Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:21 AM EST
S&P 500: +2.10; 1,490.40
NASDAQ 100: +7.25; 1,870.25
Dow: +16.00; 12,990.00
NIKKEI 225: -0.02%; 17,451.77 (-3.60)
HANG SENG: +0.08%; 20,572.80 (+16.23)
S&P/ASX 200: -0.34%; 6,188.20 (-21.00)
BSE SENSEX 30: +1.50%; 14,136.72 (+208.39)
FTSE 100: -0.42%; 6,452.40 (-27.30)
CAC 40: -0.18%; 5,906.64 (-10.68)
XETRA-DAX: -0.53%; 7,296.39 (-39.23)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.11%; $65.82 (-$0.07)
Gold: +0.10%; $694.90 (+$0.70)
Natural Gas: +0.57%; $7.60 (+$0.04)
Silver: +0.00%; $14.050
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
AT&T Beats Street on Wireless Gains
AT&T Inc. said this morning its Q1 net income doubled to $2.85 billion ($0.45/share) on its Bell-South acquisition and strong wireless growth. Revenue jumped 84% to $29 billion. Adjusted EPS of $0.65 beat Street forecasts of $0.61, while revenue lagged forecasts of $29.6 billion. Cingular, which is changing its name this year to AT&T, took customers from competitor Sprint-Nextel, who said in January it would lose more customers in Q1 2007 after already losing 306,000 in Q4 2006. Baird analyst William Power: "They're operating in what is really a fairly healthy environment, but within that they're taking share." The company also reported 700,000 net gains in high-speed internet customers and 187,000 net adds in video services, which include AT&T U-verse service and bundled satellite television service. Wireless churn was a best-ever 1.3% (down from 1.6% y/y); total churn was 1.7% (down from 1.9% y/y). Wireless margin was up 7% to 38.9%. Shares are up 0.3% in pre-market trading to $39.90.
Sources: Press release, MarketWatch, Bloomberg
Commentary: Profiting From the Global Cellular Wireless Boom • AT&T Poised for a Turnaround? • Yahoo: Concerns on Status of AT&T Deal Weaken
Stocks/ETFs to watch: AT&T Inc. (T). Competitors: Sprint Nextel Corp. (S), Verizon Communications Inc. (VZ), Qwest Communications International Inc. (Q). ETFs: iShares Dow Jones U.S. Telecom Sector Index ETF (IYZ), iShares S&P Global Telecom ETF (IXP), PowerShares FTSE RAFI Telecommunications & Technology Portfolio (PRFQ), Telecom HOLDRS ETF (TTH), Vanguard Telecom Services ETF (VOX)
Conference call transcript: Q4 2006, AT&T Earnings Conference Call Transcript (later today)
Du Pont Beats Estimates, Confirms Full Year Guidance
Dow component E.I. du Pont de Nemours & Company [du Pont] reported earnings above consensus estimates this morning, and reaffirmed its full year outlook. By the numbers, du Pont saw its net income climb 16% to $945 million, good for EPS of $1.01 a share including one-time items; the company would have pulled in EPS of $1.07 before costs, on sales of $8.2 billion. Thomson Financial projected EPS before items of $1.03. Du Pont reiterated its adjusted earnings outlook for FY2007 of $3.15 a share; the Street expects an average of $3.18 a share for the year. The company continues to expect growth outside the U.S. and strong agricultural-seed markets, which powered the current quarter's results, to outweigh lower demand from the U.S. housing and automotive markets.
Sources: Press Release, Wall Street Journal, TheStreet.com, AP, MarketWatch
Commentary: DuPont's New Biofuel: More Energy Than Ethanol, Gasoline • DuPont All But Guarantees Forward Earnings • Post-Correction Stock Sale: Bargain Hunting for P/E Ratios Under 15
Stocks/ETFs to watch: E.I. du Pont de Nemours & Company (DD). Competitors: Dow Chemical Company (DOW), Monsanto Company (MON), Eastman Chemical Company (EMN), BASF Ag (BF). ETFs: iShares Dow Jones US Basic Materials (IYM), Vanguard Materials VIPERs (VAW), Materials Select Sector SPDR (XLB)
Lockheed: Q1 Profit Up 17%, Beats Street, Raises Guidance
Lockheed Martin reported Q1 net income increased 17% to $690 million, or $1.60 per share, exceeding analysts' average estimate of $1.37. Excluding one-off gains it earned $1.39/share. It raised full-year EPS guidance to $6.20 - $6.35 (from $5.80 - $6.00) on sales of $40.35b - $41.35b (up $100m), against Street estimates of $6.06/share on sales of $41.11b. Note Q1 revenues grew only 1% to $9.28b, short of analysts' estimates of $9.52b (Bloomberg) - $9.57b (Thomson). Lockheed said its revised sales forecast is a result of its acquisitions of Management Systems Designers [MSD] and RLM Systems. The higher EPS guidance is credited to operational improvements expected across all segments (for $0.14 - $0.19 per share), as well as the $0.21/share gain in Q1 from unusual items. It repurchased 7.6 million shares valued at $739m in Q1. Shares of Lockheed rose 1.75% to $97.07 in normal trading yesterday and gained another 1.27% to $90.30 in the after-hours on thin volume of 21,000 shares.
Sources: Press release, Bloomberg, MarketWatch
Commentary: DoD's FY-08 Budget: The Largest in US History • Lockheed, Northrop Face Probe Over Coast Guard Program Cost Overruns • Jim Cramer's Take on Lockheed
Stocks/ETFs to watch: Lockheed Martin Corporation (LMT). Competitors: The Boeing Company (BA), Northrop Grumman Corporation (NOC), Raytheon Company (RTN). ETFs: iShares Dow Jones US Aerospace & Defense (ITA), PowerShares Aerospace & Defense (PPA), Industrial Select Sector SPDR (XLI)
Lee Enterprises: Online Gains Fail to Offset Print Weakness
Newspaper publisher Lee Enterprises said Monday its Q2 profit fell 18% on weak print advertising despite a 54% jump in online advertising revenue; shares plummeted 16% to close at $25.82. Excluding items, EPS of $0.19 fell short of Street estimates of $0.25/share. Revenue dropped a milder 2% to $262 million, short of $267 million analyst estimates. Combined advertising fell 1.5%; classified advertising decreased 2%. Lee reported it received 30,000 postings through its partnership with Yahoo HotJobs over the last two months, calling the start a "terrific reception." Newspaper websites attracted over 11 million visits monthly. CEO Mary Junck commented on the company's online gains that its "rapid growth continues to offset softness in print advertising," but that the company remains keenly focused on "driving print revenue, increasing print and online audiences, emphasizing strong local news and controlling costs." Its $25.82 close was its lowest since October.
Sources: Press release, AP, PaidContent, TradingMarkets
Commentary: Digesting the News at Lee Enterprises [Fool.com] • Newspapers To Partner Broadly With Yahoo
Stocks/ETFs to watch: Lee Enterprises Inc. (LEE). Competitors: Gannett Co. Inc. (GCI), E.W. Scripps Co. (SSP), News Corp. (NWS), McClatchy Company (MNI)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Are Little Changed; Toyota Motor Falls, Samsung Heavy Jumps Asian stocks were little changed as concern higher oil prices will curb demand for exports countered better-than-expected earnings from Inpex Holdings Inc., Samsung Heavy Industries Co. and Compal Electronics Inc.
• Canon Profit Rises to Record on EOS Camera, Copier Sales; Forecast Raised Canon Inc. (CAJ), the world's largest maker of digital cameras, posted a record first-quarter profit and raised its net income forecast on sales of EOS cameras and color copiers.
• Vedanta Beats India Rivals to Buy Mitsui's Sesa Goa Stake for $981 Million Vedanta Resources Plc agreed to buy Mitsui & Co.'s entire stake in Indian iron-ore exporter Sesa Goa Ltd. for $981 million, defeating rivals including Arcelor Mittal (MT) to secure supplies of the steel-making raw material.
• Newmont, Executive Cleared by Indonesian Court of Violating Pollution Laws An Indonesian court acquitted a local unit of Newmont Mining Corp. (NEM), the world's second-largest gold miner, and a U.S. executive of charges they polluted a bay in the Southeast Asian nation with mercury and arsenic.
European Headlines (via Bloomberg.com)
• European Stocks Decline, Led by Yell; Shares of Alcatel, AstraZeneca Slide European stocks dropped for a second day after Groupe Danone SA (DA), the world's largest yogurt maker, reported sales that trailed some analysts' forecasts and Yell Group Plc said U.S. revenue growth will slow.
• KKR Raises Alliance Boots Bid to 1,139 Pence a Share, Topping Hands Offer Kohlberg Kravis Roberts & Co. and Stefano Pessina raised their bid for Alliance Boots Plc (OTC:ABOYY), the U.K.'s largest drugstore chain, to 11.1 billion pounds ($22.2 billion), topping a rival offer from financier Guy Hands.
• Spanish Real Estate, Bank Stocks Plunge on Concern Property Boom Imploding Spanish real-estate and bank stocks tumbled on concern the nation's property boom is imploding.
• Yell Shares Plunge After Phone Book Publisher Says U.S. Growth Will Slow Yell Group Plc's shares plunged as much as 20 percent, a record drop, after the U.K. phone book publisher said U.S. revenue growth will slow this year as competition intensifies.