Dollar General Earnings Surge|
Dollar General (DG) reported fiscal Q2 earnings surged 47% as the retailer of
low-priced goods had strong sales across all of its segments, including a
double-digit increase in consumables sales. DG raised its full-year adjusted
per-share earnings view to $2.77 to $2.85 from its previous view of $2.68 to
$2.78 and also raised the low end of its full-year same-store sales growth view
by a percentage point, now expecting 4% to 5% growth. The company unveiled an
additional $500 million in total share authorization, bringing its total buyback
authorization to $1 billion. Due to new stores being opened and better-known
brands of merchandise being added to its shelves, DG has reported higher profits
in recent quarters. Dollar General reported a profit for quarter ending August 3
of $214.1 million or 64 cents a share, versus $146 million or 42 cents a share
from 2011. Excluding items such as the early repayment of debt, per-share
earnings were 69 cents compared with 52 cents in 2011. Sales increased by 10% to
$3.95 billion, with same-store sales rising 5.1% while gross margin narrowed to
32% from 32.1% on a change in sales mix, among other things. Selling, general
and administrative expenses increased by 9.7%. Sales of consumable items which
account for the bulk of DG's top line rose 12%; seasonal products sales climbed
6.8%; home products category saw an increase of 8.5% and the apparel category
saw a rise of 4.2%. Dollar General said the "volatility of the macroeconomic
environment continues to pressure the consumer and impact the company's cost of
purchasing and delivering merchandise to its stores." The company has also been
expanding with bigger stores and refurbishing old ones.
Apple (AAPL) refuted reports on Wednesday from computer-hacking group Antisec
claimed to have obtained one million Apple ID numbers from a computer of a
Federal Bureau of Investigation agent. Per Apple, they provided none of the
so-called UDID identification numbers to the FBI. Apple spokeswoman Natalie
Kerris was reported as saying, "The FBI has not requested this information from
Apple, nor have we provided it to the FBI or any organization." Antisec claimed
earlier in the week that it had obtained a total of 12 million UDID numbers,
including the ones allegedly from the FBI computer. The FBI said it had no
evidence to suggest one of its computers had been hacked by the Antisec group.
Hi-Tech Pharmacal (HITK) fiscal Q1 earnings fell 56% as lower average prices for
its generic nasal spray contributed to its first revenue decline in two years.
Hi-Tech's bottom line was hurt by increased expenses for sales and advertising,
as well as research and development at its generic business. For almost two
years, the company - which focuses on generic oral liquid drugs and various
topical treatments - has seen sales grow as cost-conscious consumers and
pharmacy-benefit managers seek to reduce medical costs. Net sales of generic
drugs declined 6% during recent period, mostly on lower average prices for the
company's Fluticasone Propionate nasal spray, which accounts for nearly half of
segment sales. President and Chief Executive David Seltzer said, "This quarter
was weaker than recent quarters for Hi-Tech, but we still anticipate growth in
all of our businesses this year." For quarter ended July 31, Hi-Tech reported a
profit of $6 million or 44 cents a share, down from $13.8 million or $1.05 a
share in 2011 while revenue decreased 7.4% to $52 million. Gross margin of the
company fell to 48.7% from 59.1%. Overhead costs were reported higher by 21%
amid an expansion of its sales staff at its ECR Pharmaceuticals segment and
increased advertising in its over-the-counter drugs business. ECR
Pharmaceuticals, Hi-Tech's smaller and health-care products segments saw
double-digit sales declines. Research and development expenses surged higher by
32% amid increased spending on generic-segment projects, including four that
require clinical trials.
Janssen - unit of Johnson & Johnson's (JNJ) - received priority review status
the U.S. Food and Drug Administration's for its pulmonary, multidrug-resistant
tuberculosis treatment that is used in combination with other therapies. The FDA
is expected to decide on J&J's new drug application - filed in late June - for
bedaquiline early next year. "If approved, bedaquiline would offer the first in
a new class of anti-tuberculosis drugs for patients suffering from this serious
and deadly disease," said Wim Parys, head of Janssen's infectious diseases
therapeutic area. Priority review status is granted by the FDA for medicines
that offer major advances or provide a treatment option where there currently
isn't an adequate therapy.
The U.S. Labor Department reported Wednesday that productivity of U.S. nonfarm
was revised higher in Q2. Productivity rose at a 2.2% annual rate in the
quarter, revised from 1.6% in the earlier estimate a month ago. The results
pushed productivity growth in the past four quarters up to 1.2%, compared with
earlier estimate of a 1.1% gain. Unit labor costs rose 1.5% after being revised
down from a 1.7% increase. The annual rate of growth of unit labor costs was
0.9% which is a sign of low inflation. The forecast was based on the upward
revision to Q2 GDP which rose 1.7% compared with the initial estimate of a 1.5%
gain. Unit labor costs were expected to be revised down to a 1.4% gain.
A statement from Bank of Spain took the unusual step of confirming that it has
provided extraordinary liquidity to local banks through non-traditional means on
Wednesday. The Spanish banking authority appeared to have activated the
Emergency Liquidity Assistance program that allows lenders to borrow directly
from the Bank of Spain without passing through the ECB's relatively strict
collateral demands. In July, banks appeared to have tapped the ELA for about 400
million euros ($500 million). The Bank of Spain said in a statement that
liquidity provided for financial intuitions that fall outside ordinary
mechanisms "represents an insignificant fraction" of the Bank of Spain's total
lending. The ELA is a mechanism that is generally shrouded in secrecy and
reserved for situations when banks have exhausted all other financing options.
The central bank said the measure seeks to discourage banks from offering risky
investments to their customers. Banks had jacked up the interest rates to above
4% just days after the rate cap was scrapped. ECB data published last month
showed that overall deposits dropped 4.7% on the month, to EUR1.51 trillion.
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