Lenon’s main business news

New Zealand’s trade deficit widened in December, after the delivery of a commercial jet offset an increase in exports to a seven-month high.

The shortfall was NZ$250 million ($192 million) from NZ$186 million in November, Statistics New Zealand said today in Wellington. The median estimate in a Bloomberg News survey of nine economists was for a NZ$50 million surplus.

Aircraft imports increased by NZ$247 million after Air New Zealand Ltd. took delivery of a Boeing Co. 777 jet during December. Rising exports, which make up 30 percent of the economy, add to signs New Zealand may avoid a recession after gross domestic product fell 0.2 percent in the third quarter.

“The strength of emerging Asian economies is a large factor behind the strength in New Zealand export earnings,” Nick Tuffley, chief economist at ASB Bank Ltd. in Auckland, said in a report last week. “Continued growth in China should underpin demand for commodities over the next year.”

New Zealand’s dollar was little changed after the report. It bought 77.01 U.S. cents at 10:53 a.m. in Wellington from 77.03 cents immediately before the data were released.

Exports rose 11 percent from the year-earlier month to NZ$3.8 billion, the highest since May, today’s report showed. Imports gained 18 percent from a year earlier to a two-year high of NZ$4.05 billion.

Commodity Prices

Commodity prices rose 2 percent in December from November, according to an index calculated by ANZ National Bank Ltd. From a year earlier, the index increased 23 percent.

Dairy exports, which make up a fifth of overseas sales, rose 32 percent from the year-earlier month to NZ$1.02 billion. Last month, Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, raised its forecast payment to New Zealand milk suppliers by 4.5 percent, citing higher international prices.

Meat and lumber exports also surged, and aluminum sales increased 30 percent, according to today’s report.

Exports of all goods to China, the second-largest market for New Zealand after Australia, increased 44 percent to NZ$543 million, the report showed.

Fourth-quarter exports rose 3.1 percent from the preceding quarter, the statistics agency said, citing a separate series that adjusts for seasonality. Values of meat and lumber exports increased.

In December, imports of jet engines led an increase in machinery purchases while ships, vehicles and fuel also increased, today’s report showed.

Imports Ex-Aircraft

Fourth-quarter imports rose 4.2 percent from the preceding three months, the agency said. Excluding aircraft, imports would have increased 2 percent, it said.

New Zealand posted a trade surplus of NZ$1.13 billion in the 12 months ended Dec. 31 from NZ$1.36 billion in the year through November. Economists expected a 12-month surplus of NZ$1.46 billion.

A separate government report today showed New Zealand’s home-building approvals decreased 18.6 percent in December from a month earlier. The median estimate in a Bloomberg News survey of four economists was for a 1.2 percent drop.

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Marc Lopata, chief operations officer

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314-657-0955

MLopata@MicrogridEnergy.com

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Health care giant Johnson & Johnson, hammered by global pricing pressures and numerous recalls that have kept many popular nonprescription medicines and other products off the market, posted a 12 percent profit decline and a 5.5 percent drop in sales for the fourth quarter.

Revenue fell 0.5 percent for all of 2010, an unprecedented second straight yearly decline. Revenue slumped 3 percent in 2009, the first drop for J&J since the Depression.

Chairman and Chief Executive William C. Weldon on Tuesday tried perhaps too hard to reassure analysts and investors that J&J has its manufacturing and other problems under control, in an unusually lengthy, sometimes repetitive presentation.

Wall Street wasn’t buying it, though, with J&J shares initially dropping 2.4 percent in heavy early trading. Shares were down fell $1.16, or 2 percent, to $61.06 in midday trading. The stock has lagged the benchmark S&P 500 Index over the past year.

“The Teflon has come off J&J … with a vengeance,” said analyst Steve Brozak of WBB Securities.

The adjusted earnings from the maker of Tylenol, medical devices and biologic drugs matched Wall Street estimates but revenue fell short and its earnings estimate for this year was below analysts’ current forecasts.

The New Brunswick, N.J.-based company reported net income of $1.94 billion, or 70 cents per share. That is down from $2.21 billion, or 79 cents per share, in 2009’s fourth quarter.

Excluding one-time items, net income would have been $1.03 per share, just matching analysts’ expectations. The items included an after-tax charge of $922 million for litigation settlements, costs from a recall of poorly fitting DePuy hip implants and increasing J&J’s product liability reserve.

The company’s revenue fell to $15.64 billion from $16.6 billion a year ago and was below the $16 billion expected by analysts polled by FactSet. Sales in the 2009 fourth quarter totaled $16.55 billion.

Johnson & Johnson has been hit by an eye-popping 17 recalls since September 2009 covering multiple McNeil Consumer Health products, plus contact lenses and hip replacements, and the long-term shutdown of one of the factories involved. Results also were hit by the weak global economy squeezing consumer health care spending, the impact of the U.S. health care overhaul and European government demands for lower prices.

During a conference call Tuesday, Weldon said pricing pressures from hospitals and governments won’t go away anytime soon, if ever, but that expected continued sales growth in emerging markets, and several new drugs awaiting approval, will help J&J recover.

He also said the company is committed to restoring consumer products to the quality level consumers expect.

Erik Gordon, a professor and analyst at University of Michigan’s Ross School of Business, suggested J&J would have a hard time winning back customers.

“It takes some ego for J&J to think that customers still think of it as a quality brand,” he said.

Brozak said Weldon gave “a classic sales presentation,” not an earnings report.

“Weldon is paid the big bucks to provide a solution. I didn’t hear a solution” from him, Brozak said.

Sales of consumer products such as Tylenol, Benadryl and Rolaids _ all the subject of recalls over product contamination and other problems _ were down the most. Sales in that division fell 15 percent to $3.6 billion, with a whopping 29 percent plunge in the U.S.

Sales of prescription drugs, which include Remicade for immune disorders and Concerta for attention deficit disorder, fell nearly 5 percent to $5.71 billion. The medical device division, now J&J’s largest, did best with sales up 0.2 percent to $6.32 billion.

Meanwhile, J&J forecast earnings per share of $4.80 to $4.90 for 2011. Analysts surveyed by FactSet were expecting $4.99 a share for 2011.

For the full year, net income was up nearly 9 percent to $13.33 billion, or $4.78 per share. Revenue totaled $61.59 billion, down from $61.9 billion in 2009, even though J&J’s 2009 fiscal year had a 53rd week.

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Fans of the Super Bowl can probably expect to see Clydesdales in the game for the next few years.

The owner of Budweiser says it has locked up its position as the only national beer advertiser in the Super Bowl through 2014.

The brewer, which became Anheuser-Busch InBev in 2008, has had a presence in the NFL’s championship game as the exclusive beer advertiser for 23 years. This year, it will again feature its famous horses and, according to Kantar Media, it will keep its spot as the game’s largest ad buyer.

The week of the Super Bowl, which will be played on Feb. 6, is a busy one for brewers, with beer sales rising as much as 20 percent above a typical week in January or February cash advance payday loan.

That’s part of the reason the U.S. subsidiary, Anheuser-Busch Inc., is buying seven 30-second spots this year and securing its presence going forward.

“We wouldn’t have done it if the payoff wasn’t there,” said Anheuser-Busch President Dave Peacock.

This year, AB InBev will tout Belgian lager Stella Artois in its first Super Bowl with a 60-second ad. Flagship brand Budweiser will have one 60-second ad and Bud Light will get three 30-second spots.

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Sales perk up in December

House sales in the 11-county region picked up 5 percent in December compared with December 2009, their first month of growth since May.

Dec. ‘09 Dec. ‘10 Change St. Louis County 802 832 3.74%

St. Charles 248 315 27.02%

St. Louis city 212 179 -15.57%

St. Clair 170 173 1.76%

Madison 168 156 -7.14%

Jefferson 114 139 21.93%

Franklin 72 69 -4 payday loans.17%

Lincoln 30 39 30.00%

Warren 29 29 0.00%

Monroe 21 25 19.05%

Clinton 14 18 28.57%

Total 1880 1974 5.00%

Source: MARIS, Realtors Association of SW Illinois, Kelsey Cottrell Realty, Greater Gateway Realtors Association

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European markets were steady Wednesday despite a rise in Asia as investors digested a raft of earnings reports, including strong results from Apple Inc., and prepared for figures from investment bank Goldman Sachs.

A day after rallying on hopes that EU officials were preparing a more comprehensive strategy to fight the debt crisis, European stocks ran out of momentum as traders turned their eyes to the U.S. corporate earnings schedule.

Apple had weighed on markets after the company announced that its charismatic CEO Steve Jobs was taking another medical leave. Its shares fell 2.2 percent but that was offset when the company announced its earnings after the market closed.

The company produced stellar holiday-quarter results by boosting production of iPads faster than analysts predicted, and shoppers bought iPhones as fast as Apple could make them, helping drive the company’s fiscal first-quarter net income up 78 percent from the prior year.

Apple sold 7.3 million iPad tablet computers _ a million more than analysts expected.

IBM also surprised, with net income of $5.26 billion, or $4.24 per share, topping analysts’ projections for $4.08 per share.

Later Wednesday, eBay Inc. and Wells Fargo & Co. were due to release quarterly results, while the U.S. Commerce Department’s was scheduled to publish housing starts for December.

In Europe, where the earnings season does not take off for another week, Pearson _ the publisher of Penguin books and the Financial Times _ raised its earnings guidance, sending the stock up 5 percent in London.

The German government lifted its growth forecast for this year to 2.3 percent from 1.8 percent earlier thanks to strong exports and recovering domestic demand.

Still, the shadow of the debt crisis loomed over the region. Fitch Ratings agency said Wednesday that gross government borrowing in Europe will fall sharply in 2011 due to big budget cuts. Governments are using austerity measures to heal public finances and regain bond market trust.

Britain’s FTSE 100 was down about 0.1 percent to 6,048.06. Germany’s DAX was up 0.1 percent to 7,152.39 and France’s CAC-40 lost less than 0.1 percent to 4,009.23.

Wall Street was set for a mixed opening, with Dow futures up 0.1 percent 11,819 and S&P 500 futures lower by 0.2 percent to 1,292.60.

In Asia, the electronics sector bolstered indexes, mainly in Japan and Korea.

South Korea’s Kospi rose 0.9 percent to a record high close of 2,115.69. Market bellwether Samsung Electronics Co gained 2.9 percent to an all-time high finish of 997,000 won.

Asian “markets are taking their queue from the U.S. We are in results seasons, and some have beaten forecasts,” said Lee Kok Joo, head of research at Phillip Securities in Singapore. “The most prominent one is Apple. Indications are that the retail market was very strong in the last quarter of last year. Consumers are spending.”

Japan’s Nikkei 225 stock average added 0.4 percent to 10,557.10, with Hitachi Ltd. up 3.8 percent in Tokyo.

Hong Kong’s Hang Seng index climbed 1.1 percent on robust gains by property shares. Australia’s S&P/ASX 200 climbed 0.7 percent.

Chinese shares rebounded, with the benchmark Shanghai Composite Index jumping 1.8 percent to 2,758.10. The Shenzhen Composite Index for China’s smaller, second exchange rocketed 2.4 percent.

High speed rail shares surged, boosted by China’s progress on a bid for a U.S. high-speed rail project. China South Locomotive & Rolling Stock Co., or CSR, hit the daily limit of 10 percent while North Locomotive & Rolling Stock Co., or CNR, also surged 10 percent.

In currencies, the dollar fell to 82.26 yen from 82.59 yen late Tuesday. The euro rose to $1.3453 from $1.3387.

Benchmark crude for February delivery was up 50 cents at $91.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which expires this week, fell 16 cents to settle at $91.38 on Tuesday.

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U.K. consumer confidence rose from a 20-month low in December as more Britons thought it was a good time to buy household goods before this month’s increase in sales tax, Nationwide Building Society said.

The sentiment index climbed 8 points to 53, reversing the decline seen in November, when the gauge fell to its lowest since March 2009, the customer-owned lender said in an e-mailed report today. December’s gain was the first in four months. A measure of whether now is a good time to spend advanced 10 points to 90, while a gauge of future expectations jumped 12 points to 73.

Prime Minister David Cameron’s plans for the biggest fiscal squeeze since World War II to tackle the record budget deficit has dented Britons’ outlook for 2011 and threatens to slow economic growth. The measures may eliminate 330,000 public- sector jobs, while the value-added tax on sales of goods and services rose by 2.5 percentage points to 20 percent on Jan. 4.

“While the uptick is encouraging, household confidence nevertheless remains subdued, reflecting ongoing uncertainty about the economic outlook,” Robert Gardner, chief economist at Swindon, England-based Nationwide, said in the report. “Expectations continued to be a key driver in December, this time in a more favorable direction, and perhaps provide some hope that the recovery will gain momentum in 2011 cash advance.”

An index of people’s current perception of the economy gained 3 points to 24, the report showed. TNS-RI questioned 1,002 people for Nationwide between Nov. 22 and Dec. 19. GfK NOP Ltd.’s consumer-confidence index stayed at a four-month low in December, according to a Dec. 21 report.

VAT Increase

“A key contributing factor” in the improvement in spending sentiment in December may have been the forthcoming VAT increase, Nationwide said.

“Some consumers may have decided to bring forward purchases, rather than risk paying more for them by waiting until the New Year,” Gardner said. “As a result, we could see a reversal of this measure in January’s figures.”

The rise in the measure of Britons’ future expectations “can be attributed more to a decrease in pessimism rather than consumers believing that the economic and employment situation will be significantly better in six months’ time,” Gardner said.

Consumers continued to express pessimism about the U.K. housing market in December and expect the value of their home to decrease by 0.9 percent over the next six months, compared with a November prediction of a drop of 1.4 percent, Nationwide said.

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OTTAWA