Trader Talk

Retail Sales (Not A Disaster) Boost Futures

Surprise! Retail sales were not a disaster in January; futures rose about 5 points on that news.


1) Deere's earnings of $0.83 handily beat estimates (note they earned $0.52 for the same period last year, a 60 percent increase in earnings!) They cited favorable conditions in the farm sector and strong customer response to the lineup.

However, the 2008 guidance of $700 to $725 million for net income in the second quarter is below analyst expectations of $734 million. The company was upbeat about Agricultural Equipment sales (50 percent of sales), saying "farm conditions throughout the world remain quite positive," but were cautious on sales in its Construction & Forestry Division (21 percent of sales) due to the ongoing housing slump. Despite increasing sales abroad in the last few years, Deere still gets about two-thirds of its sales from the U.S. and Canada.

2) Dean Foods reported earnings a bit below expectations, with the CEO saying "2007 was the most challenging year in the history of Dean" and went on to list record high dairy costs, oversupply of organic milk that drove down prices, increased competition, etc.

3) Coke reported earnings of $0.58 ahead of estimates of $0.55. International volume growth was again strong, up 7 percent, while North America was up only 1 percent. This is consistent with other international companies reports.

4) Rio Tinto said it had received "a great deal of encouragement" from company shareholders concerning its rejection of a takeover bid from BHP Billiton.

5) Waste Management   beat expectations for earnings and revenues.

Questions?  Comments?