Industrials
| Today's Industrials Stories | |
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News and Views
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Macro/Technicals
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Sector News, M&A, Capital Raises
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Research Away
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Top Events/Earnings Calendar
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News and Views
The industrials traded lower yesterday on some profit taking. DOW led many of the material stocks lower after a miss in their numbers. The steels were some of the bigger standouts yesterday. AKS led the group higher after announcing they would increase the current spot market base prices by $40/ton for its carbon steel products. We were active in the name. XJT announced this am that they agreed to be acquired by SKYW for $6.75/sh in cash. TRW reported better numbers this am and guided better revs for the next Q and the year. Stock is marked up 5% this am. Also OC reported 2 pennies light this am on better revs. NAV was downgraded this am by JPMorgan to underweight from neutral. Fly on the wall was reporting midday yesterday that they were hearing class 8 trucks orders came in below expectations. PCAR, CMI, and NAV all got hit off this.
Macro/Technicals
XAL : 40.93 ; -1.06S&P 500 Auto : -1.62%
S&P 500 Transportation : -0.24%
S&P 500 Materials : -1.67%
GLD : +0.4%
XLI : -0.5%
Sector News, M&A, Capital Raises
Industrials
o EADS: Cathay to buy 30 Airbus A350-900
§ Cathay posts record H1 net, to buy 30 Airbus planes
§ from Business Spectator
o SPW SPX Corp reports Q2 EPS $1.00 vs Reuters $0.71 Guides full year EPS to $3.30-$3.50, ex-items, above prior $3.00-$3.30 vs Reuters $3.32; First Call $3.31.
o AIT Applied Industrial subsidiary acquires SCS Supply Group business
o NL NL Industries reports Q2 EPS
o TG Tredegar reports Q2 EPS
o JBT John Bean Technologies reports Q2 EPS
o FFEX Frozen Food Express reports Q2 EPS
o ECHO Echo Global Logistics reports Q2 EPS
o CAP CAI International reports Q2 EPS
o GR Goodrich to acquire DeCrane Aerospace assets
o CIR CIRCOR International announces acquisition of Castle Precision Industries
o WTS Watts Water reports Q2 EPS
o MOLX Molex reports Q4 EPS
o NL NL Industries reports
o ESE ESCO Technologies reports Q3 EPS
Transports
o Strong freight traffic boosts Cathay from FT.com
§ Robust growth in cargo volume and a recovery in passenger flow have lifted first-half earnings to HK$6.84bn at Hong Kongs dominant airline, which said it could order up to 30 new aircraft
o *DELTA, AIRTRAN MUST FACE FEE-COLLUSION SUIT, JUDGE SAYS BBG
o REPUBLIC 2Q OPERATING REVENUE $683.3M, EST. $659.8M :RJET
· Debt-ridden Mexicana de Aviacion, Mexico's largest airline, announced Tuesday it filed for bankruptcy protection in Mexico and the U.S. after pilots and flight attendants rejected a deal to cut pay and staffing, The Associated Press reported.
· In Spain, air traffic controllers voted for a strike against government actions to change working hours and reduce the amount of accrued overtime pay allowed. The strike is initially expected to begin Wednesday the 18th of August and continue for up to three days, though final decisions on the exact start date and duration are to be released in the next couple of days.
o GOL Gol Linhas Aereas reports July traffic +12.2% y/y; +22.7% m/m
o RJET Republic Airways reports Q2 EPS
o ALK Alaska Air reports Jul traffic +11.0%; Capacity +7.1%; Load factor +3.1 points to 87.4%
o RJET Republic Airways reports July traffic +127.0% y/; capacity +108.0% ; load factor +7 pts to 86%
o HTZ Hertz Global reports Q2 adjusted EPS
XJT/SKYW- ExpressJet agrees to be acquired by SkyWest (SKYW) for $6.75/share in cash (3.28)
The net purchase price was $133M after giving effect for shares already owned by SkyWest. The transaction is not subject to financing conditions. The parties currently anticipate that the transaction will close during Q4.
· SkyWest has negotiated the principal terms of a new, long-term, capacity purchase agreement with Continental Airlines, which is intended to become effective upon consummation of the ExpressJet merger.
CP-Canadian Pacific reports weekly carloads (week ended 31-Jul) ($60.76)
Total carloads for the week were +14.9% to 53,646; last week's increase was +10.3%.
- Results by line of business (with y/y change vs. the prior week):
- Grain +3.1% vs (4.7%)
- Coal +2.0% vs +19.7%
- Sulphur and fertilizers +60.6% vs +88.6%
- Forest products +19.3% vs +12.9%
- Industrial products +16.8% vs +20.7%
- Intermodal +18.6% vs +2.9%
- Automotive +22.8% vs +15.9%
Materials
o Ivanhoe says in talks with 3rd parties on stakes from Reuters
§ Ivanhoe Mines is having "interesting" talks with potential new strategic investors following a recent move
o Feud at Russian Mining Firm Threatens Markets from DealBook
§ A struggle for control has erupted on the board of Norilsk Nickel, one of Russia's most valuable mining companies and the world's largest producer of nickel and platinum group metals, which currently have new uses in fuel cells for electric cars.
o BKI Buckeye Technologies reports Q4 adj. EPS
o BKI Buckeye Technologies initiates quarterly cash dividend of $0.04
o KRO Kronos Worldwide reports Q2 EPS
o BRD Brigus Gold completes private placement
o TIE Titanium Metals reports Q2 EPS
o NEU NewMarket reports Q2 EPS
o MERC Mercer International reports Q2 EPS
o IOSP Innospec reports Q2 EPS
o TX Ternium reports Q2 EPS
o USU USEC Inc reports Q2 EPS
o LNDC Landec reports Q4 EPS
o GMXR GMX Resources reports..Production guidance for 2011 has been increased approximately 17% to a range of 28 to 30
o Nippon Steel Corp: Chairman comments on changes in industry price structure; Says quarterly pricing lacks transparency and is unsustainable for mills - WSJ
Autos
o DTG, CAR Dollar Thrifty update on Avis Budget proposal
o HTZ Hertz Global reports Q2 adjusted EPS
o ARGN Amerigon reports
o Smoother Ride for Auto-Parts Makers - WSJ
§ Once Struggling, Companies Such as ArvinMeritor Are Transforming Themselves, Emerging Leaner and More Focused
§ they are profitable, their stocks are surging, they are hiring and they're putting the finishing touches on restructurings.
o Isuzu Motors Ltd., a Japanese maker of light trucks, doubled its full-year net income forecast to 40 billion yen ($468 million) on higher sales in emerging markets, according to a statement today to the Tokyo Stock Exchange.
o Toyota Motor., the worlds largest carmaker, increased its full-year profit forecast as sales in North America recover and Asia deliveries are growing more than expected.
§ Toyota swung into the black in the fiscal first quarter, as robust demand in Asia, government buying incentives in Japan, and a reviving U.S. market canceled out the impact of the strong yen.
o Chinese car and battery maker BYD said Wednesday it slashed its 2010 auto sales target by 25%, due to softening domestic demand and production constraints because of an increased focus on larger cars.
§ BYD, 10%-owned by MidAmerican Energy Holdings Co., a unit of Warren Buffett's Berkshire Hathaway Inc.,
Research Away
PH-Parker-Hannifin downgraded to market perform from outperform at Wells Fargo ($64.18) Valuation range is $70-72.
DOW- Dow Chemical downgraded to neutral from buy at Goldman Sachs, removed from Conviction Buy List
Top Events/Earnings Calendar
MERC- Mercer International reports Q2 EPS 0.23 ($5.52)
It is unclear if the figure is comparable to Reuters 0.57. Company reports revenues of 240.2M vs 158.9M y/y.
- operating EBITDA 62.1M vs. one estimate 63.3M
- pulp production 359,694 ADTs vs. 349,129 y/y
- pulp sales volume 365,002 ADMTs vs. 395,378 ADMTs y/y
- average pulp sales realizations 68.4% to 618 per ADMT vs. 367 per ADMT y/y
MERC says turbine at the mill will be down for appx an additional 51 days, which will result in an appx (6.0M) negative variance in Q3. MERC has no maintenance downtime scheduled for Q4 of 2010.
RRD- RR Donnelley reports Q2 non-GAAP EPS $0.47 vs Reuters $0.36 ($17.11)
Company reports revenues of $2.41B vs Reuters $2.39B.
ARGN- Amerigon reports Q2 EPS $0.10 vs Reuters $0.06 ($9.89)
Company reports revenues of $28.8M vs Reuters $23.3M.
- Unit shipments of CCS systems for the 2010 Q2 and first six months were 407,000 and 756,000, respectively, compared with 154,000 and 297,000 units for the year-earlier periods.
- Guides Q3 revenues to up slightly vs. Q2 and vs. Reuters $24.7M.
SKYW- SkyWest reports Q2 EPS $0.33 vs Reuters $0.38 ($12.41)
- Reports Q2:
- Revenues $649.8M vs Reuters $653.7M
- RASM (12.8%) to $0.109
RJET- Republic Airways reports Q2 EPS $0.08 vs year-ago $0.41 (6.18)
· Company notes that pre-tax income of $4.8M was negatively impacted by a total of $19.7M of items:
o $18.5M of expenses related to the integration of the branded business and accruals for the lease return costs of two A318 and five Q400 aircraft;
o $6.4M in negative adjustments for fuel hedges and prior period fuel excise taxes;
o and a $5.2M positive adjustment due to a reduction in lease obligations for Midwest aircraft and office facilities.
· The Reuters consensus for Q2 was $0.00.
· Company reports revenues of $683.3M vs year-ago $320M and Reuters $657.2M.
TRW- TRW Automotive reports Q2 EPS $1.73 ex-items ($34.55)
- Reuters estimate is $1.07 and unclear if comparable.
- Company reports revenues of $3.66B vs Reuters $3.43B.
- TRW expects 2010 full year production to total 11.6M units in North America and 17.2M units in Europe.
- Guides Q3 revenues to $3.1B vs Reuters $2.93B.
- Guides f10 revenues to $13.2B-$13.6B vs Reuters $13.01B.
OC- Owens Corning reports Q2 EPS $0.57 ex-items vs Reuters $0.59 (31.55)
Company reports revenues of $1.40B vs Reuters $1.38B.
· Guides f10 adjusted EBIT of $450M, which the company says equates to adjusted EPS of about $2.00. Reuters f10 EPS consensus is $2.07
· Buyback:
o The company's board has approved a share buy-back program authorizing the company to repurchase up to 10M shares, which is in addition to the February 2007 program that has 1.9M shares remaining.