The market is up 83. The SFE Futures suggested a 60 point gain this morning.
WALL ST UP 114 – Wall St. moved in a 222 point range and finished the session nearly 1% higher for the second consecutive session on the back of higher energy prices and better-than-expected earnings results. IBM stole the show overnight hitting a 4 month high after it announced a $15bn share buyback and upped its 2008 profit forecasts. It put on 4.8% saying the buyback – which comes on top of $400m remaining under the buyback plan – will increase EPS significantly. According to Birinyi Associates Inc, a record $858.9m in buybacks were announced last year, so far this year – up to Feb 22 – $69.7bn worth have been announced, 44% less than last year. In economic news, the Conference Board said Consumer Confidence Index fell to its lowest level since February 2003, well below what economists had forecasted, and the Labor Department said wholesale inflation (PPI) increased by 1% in January, more than double some analyst forecasts. The NASDAQ put on 0.7% – Google down 4.7% after paid advertisements viewed fell 12% from the previous quarter and were unchanged from last year. According to researcher ComScore Inc., Google’s total searches increased by 39% from last year.
Banks leading the rally today. They have added 24 points to the index. They accounted for half of the index rise yesterday. Two sectors on the rebound at the moment include financials (including banks) – Babcock & Brown now up 26% since results last week – and retailers. The worms are turning.
ABC Learning is in a trading halt after announcing this morning it has received approaches for parts of the business – shares likely to be in a trading halt for at least the next couple of days and probably more, however long negotiations take. Suggestions that the only business likely to be interested or have the fire power is US private equity. Worth noting – 10m shares have gone through the market this morning at 210c – almost certain to be a margin call. Also 2 directors have sold shares. There have been two ABS Directors interest announcements this morning – one sold 2m at $3.7353 and 5,642,249 shares at $1.66871 keeping 2,758,465 and the other sold his whole holding of 249,101 shares at $1.895170. You have to presume that both have been forced to sell shares on the back of margin calls. The stock fell 160c to 214c after results yesterday. Eddy Groves expressing his incredulity at the share price fall on ABC Lateline Business last night and pointing the finger at hedge funs (always to blame for everything) and shorting.
Lots of results today…
- Westfield Group (WDC) – IN LINE – SOLID – Announced a 38% drop in net profit to $3.44bn from $5.58bn on lower property valuations. Operating earnings as expected up 11.6% to $1.79bn from $1.65bn in constant currency terms and up 8.2% in actual terms. Analysts had expected $1.882bn. Sales down 28% to $6.67bn. Outlook: expects to deliver similar growth in operating earnings up 6%. Announced a final distribution of 53.25c, compared to 52c last year. Full year distribution expected to be flat at 106.5c (in line with consensus but below some forecasts of 112c). NTA of 1569c is up from 1543c with valuations up $2.1bn. Gearing 31.7%. WDC down 1.2% to 1746c.
- GPT Group (GPT) – OK – Realised operating profit of $605m against consensus of $594m.Ahead of forecasts. NPAT fell 11.6% to $1.2bn from $1.36bn. Sales down 10.5%. Distribution forecast of 28.9c in 2008 unchanged from 2007 – in other words falt – below some forecasts. NTA up from 366c in June to 386c. GPT down 4c to 339c.
- WorleyParsons (WOR) – BIT LOWER THAN EXPECTED – 1H NPAT up 62% to $152.7m, up from $94.5m. Analysts expected $157.6m. Revenue up 56% to $2.26bn. Declared an interim dividend of 38c, up from 28c. CEO John Grill says, “We expect the markets for WorleyParsons’ services will remain strong…Our key markets and sectors continue to experience positive conditions and we are well positioned to respond to these opportunities”. They say they have debt facilities of $840m with 16% maturing within one year and 34% maturing in one to four years. WOR 56c to 4056c.
- ConnectEast Group (CEU) – OK – Broke even for the 1H of the year compared to a $16m loss last year. Before finance costs, it recorded a loss of $4.3m. (Profit numbers are not a driver – many infrastructure stocks are loss makers and have huge depreciation costs. Declared an interim distribution of 3.25c and said that will be increased to 5.25c semi-annually until March 2010. CEU up 3c to 138c.
- Seven Network (SEV) – IN LINE – NPAT (before one-offs) fell 25.1% to $73.3m, analysts had expected $77m. $39m of abnormal items. Seven Media announced EBITDA of $239m, up 10% from last year. The company still has $2bn of cash in the bank. Announced a dividend of 17c, up from 12c last year. No guidance. SEV down 40c to 1230c.
- MacArthur Coal – Announced a 68% fall in 1H net profit on higher operating costs and higher demurrage charges. Outlook: Situation might improve in FY09. Continues to face challenges in 2H of year. MCC down 1c to 1175c.
- Macquarie Media (MMG) – announced 1H profit fell by 81% last year to $4.17m due to non-operating charges. It recorded a $29.69m net valuation loss on interest rate and foreign currency hedging instruments and a $20.9m amortisation of fees and costs. Revenue up 40% to $291.8m. MMG up 5c to 390c.
- Envestra Limited – UPPED GUIDANCE – Operating profit up 19.6% to $39m before one off items. Upped guidance for full year from $380-390m to $400-410m. Distribution of 14.5c. – ENV up 4c to 81c.
- Santos rebounding 8% today after a 30% fall since results.
- Wesfarmers (WES) going ex-dividend today 65c. Bluescope Steel, Qantas and PaperlinX go ex dividend tomorrow.
In the MARCUS TODAY newsletter today we have all the research post results the day before and continued coverage of the results season. Only two more days of results until sanity returns.
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