Finances

On December 21, 2011, housewares retailer Bed Bath & Beyond Inc. (BBBY) reported its fiscal third-quarter earnings. According to reports, the company's earnings just beat forecasts.

For the quarter, the company reported earnings per share of $0.95, up from $0.74 per share in the same quarter last year. Total earnings of $228.5 million for the quarter also beat the previous third quarter's earnings of $188.6 million.

On a sales basis, Bed Bath & Beyond reported $2.344 billion in total net sales, up 6.8% from approximately $2.194 billion in the similar quarter last year. The retailer reported an increase in comparable stores sales of 4.1%, which is on top of sales growth of 7.0% in the same period last year.

"We're pleased that we've been able to continue our strong performance in terms of earnings growth, cash flow generation and overall financial strength as we continue to challenge ourselves to improve in every aspect of our operation," said Warren Eisenberg, Bed Bath and Beyond's Co-Chairman. Eisenberg noted the company had opened a total of 16 new stores during the quarter and had undertaken efforts to relocate and renovate existing retail space. Overall, the company increased its retail space by 4% during the last 12 months, bringing the total footage under rent to 36 million square feet.

Bed Bath & Beyond reported net earnings of $2.60 per share for the first three quarters of their current fiscal year. This represents an increase of 33% over the corresponding period from a year ago.

Shares of Bed Bath & Beyond Inc. (BBBY) closed the week at $57.44 per share.

General Mills Reports Earnings

General Mills (GIS), the maker of food brands such as Cheerios, Pillsbury, Yoplait and Haagen-Dazs, reported its more recent quarterly earnings this past week. Despite an expected increase in supply, or "input" costs, the company stated it was set to meet its annual financial targets.

For the second-quarter, General Mills reported net sales of $4.62 billion. The company attributed the growth in sales to its acquisition of the Yoplait brand.

The company also reported earnings per share of $0.67. Earnings per share were down from $0.92 in the comparable quarter last year. The company also reported total net earnings of $44.8 million. Earnings were down from $615.3 million in the second quarter of last year, a decrease of 27.0%

"General Mills second-quarter results show good net sales growth worldwide. Our Yoplait acquisition fueled a more than 50 percent increase in total international sales," General Mill's Chairman and CEO Ken Powell stated. Powell also commented that despite significantly higher supply costs, General Mills was "on track to meet key financial targets we have set for fiscal 2012."

General Mills' operations rely significantly on commodity prices, particularly corn and wheat. Based on USDA estimates, analysts are projecting corn prices will move lower in 2012 which could help General Mill's operating margins.

Shares of General Mills (GIS) closed the week at $40.57 per share.

CarMax Reports Stalled Revenue Growth

CarMax, Inc. (KMX) reported its earnings and profits for the third quarter during the past week. CarMax is the United States' largest used-car retailer, operating more than 100 outlets across the country.

For the quarter, CarMax reported net sales and operating revenue growth of 7.0%. The company's sales grew to $2.26 billion from $2.12 billion in the same quarter last year.

The company experienced a 16% growth in comparable store's sale of used cars last year but saw a 3.0% decline in such sales this year. Despite this, the company's net income remained unchanged from a year ago. CarMax net income was $82.8 million in the third quarter this year compared to $82.4 million in the comparable period last year. Third-quarter earnings per share remained unchanged at $0.36 when comparing this year to last.

"We are pleased to report another quarter of strong profits, despite a difficult sales comparison and the continued sluggish economy," said Thomas J. Folliard, CarMax's President and CEO. "We remain committed to investing in our long-term growth strategy." Folliard stated the company plans to open 10 stores in fiscal 2013 and between 10 and 15 stores per year in each of the three years thereafter.

CarMax Inc.'s (KMX) shares ended the week at $30.08.

The Dow started the week at 11,866 and closed at 12,294. The S&P 500 started the week at 1,220 and ended at 1,265. The NASDAQ started the week at 2,555 and finished at 2,619.

In advance of the new year, the price for crude futures continued to rise at the end of last week. This marked the fifth straight session in which crude prices had risen.

While trading was thin, crude prices for February delivery rose by $0.44 per barrel to $99.96. Oil prices have gained nearly 7% for the week and 9% for the year.

The rise in crude is attributed in part to year-end tax planning and in part to positive economic news coming from the U.S. "This is the end of the year, people are rushing to put money into 401(k)s and commodities still look good," says Jason Shenker, President of Prestige Economics, LLC. Shenker also warned, however, that "investors are responding to relatively unimpressive data" and that the market typically gives back some of the year-end gains in January.

On a related note, Treasuries continued to drop in part because of positive economic news coming from the U.S. and concerns that Europe is still struggling to contain its sovereign-debt crisis. Long-term bond yields have fallen from their 2011 high of 4.79% in February.

The 10-year Treasury note yield finished the week at 2.03% while the 30-year Treasury note yield finished the week at 3.07%.

On December 22, 2011, Freddie Mac released its most recent Primary Mortgage Market Survey (PMMS). The survey revealed that mortgage rates, which had been hovering near historic lows for seven weeks, finally reached their all-time low during the holiday season.

The PMMS reported that the 30-year fixed rate mortgage (FRM) averaged 3.91%, eclipsing the all-time historic rate of 3.94%. Last week's FRM of 3.94% had tied an all-time record low for the 30-year fixed mortgage. Last year at this time, the FRM averaged 4.81%.

The 15-year FRM remained level compared to last week at 3.21%. A year ago, the 15-year FRM averaged 4.17%.

"Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year, which means that today's homebuyers are paying over $1,200 less per year on a $200,000 loan," said Frank Nothaft, Freddie Mac Vice President and Chief Economist. Nothaft also stated, "This greater affordability helped push existing home sales higher for the second consecutive month in November to an annualized pace of 4.42 million, the most since January." According to Nothaft, in December homebuilder confidence rose to its highest point since May 2010.

The money market fund finished this week at 0.50%. The 1-year CD finished at 0.70%.