 20% of its staff in an effort to consolidate and reinvest its resources. The stores to be closed were expected to lose money over the next six months. Revenue is expected to drop from $735 million to $555 million, and the company forecasted $50-60 million in closure related charges, mainly non-cash. Electronics retailers have been hurt by contracting margins resulting from price-slashing on popular items like plasma screens and flat-screen TV sets. It said it would expand on its Consumer El electronics [CE] Playground concept stores, which it says have been well-received. Tweeter said it would roll out its Tweeter Design Studio software suite in April, which its says will enable Tweeter's sales associates to give a very polished proposal to a customer in a fraction of the time it takes today. In pre-market trading, shares are up 4.5% to $1.40.
Sources: Press Release, MarketWatch
Commentary: Tweeter Misses Earnings on Weak TV Panel Revenues -- Best Buy and Circuit City Should Follow Suit • LCD Prices to Fall Less Flat than Last Year • LCD Panel Evolution: Revenue Strong Despite Falling Prices
Stocks/ETFs to watch: Tweeter Home Entertainment Group Inc. (NYSE:TWTR). Competitors: Circuit City Stores Inc. (NYSE:CC), Best Buy Co. Inc. (NYSE:BBY). ETFs: Consumer Discretionary SPDR ETF (NYSEARCA:XLY), PowerShares Dynamic Consumer Discretionary (NASDAQ:PEZ), Vanguard Consumer Discretionary VIPERs (NYSEARCA:VCR)
Borders Reports Q4 Loss, Announces Long-term Strategic Plan
Borders Group swung to a Q4 (ended Feb. 3) $73.6 million loss (-$1.25/share), hurt by charges related to its Waldenbooks store closings. In addition, it presented a long-term strategic plan that calls for re-embracing the online market (ending its alliance with Amazon), among other notable details. Excluding certain items Borders earned $94.8m, or $1.61/share, coming up short of analysts' average estimate of $1.62 (Reuters) - $1.63 (Thomson). In the same period in the year prior, Borders earned $119.1m, or $1.78/share. Sales rose 2.9% to $1.52b, beating analysts' average estimate of $1.47 - $1.48b. Borders said it expects to return to EPS growth in 2008, and said it won't discuss sales and earnings estimates with analysts. Details of its strategic plan include: (1) Refocusing efforts and investments on domestic Borders superstores; (2) exploring strategic alternatives for a majority of its international stores; (3) pursuing a franchise model for future int'l expansion; (4) continuing to reduce Waldenbooks store count from 564 at year-end '06 to approx. 300 by '08; (5) consolidating web properties into new Borders.com e-commerce site in early '08; (6) planning to publish exclusive and proprietary books; and (7) The Wall Street Journal mentions it will likely reduce its CD inventory and quoted the firm's new CEO who said, "We are looking to get into the downloading business." Borders' shares gained 1.28% to $21.43 yesterday -- it has traded between $16.20 - $25.49 over the past year.
Sources: Press release [I, II], Associated Press, Bloomberg, The Wall Street Journal
Commentary: Will Borders and Barnes and Noble Become Book Buddies? • 20 Stocks Owned By Top Activist Funds • Activist Investor Ackman Turns Bullish on Borders -- Shares Soar [Nov. '06]
Stocks/ETFs to watch: Borders Group (BGP). Competitors: Barnes & Noble (NYSE:BKS), Amazon (NASDAQ:AMZN), Books-A-Million (NASDAQ:BAMM)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Rise to Three-Week High on Fed Rates Statement; Sony Advances Asian stocks climbed to a three- week high after the U.S. Federal Reserve abandoned its bias toward an increase in interest rates. Sony Corp. (NYSE:SNE) and Samsung Electronics Co. led gains among exporters.
• Bank of China Second-Half Profit Surges on Tax Credit, Demand for Loans Bank of China Ltd., the nation's second-largest, reported second-half profit more than doubled, buoyed by a tax credit and rising demand for loans in the world's fastest-growing major economy.
• Hong Kong Billionaire Li Ka-shing Reports Higher Profits, Vows to Stay on Hong Kong billionaire Li Ka-Shing reported an earnings surge at his flagship companies as developer Cheung Kong (Holdings) Ltd. (OTCPK:CHEUY) sold more apartments and Hutchison Whampoa Ltd. (OTCPK:HUWHY) stemmed losses at its high-speed mobile-phone unit.
• Cheung Kong's Operating Profit Jumps 29 Percent on Higher Apartment Sales Cheung Kong (Holdings) Ltd. (OTCPK:CHEUY), Hong Kong billionaire Li Ka-shing's flagship real-estate developer, said operating profit climbed 29 percent last year because of surging property sales.
• Nikko Shareholder Harris Rejects Citigroup's Revised Offer for Brokerage Nikko Cordial Corp.'s (OTC:NIKOY) largest shareholder, Harris Associates LP, rejected a sweetened $13.4 billion takeover offer from Citigroup Inc. as too low.
European Headlines (via Bloomberg.com)
• European Stocks Rally After Fed Statement; DaimlerChrysler, Siemens Climb European stocks headed for the longest rally this year after the Federal Reserve in the U.S. indicated it's no longer inclined to raise interest rates.
• U.K. Retail Sales Rise by Most in More Than Two Years on Clothes, TV Sets U.K. retail sales rose the most in two years in February, rebounding from a drop in the previous month on purchases of clothes, furniture and electrical goods.
• EU Approves `Open Skies' Pact Deregulating Trans-Atlantic Flights to U.S. European Union governments agreed to deregulate the $18 billion trans-Atlantic airline market, endorsing a treaty with the U.S. that will spur competition, encourage mergers and end decades of national protection for carriers including British Airways Plc (NYSEARCA:BAB).
• Ahold Fourth-Quarter Profit Doubles; Share Buyback Increased to $4 Billion Royal Ahold NV (AHO), the Dutch owner of the U.S. Stop & Shop supermarket chain, said fourth-quarter profit more than doubled on a tax rebate and lower interest costs. The company raised a stock buyback to 3 billion euros ($4 billion).
• UniCredit Fourth-Quarter Net Surges on Increase in Lending, Eastern Europe UniCredit SpA, Italy's biggest bank, said fourth-quarter profit more than tripled, exceeding analysts' estimates, as lending increased in Italy and the company boosted earnings from central and eastern Europe.