tv Nightly Business Report PBS October 22, 2010 12:00am-12:30am PST
>> tom: earnings season kicks into high gear with more blue chip firms turning in blue ribbon results. can the good news keep flowing? >> i think there's no question we're going to continue to see decent earnings. i just question whether or not we'll just continue to see every time there's a surprise, the surprise has to be bias to the upside. >> susie: we take an early pulse on fourth quarter earnings. you're watching nightly business report for thursday, october 21. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
>> tom: good evening and thanks for joining us. earnings helped to push the dow industrials near its highest level in two years. susie, this earnings season has been marked by strong results across a number of industries. >> susie: tom, it looks like the third quarter is turning out to be a good one for corporate america. so far, a third of big name companies have reported results, and 83% of them have beat estimates. >> tom: investors are hoping that trend will continue through the end of the year. suzanne pratt reports. >> reporter: 21 days, or three weeks-- that's all we've lived through, so far, of this year's fourth quarter. but already, optimism about the last earnings period of 2010 is helping to lift stocks. sure, the approach of mid-term elections and hopes for more fed action have also been big factors for the market. but ubs strategist mike ryan says solid third-quarter results is making analysts feel more upbeat about the fourth quarter profits. >> even though this is not
specifically about much higher guidance for the fourth quarter, i think what you're seeing is that analysts are going through the resetting of expectations based on what they're seeing in the most recent earnings reports. >> reporter: when it comes to corporate profits, it's the future that matters most. s&p earnings expert mike thompson says, if the future is defined as the fourth quarter, it looks decent. >> you're going to have positive numbers. you're going to have better growth for the whole s&p 500, by and large, at an aggregate level. >> reporter: better, that is than q3, which could have profit growth of about 27% for the s&p 500. analysts expect q4's results to top it with a hefty 32% increase. but there is also growing concern about the quality of earnings. companies have trimmed a lot of fat in recent months, helping to boost the bottom line. and some experts say corporate america may run out of fat in the fourth quarter. >> at some point, the cost cutting as a driver of corporate profits, that kind of winds down and you have to rely more on top
line growth, and we know top line growth remains sluggish. >> reporter: others, however, believe firms will continue to be able to cost-cut their way to profits, calling it a behavioral shift in corporate america. >> what's been happening is we've never taken our foot off the risk adverse brake. i mean, companies, it's part of their dna right now to just hold the line on all costs. there's very little forgiveness in terms of missing on the cost side. >> reporter: some experts say it will be tough for stocks to retain recent gains if firms don't start to show sales growth. but economic headwinds may make it hard to get that growth in the fourth quarter. suzanne pratt, "nightly business report," new york. >> susie: here are the stories in tonight's "n.b.r. newswheel." upbeat earnings helped stocks move higher. the dow rose 38 points, the nasdaq and the s&p 500 both advanced two points. trading volume fell slightly on the big board, but picked up on the nasdaq with 2.1 billion shares changing hands.
fannie mae and freddie mac could end up needing more than $360 billion to combat losses on bad loans. taxpayers have already ponied up about half of that to keep the mortgage giants afloat. fannie and freddie either own or guarantee half the mortgages in the country. one of the biggest medicare fraud busts ever in miami, as federal agents uncovered an alleged $200 million scheme. miami-based american therapeutic corp was raided, and top execs at the chain of mental health clinics were arrested. the feds say the company paid kickbacks to recruit new patients, and routinely altered medical records to fit false billings claims. still ahead, winning at the game of business. my interview with nancy lieberman, olympian, wnba coach, and author of "playbook for success." >> tom: gas prices in the u.s. are now about $3 a gallon. that's the environment as the first mass-produced all-electric car goes on the market next
month, nissan's leaf. the leaf is the starting point for our new collaboration with planet forward, solving energy and climate challenges. and those solutions will be shaped by you, our viewers. frank sesno is an award winning journalist and professor at george washington university, where he leads the planet forward project. frank, welcome to "nightly business report." >> thanks, tom. great to be working together and focusing on invention and innovation. >> tom: tell us about the leaf, and what drivers think of it? >> tom, its got people thinking, that's for sure. you know, at planet forward, we hear from scientists, students, advocates, entrepreneurs, and experts as they make their case for energy innovation. well, with your indulgence, this new car has some folks considering whether its time to turn over a new leaf. the commercial is slick and the message is clear-- if you buy
the nissan leaf, you'll not only save polar bears, you'll be saving the planet. but will this car gain traction? at planet forward, were asking people to send innovative ideas that can affect our energy future. and this new set of wheels, which will be in showrooms in december, has drawn considerable attention. >> what you're looking at is our zero emissions pure electric vehicle. >> dan gray uploaded a video to planet forward after talking to a company rep at the d.c. auto show. and because of his video, planet forward went to test drive the leaf. >> so as you accelerate, you can see you power meter increase. >> what makes the nissan leaf unique? there's no internal combustion engine-- that means zero emissions. there are all kinds of apps so you can monitor the car and its performance. and the biggest deal of all-- you get up to 100 miles on a charge, nissan says. that's a significant leap in battery technology. >> so the battery is underneath
the seats. so it starts at the front of the front seat right here and it goes to the back of the back seats. and the battery is composed of cells and modules, so you have four cells in a module, and 48 modules to make up the pack. so you have 196 individual cells in this battery pack. >> what is it in this battery is different? what kind of progress do we see here? >> we're the first manufacturer to put a lithium ion in a vehicle. so this generation battery, the change is it's a different chemistry. we go from a lithium ion cobalt to a lithium ion manganese. and we switch from a cylindrical cell battery to a laminate cell battery. and what that gives us is twice the energy density in about half of the package size. >> nissan estimates driving this car will cost about two and half cents a mile, compared to 12 to 14 cents a mile for a gasoline powered car. are you saying this is going to put the internal combustion engine out of business? >> i'm saying its going to give it a run for its money. >> i think its a hugely important paradigm shift. >> dan indiviglio has been writing about electric cars for "the atlantic monthly. "
but he knows full well that the leaf costs about $25,000, thousands more than similar sized cars, even with government tax credits. and it takes hours to charge to go those 100 miles. >> if electricity prices stay relatively low and gas prices rise a lot, then the leaf obviously becomes a lot more attractive. these cars are really going to be attractive to the sort of the green yuppie type, right? the kind of person who really cares about the environment and has money to spend on an expensive car, because these cars are relatively expensive. >> do you buy an electric car, even though it costs more than gas-burning economy cars? is it an innovation whose time has finally come? planet forward member dan gray says "just maybe." >> i just got back from driving the nissan leaf, and you know what? it's a real car-- real smooth, real quiet. a lot of folks doubt electric cars. but in the right situation, if you commute less than 100 miles a day, it's tough to beat.
>> the car has certainly generated a lot of buzz and dan's video has drawn a number of comments. "the world will change when this car is released," says one. "when you buy a really efficient hybrid or electric vehicle, you're putting money into the future of the technology," says another. dan's response is he'd love to have a nissan leaf, but would never want to fuel it with coal. coal, because where the electricity comes from matters if you're counting carbon. and we need charging stations and people willing to adapt. but this is a gateway technology. >> tom: how is it to drive? >> it is fun, you know, that's what dan said. the thing about when you drive electric cars and if you have ever driven a golf cart, presumably you don't go 60 miles an hour with it, but you touch that pedal and you go right off.
it's got total pick up. there is no kind of rumble and delay. it's very nimble and of course it's totally silent so that takes a little getting used to. >> tom: let's talk about cost here, frank. because we mentioned a little bit the difference between electricity and gasoline cost per mile but does it pay for itself? >> this is where the rubber meets the road. at the end of the day it about dollars and cents. no it doesn't pay for itself. it to the for those who are looking for bargains. we did some math and if you take a look at what you actually pay for the nissan, even where what that government tax credit you pay about $25,000 even with this credit. now compared that to the ford focus, a comparable small car, a gasoline engine, that is going to cost you about $16 grand. so the difference there, about $8600. take that 8600, buy enough gasoline for the ford focus, will you be able to drive more than 100,000 miles so bot ot-- bottom line, dollars and cents, not there yet. >> tom: we are beginning tonight this new collaboration with your organization, planet forward. tell us a little bit more about this and project. >> well, planet forward is
meant to hear from people out in the communities, citizens, scientist, experts, entrepreneurs, the like. they come to us with the ideas then we look for the best idea, the ones in particular that focus on energy innovation and invention and we will highlight those. we will high lit them on planet forward.org on the web site itself and the best ones we're going to bring to you to nightly business report to see what are the game changers out there. what really can be happening and without can tell us things we don't already know. >> the wisdom of crowds are tapping into that, we saw some of that in the piece in the comments and blogs but also adding videos as well on-line. >> we are getting videos from scientists and students as i say and from businesspeople who were doing things in some remote places but now with the magic of a video camera and uploads they can tell the whole world about it. >> a new way tocover innovation and invention. you go to our web site to upload your ideas, nbr on pbs.org and just look for the planet forward button right there on our home page. frank, we're looking forward to this collaboration in the months ahead. thanks for joining us.
ours guest is frank senso, with plat et forward. >> susie: so tom as we have been saying, earnings, earnings, earnings, that it what the market was talking about. a lot-of-dow components, at&t, caterpillar, mcdonald's. >> tom: not all of them were big movers on the part of the earnings, calls but a few of them were so let's get everybody updated on tonight's market focus.
stock indices came off their lows as a regional fed president said he likes the strategy of buying government bonds in small increments, if that's what the fed decides to do. the market was led by industrial and consumer discretionary stocks, while utility shares were the laggards. but you can see just small moves for the sector exchange traded funds. the leading dow industrial gainer was home depot, and it came well ahead of its earnings date. today's 3.5% jump came on heavy volume. the stock is close to matching its four-month high as it was the target of some positive analyst comments. otherwise, earnings aren't scheduled for another three weeks. there were several dow components with earnings, though. mcdonald's saw its international business improve and plans to raise menu prices. results beat the street with global same-store sales jumping
6%, helped out by new beverage items like smoothies. the stock hit a new all-time high. shares added more than 1% on heavier volume. it plans to raise prices in the u.s. and europe for the first time this year, trying to head off higher food prices. at&t's results showed the value of apple's iphone, even as new competition may be coming. earnings matched expectations. almost half its revenues came from its wireless division. a record number of iphones were activated. one out of every four came from new customers to at&t. but it may not have the iphone to itself for long. barclays analyst james ratcliffe thinks verizon will offer one early next year. >> while that's clearly a plus for verizon, it's likely to generate additional customers
for them, both in terms of some at&t customers moving over, and in terms of some verizon customers now taking the chance to upgrade to a smartphone. i don't expect it to have to seismic impact on the industry as a whole. >> tom: both at&t and verizon were weaker today. verizon earnings are due tomorrow morning. the telecom sector was the best performing sector of the third quarter, and its the weakest so far this quarter. after-hour earnings from amazon came as the stock hit a new all- time high. those results came in better than anticipated, three pennies better than estimates. net sales jumped, as did gross margins. but operating expenses also jumped as it expands its distribution centers in preparation of the holidays. shares were up 4% before the
earnings report, but sold off 5% in after-hours action. another one to watch tomorrow will be sandisk. shares fell 3% before its earnings tonight. but after reporting a record high profit, the stock jumped 10% of these levels. and that's tonight's "market focus." >> paying a million dollars to settle federal charges that it violated securities
rules, the sec accused the firm and two executives of telling analysts about an expected earnings shortfall three years ago. now c.e.o. steven oddlun and former chief financial officer pat-- patricia mckay will pay $50,000. neither the company nor executives admitted or denied the charges. >> tom: tomorrow, our midterm 2010 election coverage continues with a look at the u.s. senate race in florida. also, illustrator david gillette is back at the drawing board for another installment of "ink-onomics." and mark skousen joins us with some tips for investing in rare earth stocks. he's our friday "market monitor" guest and editor of the newsletter "forecasts and strategies." >> susie: another recall for toyota. this time, it involves 1.5 million lexus and toyota avalon models. the cars were built between 2004 and 2006. the problem-- potential leaks on the brake's master cylinder, and electrical fault with the fuel pump.
toyota has recalled about 8.5 million vehicles in the last year. the auto maker says today's recall shows its commitment to increasing quality. >> tom: honda is also recalling vehicles because of brake fluid leaks. the auto maker says its recall affects some 2005 to 2007 model year acura rl sedans and honda odyssey minivans. honda hasn't said how many vehicles are covered by the recall, but says it hasn't gotten reports of injuries or accidents related to the problem.
>> susie: she's a basketball hall of famer, two-time olympian, and starting next week, she'll coach the dallas mavericks' d-league team, the texas legends. now, nancy lieberman has a new book sharing her secret strategies with other women, "the playbook for success." when i met with nancy at the nba store in new york city, i asked why she focused her book on sports and business and women. >> if you want to be competitive, if you want to be on a level playing field with men in business, you need to have some sports in your vernacular. you need to be able to connect with people. if you don't, they're probely going to do business
with somebody else. >> susie: how has playing competitive sports helped you in business? >> it's taught me everything. how to compete, how to persevere, how to have integrity, honor. how to be a good leader, how to be a great teammate to somebody. how to understand the moment. isn't that what business is? >> susie: you know, many women might think if you are not athletic you can't use sports as a business tool. can anyone learn this stuff? >> everybody can learn this stuff. children can learn it. men can use this book. women, it will empower women. it's about taking you, who you are, with the talent and the beauty and the experience you have and making you better. it's about taking you out of your comfort zone, it's about identifying your strengths and weaknesses. it's bund standing leadership. but after you have all that, you have got to communicate with me. so you have to find some sort of tool to communicate with me if we're go stock successful together. >> so let's look at your play book, you know, some of
the rules that you teach professional athletes and starting with have a pay book have. a game plan. never fear success. think like a champion. team work, do your homework. so how should women use these tips in the workplace? >> they should use it repetitively. every single day. not just when they feel like using it. if you do something over an over and over again, it will be second nature it will be the only way you live your life. and that will help make you successful because you'll be consistently consistent. >> where do you think women go wrong. what is the most common mistake. >> i think we're jealous of each other in a lot of cases. guys are so good about sharing information, sharing technology. talking to each other with respect and integrity. sometimes we think the pot is right here, right this is the business pot. and you have the big sliver of it. so you know, i'm a little jealous or envyous. mind of a champion, i'm making this bigger. there is a lot of money for you. there is a lot of success for me. we can all really be a par
part-of-of what we are going to do tochlingt empower people. >> susie: there are many people women who are successful business leaders who are the standouts and why. >> without a doubt, oprah martha stewart, maria shriver, casey kotchman t they all have a major thread. confident, they are game changers. they take people up with them and they want to change the culture. i like people like that. >> susie: you know, i think it is interesting. your book has a glossary of sports terms, that you encourage women to use at work like we're on the clock, call another play, in the red zone. how does this give women a competitive edge? >> well, you have to use sports terms. it's in every office in america. when i took the job with the nba-- with their d league team, i was blown away that i didn't know the terminology. nancy lieberman who is like a basketball maven is telling you i didn't know the nba terminology. gi into meetings with koches. and they would say we're going to play the nail, the elbow, the boxes.
we're going to glue it, ice it, black it. i was like, what are you talking about? i mean i was embarrassed. i didn't know what they were talking about. i have spent nine months learning the terminology and it's empowered me in every meating that i go into. >> susie: looks like you've hit a home run, nancy, thank you so much for talking to us. >> thank you very much. >> i just loved her, she talked so disarming, acts like a champion but really down to earth, easy to talk to. and i think it's so cool that she's now going to be coaching a men's basketball team. >> tom: it's interesting that despite all her success on the court and sidelines coaching, she still has something to learn and that's a lesson to all of us that you never stop learning. >> susie: absolutely. she had a lot of good tips for women and for men on exactly that topic. >> tom: heart of a champion. >> susie: that's "nightly business report" for thursday, october 21. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: good night, susie. i'm tom hudson. good night, everybody. we hope to see all of you again
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