Equipment Type

Bear Quarter Ends With Bullish March

The Federal Reserve’s effort to staunch the economy’s bleeding and the government’s moves to stimulate banks and consumers seemed to have no effect as indicators kept going down and unemployment numbers mounted. However, as our quarter ended March 31, 2009, the month confounded market-watchers by ending in a three-week upswing.

April 08, 2009

The Federal Reserve’s effort to staunch the economy’s bleeding and the government’s moves to stimulate banks and consumers seemed to have no effect as indicators kept going down and unemployment numbers mounted. However, as our quarter ended March 31, 2009, the month confounded market-watchers by ending in a three-week upswing. Citigroup announced on March 10 that its first two months of the year were operated at a profit, and markets kept a sustained if volatile rally that persisted for three weeks as the trading session ended. Despite the upswing, the period marked six straight negative quarters, the first time that’s happened since 1969 and 1970. The Dow industrials clocked their worst year’s start since 1939. Although March 2009 closed as the best March since 2002, few on Wall Street are declaring a bottom, and many investors are keeping their hands in their pockets. "There was no light at the end of the tunnel in January and February. Now there’s some," said Hugh Johnson, chief investment officer at Johnson Illington Advisors in Albany, NY. "It’s very, very faint."

The Construction Index experienced scant positive news in the quarter, except for a report late in March that new home sales in March rose unexpectedly. Even so, the Standard & Poor’s/Case-Shiller index of home prices in 20 major cities dropped a record 19 percent from this January to last. The Construction Index shed 376.96 points, or 19.92 percent, and ended at 1515.39. Declining issues outran advancing issues by a 25-to-4 count.

Shaw Group reported a loss in its first quarter based on a stronger yen, but the company’s adjusted profit increased. For the three months ended Nov. 30, Shaw lost $39.9 million, or $0.48 per share, compared to net income of $2.2 million, or $0.03 per share in the year-ago period. Excluding Shaw’s stake in nuclear plant constructor Westinghouse, the majority of which is owned by Japan’s Toshiba Corp., Shaw’s results bested analysts’ expectations and its sales were in line with expectations. "A severe late-summer/early-fall pullback in engineering and construction stocks was followed by a year-end rally fueled by enthusiasm regarding stimulus-related spending, though low commodity prices and frozen credit markets post risk to the bookings outlook," said J.P. Morgan analyst Scott Levine about the industry, mentioning Shaw as a company that could benefit from stimulus spending. Citigroup analyst Brian Chin raised his rating on Shaw Group to "Hold/Speculative" from "Sell/Speculative." Shaw increased 6.94 points, or 33.90 percent, and was the top dollar gainer this quarter. Shaw ended at 27.41.

Vulcan Materials tumbled 25.29 points, or 36.35 percent, after reporting an 83-percent drop in fourth quarter profit, citing weak volume. For the quarter ended in December, Vulcan reported net income of $14.8 million, or $0.13 per share, versus net income of $84.6 million, or $0.82 per share in the year-ago quarter. Sales were down to $799.2 million from $856.9 million. Analysts surveyed by Thomson Reuters expected $0.29 per share and sales of $831.5 million. Vulcan closed at 44.29, and was the top dollar loser.

Although D.R. Horton shares stumbled in March following a Credit Suisse downgrade, the company still ended the quarter on an upswing after reporting a narrowed loss in its fiscal first quarter. In the quarter ended Dec. 31, DHI lost $62.6 million, or $0.20 per share, compared to a loss of $128.8 million, or $0.41 per share in the comparable year-ago quarter. Analysts polled by Thomson Reuters expected D.R. Horton to lose $0.52 per share in the quarter. However, Credit Suisse analyst Daniel Oppenheim cut DHI’s rating to "underperform" from "neutral." D.R. Horton ended the quarter at 9.70, and was the top percentage gainer, adding 2.63 points, or 37.20 percent.

Manitowoc swung to a loss for its fourth quarter and withdrew its guidance for 2009, sending shares downward 5.39 points, or 62.24 percent for the trading session. Although sales increased 16 percent, to $1.22 billion, Manitowoc lost $36.5 million, or $0.28 per share, versus net income of $99.2 million, or $0.76 per share in the same quarter a year ago. At the end of March, Manitowoc said it no longer expects to meet its previously announced earnings and sales for 2009 and did not offer new guidance. MTW ended at 3.27, and was the top percentage loser.

Company

Name

Price

3/31/2009

Price

12/31/2008

Net

Change

Percent

Change

52-Week

High

52-Week

Low

Shares

Outstanding

Market ($000)

Capitalization

AK Steel Holding Corp.

7.12

9.32

-2.20

-23.61%

73.07

5.20

110910

789679.2

Ashland, Inc. (APAC)

10.33

10.51

-0.18

-1.71%

58.58

5.35

73620

760494.6

Caterpillar, Inc.

27.96

44.67

-16.71

-37.41%

85.96

21.71

601530

16818778.8

Centex Corp.

7.50

10.64

-3.14

-29.51%

27.72

4.91

124350

932625

Chevron Corp.

67.24

73.97

-6.73

-9.10%

104.63

55.50

2000000

134480000

CNH Global NV

10.38

15.60

-5.22

-33.46%

58.00

5.69

237300

2463174

Cummins, Inc.

25.45

26.73

-1.28

-4.79%

75.98

17.70

201350

5124357.5

DaimlerChrysler AG (Freightliner)

25.54

38.28

-12.74

-33.28%

87.19

21.53

927440

23686817.6

Deere and Co.

32.87

38.32

-5.45

-14.22%

94.89

24.51

422670

13893162.9

D.R. Horton, Inc.

9.70

7.07

2.63

37.20%

17.95

3.79

316760

3072572

Eagle Materials, Inc.

24.25

18.41

5.84

31.72%

38.89

13.01

43550

1056087.5

Exxon Mobil Corp.

68.10

79.83

-11.73

-14.69%

96.12

56.51

4940000

336414000

Fluor Corp.

34.55

44.87

-10.32

-23.00%

101.37

28.60

181530

6271861.5

Goodyear Tire & Rubber Co.

6.26

5.97

0.29

4.86%

30.10

3.17

241350

1510851

Granite Construction Ltd.

37.48

43.93

-6.45

-14.68%

50.00

21.20

38250

1433610

Halliburton Co.

15.47

18.18

-2.71

-14.91%

55.38

12.80

897170

13879219.9

Ingersoll Rand Company Ltd.

13.80

17.35

-3.55

-20.46%

46.84

11.46

318860

4400268

Kubota Corp.

27.78

36.07

-8.29

-22.98%

43.41

17.72

254420

7067787.6

Manitowoc Company, Inc.

3.27

8.66

-5.39

-62.24%

45.47

2.34

130360

426277.2

Martin Marietta Materials, Inc.

79.30

97.08

-17.78

-18.31%

125.19

58.62

41410

3283813

Oshkosh Truck Corp.

6.74

8.89

-2.15

-24.18%

42.59

3.85

74430

501658.2

Paccar, Inc.

25.76

28.60

-2.84

-9.93%

53.81

20.38

362770

9344955.2

Pulte Homes

10.93

10.93

0.00

0.00%

17.32

6.49

258580

2826279.4

Shaw Group, Inc.

27.41

20.47

6.94

33.90%

66.61

11.47

83530

2289557.3

Terex Corp.

9.25

17.32

-8.07

-46.59%

76.25

7.34

95000

878750

Wells Fargo & Co.

14.24

29.48

-15.24

-51.70%

44.75

7.80

4240000

60377600

United States Steel Corp.

21.13

37.20

-16.07

-43.20%

196.00

16.66

116200

2455306

US Concrete, Inc.

2.00

3.36

-1.36

-40.48%

8.38

1.40

37210

74420

USG Corp.

7.61

8.04

-0.43

-5.35%

115.70

4.16

99180

754759.8

Vulcan Materials Co.

44.29

69.58

-25.29

-36.35%

84.73

34.30

110360

4887844.4

Price

Price

Net

Percent

3/31/2009

12/31/2008

Change

Change

Construction Index

1515.39

1892.35

-376.96

-19.92%

Dow Jones Industrial Average

7608.92

8776.39

-1167.47

-13.30%

S&P 500 Index

797.87

903.25

-105.38

-11.67%

NASDAQ Composite

1528.59

1577.03

-48.44

-3.07%

Top Gainers and Losers

Shaw Group, Inc.

6.94

Vulcan Materials Co.

-25.29

D.R. Horton, Inc.

37.20%

Manitowoc Company, Inc.

-62.24%

Advancers

4

Decliners

25

Unchanged

1

 

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