Merck profit beats forecast, helped by cost controls; revenue lags

WHITEHOUSE, N.J., Fri Apr 27, 2012 – Merck & Co. reported quarterly earnings slightly above Wall Street forecasts, helped by cost controls, but revenue trailed expectations on generic competition and reduced proceeds from a joint venture with British drugmaker AstraZeneca Plc.

The No. 2 U.S. drugmaker on Friday said global revenue rose 1 percent to $11.73 billion, compared with Wall Street expectations of $11.82 billion. Revenue would have risen 2 percent if not for the stronger dollar, which hurts the value of sales in overseas markets.

Sales of the asthma treatment Singulair, whose U.S. patent lapses in August, edged 1 percent higher to $1.34 billion in the quarter. That marks a slowdown for Merck’s biggest product, whose sales jumped 8 percent in the prior quarter.

Singulair could lose half or more of its sales soon after cheaper generics arrive. But the company has a lineup of promising medicines in clinical trials that it hopes will be approved, and help fill the revenue gap.

They include a new type of insomnia treatment called suvorexant, osteoporosis treatment odanacatib and two drugs that have been delayed by regulators: Bridion, to reverse the effects of anesthesia, and Tredaptive, a form of niacin meant to raise “good” HDL cholesterol without causing facial flushing.

“Beyond earnings, we continue to believe Merck’s late-stage pipeline updates in 2012 and 2013 represent key drivers for the stock,” JP Morgan analyst Chris Schott said in a research note, referring to expected progress reports on the drugs.

Schott said Merck could generate compound annual earnings growth of 7 percent through 2017, the highest gains of any major drug company he covers. Even so, he said Merck shares are trading at only 10 times the company’s expected 2012 per-share earnings, a discount to most rival large drugmakers.

Caterpillar first quarter profit beats Wall Street predictions

PEORIA, Ill., Wed Apr 25, 2012 – Caterpillar Inc. reported a 29 percent rise in first-quarter profit on Wednesday and beat analyst expectations thanks to continued demand for replacement machinery in North America and growth in its mining business.

The world’s largest maker of construction machinery reported net earnings of $1.6 billion, or $2.37 per share, compared with $1.2 billion, or $1.84 per share, a year earlier.

The company said the first quarter earnings per share figure was its highest on record.

Caterpillar’s sales rose 23 percent to $16 billion during the first quarter, the company said.

Analysts on average had projected a profit of $2.13 a share, according to Thomson Reuters I/B/E/S. Revenue, however, fell short of the $16.2 billion that Wall Street had expected.

In a press release, Caterpillar CEO Doug Oberhelman said the company was experiencing a “slowing” in China and Brazil as those countries “took steps in 2011 to slow their economies and bring inflation under control.” Strength in the United States was expected to offset that weakness.

U.S. sales boost McDonald’s Corp. first-quarter profit

OAK BROOK, Ill., Fri Apr 20, 2012 – McDonald’s Corp. reported higher quarterly profit on Friday, paced by strong sales at established restaurants in the United States and Europe.

Quarterly sales at restaurants open at least 13 months were up 7.3 percent, more than the 6.7 percent increase expected by analysts polled by Consensus Metrix. Comparable sales rose 8.9 percent in the United States and 5 percent in Europe.

Companywide, the restaurant chain expects the momentum to continue in April, forecasting comparable sales will be up 4 percent for the month.

A difficult economy in Europe, the company’s biggest market, had raised concerns that McDonald’s patrons might pull back.

“People have been most concerned about Europe and it looks like it’s OK,” said Sara Senatore, an analyst with Sanford C. Bernstein & Co.

In Asia/Pacific, Middle East and Africa, comparable sales were up 5.5 percent.

Shares of McDonald’s rose 1.7 percent to $96.95 in premarket trading on Friday.

Net income at the world’s biggest fast-food chain rose to $1.27 billion, or $1.23 per share, during the first quarter, up from $1.21 billion, or $1.15 per share, a year earlier. That was in line with analysts’ average forecast, according to Thomson Reuters I/B/E/S.

GE profit, revenue top Wall Street forecast; orders up 20 percent

FAIRFIELD, Conn., Fri Apr 20, 2012 – General Electric Co. topped Wall Street’s profit and revenue forecasts for the first quarter, helped by strong demand for energy equipment and railroad locomotives.

The largest U.S. conglomerate said industrial orders had risen 20 percent in the quarter and that selling prices had improved in most of businesses. This should help CEO Jeff Immelt achieve his goal of boosting profit margins by a 0.5 percentage point this year.

“We witnessed broad-based strength in orders across all our infrastructure businesses and in both equipment and services,” Immelt said in a statement.

GE shares rose 0.9 percent to $19.31 in premarket trading.

Investors noted that the company had notched solid organic growth — a measure that factors out the influence of acquisitions or fluctuations in exchange rates.

“Organic revenue growth in the industrial business was great at 11 percent,” said Jack De Gan, chief investment officer of Harbor Advisory Corp., a Portsmouth, New Hampshire, firm that owns GE shares. “GE has been a disappointment for a long time … (and) is now finally going to get back to where its earnings can compound at a rate better than the S&P for a while.”

As of Thursday’s close, GE shares were up 6.6 percent for the past year, trailing the 10 percent rise of the Standard & Poor’s 500 stock index.

Investors said the report was a good sign for the rest of the industrial sector. Fellow blue-chip companies United Technologies Corp., 3M Co. and Caterpillar Inc. are all due to report results next week.

GE “beat on revenues, which they haven’t really been able to do in a long time, and that really bodes well for industrials in particular,” said Kim Forrest, senior equity research analyst of Fort Pitt Capital Group in Pittsburgh.

MasterCard quarterly profit up as consumers use more credit

PURCHASE, N.Y. – MasterCard Inc. reported a higher quarterly profit, as consumers around the world spent more money using credit and debit cards.

For the fourth quarter, the company which has beaten analysts’ expectations for seven straight quarters, posted a net income of $514 million, or $4.03 a share, compared with $415 million or $3.16 a share last year.

Total revenue was $1.72 billion, up 20 percent.

Excluding items, the company posted a net income of $19 million, or 15 cents a share.

Fourth-quarter revenue is typically higher as consumers buy more during the holiday shopping period and card processors provide higher rebates and incentives to cardholders.

Shares of the company closed at $357.62 on Wednesday on the New York Stock Exchange.

October homebuilder sentiment highest since May 2010

NEW YORK ― Homebuilder sentiment perked up in October to its highest level in a year and a half, though ongoing challenges still kept confidence historically low, the National Association of Home Builders said on Tuesday.

The NAHB/Wells Fargo Housing Market index rose to 18 from 14 the month before, the group said in a statement. It was the highest level since May 2010. Economists polled by Reuters had predicted the index would rise to 15.

Readings below 50 mean more builders view market conditions as poor than favorable. The index has not been above 50 since April 2006.

“This latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country, as extremely favorable interest rates and prices catch consumers’ attention,” NAHB chief economist David Crowe said in a statement.

Even so, builders are being squeezed by rising materials costs and low home prices due to the glut of foreclosed homes, Crowe said.

A gauge of single family home sales rose to 18 from 14, which was also the highest level since May 2010. The gauge of sales expectations in the next six months climbed to 24 from 17, the highest since March.