S&P 500: +12.31 (+1.36%)
Dell (DELL) +0.78%
Dell reported less revenues and profit than last year, but the company still managed to beat analyst’s earnings expectations for the first quarter thanks to cost reductions.
CFO Brian Gladden said sales fell because of less demand from business customers and Dell’s decision to avoid price cuts. Dell said signals about the demand environment are mixed, but the company is preparing for what it believes will be a “powerful replacement cycle,” due to new products from Microsoft (MSFT) and Intel (INTC).
The company did not provide a specific financial outlook, but did announce it would slash another $1 billion in costs. That added to the $3 billion it had already pledged to cut annually within two years. Gladden sees the biggest opportunity for saving money in the cost of goods sold, including expenses from manufacturing and supplies.
Southern Company (SO) +0.42%
Southern Company announced it will manage and operate the U.S. Department on Energy’s new National Carbon Capture Center, which will develop and test advanced technologies to capture carbon dioxide from coal-based power plants. Arch Coal (ACI) and Peabody Energy (BTU) are among other partners.
Monsanto (MON) +3.99%
Earlier this week, Monsanto said earnings this fiscal year will be at the low end of its previous forecast because of stronger-than expected competition in its Roundup herbicide business.
The company is sacrificing Roundup sales volume to maintain prices amid increased competition from cheaper generic glyphosate herbicide from China. CEO Hugh Grant was surprised at how quickly and how much Chinese generic versions recently reached global markets. The generic version retails for about $20 a gallon, compared with $30 for Monsanto’s Roundup Grand.
The company expects growth in seeds to offset any decline in Roundup sales.
Procter & Gamble (PG) -1.24%
Yesterday, P&G said fiscal 2010 profit may rise as much as 4 percent as it introduces new products and doubles its distribution capacity in emerging markets.
The company raised some prices in some markets to cover fluctuating exchange rates, although it had to cut prices in categories such as fabric care and tissues to maintain its share.
On the topic of the balance sheet, the company’s primary use for cash will be to maintain its credit rating (Aa3 at Moody’s and AA- at S&P), but will also be used to expand its manufacturing capacity and to maintain the dividend. P&G will stop share repurchase program until the economy improves.
Quick Hits
Peter Lazaroff, Junior Analyst
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