Amazon.com 3Q Net Up 16% On Sales Jump; Spending Still Strong

Amazon.com Inc.'s (AMZN) third-quarter earnings rose 16% as revenue continued to surge at the No. 1 Internet retailer by sales, but investors were unsettled because the company raised the possibility that operating income might decline in the current quarter. Seattle-based Amazon said operating expenses jumped 40% in the third quarter, in part because it was spending on a previously planned infrastructure expansion that includes 13 new fulfillment centers.

During a conference call with analysts, Chief Financial Officer Tom Szkutak said the company had completed 10 of the centers and is planning to open more before the peak holiday shopping season. Amazon will continue to build infrastructure if it sees more growth, Szkutak said.

The earnings come as Amazon continues to capture a disproportionate share of growth in the online retail market, which is seen rising 13% this year to $152 billion, according to eMarketer, a research group. To take advantage of that opportunity, Amazon is continuing to spend on distribution centers and other investments. The potential for higher costs weighed on Amazon stock, which is up 23% so far this year. In after-hours trading, shares were down 3.8% at $158.70. Still, Amazon saw sales jump, particularly in its catch-all categaory, electronics and other general merchandise, which rose 68%. Traditional media was up 14%, a slower pace than in the second quarter. Some of those sales had been driven by discounting, because the company undercut competition with low prices in order to grab market share.

The company has also widened its offerings, including a growing number of third-party merchants selling on the site. Amazon's Kindle e-book reader and the company's digital book business have encountered increasing competition. The Kindle has also contributed to Amazon's rising costs because the company has boosted spending to promote the Kindle in the face of Apple Inc.'s (AAPL) iPad touchscreen tablet. On Thursday, the company said its latest e-reader models are the fastest-selling Kindles so far, but it remained characteristically tight-lipped on specific sales figures. In the latest period, Amazon posted a profit of $231 million, or 51 cents a share, from $199 million, or 45 cents a share, a year earlier.

Analysts predicted 48 cents. Net sales jumped 39% to $7.56 billion, which would have been a point higher excluding foreign-exchange effects. In July, the company predicted $6.9 billion to $7.63 billion. Gross margin inched higher to 23.5% from 23.4%. The company projected fourth-quarter revenue of $12 billion to $13.3 billion, compared with analysts' average estimate of $12.3 billion, according to Thomson Reuters. The company also offered a wide range for its operating income, which it said could decline as much as 24% or rise as much as 18%.

Source: Dow Jones Newswires

Hot Stocks To Watch: Netflix, eBay, McDonald's, Hershey, Baxter

Among the companies whose shares are actively trading in the session are Netflix Inc. (NFLX), eBay Inc. (EBAY) and McDonald's Corp. (MCD).

Netflix's ($172.61, +$19.46, +12.71%) third-quarter earnings improved 26%, topping its expectations as revenue and margins grew and subscriber-acquisition costs fell. Subscriber-acquisition costs, a metric closely watched by investors in the online movie rental company, declined 26%. The churn rate--a measure of customer cancellations and free subscribers--decreased to 3.8% from 4.4%.

EBay's ($27.75, +$2.09, +8.14%) evolution toward becoming a PayPal-focused company continued in the latest quarter as it reported better-than-expected results because of strength in its online payment business. According to eBay, PayPal ended the quarter with 90 million active accounts worldwide, adding more than a million new accounts each month during the quarter. EBay also announced a $2 billion stock buyback as well as plans to issue up to $1.5 billion in term debt financing under the company's existing shelf registration statement.

McDonald's ($79.10, +$1.69, +2.18%) third-quarter earnings rose 10% as the world's largest hamburger chain's U.S. sales got a boost from its blended-ice beverages and continued international growth. The results beat analysts' expectations.

Hershey Co.'s (HSY, $48.97, -$2.13, -4.17%) third-quarter earnings climbed 11% as the chocolate maker saw its sales and margins increase. Still, organic sales - a key metric that typically excludes acquisitions and foreign exchange - were below some analysts' expectations. In a statement, Hershey said the timing of some "seasonal shipments" damped third-quarter sales by about one percentage point. But those shipments were moved to early October and fourth-quarter sales will be higher than expected, the company said.

Children's Place Retail Stores Inc. (PLCE, $45.52, -$6.36, -12.26%) cut its fiscal third-quarter earnings forecast to account for comparable retail sales falling some 5% so far during the period for the children's retailer.

Other Stocks In Focus:
AptarGroup Inc.'s (ATR, $44.98, -$2.41, -5.09%) third-quarter earnings rose 40% to beat views, but the product-dispenser maker was downbeat about earnings for the current quarter because of dollar strength and a tough comparison.

Baxter International Inc.'s (BAX, $51.02, +$1.63, +3.30%) third-quarter earnings rose 12% following charges a year ago and as the company cited "improved performance" in a business that includes plasma-based drugs and has been a big source of turbulence this year. Janney Capital Markets raised its stock-investment rating on BJ's

Wholesale Club Inc. (BJ, $42.82, +$1.57, +3.81%) to buy from neutral, saying it believes the likelihood of a buyout by Leonard Green & Partners, a big stakeholder, is a very real possibility.

Covanta Holding Corp. (CVA, $16.09, +$0.42, +2.68%) third-quarter earnings fell 51% as the renewable-energy company's growth in operating expenses outpaced that of weaker-than-expected revenue. Adjusting for one-time charges related to an Irish development project and a loan to improve a Pennsylvania facility, core profit rose and beat analysts' expectations.

Cypress Semiconductor Corp. (CY, $11.78, -$0.61, -4.92%) reported a third-quarter profit following weak prior-year results as demand continues to rebound. But the company's revenue growth fell short of Wall Street's expectations.

Danaher Corp.'s (DHR, $43.19, +$1.60, +3.85%) third-quarter earnings surged 84% on a $291 million gain related to the diversified manufacturer's tool joint venture. Stronger sales and margins also contributed to the results beating analysts' expectations.

E*Trade Financial Corp. (ETFC, $14.45, -$0.30, -2.03%) posted its second consecutive quarterly profit as the online brokerage again set aside less money for current and future potential losses. But E*Trade, which has been hammered by bad loans made by its banking unit, also felt the pain of a slowdown in trading activity, as daily average revenue trades--or DARTs, a measure of trading levels--plunged 30% from a year earlier, and 26% from the second quarter.

Drug maker Eli Lilly & Co. (LLY, $35.60, -$0.41, -1.14%) said Thursday its third-quarter profit rose 38% from the year earlier period, which was weighed down by an asset-sale charge, while revenue growth was relatively weak.

Fidelity National Financial Inc. (FNF, $13.52, -$1.22, -8.28%) announced Chief Executive Alan Stinson stepped down as third-quarter profit rose 13%, with cost-cutting more than offseting declining revenue. Stinson will remain with the title insurance company as an executive vice president. Fellow title insurer First American Financial Corp. (FAF, $14.31, -$0.66, -4.41%) also declined.

Fifth Third Bancorp. (FITB, $12.88, +$0.48, +3.87%) swung to a third-quarter profit as it set aside much less to cover loan losses.

Source: Dow Jones Newswires

Top Equities Stories Of The Day

ELI LILLY PROFIT RISES 38%
Drugmaker's 3Q earnings climb to $1.3 billion, or $1.18 a share, as the company rebounds from a year-earlier quarter hamstrung by $549.8 million of charges, and revenue edges up 1.7% to $5.65 billion.

US STOCK FUTURES GAIN ON EARNINGS OPTIMISM
U.S. stock futures rise, as strong company earnings boost sentiment on Wall Street. A slew of heavyweights, including Caterpillar, McDonald's, and Travelers deliver earnings ahead of opening bell.

GOLDMAN SACHS MAY REPAY $5B IOU TO BERKSHIRE
Goldman Sachs considers paying back a $5 billion investment from Berkshire Hathaway that bolstered the securities firm during the worst of the financial crisis, people familiar with the situation tell The Wall Street Journal.

TRAVELERS UPS GUIDANCE AFTER PROFIT RISES 7.5%
Insurer raises its full-year guidance after 3Q results beat the consensus estimate of analysts. Travelers results are driven by higher investment gains and a near-total absence of the catastrophic hurricanes that typically plague insurers in 3Q.

XEROX PROFIT SURGES ON HIGHER REVENUE
Xerox 3Q earnings more than double to $250 million, or 17c a share, as revenue jumps 48% to $5.43 billion, on benefits from its acquisition of Affiliated Computer Services.

US SEEKS GLOBAL PACT FOR BIG BANKS
Some top U.S. officials, including Treasury Secretary Timothy Geithner, are wary of imposing additional capital requirements on large U.S. firms unless other countries follow suit.

CREDIT SUISSE 3Q PROFIT SLIDES, MISSES ESTIMATES
Credit Suisse Group says 3Q profit shrinks, hit by losses on its own debt and a lull in volumes at its securities unit and as wealthy private clients hold back from investments. The figure misses analyst estimates.

AKZO NOBEL'S QUARTERLY PROFIT BOOSTED BY CHEMICALS
Akzo Nobel says housing and construction markets remain soft, as it reports a forecast-beating net profit for the 3Q supported by strong demand at its chemicals business that offset lower profitability at its paints and coatings businesses.

PNC PROFIT NEARLY DOUBLES ON GAIN, TOPS VIEWS
Bank's 3Q profit jumps to $1.1 billion, or $2.07 a share, after a gain from the sale of its investment-servicing business, but its adjusted results easily top estimates. Loan-loss provision was nearly halved to $486 million.

CONOCOPHILLIPS MAY SELL MORE THAN $10B IN ASSETS
ConocoPhillips could sell more than $10 billion in assets as part of a previously announced two-year restructuring plan to shore up its finances, Chief Executive Jim Mulva tells CNBC.

HERSHEY NET RISES 11%; RAISES YEAR EPS VIEW
Maker of Hershey's Kisses and Reese's Peanut Butter Cups posts 3Q profit of $180.2 million, or 78c a share, on higher margins and a 4% increase in sales to $1.55 billion. It also boosts its 2010 EPS forecast to $2.52-$2.56 from $2.47-$2.52.

Source: Dow Jones Newswires

Morgan Stanley reports 3rd quarter loss tied to changing value of bank's own debt

Morgan Stanley became the latest investment bank to report weaker results Wednesday from a trading slowdown during the summer.

The New York-based bank reported a net loss during the third quarter as revenue fell 20 percent and because of some special one-time charges. Even stripping out the charges, adjusted earnings tumbled from the year-ago period.

Morgan Stanley's CEO James Gorman said in a statement: "Our results in aggregate clearly do not reflect the true potential of Morgan Stanley's global client franchise and I am not satisfied with our overall performance."

The bank's shares closed down a penny at $25.38 as broader markets rallied.

Paul Zubulake, a senior analyst at Aite Group, said Morgan Stanley was up against the same problems other investment banks were facing. Economic, regulatory and political uncertainty all factored into a slowdown in trading and market activity, he said.

"There's just less risk-taking going on," Zubulake said.

Morgan Stanley was hurt, like competitors Goldman Sachs Group Inc. and JPMorgan Chase & Co., as customers significantly ratcheted back on investing. Everyone from retail investors to large institutions scaled back their trading during the summer because of worries about the health of the economy and a general lack of volatility that often propels trading.

"It was a really protracted slowdown reflecting ongoing uncertainty in the markets," Ruth Porat, Morgan Stanley's chief financial officer said in an interview with The Associated Press.

Morgan Stanley was especially hard-hit by a slowdown in bond trading and underwriting stock offerings. Porat said the pace had started to pick up in September but that it was too early to tell if the gains would continue.

Craig Fehr, a senior financial services analyst for Edward Jones, said growth in the investment banking division is likely to be moderate over the next year as customers slowly re-enter financial markets. He predicted growth could be between 6 percent and 8 percent during the next 12 months.

Morgan Stanley's overall revenue fell 20 percent to $6.8 billion in the third quarter, but that was still ahead of the $6.4 billion forecast by analysts polled by Thomson Reuters.

The bank's net loss applicable to common shareholders was $91 million, or 7 cents per share, during the quarter, compared with earnings of $498 million, or 38 cents per share, during the same quarter last year.

Morgan Stanley would have earned a profit if it wasn't for special charges it took to cut the value of an investment it plans to sell and the changing value of its own debt.

Earnings from continuing operations totaled $313 million, or 5 cents per share, a 67 percent drop from the $936 million, or 50 cents per share, earned during the same quarter last year.

Stripping out special charges and discontinued operations, Morgan Stanley earned 23 cents per share, during the most recent quarter.

One of the biggest drivers of the loss was a $731 million charge Morgan Stanley took to reflect the greater cost it would incur to repurchase outstanding debt, which is worth more now because of the bank's improving financial condition. That reduced earnings by 30 cents per share.

The New York-based investment bank was on the brink of collapse during the depths of the financial crisis in late 2008. As the company received new investments and expanded its retail brokerage business through the purchase of Smith Barney, it recovered. With that recovery the price of its debt rose.

Banks must account each quarter for how much it would cost to buy back all its outstanding debt.

Morgan Stanley also took a $229 million charge as it slashed the value of its investment in Revel Entertainment Group, an Atlantic City, N.J. casino operator it plans to sell.

Quarterly results got a 12 cent per share lift from a one-time tax gain.

Source: Business Writer

US Economic Growth Continues At Modest Pace

U.S. economic activity continued to rise modestly in September and early October, with growth picking up in several districts, according to a report released Wednesday by the Federal Reserve.

Several sectors in some districts, however, showed continued signs of sluggishness, the Fed's latest beige book indicated.

Housing markets remained weak, with most of the Fed's 12 regional districts reporting sales below those of a year ago, the Fed said.

"Home inventories were elevated or rising according to most District reports," the Fed said.

The report comes as the Fed is widely expected by investors to announce new government bond purchases at its next meeting on Nov. 2-3 in a bid to boost the slowing recovery.

Minutes from Fed policymakers last meeting Sept. 21 showed most officials believing that the central bank needed to undertake new measures to boost growth, given that inflation remains too low and unemployment too high.

The U.S. central bank compiles the beige book eight times a year from anecdotal information collected by the dozen regional Fed banks scattered around the country. The report, which is based on interviews with businesses, economists and market experts, helps inform Fed officials as they decide the future course of monetary policy.

This latest beige book was prepared by the Federal Reserve Bank of Dallas, based on information collected on or before Oct. 8, and is prepared for the central bank's next policy-setting meeting.

With the central bank concerned that inflation is too low, the beige book found that input costs increased slightly but were generally not being passed on to consumers in the form of higher prices for goods and services.

"Pass-through of rising input costs to final prices remained limited although there were scattered reports of increases," the Fed said.

Most districts reported minimal wage pressure, though there were numerous reports from all the districts that firms expected health-care reform to increase the cost of employee benefits.

According to the beige book, retail spending was flat to up slightly in most districts, and retailers said that "consumers are slowly regaining confidence." But the Fed also said that consumers are confining their purchases largely to must-buy items. Atlanta and Richmond districts were the exceptions to the generally positive trend; each suffered declining shopping traffic and sales, the Fed said.

"Looking ahead, retailers in several districts expected modest sales growth through year-end. In particular, some contacts in New York planned to add more holiday staff than last year," the report said.

In most districts, new auto sales either held steady or grew. Sales of used vehicles were reported to be strong, with prices rising thanks to demand and lean inventories, the report said.

"Respondents' outlooks were for slight growth in sales through year-end," the Fed said.

Manufacturing continued to expand across most districts, with exports boosting activity in several regions.

But hiring by manufacturing firms "remained sluggish," the Fed said.

A few districts saw improvement on the housing front, including Philadelphia, which reported an uptick in sales of existing homes. Richmond, Kansas City and Dallas districts also reported increased home sales in the higher price range.

Lending activity reported during the early fall remained at low levels, but "there were some reports that demand picked up slightly," the Fed said. Richmond and Dallas both reported an uptick in lending activity.

"Some contacts noted there was pressure to price loans slightly more aggressively," the Fed said.

Source: DOW JONES NEWSWIRES

US Stocks Erase Most Of Previous Day's Losses

U.S. stocks jumped Wednesday, erasing most of the previous day's bruising losses as a positive outlook from the financial sector and a spate of strong earnings from airlines and other bellwethers gave investors reasons for optimism. The Dow Jones Industrial Average added 129.35 points, or 1.18%, to finish at 11107.97, while the Standard & Poor's 500-stock index was higher by 12.27 points at 1178.17 and the Nasdaq Composite gained 20.44 points to 2457.39.

Materials and energy stocks were two of the best performing sectors, a day after both were clobbered by fears over Beijing's attempts to slow the world's second-largest economy. Cliffs Natural Resources added 3.6%, Freeport McMoRan Copper & Gold gained 2.8%, and Massey Energy jumped 5.1% amid reports the Richmond, Va., miner is exploring a potential sale of the company.

Transport stocks also soared, with the Dow Jones Transportation Average gaining 2.2% after a trio of airlines reported strong earnings. Delta Air Lines jumped 11% after swinging to a third-quarter profit and reporting strong forward bookings through the holiday season.

American Airlines parent AMR Corp. surged 13% after its first profit in two years, while US Airways Group gained 7.4% on strong earnings. JetBlue Airways and United Continental rode the wave of optimism, picking up 6.8% and 7.6% respectively. "People are getting confident that earnings are going to be good this year," said Maris Ogg, president of Tower Bridge Advisors. "Maybe not to the level where we have 75% or 80% of companies beating expectations, but people are more confident the economy is on a more even keel." Intel and Boeing helped advance the broad-based rally, which included all but three of the Dow's 30 components and all 10 sectors of the S&P 500.

Boeing added 3.4% to lead the Dow components after the aerospace company said it swung to a quarterly profit from a year-ago loss and lifted its outlook. Intel gained 2.2% after it said it would invest up to $8 billion over several years to upgrade its manufacturing plants in the U.S. and build a new research facility in Oregon.

Also contributing were pharmaceutical companies, as Merck gained 1.3% and Pfizer added 1.6%. Even financial stocks joined in the rally, despite continuing worries over mortgage foreclosures.

Morgan Stanley pared deep morning losses to finish down by one penny after the investment bank's net profit fell in the third quarter, and Wells Fargo gained 4.3% after the San Francisco bank posted its best-ever quarterly earnings and made encouraging remarks on the foreclosure issue. Goldman Sachs Group rose 1.8% after its second consecutive quarterly profit decline, of 40% from a year earlier, surpassed most analyst estimates.

BlackRock, however, fell 2.9% even after beating analysts' forecasts with third-quarter earnings rising 74%. Bank of America, at the center of the foreclosure debacle, erased a steep morning decline to finish down 0.4%. Oppenheimer and Stifel both downgraded the stock, and the Charlotte, N.C., lender vowed to fight government-backed demands that it repurchase loans that allegedly didn't meet underwriting guidelines and other promises. "There's still a lot of headline risk around the financials, and that's going to persist for some time," said Jim Dunigan, managing executive of investments at PNC Wealth Management. "Most of the banks seem to have their arms around the challenges and they're working through them, adjusting to the new financial regulations and business models. So if you can stomach the headline risk, you're building value over time, but there's still going to be some volatility."

United Technologies reversed its morning decline to creep up 0.4% after third-quarter earnings for the maker of Otis elevators and Pratt & Whitney plane engines posted slower-than-expected revenue growth.

Abbott Laboratories dropped 0.9% after third-quarter net income fell 40%, while Yahoo added 2% to reverse most of Tuesday's loss after the company reported a surge in profits. Online auctioneer eBay, which finished with a 0.5% gain, added another 7% in after-hours trading after beating earnings expectations.

Sanofi-Aventis added 2.1% on news that U.S. antitrust regulators have given the green light for its proposed acquisition of Genzyme. Genzyme, which also announced third-quarter net income that more than quadrupled on strong product sales, advanced 0.3%.

Genzyme is meeting Friday with investors and analysts to provide 2011 financial guidance and make its case that the offer doesn't adequately value its existing business, its recovery plans or its pipeline products. Danish drug maker Novo Nordisk jumped 11% after the Food and Drug Administration sent a rival diabetes drug back for more testing. The makers of that drug fell, with Amylin Pharmaceutical down 46%, Alkermes down 28%, and Eli Lilly down 3.9%.

BHP Billiton rose 3.3% despite a growing likelihood Saskatchewan's government would vote down its proposed $38.6 billion takeover of Potash Corp. of Saskatchewan, The Wall Street Journal reported. Potash fell 0.7%.

The broad gains came amid continued weakness in the dollar. The U.S. Dollar Index, which measures the greenback against a basket of six others, fell 1.3% as the euro jumped to almost $1.40. The yen strengthened to trade at 81.16 yen to the dollar--its strongest finish in 15 years. The benchmark 10-year Treasury note gained, pushing the yield down to 2.47%. Gold gained, while oil rose to $81.77 a barrel.

Source: Dow Jones Newswires

Delta Air Sees 4Q Profit As Sector Rallies

The head of Delta Air Lines Inc. (DAL) said Wednesday that the European Union should help the region's carriers compete with fast-growing Middle East rivals. Richard Anderson, Delta's chairman and chief executive officer, is the first U.S. airline executive to address the competitive threat of carriers such as Emirates, Etihad and Qatar Airways, which are using their geographical position to take market share from established entrants on long haul international routes. European carriers including Deutsche Lufthansa AG (DLAKY, LHA.XE) and Air France-KLM (AFLYY, AF.FR)--a Delta partner in the SkyTeam alliance--have rallied against Middle East rivals, alleging they receive unfair subsidies. Emirates and others deny the charge. Anderson said on a conference call that the European Union should support airlines in the region by providing antitrust immunity for services to Asia. SkyTeam and the other two global alliances--Star and Oneworld--have benefited from immunity to cooperate on transatlantic and transpacific services. "The EU needs to get on with it," said Anderson. Anderson said immunity to cooperate on fares and scheduling on Europe-Asia services was "a big piece of the puzzle" in securing more synergies from the alliances. Some EU member states have long resisted giving the European Commission--the EU's executive arm--authority to negotiate aviation treaties with countries in Asia, notably China, fearing their flag carriers could be disadvantaged. British Airways PLC (BAIRY, BAY.LN) has talked of seeking antitrust approval next year for flights with its Oneworld partner, Japan Airlines Corp. (JALSQ).


Delta Air Lines Inc. (DAL) said Wednesday that it expected to make its first fourth-quarter profit in a decade, highlighting the progress that U.S. carriers have made in managing costs and capacity in the wake of high fuel prices. The forecast came as four of the largest U.S. carriers beat expectations with third quarter profits earned during the busy summer travel season and no sign of a post-holiday slowdown. Strong international growth and discipline in adding back domestic capacity drove up U.S. airline stocks, with Delta and Hawaiian Airlines both up more than 10% in morning trade. Delta left its fourth-quarter and 2011 capacity guidance unchanged, and pledged to hold back capital expenditure in a bid to reduce its debt and prepare for any unforeseen downturn in the industry's fortunes. Richard Anderson, chairman and chief executive, said he would like to improve on Delta's existing target of reducing debt to $10 billion by 2012. He also said that global industry consolidation was three-quarters complete. A series of mergers on both sides of the Atlantic has helped to limit capacity growth. The second-largest U.S. airline said it sees an operating margin of 6% to 8% in the fourth quarter--one of the year's two weakest for U.S. carriers--but kept its capacity forecast intact. Some analysts expected this to be ratcheted down after planned additions, which concerned investors when first announced in August. "The strong revenue momentum we saw in the first half of the year continues to build," said Hank Halter, chief financial officer, in a memo to employees. Revenue per available seat mile--a key industry measure--is up 11% to 12% so far in October. Delta plans to expand by 5% to 7% in the December quarter, led by a 10% to 12% rise in international flying. President Ed Bastian said overseas services led the third-quarter performance. The airline reported a profit of $363 million for the third quarter compared with a year-ago loss of $161 million. Earnings of 43 cents a share compared with a year-earlier loss of 19 cents. Excluding items such as debt reduction and fleet charges, earnings rose to $1.10 from 6 cents as revenue jumped 18% to $8.95 billion. AMR Corp. (AMR), parent of third-ranked American Airlines, reported a profit of $143 million, or 39 cents a share, for the September quarter. This compared with a year-earlier loss of $359 million, or $1.26 a share. Its shares were recently up 8.7% at $7.09. US Airways Group Inc. (LCC) made $240 million, or $1.22 a share, in the quarter. This compared with a year-earlier loss of $80 million, or 60 cents a share; its shares were up 6.4% at $10.73. Hawaiian Airlines Holdings Inc. (HA) led the sector with nearly a 12% rise to $6.74 after beating analysts' expectations with earnings late Monday.

Source: Dow Jones Newswires;

Altria 3Q Profit Rises 28% Amid Improved Sales

Altria Group Inc.'s (MO) third-quarter earnings rose 28% as the tobacco giant benefited from higher prices for its cigarettes and as sales in its smokeless tobacco unit climbed. The results beat analysts' expectations. Altria, the maker of Marlboro cigarettes and Copenhagen smokeless tobacco, has in recent years offset falling cigarette volumes with higher prices. The U.S. cigarette industry has been hurt by bans on smoking in public places and higher taxes. But Altria has also benefited from growing demand for smokeless tobacco products. Highlighting the growing importance of smokeless products, Altria executives on a conference call said they are working with retailers to get better and increased displays for smokeless tobacco brands on retail shelves. Some of the added displays for smokeless will come from space previously taken by cigarette racks, the company said. Altria described the changes as a "reallocation of space" between cigarettes and smokeless products that comes in response to the changing dynamics of the U.S. tobacco industry. The U.S. smokeless tobacco industry has grown, aided partly by bans on smoking in public places. In the company's UST smokeless division, earnings increased 65%, mostly owing to 16% growth in volume led by its Copenhagen brand, as revenue rose 11%. Its smokeless-tobacco market share rose 1.9 percentage points from a year ago to 55.6%. The parent company of Philip Morris USA reported a profit of $1.13 billion, or 54 cents a share, up from $882 million, or 42 cents a share, a year earlier, which included 6 cents in write-downs and other charges. Revenue increased 1.6% to $6.4 billion and rose 3.3% excluding excise taxes to $4.5 billion, as higher prices more than offset lower volume. Analysts polled by Thomson Reuters most recently forecast earnings of 52 cents on revenue of $4.42 billion. Cigarette earnings grew 15%, while revenue increased 1.8% despite a 2.4% volume drop. Retail market share fell 0.1 percentage point to 49.6%, though Marlboro's share rose 0.7 point to 42.6%. Earnings in the company's wine business were flat at $12 million and total cigar volumes were down 0.8%. The company raised its 2010 full-year guidance from a range of $1.81 to $1.85 a share to a range of $1.83 to $1.87, reflecting tax benefits. On an adjusted basis the company reaffirmed its guidance. Altria shares, which are up 27% for the year, recently added 0.5% to $24.87.

Source: Dow Jones Newswires;

Seagate Tech 1Q Profit Down 17% On Lower Margins

Seagate Technology Inc.'s (STX) fiscal first-quarter profit fell 17% on lower margins, and the computer disk-drive maker's results fell short of Wall Street's expectations. Seagate, one of the world's largest hard-drive makers, returned to profitability in the past year as demand rebounded from a drop during the recession. But the company, which is especially strong in higher-margin high-end drives used by corporate customers, in the previous quarter reported lower unit shipments and unfavorable pricing on disk drives at some capacity and blamed the debt crisis in Europe and slower consumer spending there and in the U.S. Conditions in the market have long been volatile, with competitors racing to introduce drives that store more data at ever-lower prices. Challenges include the rise of data-storage devices based on chips known as flash memory, which cost more but are compact and energy-efficient. Rival Western Digital Corp. (WDC) on Tuesday reported its fiscal first-quarter profit dropped 32% on lower margins despite increased revenue and shipments. For the quarter ended Oct. 1, Seagate reported a profit of $149 million, or 31 cents a share, down from $179 million, or 35 cents a share, a year earlier. Excluding write-downs and other impacts, earnings fell to 37 cents from 58 cents as revenue rose 1.3% to $2.7 billion. Analysts estimated earnings of 45 cents on revenue of $2.72 billion, according to a poll by Thomson Reuters. Gross margin fell to 20.4% from 24.5%, below the company's long-term forecast. The disk-drive business has been known for razor-thin margins and excess capacity. Seagate shipped 49.2 million hard-disk drives, below the 50.7 million units that Western Digital did. Seagate's shares closed at $15.37. The stock is down 16% this year, but has climbed about 20% since Seagate late Thursday said private-equity firms had expressed interest in taking the company private in what could be an $8 billion deal.

Source: Dow Jones Newswires

Arena Pharmaceuticals Announces Phase 1 Results for APD916 for Narcolepsy with Cataplexy

Arena Pharmaceuticals, Inc. (ARNA) announced today results from a Phase 1 clinical trial of APD916, a novel drug candidate discovered by Arena that targets the histamine H3 receptor for the treatment of narcolepsy with cataplexy. The randomized, double-blind and placebo-controlled trial evaluated the safety, tolerability and pharmacokinetics of 1 mg, 3 mg and 5 mg single doses of APD916. The trial evaluated 24 healthy volunteers in three cohorts of eight participants each, six randomized to APD916 and two to placebo. APD916 demonstrated dose-proportional pharmacokinetic exposure over the tested dose range. The terminal half-life was approximately 50 hours. Dose-limiting CNS adverse events occurred at the 5 mg dose, including insomnia, abnormal dreams and a nightmare. Adverse events of insomnia, nausea, headache, parosmia, alterations in perception of body temperature, abnormal dreams and visual and tactile hallucinations were commonly reported at the 3 mg and 5 mg doses, and adverse events of insomnia were commonly reported at the 1 mg dose. All adverse events in the trial were mild or moderate in nature. No serious adverse events were reported nor were there any significant safety issues with respect to vital signs, ECGs or laboratory testing. "APD916 is a highly potent compound, and we believe that exposures of 1 mg or less could be sufficient for the intended patient population," said William R. Shanahan, M.D., Arena's Senior Vice President and Chief Medical Officer. "We are currently evaluating next steps for this program."

About APD916
APD916, a potent and selective inverse agonist of the histamine H3 receptor, is Arena's internally discovered drug candidate for the treatment of narcolepsy with cataplexy. The histamine H3 receptor is predominantly expressed in the brain, and inverse agonists of the H3 receptor increase the synthesis and release of histamine through inhibition of presynaptic autoreceptors. Enhanced histamine release plays an important role in arousal, and the histaminergic system is at least partly under the control of orexin/hypocretin neurons. Narcolepsy with and without cataplexy have been associated with orexin/hypocretin deficiency and low levels of histamine in cerebrospinal fluid. Therefore, an H3 inverse agonist, by increasing central histamine activity, may potentially be effective in the treatment of these conditions.

About Narcolepsy and Cataplexy
Narcolepsy is a chronic neurological disorder caused by the brain's inability to regulate sleep-wake cycles normally. At various times throughout the day, people with narcolepsy experience fleeting urges to sleep. If the urge becomes overwhelming, individuals will fall asleep for periods lasting from a few seconds to several minutes. Cataplexy, or the sudden loss of muscle tone often triggered by emotional factors, is a symptom of narcolepsy and can cause a range of physical changes, from slurred speech to complete weakness of most muscles. According to the National Institutes of Health, or NIH, narcolepsy affects about one in every 2,000 Americans. Treatments are limited and consist of stimulant drugs to suppress daytime sleepiness and antidepressants for cataplexy. The only approved treatment for cataplexy in the United States is Xyrem (sodium oxybate), a DEA Schedule III drug.

About Arena Pharmaceuticals
Arena is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors, an important class of validated drug targets, in four major therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. Arena's most advanced drug candidate, lorcaserin, is intended for weight management and has completed a pivotal Phase 3 clinical trial program. Arena has filed an NDA for lorcaserin with the FDA, and the FDA has assigned a PDUFA date of October 22, 2010, for review of the application. Arena's wholly owned subsidiary, Arena Pharmaceuticals GmbH, has granted Eisai Inc. exclusive rights to market and distribute lorcaserin in the United States.

IPO Scorecard: Update On Selected Initial Stock Offerings

Company Symbol Percent Current Offer Date
MakeMyTrip Ltd MMYT 166% $37.20 $14.00 8-Aug-10
HiSoft Technology International HSFT 151% $25.11 $10.00 30-Jun-10
Molycorp Inc. MCP 133% $32.63 $14.00 28-Jul-10
Qlik Technologies Inc QLIK 123% $22.34 $10.00 15-Jul-10
Fabrinet Co. FN 78% $17.84 $10.00 25-Jun-10
AutoNavi Holdings Ltd AMAP 54% $19.21 $12.50 1-Jul-10
Envestnet ENV 52% $13.70 $9.00 28-Jul-10
IntraLinks Holdings Inc. IL 45% $18.80 $13.00 6-Aug-10
Green Dot Corporation GDOT 35% $48.77 $36.00 21-Jul-10
Ameresco Inc. AMRC 29% $12.86 $10.00 21-Jul-10
MediaMind Technologies Inc MDMD 27% $14.01 $11.00 8-Aug-10
Daqo New Energy Corp. DQ 27% $12.08 $9.50 7-Oct-10
Tesla Motors Co. TSLA 21% $20.52 $17.00 28-Jun-10
KEYW Holding KEYW 18% $11.80 $10.00 30-Sep-10
RealD Inc RLD 17% $18.70 $16.00 15-Jul-10
Ambow Education Holding Ltd AMBO 17% $11.68 $10.00 5-Aug-10
SciQuest Inc. SQI 15% $12.48 $9.50 23-Aug-10
RealPage Inc. RP 15% $22.41 $11.00 8-Aug-10
Oxford Resource Partners OXF 13% $20.98 $18.50 13-Jul-10
Rhino Resources RNO 13% $23.20 $20.50 29-Sep-10
Amyris Biotechnologies Inc. AMRS 7% $17.12 $16.00 28-Aug-10
Chesapeake Midstream Partners CHK 5% $22.08 $21.00 28-Jul-10
Campus Crest Communities Inc. CCG 1% $12.60 $12.50 13-Oct-10
Body Central Corp. BODY 0% $13.01 $13.00 14-Oct-10
Cazador Acquisition CAZAU 0% $10.00 $10.00 7-Oct-10
Tower International Inc. TOWR -1% $12.89 $13.00 14-Oct-10
Ellingtion Financial EFC -1% $22.25 $22.50 7-Oct-10
Regeneron Pharmaceutical Inc. REGN -3% $27.07 $28.00 8-Oct-10
Tianli Agritech OINK -10% $5.42 $6.00 15-Jul-10
NXP Semiconductors N.V. NXPI -13% $12.12 $14.00 5-Aug-10
Trius Therapeutics Inc. TSRX -20% $4.00 $5.00 4-Aug-10
Smart Tech SMT -21% $13.37 $17.00 21-Jul-10
NuPathe Inc. PATH -33% $6.71 $10.00 6-Aug-10

Verenium Announces Regulatory Approval for Purifine(R) PLC in China

CAMBRIDGE, Mass., Oct 20, 2010 /PRNewswire via COMTEX/ -- Verenium Corporation (VRNM), a pioneer in the development and commercialization of high-performance enzyme solutions, today announced that Purifine(R) PLC, the Company's novel enzyme specifically developed for the edible oil industry, has received all necessary Chinese government authorizations for sale as a processing aid in the edible oil industry. With this regulatory approval, Verenium now has the ability to sell Purifine(R) PLC in all the major oilseed processing areas of the world, which include Argentina, Brazil, the United States and China.

"We are very pleased that Purifine(R) PLC has met China's strict regulatory requirements for sale in that country's large and rapidly growing edible oils market," said Janet Roemer, Verenium's President and Chief Operating Officer. "Purifine(R) PLC continues to gain traction with current and potential customers, and now with this important approval, we can look to further expand the market reach of our innovative oilseed degumming process within the estimated $100 billion global edible oil market."

China's consumption of edible oils is growing at a high rate due to a large population and an ongoing shift to better quality food products. As a result, existing crushing capacity is being more fully utilized and additional plants are being built. Through regulation, China's government is driving the industry to adopt best efficiency practices to enhance oil yields. Verenium's Purifine(R) PLC enzymatic degumming process is well suited to help China meet this growing demand in an efficient and environmentally safe manner.