Bernanke Acknowledges Possible Recession; Best Buy Up, No Thanks to U.S.; IMF Cuts Global Growth Forecast; Monsanto Reaps Healthy 1Q Revenue; Private Sector Jobs on the Rise; Sotheby's Shares Sink; Packeteer Rejects Bid; BlackBerry Income Rises
Citing deteriorating homebuilding, employment and consumer spending figures, U.S. Federal Reserve Chairman Ben S. Bernanke acknowledge for the first time that the United States may slip into a recession. "It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke said in testimony to Congress's Joint Economic Committee today, Bloomberg reported. He also testified that if the Fed didn't bailout The Bear Stearns Cos. Inc. (BSC), the financial company said it would file for Chapter 11 bankruptcy.
Best Buy Co. (BBY) posted better-than-expected earnings for its fiscal fourth quarter ended March 1, but the electronics retailer was still stifled by lower traffic in its U.S. stores. Same-store sales in the international segment are expected to outperform U.S. sales in fiscal 2009, Reuters reported.
The International Monetary Fund cut its forecast for global growth this year and said there's a 25% chance of a world recession, citing the worst financial crisis in the U.S. since the Great Depression. The world economy will expand 3.7% in 2008, the slowest pace since 2002, according to a document obtained by Bloomberg News at a meeting of Southeast Asian deputy finance ministers and central bankers in Da Nang, Vietnam. In January the fund projected growth of 4.1%.
Monsanto Co. (MON) said yesterday (Wednesday) that its second-quarter earnings more than doubled on strong sales of corn seed and herbicide in the United States. Monsanto earned $1.13 billion, or $2.02 per share, in the three months ended Feb. 29, up from $543 million, or 98 cents per share, in the prior year. Its revenue jumped from $2.6 billion to $3.8 billion, a 45% increase.
U.S. private-sector employers unexpectedly added 8,000 jobs in March, payroll data showed yesterday (Wednesday). The increase follows a revised drop of 18,000 in February that was less than previously estimated, according to the report from ADP Employer Services.
Analysts at JMP Securities LLC, a subsidiary of JMP Group Inc. (JMP), published a research note reducing Sotheby's (BID) target price from $42 to $37. Net revenue estimate for the first quarter was also reduced from $147 million to $131 million. An earnings per share estimate for 2008 was reduced from $2.75 to $2.65. Sotheby's shares dropped $2.86 (9.5%) yesterday (Wednesday) to close at $27.23.
Shares of Packeteer Inc. (PKTR) jumped almost 10% yesterday (Wednesday) after rejecting a hostile takeover bid of $5.50 a share from the Elliott Associates hedge fund, which is managed by Elliott Management Corp.Shares of the tech firm gained $0.51 to close at $5.74, reaffirming that shareholders feel the company is worth more than Elliott is offering.
Research In Motion Ltd. (RIMM), manufacturer of the BlackBerry e-mail phone, announced fourth-quarter profit more than doubled on strong consumer sales. Net income increased to $412.5 million, or 72 cents per share, from $187.4 million, or 33 cents per share, a year earlier, Bloomberg News reported.