Boeing --- Greg (slow)
American Express --- June (slow)
>> john mack, who’s helping coordinate a possible takeover the new york stock exchange, said c.e.o. john thain has agreed to meet with wall street firms investigating the deal. the people who work on the floor of the new york exchange may be wondering how long they have a job. billionaire kenneth langone, considering a takeover of the new york exchange, would close the trading floor, ending a system that’s been around for two centuries. members of the exchange aren’t sure what to make of a possible langone bid, according to tom caldwell, whose company controls 13 nyse seats.
>> we’re a pretty disparate bunch with a lot of interests and concerns because we look upon our seats differently, whether floor traders, volume traders and specialists. so he has to get one of the groups that might be―that might not be happy and say, i can give you a better mouse trap.
>> if langone makes a bid for the exchange, it would disrupt the exchange’s own plans which include maintaining the trading floor. john thain wants to purchase the electronic trading system, archipelago, and take the exchange public, maintaining the floor and adding electronic trading. two in a row for boeing, the company winning an order for 50 passenger jets from air india, beating out airbus. yesterday, boeing beat airbus in winning an order from air canada. the air india sale valued at $6.9 billion. investors are waiting for boeing to report earnings tomorrow. the number two commercial aircraft maker probably going to say first-quarter earnings fell 15%, to 55 cents a share, hurt by competition from airbus. investors will focus less on first-quarter results and more on boeing’s progress in turning around the commercial aircraft business. the deals today and yesterday, greg miles here with a preview.
>> the multi-billion dollar deals add up after a while. boeing’s top management was shaken in the first quarter by the firing of c.e.o. harry sten cypher stemming from an affair with an employee and by a 7% decline in passenger aircraft deliveries as it lost business to airbus. since the rise in boeing stock, it reflects optimism that boeing will make progress in reviving its aircraft business. the analyst at p.c.w. group put it this way -- after rising 1.4% last year, boeing forecasts that deliveries will rise 12% to 320 jets this year and higher next year. rising passenger air travel sparked increasing sales of boeing jets including the lower margin 737 jet, a single aisle aircraft.
>> i think we’re seeing a turnaround. these are―this is a long cycle we’re looking at, four to five years from trough to peak so pretty clearly, 320 is up from where we were last year, even if the mix isn’t great. by the way, normally, in the early part of an uptick, you don’t expect to be led by high margin planes.
>> orders also increasing for the higher margin jets, including the 787 dreamliner, including $13 billion in orders this week from air canada and air india. this will help boost sales this year from 3% growth in the first quarter to 9% in the second quarter to 11% in the third quarter and 17% in the fourth quarter. of course, that turnaround is crucial to offset slowing growth in the defense business because of budget cuts. boeing forecasts defense sales will rise 7% this year, slower than the 11% growth last year. back to you.
>> greg miles. american express’s first-quarter profit rose 19% as the company added new credit card customers. june grasso is here with the details. june?
>> thank you. shares of american express higher on the latest earnings report. looking at the numbers, net income rose to $959 million or 75 cents a share for the fourth largest u.s. credit issuer, matching the average analyst estimates. the gain means chief executive ken chenault can brag about an earnings streak growth of 10%.
>> american express has been pretty good about hitting targets and i think this year was no exception. i would say we certainly feel it’s possible for them to earn around the popular estimate of $3 or $3 and change, which would, i think, be a very, very nice performance for them.
>> the company is benefiting from a deal with mbna to issue american express credit cards, piggy bagating on the―backing on the success of the biggest credit card company. american express has made a similar agreement with citibank.
>> clearly, it’s a positive from the standpoint that before the agreement, american express could only sell their product themselves. now they have two of the top three credit card players marketing their product. so certainly that’s going to enable their product to become more widely distributed and over time, that will benefit american express.
>> american express also taking steps to boost future profits by spinning off its financial advice business.
>> thank you very much.% june grasso. stay with us. we’ll have more, including earnings at southern company.
在线播报
Listen Market briefing --- Mike (fast)
Wall Street today --- Deirdre (slow)
NYSE --- Deb (slow)
welcome to news, i’m michael mckee, reporting tonight from washington. to the latest on amazon.com. shares are tumbling, down as much as 6% in the extended hours after the world’s largest internet company said it missed analysts’ estimates for the first quarter by a nickel a share. this is the fourth quarter in a row that amazon has missed analysts’ estimates. su keenan has details.
>> we’re now seeing shares down as much as $2. chief executive, jeff bezos, of course, has been trimming prices and fees and spending more on site design, betting a short-term sacrifice of profits will cement amazon’s lead over rivals. amazon’s sales were in line with expectations, rising 24% this quarter. analysts say new discounts and development costs hurt profits. amazon reported profit falling to 18 cents a share, including a six-cent-a-share gain from a change in accounting,ating,a 30% drop compared to last year’s 26 cents a share. it is also five cents a share below the estimate of analysts surveyed by thomson financial. revenue was $1. 9 billion, in line. amazon has been spending money on software engineers and offering discounts in order to make its online marketplace more attractive to vendors and customers of the before the numbers were released, analyst mark mahaney expressed concern about profitability, saying shipping and discounts would drive down amazon’s operating margin and predicts it will drop a full percent in 2005 and says investors may doubt the company’s pledge to raise margins to 10% down the road.
>> all you know now is that margins are under pressure, going down on a year-on-year basis, reducing anybody’s confidence in the ability of the company to gain 10% operating margins.
>> he and others say margin contraction is a major reason the stock has declined nearly 30% in the past year. there’s another reason amazon’s sales growth is slowing worldwide, although the international rate still outpaces the u.s. the conference call just underway at this hour and pacific crest security’s analyst says he’s listening closely for details on sales growth.
>> the key issue to us on amazon will be how much do they have to sacrifice margins in order to get growth. that’s what’s critical to building our forecast going forward and ultimately bringing it back to valuation.
>> as far as outlook, amazon.com sees 2005 revenue at $8.18 billion, a range of $8.18 billion to $8.68 billion. the midpoint is in line with estimates of $8.42 billion. headlines crossing now and the c.e.o. saying the amazon earnings shouldn’t be compared to the thomson estimates.
>> they have always talked about cash flow rather than earnings. let’s get you to the overall numbers. the dow jones industrials, on the day, having their worst day in a week, losing 91 points, finishing at 10,1 51 -- the broader major indexes finishing down, st. louis 5050 treasury notes fell after sales of new homes set a record, giving some hope about the economy. the 10-year note down almost 1/8 on the day, the yield up a basis point to 4.27%. in the belly of the curve, the five-year note down 1/16, the yield down to 3.95%. the two-year note little changed. a burst of optimism that washed over wall street this morning when the new home sales were announced faded, as we’ve been talking about. you can see that in the results at the end of the day. deirdre bolton has the day on wall street.
>> mike, investors were served a confusing cocktail, the seemingly good news with lower oil prices offset by mixed economic earnings and earnings news. on the earnings front, dupont, lexmark, both of those stocks falling on disappointing results. altria soaring, pushing semiconductor stocks higher on altria’s better-than-expected first-quarter results. overall, first-quarter earnings have come in higher than forecast, but not enough of a catalyst. earnings season has been as good if not better than people expected. the key question is whether or not investors really care.
>> malone says investors continue to worry about how high the federal reserve will raise interest rates.
>> visibility going forward is lacking to really prompt investors to put money at work at this point in time.
>> the housing report seems to say the economy is not in a soft spot so rates can keep rising. one place where investors are willing to put money, real estate and home home building stocks. record new home sales and historically low mortgage rates show the boom is not losing steam. centex, d.r. horton and pulte pushed the index of home building stocks higher for the second consecutive session. lower oil prices pushed energy prices lower. even higher-than-expected earnings at schlumberger didn’t help their stock. retailers were mixed, as well, the five-month low in consumer confidence suggesting americans may spend less. still, companies that sell to high-end consumers continue to grow. coach rallied as much as 7% after reporting third-quarter sales growth of 53%. coach is also taking control of its japanese unit. it wants to double its sales there within four years. coach, by the way, is up 26% over the past year, compared to wal-mart’s 19% loss. s&p 500, as we know, up close to 2% over the same time frame. mike, back to you.
>> deirdre bolton. traders say the market seems to be preoccupied by earnings and concerns about growth in the economy these days. for more on today’s trading action, we have a report from deborah kostroun at the big board.
>> and the big question for the markets right now is how much is the economy slowing down? we will get first-quarter g.d.p., that number on thursday. that will answer that question. and a lot of concern about slowing growth and rising interest rates have the indexes down for the year. in tuesday’s session, the dow jones industrial average closing at its lowest level of the day. in fact, stocks started on the wrong foot. lexmark ended up at a 52-week low, its biggest drop in nearly two years after they said their first-quarter numbers were disappointing and the outlook for the second quarter also disappointing. that, of course, is the number two printer maker that also led the number one printer maker, hewlett-packard, to the lower side. looking at other numbers, with the economy, the housing market , a report showing new home sales unexpectedly increased to the highest level on record, helping to lift shares of homebuilder. centex reports earnings tomorrow. meritage homes, that stock traded higher. they expect full-year earnings to come in better than expected, with an increase of 22% to 27%. i.b.m., the biggest gainer in the dow jones industrial average and that after the company saying it will buy back as much as $5 billion in shares. they also boosted their quarterly dividend 11% to 20 cents a share. looking at american express, this is the fourth biggest credit card issuer. they released earnings during the session. income rose 19% to a record as the company attracted new credit card customers from its partner with mbna and mbna issues american express credit cards along with mastercards and visa cards, providian financial and metris companies also beat analysts’ estimates with their earnings.% boeing, world’s number two commercial airplane maker, won another order today from air india after winning an order yesterday from air canada. i’m deborah kostroun at the new york stock exchange, bloomberg news.
>> we want to check oil prices, now. crude oil down for a second day on optimism about production after the president’s meet with the saudi crown prince yesterday. crude oil futures finishing lower 37 cents at $54.20. among other energy movers today, unleaded gasoline down two cents, heating oil and natural gas futures lower on the day. boeing beats airbus for a second day in a row but investors are also focusing on tomorrow’s earnings report. coming up, we’ll tell you what wall street is expecting.
