Archive for July, 2009

Bankrate 2Q profit cut in half (AP)

Thursday, July 30th, 2009 | Finance News

NEW YORK – Bankrate Inc. on Thursday reported its second-quarter profit was cut in half as the recession eroded advertising revenue at the consumer finance Web site operator.

The results were in line with Bankrate's preliminary announcement of second-quarter results on July 22, when the company warned it expected to miss Wall Street revenue and earnings estimates for the year. Bankrate also announced that day that it had agreed to be acquired by New York-based private equity firm Apax Partners in a $571 million deal that will take Bankrate private.

For the three months ended June 30, Bankrate reported net income of $1.9 million, or 10 cents per share, down from a profit of $4.1 million, or 21 cents per share, in the year-ago quarter.

Excluding shared-based compensation expenses, Bankrate reported an adjusted profit of 19 cents per share in the latest quarter. Before the company's July 22 preliminary earnings report, analysts surveyed by Thomson Reuters had expected an adjusted profit of 30 cents per share, on average.

Revenue fell 23 percent to $31 million compared with $40.2 million in the year-ago quarter.

Revenue from online operations fell 23 percent to $29 million, while graphic advertising and lead generation revenue also dropped 23 percent, to $20.9 million.

Hyperlink revenue was $8.1 million, down 24 percent, while print publishing and licensing revenue was $2 million, down 16 percent.

"Macroeconomic conditions have continued to impact financial advertising, particularly in our banking, mortgage and credit card channels," Bankrate President and CEO Thomas Evans said. "The difficult environment in the financial service advertising sector has been a major contributor to our recent results."

Bankrate announced quarterly results after its shares rose 11 cents to close at $28.91. The stock was unchanged in after-hours trading.


Wall St. climbs on earnings, but Disney off late (Reuters)

Thursday, July 30th, 2009 | Finance News

NEW YORK (Reuters) –
Stocks rose on Thursday as solid corporate profit reports and a drop in the number of Americans on jobless benefits gave investors reasons to buy equities following the S&P 500's two days of losses.

The market's rally pushed the benchmark S&P 500 index earlier in the session to its highest intraday level in almost nine months, putting it less than 4 points away from the psychologically important 1,000 level. The Nasdaq briefly rose above 2,000 for the first time since October.

But shares lost ground at the close and finished off the day's highs.

The stock market's advance was underpinned by strong demand for the Treasury Department's auction of a record $28 billion of 7-year notes. Strong bids on U.S. debt diminish the chance of a rise in borrowing costs.

The gains were broad-based, but a surge in commodity prices gave an extra boost to raw materials shares. The Reuters/Jefferies CRB index (.CRB), a gauge of 19 commodities' prices, rose 3.9 percent, its biggest daily percentage gain since mid-March. The S&P materials index (.GSPM) jumped 3 percent.

Companies reporting better-than-expected results on Thursday included MasterCard Inc (MA.N), up 3 percent at $194.11, and industrial conglomerate Tyco International Ltd (TYC.N), up 2.9 percent at $29.64.

Shares of Motorola Inc (MOT.N) shot up 9.4 percent to $7.19 as the world's No. 3 cellphone maker behind Nokia and Samsung cut costs and shipped more phones than expected, and beat analysts' expectations.

"We are now in a market where the momentum is so strong that people typically say (it) is overbought," said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.

"In actuality, it's the type of strength that leads to further gains, and pullbacks tend to be shallow."

The Dow Jones industrial average (.DJI) added 83.74 points, or 0.92 percent, to close at 9,154.46. The Standard & Poor's 500 Index (.SPX) rose 11.60 points, or 1.19 percent, to 986.75. The Nasdaq Composite Index (.IXIC) gained 16.54 points, or 0.84 percent, to 1,984.30.

The S&P 500 is up 45.9 percent from the 12-year closing low of March 9, but it's still down 37.4 percent from its record high close in October 2007.


With just one day left in the month, the Dow is on track for its best monthly percentage gain since October 2002, while the S&P 500 and the Nasdaq probably will mark their fifth straight month of gains.

At Thursday's close, the Dow was up 8.38 percent for the month of July so far, while the S&P 500 was up 7.34 percent and the Nasdaq was up 8.13 percent.

On the economic front, U.S. government data showed initial claims for state unemployment insurance benefits rose slightly above market expectations in the week ended July 25.

However, the four-week moving average for new claims, considered a better gauge of underlying trends as it smoothes out volatility, fell to its lowest level since January.

Shares of Dow component Walt Disney Co (DIS.N) fell 2.75 percent to $25.50 in extended trade after the company posted a drop in profit in line with Wall Street's expectations, but revenue missed forecasts. [ID:nN30376974] Disney's stock had gained 1.3 percent during the regular session to close at $26.22 on the New York Stock Exchange.

DryShips Inc (DRYS.O) reported better-than-expected quarterly earnings, helped by a recent rise in spot charter rates and an increased contribution from its offshore drilling segment, sending its shares up 5.7 percent to $7.10 after the bell. In regular trading, the stock gained 2.9 percent to end at $6.72 on Nasdaq.


Goldman Sachs upgraded General Electric (GE.N) to "buy"

because they believe it is less likely that GE will have to spin off its finance arm, GE Capital.

GE's stock shot up 6.9 percent to $13.11 on the New York Stock Exchange.

Among the Nasdaq's bellwethers, UBS initiated coverage of Internet companies Google Inc (GOOG.O) and Inc (AMZN.O) with "buy" ratings; shares of both companies rose slightly over 2 percent.

So far, 75 percent of the S&P 500 companies that have reported quarterly results have beaten expectations, according to Thomson Reuters data.

Volume was nearly average on the New York Stock Exchange, where about 1.36 billion shares changed hands, not far below last year's estimated daily average of 1.49 billion. But on the Nasdaq, about 2.56 billion shares traded, exceeding last year's daily average of 2.28 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 4 to 1, while on the Nasdaq, about nine stocks rose for every four that fell.

(Additional reporting by Angela Moon)


Disney profit pulled lower by parks, networks (Reuters)

Thursday, July 30th, 2009 | Finance News

LOS ANGELES (Reuters) –
The Walt Disney Co posted a 26 percent lower profit on Thursday as the global economic woes pulled down operating profits by double digits at its powerhouse media networks and theme parks.

The third-quarter profit result was in line with Wall Street expectations, but revenue missed, and Disney's share price dropped 3.5 percent in after-hours trade.

Still, the 19 percent decline in park profits compared favorably with last quarter's 50 percent decline, and cable networks were pushed lower by a shift in revenue recognition at ESPN, rather than pure weakness in the advertising market, Disney officials said.

Net income was $954 million, or 51 cents per share, for the quarter ended June 27, compared with $1.3 billion, or 66 cents a share, in the year-ago third quarter.

Revenue fell 7 percent to $8.59 billion from $9.24 billion a year ago. That was below analysts' average forecast of revenue of $8.84 billion, according to Reuters Estimates.

Shares of Disney dropped to $25.30 after closing at $26.22 on Thursday on the New York Stock Exchange.

Disney shares rose 31 percent in its third fiscal quarter.

(Reporting by Gina Keating; Editing by Gary Hill)