boeing

WELLS FARGO & CO., $19.61, New York symbol WFC, jumped over 30% on Thursday after it reported that it expects to post first-quarter earnings of $3 billion, or $0.55 a share. This is more than double the consensus forecast of $0.26 a share. Wells Fargo said the higher earnings were driven by strong growth at its traditional banking services and improved results at its investment-banking division. It also reported that residential mortgage applications rose 64% from the year-earlier quarter. Part of this gain was caused by Wells Fargo’s purchase of Wachovia Corp. earlier this year. Wells Fargo has already written down most of Wachovia’s troubled loans and securities, and is doing a good job of integrating Wachovia’s operations into its own....

AGRIUM INC., $46.00, Toronto symbol AGU, may now mail its $67.75 cash-and-stock offer to buy U.S.-based fertilizer producer CF Industries Holdings Inc. (New York symbol CF), directly to CF’s shareholders, now that CF’s management has rejected it (all amounts except share price in U.S. dollars). CF’s stock is now trading at $68.61, which indicates that investors anticipate a higher bid. Agrium’s offer for CF is worth roughly $3.3 billion (56% of the offer is stock and 44% is cash). This is a big acquisition for Agrium, which earned $1.3 billion, or $8.34 a share, in 2008 However, CF has a shareholder-rights plan that lets shareholders buy new shares at half the market price if an investor tries to buy more than 15% of the outstanding shares without the approval of CF’s directors. This makes hostile takeovers like Agrium’s less likely to succeed....

UNITED TECHNOLOGIES CORP., $40.57, New York symbol UTX, plans to cut 5% of its workforce because of slowing demand for its Pratt & Whitney jet engines and Hamilton Sundstrand aerospace equipment. United Technologies sells its products and services in the construction and aerospace industries. Along with Pratt & Whitney and Hamilton Sundstrand, it sells Carrier heating and air conditioning units and Otis elevators, among other products. Weakness in the construction industry has hurt sales at Carrier and Otis. United Technologies’ management believes the company’s 2009 revenue will fall about $2.7 billion (or 5%) short of its original forecast of $57 billion....

NOVA CHEMICALS CORP., $4.76, Toronto symbol NCX, fell 20% this week on fears that the credit crisis will hurt its ability to refinance part of its debt, particularly as the slowing economy has lowered demand for its industrial plastics. Nova’s long-term debt at September 30, 2008 was $1.5 billion U.S., which is equal to 4.7 times its current market cap. This figure excludes a $250-million U.S. bond due in April 2009. Nova has $575 million U.S. in cash and untapped credit lines, so it can easily meet this obligation. The company aims to negotiate better terms for its remaining debt, which includes over $1 billion U.S. due over the next two years. Due to the current economic slowdown, Nova is expanding its cost-cutting program, including reducing its workforce by 15%. These moves should save it $100 million U.S. in 2009 and help Nova pay down its debt....

GANNETT CO. INC. $8.10 (New York symbol GCI) expects that its revenue for 2008 will fall 8% from 2007, as lower advertising and circulation revenue at its newspapers more than offset gains at its TV and Internet businesses. The company will continue to cut costs at its newspaper operations, and use the savings to expand its faster-growing online operations. Lower capital spending will also help it cope with the current downturn. Buy. THE BOEING CO. $41 (New York symbol BA) has increased its quarterly dividend by 5.0%, from $0.40 a share to $0.42. It now yields 4.1%. Buy. PROCTER & GAMBLE CO. $61 (New York symbol PG) hoped to increase its revenue by 4% to 6% in its second fiscal quarter ending December 31, 2008. However, it will probably fall short of that goal as retailers cut inventories in the face of slowing sales. Still, Procter is one of the world’s largest advertisers, and it is now using its clout to negotiate lower ad rates. Buy.

THE BOEING CO. $52.42, New York symbol BA, has agreed to a new contract with its striking machinists union. The strike began in early September, and probably cost Boeing $100 million a day in lost revenue. The company hopes this new agreement will help it secure a new contract with its engineers and technical workers, whose current contract expires on December 1, 2008. Meanwhile, Boeing’s third-quarter earnings fell 34.3%, to $0.94 a share from $1.43 a year earlier. The decline was mostly due to the strike. Revenue fell just 7.4%, to $15.3 billion from $16.5 billion, as strong growth at its military products division helped offset lower sales of commercial planes. Boeing’s order backlog now stands at a record $349.4 billion, which is equal to over five times its annual revenue. The slowing economy could prompt some airlines to delay or cancel their orders. However, about 90% of the backlog for commercial jets comes from overseas airlines, many of which receive financial subsidies from their governments. Demand for new fuel-efficient planes, such as the 787 Dreamliner, also remains strong....

Some investors worry that Washington’s $700 billion bailout of the banking industry is going to fall apart, and that this will lead to a rise in gold and a drop in the stock market. We think the bailout will go through. The only obstacle to it is the political bickering and posturing that is bound to go into a highly visible effort like this, all the more so just prior to a presidential election. There is always a possibility that the market will move lower from here. Meanwhile, gold will stay volatile. But we still feel stock prices will hit bottom over the next month or two, then move up for six months or more. WASHINGTON MUTUAL INC. $0.16, New York symbol WM, fell over 90% on Friday before the New York exchange halted trading. That’s because banking regulators have seized control of the company. Regulators subsequently sold the assets of Washington Mutual’s main banking subsidiary to J.P. MORGAN CHASE & CO. $48.24, New York symbol JPM. The purchase included branches, deposits and the loan portfolio....

MTS SYSTEMS CORP. $41 (Nasdaq symbol MTSC; Aggressive Growth Portfolio, Manufacturing & industry sector; Shares outstanding: 17.0 million; Market cap: $697.0 million; WSSF Rating: Average) has sold its Nano Instruments division for a gain of $2.5 million. This business makes products that accurately measure the thickness and hardness of adhesives, coatings and other thin films. The sale will help fund MTS’s recent purchase of a Chinese company that makes testing equipment. Meanwhile, MTS’s earnings in its third fiscal quarter ended June 28, 2008 rose 17.0%, to $11.0 million from $9.4 million a year earlier. Earnings per share grew 23.1%, to $0.64 from $0.52, on fewer shares outstanding. Sales rose 11.1%, to $116.9 million from $105.2 million. MTS Systems is a buy....

THE BOEING CO. $65.56, New York symbol BA, has asked the U.S. Air Force for more time to prepare a new bid for a major contract to build refueling tanker planes. The company had previously lost this contract to a joint venture formed by Northrop Grumman Corp. and Europe’s Airbus. However, Boeing claimed the Air Force made mistakes in evaluating the original offers, and got it to re-open the bidding. Meanwhile, Boeing’s military operations continue to win new orders, including a $4.3 billion, multi-year contract to build 191 Chinook helicopters for the U.S. Army. To put that in perspective, Boeing’s annual revenue is roughly $67 billion. As well, demand for its new 787 Dreamliner commercial jet remains strong despite production delays....

DIAMONDS TRUST SHARES $112 (American Exchange symbol DIA; buy or sell through brokers) hold the 30 stocks that make up the Dow Jones Industrial Average. Currently, the fund’s top 10 holdings are IBM, 3M, Boeing Co., United Technologies, Caterpillar, McDonald’s Corp., Chevron Corp., Johnson & Johnson, Procter & Gamble and Exxon Mobil. Expenses are about 0.18% of assets. Diamonds Trust Shares are a buy.