9:45AM New York – U.S. stocks opened weak ahead of rate decision, weak earnings from Yahoo and UPS, and larger than expected sub-prime loss at UBS and BNP.
U.S. stocks opened lower ahead of the rate decision from the Fed. European markets fell after the renewed worries related to subprime losses and Asian markets closed lower with a loss of 1% in Japan.
UPS reported lower earnings due to one-time contribution to pension plan and overnight Yahoo reported lower than expected earnings. Yahoo fell 10% after its chief executive said that company faced ‘headwinds’ in the near future. Yahoo also plans to lay-off 1,000 people to cut costs.
UBS in Switzerland reported fourth quarter write-down of $14 billion, $4 billion higher than the previous estimate, related to sub-prime lending in the U.S.
UBS reported fourth-quarter loss of Sfr12.5 billion and for the year a loss of Sfr4.4 billion compared to a profit for the full year in Sfr11.25 billion.
) today reported adjusted diluted earnings per share of $1.13 for its fourth quarter, an 8.7% increase over last year. Revenue improved 6.1% driven by a double-digit increase in international export volume.
During the quarter, the company announced the ratification of a new five-year agreement with the International Brotherhood of Teamsters, eight months before expiration of the existing contract. As a result, $6.1 billion was paid to withdraw approximately 45,000 UPS employees from the Central States multi-employer pension plan and expensed to the U.S. Package segment in the quarter.
Including the impact of that charge, diluted earnings per share fell to a loss of $2.46 for the three-month period.
Average daily package volume rose by 359,000 to 17.7 million pieces.
For the full year, the company delivered a record 3.97 billion packages, an average of 15.8 million per day. Consolidated revenue climbed 4.5% to $49.7 billion. Adjusted diluted earnings per share were $4.17, an increase of 8% compared to 2006 and at the midpoint of UPS’s earnings guidance for 2007. Before adjustments, operating profit equaled $578 million and diluted earnings per share totaled $0.42.
Operating margins in the quarter, excluding one-time adjustment for the pension contribution fell to 13.8% from 14.3%.
Yahoo fell in the early morning trading after weak financial revenue and earnings projection. Yahoo continues to face challenges from Google and from decline in revenues in the international markets.
) Revenues were $1,832 million for the fourth quarter of 2007, an 8% increase compared to $1,702 million for the same period of 2006. Revenues excluding traffic acquisition costs were $1,403 million for the fourth quarter of 2007, a 14% increase compared to $1,228 million for the same period of 2006.
Net income for the fourth quarter of 2007 was $206 million or $0.15 per diluted share compared to $269 million or $0.19 per diluted share for the same period of 2006.
Gross profit for the fourth quarter of 2007 was $1,130 million, a 12% increase compared to $1,012 million for the same period of 2006. Operating income for the fourth quarter of 2007 was $191 million, a 38% decrease compared to $308 million for the same period of 2006.
Operating income before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2007 was $527 million, a 2% decrease compared to $540 million for the same period of 2006.
United States segment revenues for the fourth quarter of 2007 were $1,313 million, a 15 percent increase compared to $1,145 million for the same period of 2006. International segment revenues for the fourth quarter of 2007 were $519 million, a 7 percent decrease compared to $558 million for the same period of 2006.
For the full year revenues were $6,969 million for 2007, an 8% increase compared to $6,426 million for 2006. Marketing services revenues were $6,088 million for 2007, an 8% increase compared to $5,627 million for 2006.
Net income for 2007 was $660 million or $0.47 per diluted share compared to $751 million or $0.52 per diluted share for 2006.