Market briefing --- Lori
Focus: Cogate
>> welcome back. jones apparel group, maker of ann klein clothes and 9 west says it’s exploring a sale of the company. goldman sachs has been hired as financial adviser. jones apparel is considering the sale after profit fell for two consecutive years. the company faces a decline in sales at federated department stores and competition from more fashionable brands. such as juicy cutour. the c.e.o. plans to open more stores and reduce spending by $100 million over the next two years in an effort to boost profit. colgate palmolive is going natural. the world’s largest toothpaste maker is is acquiring a majority stake in toothpaste maker tom’s of maine. the founders will retain a 16% stake. tom’s of maine is the number one natural oral care brand and has 60% market share. colgate says the u.s. market for natural oral and personal care products is $3 billion and growing at a 15% pace a year. with just a couple of weeks to go in the first quarter, that puts us in the midst of the so-called confession season when companies tell us what their numbers are looking like for the quarter. connell mcshane is here with a look at how things are going. what confessions are we hearing?
>> the funny thing is, we’re not hearing that many of them, at least today. for at least one day, things are looking pretty good for companies making preannouncements. at least four of them boosted forecasts today, coming as a welcome surprise to the market . analyst art hogan at jeffries and company.
>> the confessions season historically is one where we only hear bad news, we don’t typically hear good news so i think the markets are telling us there’s not too many blowups or warnings on the way because the path of least resistance to this market has certainly been higher.
>> to the four companies that i mentioned. they come from very different industries. the chip designer rambus boosting its sales forecast. all these stocks up today in a down market . higher full-year forecast from video game seller, gamestop. electronics commerce company, digital river boosting its profit outlook and travel company cendant saying first degree profit will be at or near the high end of the range. there is a risk when we talk about revised numbers. when i talked to art hogan about that, he expressed concern about expectations getting ahead of themselves and the market possibly taking a pause.
>> i do know we are back into that elusive state where there are printed estimates and whisper numbers and whisper numbers always being higher and unfortunately we saw that last week with some of the investment banks.
>> he pointed to lehman brothers as a prime minister example. goldman sachs, you’ll remember, with the strong numbers, set the bar so high. lehman comes in, pretty good numbers, as well but not as good as goldman and the stock moved lower. something we’ll have to watch for when all the other companies report.
>> thank you very much for joining us. moving on to stories from the defense industry. general dynamics is the u.s. army’s largest supplier. today, the company said it is likely to get at least $1 billion in revenue from a new guided rocket. this after the company teamed up with three groups bidding for the contract. general dynamics says it agreed to act as a subcontractor after the army rescinded a previous award to develop the weapon because of cost overruns. the army’s decision to save money by upgrading an existing rocket, benefits general dynamics, the only maker of the weapon. teams led by lockheed martin and raytheon and b.a.e. systems each propose adding a guidance system to the current weapon to create the advanced precision kill weapon precision kill two rocket. we’ll check world and national news coming up and another salvo in the video game battle between microsoft and sony. this time, microsoft looks to take advantage of a misstep by its rival in asia. details next.
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Listen World & National News
>> i’m mark crumpton with a world news update. president bush says if he didn’t believe the u.s. could achieve victory, he would pull america’s forces out of iraq. at a white house news conference, the president again acknowledged public doubts about the iraq war and even predicted, in his words, more tough fighting ahead. the president said, “we all recognize there was violence.” but rejected the assertion from former interim prime minister iyad allawi who said iraq is in the midst of a civil war. mr. bush said other voices out of iraq say it’s not a civil war.
>> no question that the enemy has tried to spread sectarian violence. they use violence as a tool to do that. they’re willing to kill innocent people. the reports of bound sunnis that were executed are horrific and it’s obviously something we’re going to have to deal with
