McDonald’s second-quarter profit falls, sales slow

OAK BROOK, Ill., Mon Jul 23, 2012 – McDonald’s Corp. reported lower-than-expected quarterly profit on Monday, hurt by a slowing global economy and the impact of a stronger dollar, and said sales growth at established restaurants would slow this month.
Shares in the world’s largest fast-food chain operator fell 2.1 percent to $89.65 in premarket trading.
The results come just days after Chipotle Mexican Grill Inc. surprised investors by saying the sluggish U.S. economy had cooled same-restaurant sales growth, adding to concerns about how much consumers were cutting back on discretionary spending.
McDonald’s net income fell to $1.35 billion, or $1.32 per share, during the second quarter, from $1.41 billion, or $1.35 per share, a year earlier. The impact of the stronger dollar — which lessens the value of sales overseas for U.S. companies – cut 7 cents a share from earnings in the latest quarter, the company said.
Analysts, on average, looked for $1.37 a share, according to Thomson Reuters I/B/E/S.
Sales edged up to $6.92 billion from $6.91 billion a year earlier.
Sales at restaurants open at least 13 months were up 3.7 percent in the quarter, exceeding the 2.9 percent increase expected by analysts polled by Consensus Metrix, but down from a 5.6 percent increase in June.
Comparable sales growth slowed even more in June – to 4.4 from a 7.7 percent rise a year ago.
The company said it expects same-restaurant sales to rise in July, but less than they did in the second quarter.
Same-restaurant sales rose 3.6 percent in the United States and 3.8 percent in Europe in the quarter. Analysts expected gains of 3.5 percent in the U.S. and 2.4 percent for Europe.
Comparable sales rose 0.9 percent in the Asia/Pacific, Middle East and Africa region, hurt by weakness in Japan. Analysts expected a 0.8 percent increase in that region.

Cisco shares drop on tech spending concerns about European economy

SAN JOSE, Calif., Thu May 10, 2012 – Shares of Cisco Systems Inc. fell 9 percent in premarket trading on Thursday, after the network equipment maker forecast weaker-than-expected quarterly results on growing worries about the European economy and nterprise IT spending.

Brokerages including BMO, Deutsche, Nomura, Piper Jaffray and Mizuho cut their price target on Cisco’s stock.

Cisco reported higher-than-expected third-quarter earnings on Wednesday but said it was “really hard to read” what would happen in the second half of the year as customers were more cautious about Europe.

The company, which relies on government and corporate spending on Internet gear, could be in for further estimate cuts if economic trends deteriorate further, said Nomura.

Cisco’s comments will likely pressure stocks across the sector, analysts said.

“The weak fourth-quarter guide is indicative of near-term macro-driven uncertainty in enterprise IT spending,” said Deutsche Bank analyst Brian Modoff.

Cisco’s comments about its telepresence sales, which were hurt by spending cuts by governments as well as businesses, are also negative for videoconferencing company Polycom Inc., BMO Capital Markets analysts said.

U.S. trade gap narrows sharply in February to $46 billion

WASHINGTON, Thu Apr 12, 2012 – The U.S. trade deficit narrowed unexpectedly in February as exports hit a record high, imports from China and other key suppliers declined and oil import volume fell to the lowest in 15 years, a government report showed on Thursday.

The monthly trade gap shrank 12.4 percent to $46.0 billion, the biggest month-to-month decline since May 2009, the Commerce Department report said. Analysts surveyed before the report had expected the deficit to narrow only slightly from January’s revised estimate of $52.5 billion.

U.S. exports edged slightly higher to a record $181.2 billion, led by record exports of services and capital goods, such as civilian aircraft and industrial machines.

Exports to Canada, the biggest U.S. trade partner, grew 7.2 percent and also rose to the 27-nation European Union, China, Brazil and newly industrialized countries. Exports to Britain hit a record $5.3 billion.

Imports dropped 2.7 percent to $227.2 billion, the biggest monthly drop in three years.

Chevron profit falls as refineries, output suffer

SAN RAMON, Calif. – Chevron Corp. reported lower quarterly earnings on Friday, missing Wall Street forecasts, as rising spending on oil and gas projects and losses at its U.S. refinery business offset gains from higher crude oil prices.Oil and gas output at the No. 2 U.S. oil company also declined to 2.64 million barrels per day from 2.79 million BPD a year-ago, although benchmark oil prices rose about 25 percent during the quarter.

Chevron had said earlier this month its refinery margins were suffering and would be near breakeven for the quarter, but the U.S. losses pulled the entire segment into the red, and the company’s profits from oil and gas sales also appeared weaker than expected.

Its shares fell 2.5 percent in early trading.

“It was a miss on some non-controllable factors,” said Pavel Molchanov, analyst with Raymond James in Houston, citing the timings of sales and global pricing differences as the likely reason oil and gas profits fell about $500 million below his forecast.

Still, Chevron added 1.67 billion barrels of oil equivalent to its reserves last year, 171 percent of its 2011 output, a very strong performance, Molchanov said.

Chevron is embroiled in two major legal battles in South America, where a Brazilian prosecutor plans to file criminal charges against it and some of its local managers.

The company is facing an $11 billion lawsuit there related to an offshore oil spill in November, and it also remains locked in a legal war against plaintiffs in Ecuador, who won an $18 billion judgment against it in a court there.

Jobless claims fall to lowest since April 2008, suggesting labor recovery growth

WASHINGTON ― New claims for unemployment benefits dropped last week to its lowest in more than 3-1/2 years, suggesting the labor market recovery was gaining speed.

Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 364,000, the Labor Department said. That was the lowest level since April 2008.

The economy has shown signs it is gaining steam as the year ends, although the recovery still could be derailed by any big flare up in Europe’s debt crisis. The economy also faces risks from the fight in Congress over extending special unemployment benefits and a payroll tax cut.

The prior week’s claims data was revised up to 368,000 from the previously reported 366,000.

Economists polled by Reuters had forecast claims rising to 375,000 last week.

The level of unemployment claims has fallen in recent weeks, and analysts say fewer layoffs means employers are probably more likely to hire.

Economists at Goldman Sachs said earlier in the week that weekly claims below 435,000 pointed to net monthly gains in jobs. Their research was based on figures available through October.

In November, the jobless rate dropped to a 2-1/2 year low of 8.6 percent. The Federal Reserve last week acknowledged an improvement in the jobs market, but said unemployment remained high and left the door open for further measures to help the economy.

A Labor Department official said claims were not estimated for any states, and that there was nothing unusual in the data.

The four-week moving average of claims, considered a better measure of labor market trends than the headline number, fell 8,000 to 380,250 — the lowest since June 2008.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 79,000 to 3.546 million in the week ended Dec. 10.

Economists had forecast so-called continuing claims holding steady at 3.6 million.

As of Dec 3, a total of 7.150 million people were claiming unemployment benefits under all programs, down 299,738 from the prior week.