Archive for April, 2009

Family Dollar sees 3Q results above Wall Street (AP)

Wednesday, April 8th, 2009 | Finance News

MATTHEWS, N.C. – Discount retailer Family Dollar Stores Inc. on Wednesday predicted fiscal third-quarter results above Wall Street expectations, helped by same-store sales growth.

For the period ended May 30, the company projects income between 54 cents per share and 58 cents per share, up from 46 cents per share reported in the same quarter last year.

Sales are expected to rise between 7 percent and 9 percent, Family Dollar said. Based on year-ago sales of $1.7 billion, that implies revenue between $1.82 billion and $1.86 billion.

Analysts polled by Thomson Reuters expect earnings of 50 cents per share and sales of $1.81 billion.

Same-store sales, or sales at stores open at least one year, will rise between 5 percent and 7 percent during the quarter, the company said.

For the fiscal year ending Aug. 29, earnings are expected between $1.90 and $2 per share, up from $1.66 per share last year, according to the company.

Sales will rise between 5 percent and 7 percent, with same-store sales rising between 3 percent and 5 percent, Family Dollar said. Based on year-ago revenue of $6.98 billion, that implies sales between $7.33 billion and $7.47 billion.

Analysts expect full-year earnings of $1.90 per share and sales of $7.36 billion.

Separately, Family Dollar reported its fiscal second-quarter earnings rose as shoppers increasingly turned to the discount retailer for food and other necessities.

In premarket trading, shares of Family Dollar rose $1.04, or 3.2 percent, to $33.70.

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World stock markets slide further (AFP)

Wednesday, April 8th, 2009 | Finance News

LONDON (AFP) –
Asian and European equities fell sharply again on Wednesday after overnight losses on Wall Street, where worries about the earnings season were underscored by a huge loss at US aluminium giant Alcoa.

In late morning trading in Europe, the London market fell 0.82 percent, Frankfurt shed 0.95 percent and Paris lost 0.99 percent in value.

In Asia, Hong Kong slid more than 3.0 percent, Tokyo dipped 2.69 percent and Sydney finished down 2.34 percent, with financial and resources stocks hit the hardest. Markets throughout the region were showing losses.

This followed a dismal day of trading on Tuesday in the United States, where the Dow Jones Industrial Average dropped 2.3 percent.

The US corporate earnings season got off on a sour note as Alcoa posted a quarterly net loss of 497 million dollars, with prices and demand down dramatically in the face of the global slowdown.

"Alcoa's first-quarter 497-million-dollar loss is weighing heavily on sentiment," said VTB Capital analyst Ivan Ivanschenko on Wednesday.

"Importantly, it also sets the tone for the whole reporting season and... (the) chances are (that) we shall see further weakness as investors realise that hopes of an economic recovery contrast markedly with corporate earnings."

World stock markets had plunged on Tuesday into negative territory on gloomy growth forecasts in Asia and news that the eurozone economy sank deeper into recession last year than had been feared.

"Here we go again," said analyst Stuart Bennett at Calyon, the investment banking arm of French bank Credit Agricole.

"Another poor performance by stocks, disappointing figures from Alcoa and the prospect that Q1 earning season will produce similarly sluggish figures from other companies has prompted the market to question the sustainability of the recent rise in global bourses," he added.

On Wednesday, the Hong Kong market was worst off, with the Hang Seng index handing back 3.04 percent, more than 450 points, to 14,474.86.

Francis Lun, general manager of Fulbright Securities, a Hong Kong brokerage, said that investors in Asia were "scrambling for an exit" after the tumble on Wall Street.

"It is all the fault of the US market," Lun said. "Everyone is dumping financial stocks after George Soros said the banks were no good."

Soros, the billionaire hedge fund manager, had said Tuesday that the month-long rally in the United States was a bear-market rally because the economy was still shrinking.

Investors have been especially worried about the troubled financial sector -- concerns that deepened following a newspaper report highlighting the depth of the bad asset problem plaguing institutions.

According to the Times newspaper of London, new forecasts from the International Monetary Fund (IMF) are set to suggest that toxic debts racked up by banks and insurers could reach four trillion dollars.

The IMF said in January it expected the deterioration of US-originated assets to reach 2.2 trillion dollars by the end of 2010, but it is understood to be looking at raising that to 3.1 trillion dollars in its next assessment of the global economy, due to be published later this month, the report said.

In addition, the IMF was likely to forecast 900 billion dollars for toxic assets that originated in Europe and Asia, the Times said.

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German, Japanese data jolts investors (AFP)

Wednesday, April 8th, 2009 | Finance News

FRANKFURT (AFP) –
German exports slumped and Japan prepared another stimulus package on Wednesday as the global crisis further undercuts the old economic order, jolting investors hoping for a return to business as usual.

German exports, the key driver for Europe's biggest economy, plunged a record 23.1 percent in February, after a fall of 23 percent in January.

"The nightmare for German companies is not over yet," UniCredit economist Andreas Rees said, adding: "There are few signs that exports will stop shrinking anytime soon."

Meanwhile Japan's current account surplus more than halved in February as a collapse in exports kept the world's second-largest economy deep in recession.

Plummeting worldwide demand for its cars, machinery and high-tech goods has put Japan on course for its worst economic slump since World War II.

The surplus in the current account, the broadest measure of trade in goods and services, plunged 55.6 percent in February from a year earlier to about 1.12 trillion yen (11.1 billion dollars), the finance ministry said.

The trade surplus alone dived 80.4 percent to 202.1 billion yen as exports roughly halved, marking a record fall. Imports sank almost 45 percent, reflecting weak domestic demand, to leave the economy without any impetus.

Japanese press reports said the government might increase its economic stimulus package from 100 billion dollars to 150 billion dollars in an effort to get demand going again.

Japan's mighty car and electronics makers have been badly hurt by recession in major markets including the United States, Europe and Japan, with its major companies -- Sharp, Sony, Panasonic -- all in the red and cutting jobs.

World stock markets, which posted a sharp rally from early March on the hope that the worst of the global economic crisis was over, were weaker on Wednesday, extending losses on profit-taking and fear the gains may have been overdone.

In midday trade in Europe, London's FTSE 100 index of leading shares was down 0.89 percent, with Frankfurt off 0.85 percent and Paris down 1.08 percent.

In Asia, Tokyo lost 2.69 percent, Hong Kong fell more than 3.0 percent and Sydney dropped 2.34 percent, with financial and resources stocks hit the hardest.

A sharp overnight slump on Wall Street, down 2.34 percent, added to the pressure with investors rattled by a bad start to the US corporate earnings season when aluminium giant Alcoa posted a larger-than-expected quarterly net loss of 497 million dollars.

The results set "the tone for the whole reporting season and ... (the) chances are (that) we shall see further weakness as investors realise that hopes of an economic recovery contrast markedly with corporate earnings," VTB Capital analyst Ivan Ivanschenko said.

Markets also fell on Tuesday after gloomy Asian growth forecasts and news the eurozone economy sank deeper into recession last year than had been feared.

"Here we go again," said analyst Stuart Bennett at Calyon, the investment banking arm of French bank Credit Agricole.

"Another poor performance by stocks, disappointing figures from Alcoa and the prospect that the first quarter earning season will produce similarly sluggish figures from other companies has prompted the market to question the sustainability of the recent rise in global bourses," Bennet said.

Japan, China, India and wider Asia have built their economies on exports, mainly for the giant US market, but that model has been put in doubt as the American consumer is forced to save for the future rather than borrow and spend as if there was no tomorrow.

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