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Stocktober

October 3rd, 2008 by matt.that Business, Commerce, & The Economy

Its shaping up to be another memorable October for people working in, or who report on, the Financial sector. The last 12 months have shown that anything is possible in financial markets. Credit spreads have widened to never before seen levels. Any short-term lending mechanics, but especially Commercial Paper, are frozen stiff. “Easy Money” is anything but.

This time just last year — on October 5th, 2007, the Dow Jones Industrial Average closed at a price of 14,066.01 on a volume of 29,190,300. To put things into perspective, today — October 3rd, 2008 — the Dow Jones Industrial Average opened at 10,483.96 on 264,270,000 average volume.

The next 12 months prove to be interesting for those who find themselves in the boundaries of what remains of Wall St.  The coming earnings seasons will expose with certainty, the fact that we are (and have been) in a recession. Between dwindling credit, falling consumer confidence and spending, and growing unemployment statistics, there are few reasons to expect that companies will turn anything like the profits to which Wall St. is accustomed. In fact, it will be intriguing to see what innovation and consolidation take place in order that many major players are able to survive.

RPM cuts 2009 profit forecast(9:09 am ET)
NEW YORK (MarketWatch) — RPM International Inc. (RPM: news, chart, profile) said Thursday that it lowered its 2009 earnings forecast to a range of $1.75 to $1.85 a share, compared to its previous guidance of about $1.85 a share. On average, analysts polled by FactSet Research were looking for earnings of $1.88 a share for the period. The company, which makes specialty coatings, sealants and industrial products, cited the weak economy and domestic-market conditions, financial-market volatility and raw-material cost pressure. Shares of RPM closed Wednesday at $19.37.
Westar Energy cuts earnings forecast(7:18 am ET)
LONDON (MarketWatch) — Westar Energy Inc. (WR: news, chart, profile) said Thursday it’s cutting its third-quarter earnings forecast to a range of $1.35 to $1.45 a share from a range of $1.50 to $1.65 a share due to abnormally cool weather. The forecast excludes a one-time tax benefit recorded in the first quarter of the year. The company said cooling degree days for the third quarter were 14 percent below normal which it estimated will reduce earnings by about 10 cents per share.
Marriott profit drops 28%, warns 2009 profit to fall(6:41 am ET)
LONDON (MarketWatch) — Marriott International (MAR: news, chart, profile) said third-quarter to Sept. 5 net income dropped 28% to $94 million, or 27 cents a share, and said next year’s profit will fall. Adjusted earnings from continuing operations rose 10% to 34 cents a share, and revenue rose 1% to $2.96 billion. Analysts polled by FactSet had expected earnings of 32 cents a share on revenue of $2.95 billion. Revenue per available room, a key metric in the hotels industry, rose 3.4%. For the fourth quarter, it expects systemwide RevPAR to fall 1% to 3% and for earnings between 44 cents and 50 cents a share, and for 2009, it expects earnings between $1.48 and $1.60 a share against projected 2008 earnings between $1.62 and $1.68. Analysts had expected 2008 earnings of $1.79 and 2009 earnings of $1.86.
Hartmarx swings to 3rd-period loss; reduces staff(3:58 am ET)
TEL AVIV (MarketWatch) - Hartmarx Corp., (HMX: news, chart, profile) the Chicago apparel maker, swung to a third-quarter net loss on 8.3% lower revenue. For the quarter ended Aug. 31, the loss was $2.4 million, or 7 cents a share, compared with net income of $542,000, or 1 cent, in the year-earlier period. Average shares outstanding fell 4.3% to 35.1 million. Revenue fell to $124 million from $135.2 million. “Low consumer confidence; declines in discretionary apparel purchases, particularly by professional men; volatility in the financial-services sector, large retailers’ requests to defer advance order shipments, and the deteriorating creditworthiness of small specialty-store retailers all contributed to a very difficult quarter,” Chairman And Chief Executive Officer Homi B. Patel said in a statement. Hartmarx said it’s cutting costs and paring administrative staff, and the fourth quarter will reflect the closing of a sewing facility in Missouri, affecting about 150 employees.
CORRECT: Marks & Spencer comparable sales, margin decline(3:13 am ET)
LONDON (MarketWatch) — U.K. department store and food retailer Marks & Spencer (UK:MKS: news, chart, profile) said Thursday that group sales in the 13 weeks to Sept. 27 rose 0.4%, while U.K. sales declined 1.6%. The group said comparable sales in the U.K. were down 6.1%, due to declines in both general merchandise and food sales. Online and international sales both grew strongly. Marks & Spencer added it expects its U.K. gross margin to fall around 1 percentage point for the year, due to a greater reliance on promotions. “Consumers are increasingly cautious about their budgets. We have responded by offering our customers better values and more promotions across the business,” the group said. (Corrects to show group sales rose 0.4%.)

LaBranche sees net loss; adjusted net to exceed estimate(1:44 am ET)
TEL AVIV (MarketWatch) — LaBranche & Co., (LAB: news, chart, profile) the New York specialist for exchange-listed securities, expects to report a third-quarter net loss of $4 million to $6.5 million, and adjusted net income of $12.5 million to $15 million. The net loss, LaBranche said late on Wednesday, reflects a $19.2 million loss from the decline in the estimated fair value of NYSE Group (NYX: news, chart, profile) shares that LaBranche holds. The net loss equals 7 cents to 11 cents a share. The adjusted net, which equals 20 cents to 24 cents a share, reflects in particular higher principal trading revenue at LAB’s specialist and market-making division. Three analysts surveyed by FactSet Research produced a consensus estimate of adjusted profit of 5 cents a share. The company said it reported the estimates in light of the amount by which its adjusted profit exceeds consensus analysts’ estimates and “in light of the adverse market conditions and expectations in the financial-services industry.”

Micron sees losses deepen on inventory, pricing charges(4:10 pm ET)
SAN FRANCISCO (MarketWatch) — Micron Technology Inc. (MU: news, chart, profile) said its net loss deepened during its fourth fiscal quarter thanks mostly to charges related to inventory write-downs and price adjustments. For the period ended Aug. 28, the maker of memory chips reported a net loss of $344 million, or 45 cents a share, compared to a loss of $158 million, or 21 cents a share, for the same period last year. Excluding certain charges, the company said it would have lost $209 million, or 27 cents a share, for the recent quarter. Revenue rose slightly to $1.45 billion. Analysts were expecting a loss of 23 cents a share on revenue of $1.55 billion, according to consensus estimates from FactSet Research.

Pediatrix Medical warns on third, fourth quarter earnings(6:10 am ET)
LONDON (MarketWatch) — Pediatrix Medical Group (PDX: news, chart, profile) issued a profit warning for the third and fourth quarters, citing a shift in reimbursement for patient care from commercial payors to government payors and same-unit neonatal intensive care unit patient volume at the lower end of a predicted drop between 1% and 4%. It now sees third-quarter earnings per share between 81 cents and 83 cents a share and said it can’t confirm its fourth-quarter view of 84 cents to 87 cents a share. Pediatrix had predicted third-quarter earnings of 84 cents a share.

Citi CFO sees drop in Q3 net income, versus previous quarter(11:38 am ET)
SAN FRANCISCO (MarketWatch) — Citigroup Inc. (C: news, chart, profile) Chief Financial Officer Gary Crittenden said on Monday that third-quarter net income will likely be lower than the profit the giant bank generated during the second quarter. The continued deterioration in consumer credit will have a “significant” impact on third-quarter results, Crittenden explained during a conference call with analysts. Still, third-quarter net income will be higher than during the first quarter of 2008, he noted. Total credit costs will be about $9.8 billion in the third quarter, up from the second quarter. Write-downs on exposures including mortgages and leveraged loans will probably be $1.5 billion, down from previous quarters. Write-downs on SIV assets will be higher at roughly $1.7 billion, Crittenden forecast. There will also be about $2 billion in losses related to credit card securitization, he added. Expenses will have fallen by about $1 billion during the third quarter, with the reduction of roughly 10,000 staff, the CFO said.

Pilgrim’s Pride gets waiver from creditors, warns of loss(7:15 am ET)
NEW YORK (MarketWatch) — Pilgrim’s Pride Corp. (PPC: news, chart, profile) said Monday it has obtained agreement with its creditors for temporarily relief through Oct. 28, via a waiver of the lenders’ fixed-charge coverage ratio covenant. The poultry producer said its lenders also agreed to continue to provide liquidity under these credit facilities during this same 30-day period. Pilgrim’s Pride said the waiver was granted after it told the lenders it expects to report “a significant loss” in the fourth quarter, ended Saturday, due to “high feed-ingredient costs, continued weak pricing and demand for breast meat, and the significant negative impact of hedged grain positions.” The company also said it had hired Lazard to advise it on refinancing and recapitalization opportunities.
Cal-Maine profit slips as feed prices soar(6:38 am ET)
LONDON (MarketWatch) — Egg producer Cal-Maine Foods Inc. (CALM: news, chart, profile) said Monday that its fiscal first-quarter net profit fell 38% to $11.1 million, or 47 cents a share, from $18 million, or 76 cents a share, a year earlier. Sales for the quarter rose 16% to $206.9 million. Sales were boosted by stronger egg prices and higher volumes. That was more than offset, however, by much higher feed costs, the company said.

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