April 23, 2008 08:19 am SAN FRANCISCO (AP) — Yahoo Inc. delivered first-quarter results that surpassed analysts' modest expectations, but the performance might not be enough to fortify the Internet pioneer's defense against Microsoft Corp.'s takeover bid. The Sunnyvale-based company said Tuesday that it earned $542.2 million, or 37 cents per share, more than tripling from its profit of $142.4 million, or 10 cents per share, at the same time last year. Most of the first-quarter improvement stemmed from a one-time gain of $401 million generated by Yahoo's stake in the parent company of Alibaba.com, a leading e-commerce site in China. If not for the Alibaba windfall, Yahoo would have earned 11 cents per share — comparable to its profit at the same time last year, on an apples-to-apples basis. The results were 2 cents above the average estimate among analysts surveyed by Thomson Financial.
United Airlines shares plummet on 1Q loss, planned cuts CHICAGO (AP) — United Airlines parent UAL Corp. lost about a third of its market value Tuesday after reporting a $537 million first-quarter loss due to soaring fuel costs and saying it is cutting flights and 1,100 jobs. The sell-off accelerated and shares of other airlines dropped after Delta Air Lines Inc. CEO Richard Anderson said in Washington that in the face of record fuel prices domestic carriers would need to raise fares by 15 percent to 20 percent just to break even. At the same time, crude oil prices jumped by more than $2 and neared the once-unimaginable $120-a-barrel mark. Anderson said higher fares would likely diminish demand for air travel, and prompt carriers to further reduce their schedules. UAL's loss, in what it called an "extraordinarily difficult" environment for airlines, was the biggest since the nation's second-largest carrier emerged from bankruptcy in 2006 and worse than Wall Street expected.
Stocks decline as oil rises, Street examines earnings NEW YORK (AP) — Wall Street pulled back Tuesday, with the Dow Jones industrials tumbling more than 100 points as a rush of quarterly results from bellwethers like AT&T Inc., DuPont and McDonald's Corp. failed to impress investors. Oil prices also reached fresh highs, raising concerns about inflation. AT&T's earnings met Wall Street's forecast while McDonald's and DuPont reported stronger-than-expected numbers. But DuPont said a U.S. slowdown will offset growth abroad and McDonald's said an important metric of its sales showed a decline for March. All three companies are among the 30 stocks that make up the Dow. The comments gave trading a cautious tone. With hundreds of companies still to report results, investors are anxious over what the figures might say about the prospects for the economy. Investors appeared little moved by news of continued weakness in the housing sector. Sales of existing homes fell 2 percent in March to a seasonally adjusted annual rate of 4.93 million units, while the median sales price dropped for a seventh straight month. The National Association of Realtors also said sales rose in the Northeast and West but fell in the Midwest and South.
Existing home sales fall in March WASHINGTON (AP) — Sales of existing homes fell in March, the seventh drop in the past eight months, as the spring sales season got off to a rocky start. The median price of a home was down compared with a year ago, and some economists predicted home prices could keep falling for many more months given all the troubles weighing on housing, from a severe credit crunch to a rising tide of foreclosures. The National Association of Realtors reported Tuesday that sales of existing single-family homes and condominiums dropped by 2 percent in March to a seasonally adjusted annual rate of 4.93 million units. The median price of a home sold last month was $200,700, a decline of 7.7 percent from a year ago and the seventh consecutive year-over-year price drop. It was also the second biggest decline following a record 8.4 percent drop in February. These records go back to 1999.
Gas prices rise further above $3.50, while oil nears $120 NEW YORK (AP) — Gas and oil prices pushed further into record high territory Tuesday, with retail gas reaching a national average of $3.51 for the first time and crude nearing $120 as the dollar fell to a new low against the euro. At the pump, the national average price of a gallon of regular gas rose 0.8 cent Tuesday to $3.511, according to a survey of stations by AAA and the Oil Price Information Service. Prices for diesel — used to transport most food, industrial and commercial goods — also rose overnight to a new record of $4.204 a gallon. Gas prices are nearly 66 cents higher than last year, when they peaked at a then-record of $3.23 in late May, and have prompted many analysts to raise their estimates of where gas is going to go. "I wouldn't rule out the possibility that we could get to $4," said Antoine Halff, an analyst at Newedge USA LLC. Other analysts are less certain. Fred Rozell, retail pricing director at the Oil Price Information Service, thinks gas prices will rise only another 10 cents to 20 cents nationally. That would mean they would peak near $4.15 a gallon in California, where prices are typically highest, and around $3.50 in New Jersey, where they're typically lowest.
AT&T 1Q profit up 22 percent on strong wireless growth NEW YORK (AP) — Showing few signs of being affected by a slowing economy, AT&T Inc.'s first-quarter earnings rose 22 percent on strong growth in wireless. The wireless division at country's largest telecommunications company continued to drive growth, even as the local-phone business is stuck with declining numbers. The enterprise division, which provides services to the government and large corporations, reversed a slide. AT&T earned $3.46 billion, or 57 cents per share, in the three months ended March 31, compared with $2.85 billion, or 45 cents per share, a year ago. Excluding items, AT&T earned 74 cents per share, up from 65 cents per share a year ago. Revenue rose 6.1 percent to $30.7 billion. The earnings per share and revenue matched the average expectation of analysts polled by Thomson Financial.
McDonald's 1Q profit rises on strong international sales CHICAGO (AP) — Strong international sales helped McDonald's Corp. post a 24 percent gain in first-quarter profit, but investors seemed nervous about the company's first monthly decline of U.S. same-store sales in five years. The fast food behemoth easily topped Wall Street forecasts Tuesday when executives said it earned $946.1 million, or 81 cents per share, during the January-to-March period. That's up from $762.4 million, or 62 cents per share, during the same period last year. Revenue climbed 6 percent to $5.6 billion. Analysts surveyed by Thomson Financial expected a quarterly profit of 70 cents per share on revenue of $5.4 billion. But a 0.8 percent dip in U.S. comparable store figures for March — an important metric for retailers — kept McDonald's stock from rising Tuesday, despite assurances from the Oak Brook-based fast-food chain that same-store sales were on track to rebound in April.
Euro breaks through $1.60 as dollar slumps to record low NEW YORK (AP) — The euro roared to another record high Tuesday, crossing $1.60 for the first time ever after a pair of European Central Bank governors said high inflation may cause the bank to raise interest rates. The U.S. dollar also fell against the Japanese yen and the British pound. The euro rose as high as $1.6018, more than a penny above the $1.5916 it bought late Monday. The 15-nation currency, which was introduced in 1999, has traded as low as 82 cents. It has surged recently, rising 20 cents against the dollar in just five months and 10 cents in just two months. The euro hit its last record of $1.5982 Thursday. It dropped back Friday after a Wall Street rally generated optimism that the worst of the U.S. credit crunch may be over, but the euro rose again Monday when Bank of America's first-quarter earnings fell short of expectations. The dollar's slump is a boon for U.S. companies that rely heavily on exports, but it's the bane of travelers as worldwide inflation rises, air fares climb and prices rise in dollar terms for everything from beer in Munich to fine wine in Paris to gondola rides in Venice.
By The Associated Press The Dow fell 104.79, or 0.82 percent, to 12,720.23. Broader stock indicators also declined. The Standard & Poor's 500 index fell 12.23, or 0.88 percent, to 1,375.94, and the Nasdaq composite index fell 31.10, or 1.29 percent, to 2,376.94. Light, sweet crude for May delivery rose to a new trading record of $119.90 before retreating to settle up $1.89 at a record $119.37 a barrel on the New York Mercantile Exchange. The contract expired after the Nymex closed, which contributed to its spike higher as investors scrambled to square bets. June crude futures, which now become the focus of trading, rose $1.44 to settle at $118.07 a barrel, nearly $2 shy of the $120 level. In other Nymex trading Tuesday, May gasoline futures rose 3.73 cents to settle at $3.0164 a gallon after earlier rising to a trading record of $3.025, while May heating oil futures rose 0.55 cent to settle at $3.3169 a gallon after earlier rising to their own trading record of $3.35. May natural gas futures fell 12.6 cents to settle at $10.607 per 1,000 cubic feet. In London, June Brent crude rose $1.52 to settle at $115.95 a barrel on the ICE Futures exchange.
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