10/27/05:
Mixed Messages From Microsoft
PAUL KANGAS: Mixed signals from tech powerhouse
Microsoft tonight. Excluding charges for a settlement with
Real Networks, the software giant earned $0.31 a share, a
penny ahead of Street estimates. But revenues came in just
shy of expectations at $9.75 billion. Microsoft also said
it sees fiscal second quarter earnings in the range of $0.32
to $0.33 a share. The Street`s looking for $0.35. The stock
is down 7 percent year to date, but analysts see several positives
on Microsoft`s horizon.
ART RUSSELL, SR. TECHNOLOGY ANALYST, EDWARD JONES: Microsoft
is getting ready to embark on the most richest new product
cycle in the company history with the new Xbox 360, new versions
of sequel server and Windows Vista and the new version of
Office in the upcoming year. So I think as investors get more
comfortable that those products are going to ship on time,
they`ll feel a little more comfortable about the stock.
KANGAS: Russell says he`s optimistic about
Microsoft`s outlook. Also today, the company said it will
speed up its $19 billion share repurchase program.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright
(c) 2005 Community Television Foundation of South Florida,
Inc. ALL RIGHTS RESERVED. Terms of use.
10/27/05:
Gushing Oil Profits Are Fueling Concern And Anger
SUSIE GHARIB: Skyrocketing prices at the gas pumps translated
into skyrocketing profits at major oil companies. ExxonMobil,
Royal Dutch Shell, Conoco Phillips and Marathon Oil all reported
huge third quarter earnings today. That caught the attention
of lawmakers on Capitol Hill, who are calling on the industry
to use those profits to explore for more oil. We have two
reports this evening on the earnings and the debate they`re
fueling. We begin with Scott Gurvey in New York.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The world`s
largest energy company made the world`s largest profit in
the third quarter. ExxonMobil`s net income growing 75 percent
to $9.9 billion due to high oil and gas prices in the wake
of hurricanes Katrina and Rita. Company CEO Lee Raymond says
the company quote, acted responsibly in pricing gasoline in
the wake of the storms and warned reduced volumes and higher
costs will impact fourth quarter earnings. The third quarter
results amounted to $1.32 a share, after excluding special
items, compared to $0.88 a share a year ago. On that basis,
the earnings were a little below the average expected by analysts
polled by Thomson First Call. That shortfall raised eyebrows
on Wall Street.
SAL ILACQUA, OIL ANALYST, MONNESS, CRESPI, HARDT & CO.:
I think something funny was happening there. It could be the
expenses of the shutdown of their refineries. And secondly,
my guess is that they did not price their gasoline as aggressively
as some of the smaller companies did.
GURVEY: Oil and natural gas producer Apache posted a 60 percent
increase in third quarter profit, but at $2.05 a share, earnings
were less than Wall Street expectations. Marathon Oil also
disappointed analysts in posting earnings of $2.16 a share,
excluding special items. On average analysts had expected
$2.73 a share. One of the biggest surprises, according to
analysts, was the 68 percent jump in earnings at Royal Dutch
Shell. The company was hard hit by the Gulf hurricanes, but
said higher prices and gains from divestments made up for
the Gulf loses. Shell reported earning $1.35 a share compared
to $0.79 a share a year ago. Analysts say it is good news
from what had been a troubled company.
FADEL GHEIT, OIL & GAS ANALYST, OPPENHEIMER: They are
about turned the company around 180 degrees from where they
were a year ago. Earnings exceeded expectation, solid across
the board in all their lines of businesses, although they
were hit by the hurricane more than Exxon, more than BP. GURVEY:
One interesting note, the oil companies uniformly did not
highlight their record profits in their news releases today,
apparently in an attempt to downplay their banner results.
Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: This
is Stephanie Dhue. Big oil`s billion-dollar profits are drawing
political fire. Gushing profits as prices soared at the pump
have Democrats calling for a tax on the industry`s windfall.
SEN. BYRON DORGAN (D) NORTH DAKOTA: There`s a barrel full
of money for the oil companies these days and it`s growing,
and there`s a tank full of trouble for the consumers these
days and it`s getting worse. DHUE: It`s not just Democrats
sounding the alarm. REP.
DENNIS HASTERT, HOUSE SPEAKER: These are tough times that
call for tough measures. We expect oil companies to do their
part to help ease the pain.
DHUE: On Tuesday, Republicans called on the industry to invest
more of their cash in exploration and refining capacity.
HASTERT: Increasing capacity, improving refineries will help
boost supplies so that the consumers will not feel such a
big pinch.
DHUE: The industry says it`s already plowing profits back
into its product, spending $86 billion on exploration and
development this year. And it says price spikes in the wake
of Katrina and Rita are a classic supply-and-demand market
reaction.
RAYOLA DOUGHER, AMERICAN PETROLEUM INSTITUTE: This is why
we`re seeing the price of gasoline come down again, because
supplies are finally flowing again. If you did not have that,
if you did not allow a price response, we`d have shortages
today.
DHUE: Analysts say it`s a lot of political posturing, and
Congress can`t really do much.
ANDY LAPERRIERE, POLITICAL ANALYST, INTERNATIONAL STRATEGY
& INVESTMENT, I think the bottom line is that both Republicans
and Democrats know there`s really almost nothing Congress
can do about high gas prices. And then we have a world economy
for oil prices and there`s even less they can do on that.
DHUE: Still, big oil will stay in the political crosshairs.
Senate Majority Leader Bill Frist says he will call oil company
executives to Capitol Hill to testify on why energy prices
are high. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
10/27/05: One On One With Apache
CEO Steven Farris
SUSIE GHARIB: As Scott Gurvey reported, Apache`s third quarter
earnings missed analyst estimates. They came up short because
of hurricanes Katrina and Rita. Joining us now to talk more
about the numbers and the outlook, Apache CEO Steven Farris.
Mr. Farris, welcome to NIGHTLY BUSINESS REPORT. STEPHEN
FARRIS, CEO, APACHE CORP: Thank you very much for having us.
GHARIB: Well, as you said on the analysts` conference call
today, Apache`s going to experience more production declines
in the fourth quarter because of hurricane-related damage
to your facilities in the Gulf coast. How much longer before
things get back to normal there?
FARRIS: Well we really have two separate issues. One is the
impact on our platforms and the other one is the infrastructure
damage that`s been done by Rita. We should have most of the
production that is associated with the infrastructure damage
in the fourth quarter and the first quarter of next year and
then we have the destruction of some of our platforms that
will be on later in the year 2006.
GHARIB: Looking at your other operations in other regions
in the fourth quarter, how are they doing?
FARRIS: Actually, the hurricane really masked a very good
quarter for us. We had production excluding the impact of
the hurricanes, our production grew about 3 percent quarter
over quarter and for the first nine months this year compared
to last we were up four percent.
GHARIB: Now Apache also benefited from higher oil prices.
They were up 54 percent from the year ago period. What do
you think we`re going to be saying about oil price`s a year
from now? How high are they going to be or are they going
to be lower?
FARRIS: Well I think unlike what we saw in `80 and `81, 1980
and `81, we have increasing demand both in the far east and
also in this country. And you also have shrinking supplies.
Today the world uses 84 million barrels of oil a day which
is up substantially over it was from 1980 and `81.
GHARIB: So are prices going to be higher then?
FARRIS: You know, we`re not clairvoyant. The one thing I would
say is that it is a big incentive for oil companies. We`re
a pure E&T (ph) company (INAUDIBLE) oil company and we
really - shareholders buy our stock because they expect us
to grow and that`s what we expect to do ourselves and that`s
what we`re going to do in 2006 but we`re going to invest $3.5
billion in cash flow this year, which is 40 percent higher
than we did in 2004 and so we`re trying to do our part to
ease the energy shortages we do have.
GHARIB: Well, I want to bring up that subject with you. You
heard our report from Washington where law makers looking
at these huge profits that oil companies have been reporting
especially today, that they`re criticizing oil companies for
not spending their profits to search for more oil and natural
gas and you`re also talking about some giveback to the public.
I just want to know what your thoughts are on all of this
and do you support these kind of moves?
FARRIS: I think it`s important to recognize that this time
we`re all into it -- in it together. If you look at natural
gas in North America, the United States uses about 63 BCF
a day and we actually produce about 52 BCF a day. That impact
is exacerbated by the hurricane Rita and Katrina where you`ve
got 5.5 BCF a day off plus one billion barrels of oil a day
which is 20 and 25 percent --
GHARIB: But to the point of this push from Washington, what
is your comment about that? What is your reaction?
FARRIS: I think the important thing is that we do two things.
One is that we work very hard to reinvest cash flow that we`re
generating o increase the supply and I think conservation
is an important part of this puzzle.
GHARIB: All right. We`ll have to leave it there, sir. Thank
you so much for coming on our program.
FARRIS: Thank you for inviting us.
GHARIB: We`ve been speaking with Steven Farris, CEO of Apache
Corp.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
10/27/05: China Construction
Bank's IPO
SUSIE GHARIB: One of the world`s biggest initial public
offerings started trading today. In Hong Kong, China Construction
Bank`s $8 billion offering got a so-so reception from investors,
ending the day at $2.35 Hong Kong a share, right where it
started. As Hope Ngo reports, the offering is a milestone
in Beijing`s move to reform China`s banking system.
HOPE NGO, NIGHTLY BUSINESS REPORT CORRESPONDENT: China Construction
Bank`s statistics are mouth watering. It claim`s a net worth
of 14,000 branches which holds 146 million active personal
deposit accounts. CCB says 97 of the country`s top largest
enterprises are its clients and late last month, Standard
& Poor`s gave CCB a credit ratings upgrade to reflect
the way the bank has managed to clean up its financial profile.
RYAN TSANG, STANDARD & POOR`S: We see a lot of improvement
in terms of risk management capability, in particular how
they look at credit risk, how they manage it. They put in
a new system. They use the new system to analyze their long
portfolio in a more detailed way to improve how they manage
their special (INAUDIBLE) loans and non-performing loans .
JONATHAN ANDERSON, CHIEF ASIAN ECONOMIST, UBS, The banking
system changed a lot in the last 10 years. The government
is throwing a lot of money into the banking system. So you`re
buying into something which is really what it`s advertised
to be.
NGO: CCB has already attracted companies like Bank of America
which has poured $2.5 million into the bank. Bank of America
has also said it would invest another half a billion dollars
to maintain its 9 percent stake. Another international investor,
Singapore`s Tamaska (ph) Holdings is expecting to put in nearly
$2.5 billion for 5.1 percent. While
CCB`s IPO is expected to raise an estimated between $6 to
nearly $7 billion U.S. dollars - that`s about 30 percent of
the bank`s existing capital, Anderson believes the institution
isn`t just going public to raise money.
ANDERSON: Chinese banks don`t need our money. They have plenty
of capital. The government has been throwing money at them
to clean them up. So it`s really buying in for management
and for ownership. They actually don`t want short-term investors
who are going to bail out after two years. They want people
who are going to be here for the 10 years and ride this through.
NGO: But Standard & Poor`s Tsang warns the real work for
CCB will begin after it goes public.
TSANG: They have put in a lot of resources into the bank to
improve the capability and system. However, we are talking
about the bank with over 300,000 employees, over tens of thousands
of branches. So by pushing a simple idea thoroughly throughout
the whole organization of that size is by itself an enormous
task.
NGO: Going public is CCB`s opportunity to set the standards
for transparency. That`s a quality analysts say is crucial
for China`s banks to become better institutions over the next
decade. Hope Ngo, NIGHTLY BUSINESS REPORT, Hong Kong.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
10/27/05: "Commentary"-- Are
The Markets Worth The Risk?
SUSIE GHARIB: Tonight`s commentator looks at the markets
and the question of risk versus reward. Here`s Laura Unger,
former commissioner of the Securities and Exchange Commission.
LAURA UNGER, FORMER SEC COMMISSIONER: How many times have
you heard that the U.S. capital markets are the envy of the
world? As a former SEC policymaker, I have heard and said
those words numerous times. Perhaps my view is a myopic one,
but I think they mean that the U.S. has done a rather remarkable
job balancing market-imposed regulation with regulation from
Washington. Such is a difficult balance to achieve. It is
also tempting to use regulation to smooth out the ups and
downs of the marketplace. These days, hedge funds are seeing
a fair amount of ups and downs. Hedge funds have long been
the purview of sophisticated investors. Hedge funds move quickly
and nimbly in the marketplace. They provide liquidity for
thinly traded products and a vehicle for financial innovation.
Hedge fund managers also generally have a significant stake
in the funds they manage. Arguably, this skin in the game
makes for thorough due diligence by fund managers. Hedge funds
are all about takin g risk, significant risk in some cases.
For that risk, they either earn big or lose big. By some accounts,
the largely unregulated hedge fund industry has become so
successful it has grown into a $1 trillion industry, mostly
in the last five years. This rapid growth has made Washington
somewhat uneasy. In today`s environment, this could make for
some bad rulemaking. We need to let the sophisticated investors
take the risk and either get their financial reward or not.
In our haste to perfect the bumps along the way, let`s not
drive one of the last vehicles for market liquidity, efficiency
and innovation out of our marketplace. I`m Laura Unger
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
10/27/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Wall Street opened broadly lower with GM stock
sliding on news the SEC is probing its accounting, which we`ll
detail later. Another negative was a 2.1 percent decline in
September durable goods orders, which offset a 2.1 percent
rise in new home sales. At noon, the Dow was off 50 points,
NASDAQ down 16. An afternoon sell-off ahead of Microsoft`s
results sent stocks sharply lower. The Dow Industrial Average
slid to a closing loss of 115 points at 10,229.95. The NASDAQ
Composite fell 36 1/4 points to 2063.81. Standard & Poor`s
500 Index lost 12 1/2 points ending at 1178.90. Over in the
bond market, the 10-year note rose 9/32 to 97 20/32, putting
the yield at 4.55 percent.
Big board volume leader of 55 1/4 million shares, Lucent Technology
(LU) down $0.18. Its good customer Verizon plans no increase
in 2006 network equipment spending, not good news for Lucent.
Pfizer (PFE) moved up $0.04.
Then ExxonMobil (XOM) down $0.60. You heard about the great
earnings but they were $0.07 shy of the Street consensus.
Texas Instruments (TXN) $0.73.
Sprint Nextel (S) lost $0.41, fifth in big board volume.
General Electric (GE) down $0.12.
Then the big loser of the day, Kinetic Concepts (KCI) down
$14.84. The government`s Medicare and Medicaid service agency
gave a competitor`s product for negative pressure wound therapy
the same reimbursement code as its product and that means
increasing competition. Incidentally, Kinetic is suing that
competitor, Blue Sky Medical for patent infringement.
Corning (GLW) up $1.08. Third quarter earnings of $0.13 versus
a big loss last year. Sales up 18 percent and the company
sees fourth quarter earnings rising to $0.21 to $0.23 a share.
Johnson & Johnson (JNJ) fell $1.37. The FDA has rejected
the company`s new male sexual dysfunction product.
Citigroup (C) tenth in volume lost $0.24 a share.
Verizon (VZ) itself was up $0.17. The Department of Justice
approved the company`s acquisition of MCI and Verizon reported
third quarter earnings $0.66, a penny more than last year
and $0.02 above the Wall Street estimate.
SBC Communications (SBC) gained a nickel. The Justice Department
approved its takeover of AT&T and it will keep that AT&T
brand name alive.
Aetna (AET), the big insurance company, up $2.10. Third quarter
operating earnings $1.19, up from $0.88 last year, $0.02 above
the Street estimate. Revenues were up 14 percent.
Goodyear Tire (GT) up $1.97, nice move there. Third quarter
earnings more than tripled to $0.70 versus $0.20 a year ago.
Sales were up about 6 1/2 percent.
On the downside, Chicago Bridge & Iron (CBI) losing $6.22
in a negative reaction to news the company will delay its
third quarter results.
Skechers (SKX), the footwear company, down $3.47. Third quarter
earnings doubled, $0.30 versus $0.15 last year, but the company
sees fourth quarter dropped to only $0.02 to $0.07 a share.
And Martha Stewart Living (MSO) down $3.23. Third quarter
loss of $0.51, bigger than last year`s $0.30 loss. The company
sees a break even fourth quarter. Standard & Poor`s repeated
a "strong sell" on Martha`s stock.
Google (GOOG) topped the active list with a loss of $2.38.
Microsoft (MSFT) closed down $0.26. In after hours trading
it fell down to around $24.16 because of the rather, somewhat
pessimistic output.
Intel (INTC) $0.23 loss there.
Apple Computer (AAPL) fell $1.62. Qualcomm (QCOM) completing
this blizzard of minus signs, off $1.80.
Cisco Systems (CSCO) a nickel drop.
Then Express Scripts (ESRX) a big gain of $10.35. The pharmacy
benefits manager had third quarter earnings $0.68 versus $0.40
last year, $0.07 better than the Street was expecting and
it also gave an upbeat fourth quarter forecast.
Dell (DELL) $0.61 loss there.
Research in Motion (RIMM) rebounding $3.11 after several days
of steep losses.
eBay (EBAY) was down $0.46, tenth in dollar volume.
XM Satellite Radio (XMSR) down $3.14. Third quarter loss,
$0.60, a penny loss larger than last year. The Street however
was looking for a $0.66 loss, but programming costs tripled
and subscriber growth did slow down. That hurt the stock.
Finally Digital River (DRIV) down $9.77. The company cut its
2006 earnings guidance in anticipation of Microsoft entering
the security software market. And those are the stocks in
the news tonight, Susie.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
10/27/05:
Market Stats
Due to Hurricane Wilma and the aftermath of technical and logistical issues NBR faced on 10/27/05, we do not have market stats for this date.
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