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US stock market daily report (September 05, 2012, Wednesday)

Dollar General (DG) reported fiscal Q2 earnings surged 47% as the retailer of low-priced goods had strong sales across all of its segments, including a double-digit increase in consumables sales. DG raised its full-year adjusted per-share earnings view to $2.77 to $2.85 from its previous view of $2.68 to $2.78 and also raised the low end of its full-year same-store sales growth view by a percentage point, now expecting 4% to 5% growth. The company unveiled an additional $500 million in total share authorization, bringing its total buyback authorization to $1 billion. Due to new stores being opened and better-known brands of merchandise being added to its shelves, DG has reported higher profits in recent quarters. Dollar General reported a profit for quarter ending August 3 of $214.1 million or 64 cents a share, versus $146 million or 42 cents a share from 2011. Excluding items such as the early repayment of debt, per-share earnings were 69 cents compared with 52 cents in 2011. Sales increased by 10% to $3.95 billion, with same-store sales rising 5.1% while gross margin narrowed to 32% from 32.1% on a change in sales mix, among other things. Selling, general and administrative expenses increased by 9.7%. Sales of consumable items which account for the bulk of DG's top line rose 12%; seasonal products sales climbed 6.8%; home products category saw an increase of 8.5% and the apparel category saw a rise of 4.2%. Dollar General said the "volatility of the macroeconomic environment continues to pressure the consumer and impact the company's cost of purchasing and delivering merchandise to its stores." The company has also been expanding with bigger stores and refurbishing old ones.

Apple (AAPL) refuted reports on Wednesday from computer-hacking group Antisec claimed to have obtained one million Apple ID numbers from a computer of a Federal Bureau of Investigation agent. Per Apple, they provided none of the so-called UDID identification numbers to the FBI. Apple spokeswoman Natalie Kerris was reported as saying, "The FBI has not requested this information from Apple, nor have we provided it to the FBI or any organization." Antisec claimed earlier in the week that it had obtained a total of 12 million UDID numbers, including the ones allegedly from the FBI computer. The FBI said it had no evidence to suggest one of its computers had been hacked by the Antisec group.

Hi-Tech Pharmacal (HITK) fiscal Q1 earnings fell 56% as lower average prices for its generic nasal spray contributed to its first revenue decline in two years. Hi-Tech's bottom line was hurt by increased expenses for sales and advertising, as well as research and development at its generic business. For almost two years, the company - which focuses on generic oral liquid drugs and various topical treatments - has seen sales grow as cost-conscious consumers and pharmacy-benefit managers seek to reduce medical costs. Net sales of generic drugs declined 6% during recent period, mostly on lower average prices for the company's Fluticasone Propionate nasal spray, which accounts for nearly half of segment sales. President and Chief Executive David Seltzer said, "This quarter was weaker than recent quarters for Hi-Tech, but we still anticipate growth in all of our businesses this year." For quarter ended July 31, Hi-Tech reported a profit of $6 million or 44 cents a share, down from $13.8 million or $1.05 a share in 2011 while revenue decreased 7.4% to $52 million. Gross margin of the company fell to 48.7% from 59.1%. Overhead costs were reported higher by 21% amid an expansion of its sales staff at its ECR Pharmaceuticals segment and increased advertising in its over-the-counter drugs business. ECR Pharmaceuticals, Hi-Tech's smaller and health-care products segments saw double-digit sales declines. Research and development expenses surged higher by 32% amid increased spending on generic-segment projects, including four that require clinical trials.

Janssen - unit of Johnson & Johnson's (JNJ) - received priority review status the U.S. Food and Drug Administration's for its pulmonary, multidrug-resistant tuberculosis treatment that is used in combination with other therapies. The FDA is expected to decide on J&J's new drug application - filed in late June - for bedaquiline early next year. "If approved, bedaquiline would offer the first in a new class of anti-tuberculosis drugs for patients suffering from this serious and deadly disease," said Wim Parys, head of Janssen's infectious diseases therapeutic area. Priority review status is granted by the FDA for medicines that offer major advances or provide a treatment option where there currently isn't an adequate therapy.

The U.S. Labor Department reported Wednesday that productivity of U.S. nonfarm was revised higher in Q2. Productivity rose at a 2.2% annual rate in the quarter, revised from 1.6% in the earlier estimate a month ago. The results pushed productivity growth in the past four quarters up to 1.2%, compared with earlier estimate of a 1.1% gain. Unit labor costs rose 1.5% after being revised down from a 1.7% increase. The annual rate of growth of unit labor costs was 0.9% which is a sign of low inflation. The forecast was based on the upward revision to Q2 GDP which rose 1.7% compared with the initial estimate of a 1.5% gain. Unit labor costs were expected to be revised down to a 1.4% gain.

A statement from Bank of Spain took the unusual step of confirming that it has provided extraordinary liquidity to local banks through non-traditional means on Wednesday. The Spanish banking authority appeared to have activated the Emergency Liquidity Assistance program that allows lenders to borrow directly from the Bank of Spain without passing through the ECB's relatively strict collateral demands. In July, banks appeared to have tapped the ELA for about 400 million euros ($500 million). The Bank of Spain said in a statement that liquidity provided for financial intuitions that fall outside ordinary mechanisms "represents an insignificant fraction" of the Bank of Spain's total lending. The ELA is a mechanism that is generally shrouded in secrecy and reserved for situations when banks have exhausted all other financing options. The central bank said the measure seeks to discourage banks from offering risky investments to their customers. Banks had jacked up the interest rates to above 4% just days after the rate cap was scrapped. ECB data published last month showed that overall deposits dropped 4.7% on the month, to EUR1.51 trillion.