- The Washington Times - Tuesday, January 24, 2006

Quarterly profits outweigh losses

NEW YORK (Bloomberg) — U.S. stocks, helped by better-than-forecast earnings at United Technologies Corp. and McDonald’s Corp., staged their first two-day advance since the New Year’s rally peaked.

The fourth-quarter profits, along with lower oil prices, outweighed disappointing results at companies including 3M Co., Texas Instruments and Johnson & Johnson. Similar shortfalls last week at Citigroup Inc. and Intel Corp. sent share prices tumbling.

The Standard & Poor’s 500 index added 3.04, or 0.2 percent, to 1266.86. The Dow Jones Industrial Average rose 23.45, or 0.2 percent, to 10,712.22, helped by a gain in General Motors Corp. The Nasdaq Composite Index climbed 16.78, or 0.8 percent, to 2265.25.

The S&P; 500 on Friday dropped the most since 2003 and has declined 2.1 percent from a four-year high reached Jan. 11 as fewer companies exceed analysts’ expectations and ones such as Intel outright missed.

Oil prices fell on speculation that supplies are sufficient to meet demand and that Iran is unlikely to curtail oil exports because of a nuclear-research dispute. Crude, which reached a four-month high of $69.20 a barrel a day ago, lost 1.5 percent to $67.06.

About 30 S&P; 500 companies reported yesterday and more than 140 this week, the busiest period for fourth-quarter earnings. So far, 59 percent of the 130 S&P; 500 companies that reported earnings surpassed analysts’ estimates. For the fourth quarter of 2004, 66 percent exceeded forecasts, according to a Bloomberg analysis of Thomson Financial data.

United Technologies, the world’s largest maker of elevators and air conditioners, rallied $1.98 to $56.45 and was the top contributor to the Dow average’s gain. It reported fourth-quarter profit, excluding some items, of 71 cents a share. Analysts, on average, expected 70 cents in a survey by Thomson, which doesn’t provide Bloomberg News with the parameters for estimates.

Another Dow average member, McDonald’s, climbed 14 cents to $35.85. The world’s largest restaurant chain said earnings in the fourth-quarter rose 53 percent on higher sales in the U.S. and Germany. Excluding an impairment charge, per-share profit was 49.5 cents on sales of $5.23 billion. Analysts expected 48 cents and revenue of $5.21 billion, according to Thomson. The company also said it expects to buy back $1 billion of stock this quarter. The shares have jumped 6.3 percent in 2006.

AT&T; Inc. gained 21 cents to $24.66, and BellSouth Corp. added 11 cents to $26.92. Cingular Wireless LLC, the No. 1 U.S. mobile-phone service provider and a joint venture of AT&T; and BellSouth, had a fourth-quarter profit of $204 million after adding a record 1.82 million customers. A year ago, Cingular had a loss of $495 million.

GM added $1.20 to $23.05, bringing its two-day rise after the announcement of Ford Motor Co.’s restructuring to 15 percent.

3M, a maker of more than 50,000 products, retreated $1.50 to $74.20. The company reported fourth-quarter sales of $5.33 billion. Analysts expected $5.4 billion, according to Thomson. This year, revenue will rise 4 percent to 7 percent, 3M said, below its long-term target of 5 percent to 8 percent.

Texas Instruments lost $1.01 to $30.69. The world’s biggest maker of mobile-phone chips said yesterday after markets closed that fourth-quarter sales rose to $3.59 billion, the lower end of a forecast the company gave in December. Revenue this period may trail analysts’ estimates, Texas Instruments said.

J&J; fell $1.83 to $59.36 and was the top drag on the Dow average. The biggest maker of medical devices said that fourth-quarter revenue declined to $12.6 billion from $12.8 billion.

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