MBIA CEO's Words Rally; MasterCard Rings Up Strong 4Q; Starbucks Scales Back; Home Depot Cuts Jobs; Volcker Edorses Obama; Japan Airline Takes Off; Google Disappoints; Cheers at Anheuser Busch
MBIA Inc. (MBI) Chief Executive Officer Gary Dunton had reassuring words for shareholders on a conference call yesterday (Thursday), which addressed the bond insurer's $2.3 billion fourth-quarter loss. "It's very difficult to see the reputation of a company you love coming under fire," Dunton said during the call. "The ground has literally opened up below us in the industry," he said. But he said the firm's capital position is strong enough to maintain its AAA-rating and avoid bankruptcy.
MasterCard Inc. (MA) announced fourth-quarter and full-year 2007 earnings yesterday (Wednesday). Net revenue for the quarter was up 27.8% from the same period a year prior, to $1.07 billion. MasterCard attributed 4.7% of the increase to favorable currency exchange rates. Global purchases rose 16.1%, measured in local currency, during the quarter to $477 billion, due in part to an increase of 12.6% for the number of cards issued during the year. Robert W. Selander, MasterCard president and chief executive officer, said, "We continue to benefit from the worldwide demand for electronic payments, solid performance in high-growth regions such as South Asia/Middle East/Africa and Latin America, as well as strong growth in processed transactions and cross-border travel volumes."
Gourmet coffee-seller, Starbucks Corp. (SBUX), took a beating in early morning trading yesterday (Thursday) after a weak fiscal first-quarter report was released late Wednesday. Profits rose by less than 2%. With consumer confidence on the wane, paying top dollar for coffee that can be brewed more cheaply at home is falling out of fashion. Based on current market sentiment, Starbucks pared back its planned store openings to 1,175 from an original forecast of 1,600. Starbucks already has 11,160 stores through the United States and now plans to focus more on growth overseas.
Home Depot Inc. (HD) slashed 500 jobs, 10% of employees at its Atlanta-based headquarters. "We're operating in a tough business environment, and we expect that to continue into 2008," Home Depot spokesman Ron DeFeo said today in an interview with Bloomberg News. The worst housing market in 26 years has lead to lower sales at the firm's home improvement retail stores and analysts are predicting a decline in revenue for the 12-months ended Feb. 3.
Former Federal Reserve Chairman Paul Volcker endorsed Democratic presidential candidate Barack Obama, yesterday (Thursday), Bloomberg News reported. "It is only Barack Obama, in his person, in his ideas, in his ability to understand and to articulate both our needs and our hopes that provide the potential for strong and fresh leadership," Volcker said in an emailed statement. Volcker's 1979 decision to raise interest rates drove the economy into a 16-month recession but the consumer price index, which had risen to 14.8% in the year ending March 1980, fell to 6.8% two years later and 3.6% in March 1983.
All Nippon Airways Co., Japan's second biggest airline, said yesterday (Thursday) that its profit rose 33.9% in the October-December quarter, The Associated Press reported. The increase was largely due to robust international services and the sale of hotel assets. Net group profit totaled $116.5 million (12.4 billion yen) quarter, ANA said in a statement. Sales for the latest quarter slid 0.9% to $3.55 billion (378.2 billion yen).
Google Inc. (GOOG) disappointed yesterday (Thursday) as its quarterly income fell short of analysts estimates. Net income for the fourth quarter rose 17% to $1.21 billion, or $3.79 a share, from $1.03 billion, or $3.29 a share, a year earlier. Analysts polled by Thomson Financial expected Google to report adjusted fourth-quarter earnings of $4.44 a share on revenue of $3.45 billion. The results may lead some to speculate that Google won't be able to sell as much online advertising as consumers tighten their spending spending.
Anheuser-Busch Cos. Inc. (BUD), the nation's largest brewer, said yesterday (Thursday) that surging beer sales helped push its profit up 12% in the fourth quarter. The company earned $214 million, or 29 cents per share, in the three months ended Dec. 31, up from 25 cents a share or $191 million, in the same period in 2006. The company reported the revenue of its U.S. beer segment rose 3% during the fourth quarter, while revenue from international markets jumped 4.7%.