Capital Goods Sector Review: Big Construction Contracts and Aircraft Delivery Update from Boeing
The White House denied rumors it plans a massive mortgage-refinancing effort. However, homebuilders such as Beazer Homes USA, Inc. (NYSE:BZH) did well on Friday as hope for a housing bottom is resurrecting. The shares closed at $2.86, up $0.12, or 4.38%, on the day. Its market capitalization is $216.07 million.
KBR, Inc. (NYSE:KBR) announced the company was awarded a contract to provide construction services for ExxonMobil’s new synthetics lubricant base stock facility to be built at ExxonMobil’s refinery and chemical plant complex in Baytown, TX. The shares closed at $28.61, up $0.6, or 2.14%, on the day. Its market capitalization is $4.26 billion.
Credit Suisse downgraded CRH PLC (NYSE:CRH) to Underperform from Neutral. The shares closed at $18.71, down $0.81, or 4.15%, on the day. Its market capitalization is $13.24 billion.
Texas Industries, Inc. (NYSE:TXI) CEO Mel Brekhus told shareholders, “While the general economy is showing signs of some improvement, it has yet to manifest itself in increased construction activity in our markets. This is consistent with my expectation of a slow and prolonged recovery in the construction industry. I am pleased with the progress we have made on our cost cutting and efficiency initiatives. Our total headcount is down 11% compared to August 31, 2011. Projects are underway to improve efficiencies throughout our operations and our efforts to reduce costs through improved purchasing practices are showing good results. There is obviously much more work to be accomplished in order to reach our goals of a 15% gross profit margin and SG&A expense at 8% of sales by the end of FY13 but we are off to a very good start.” Shares closed at $28.15, down $0.91, or 3.13%, on the day. Its market capitalization is $785.22 million.
Caterpillar Inc. (NYSE:CAT) is taking on unions in Canada at the same time. Caterpillar is locking out 450 workers at a locomotive plant in Ontario, and Rio doing the same at a Quebec smelter. whether these actions will help increase shareholder value is an open question. CAT shares closed at $95.76, up $0.24, or 0.25%, on the day. Its market capitalization is $61.92 billion.
The Boeing Company (NYSE:BA) is delivering less aircraft than expected for 2011. The good news: Boeing reaping a higher yield on each aircraft delivered than originally expected. Sterne Agee has decided that the good outweighs the bad, and their have raised their estimates of Boeing from $4.55 to $4.60 a share. The stock closed at $73.98, up $0.45, or 0.61%, on the day. Its market capitalization is $54.98 billion.
Honeywell Intl. Inc. (NYSE:HON) announced Dow Chemical (NYSE:DOW) will hire them to provide technology to produce propylene at a Dow production site in Texas. Also, Morgan Stanleyey initiated coverage on the equity with an Overweight rating and a price target of $62. Honeywell shares closed at $55.18, down $0.41, or 0.74%, on the day. Its market capitalization is $42.68 billion.