Finances

Adobe Systems Incorporated (ADBE), a producer of multimedia software, announced its quarterly and annual earnings on December 13.

The company reported fourth quarter revenue of $1.153 billion and annual revenue of $4.4 billion. This is an increase from last year's fourth quarter and annual revenue of $1.152 billion and $4.2 billion, respectively.

Adobe also reported fourth quarter and annual net income of $222 million and $832 million, respectively. The fourth quarter net income figure is an increase from the same period last year when the company reported net income of $173 million. The annual net income figure was virtually unchanged from last year's reported net income.

Shantanu Narayen, President and Chief Executive Officer, said, "We beat our Creative Cloud subscription goals and established Adobe Marketing Cloud as the leader in the exploding category of Digital Marketing during fiscal 2012. In fiscal 2013 we intend to accelerate our pace of innovation, and drive integration between Creative Cloud and Adobe Marketing Cloud."

Adobe is a multinational computer software company headquartered in San Jose, California. The company produces multimedia and creativity software such as Adobe Photoshop, Adobe Illustrator and Adobe Dreamweaver.

Adobe Systems Incorporated (ADBE) shares ended the week at $37.58.

Pier 1 Imports Delivers Strong Third Quarter Results

Pier 1 Imports, Inc. (PIR), a retailer specializing in home furnishings and décor, reported its quarterly earnings on December 13.

Pier 1 reported third quarter 2013 sales of $424.5 million. This represents an increase of 10.9% from the same period last year when the company reported third quarter sales of $382.7 million.

The company also reported net income of $23.7 million for the quarter. This is an increase from last year's third quarter when the company reported net income of $23 million.

"Our third quarter results represent the 13th consecutive period of growth in comp store sales and earnings per share," stated Alex W. Smith, President and Chief Executive Officer. "Our team continues to execute well, bringing the Pier 1 Imports customer a highly differentiated assortment of merchandise that keeps her coming back to both our stores and website. This marks the Company's first full quarter of e-Commerce sales and we're pleased with the initial results, as the level of both new and existing customer visits indicates the long-term opportunity is significant. Indeed, we saw very strong traffic at both our stores and Pier1.com during the period, and trends have remained robust thus far in the holiday selling season."

Pier 1 Imports is headquartered in Fort Worth, Texas and operates nearly 1,000 stores in the United States, Canada, Mexico and Puerto Rico.

Pier 1 Imports, Inc. (PIR) shares ended the week at $19.39.

Orchard Supply Hardware Reports Quarterly Earnings

Orchard Supply Hardware Stores Corporation (OSH), a chain of hardware and garden stores, reported its third quarter results on December 10.

The company reported third quarter sales of $155.2 million. This number was a decrease from the same period last year when Orchard Supply reported sales of $158.7 million.

Orchard Supply also reported a net loss of $53.6 million for the quarter. This number compared unfavorably to the net loss of $10.1 million the company reported for the third quarter of 2011.

Mark Baker, President and Chief Executive Officer, stated, "At the beginning of fiscal 2012, we outlined five strategic priorities, which included our plans to transform Orchard's store portfolio to our productive new neighborhood format. Thus far in 2012, we opened two new stores and remodeled four existing locations, three of which were completed during the third quarter, and we're seeing increased customer traffic and engagement at those locations. While comparable store sales were flat in the third quarter, the combination of stronger sales of seasonal merchandise and contributions from the newly remodeled stores drove an improvement in comp store trends throughout the period. However, our margins were pressured as we increased our promotional activity to help drive traffic and sales."

Orchard Supply Hardware operates 100 neighborhood hardware and garden stores in California focused on paint, repair and the backyard. The company became a separate public company from Sears Holdings in 2012.

Orchard Supply Hardware Stores Corporation (OSH) shares ended the week at $7.14.

The Dow started the week at 13,155 and closed at 13,135. The S&P 500 started the week at 1,418 and ended at 1,414. The NASDAQ started the week at 2,978 and finished at 2,971.

Despite a continued stalemate between President Obama and Speaker Boehner on the fiscal cliff, treasuries fell for a third consecutive day last Thursday on news of a decline in U.S. unemployment-insurance claims and an increase in retail sales. The positive economic news weakened demand for 30-year bonds, while the Federal Reserve made a surprise announcement regarding another round of quantitative easing.

The weakened demand for 30-year bonds was tempered by the continued fiscal cliff standoff in Washington, D.C. Last Thursday's sale drew a seven-month high yield of 2.917%, which was higher than the 2.889% forecast in a Bloomberg survey of the Federal Reserve's 21 primary dealers. "There remains continued optimism that the economy will be better next year as long as headwinds die down," said Jim Vogel, head of agency-debt research at FTN Financial in Memphis, Tennessee.

With yields drawing a seven-month high of 2.91% Thursday, analysts, such as Jason Rogan, director of U.S. government trading at Guggenheim Partners LLC, say some people are questioning the value of sub-3% 30-year yields. He added, "Still, until we get a better idea about the economy and the fiscal cliff, the market is going to stay relatively well bid."

Although applications for jobless benefits fell to 343,000 in the week ended December 8 and unemployment has fallen to 7.7%, Federal Reserve Chairman Ben Bernanke made a surprise announcement last Thursday. With the expiration at year-end of Operation Twist, a $667 billion program in which the central bank has sold $45 billion in short-term Treasuries each month, Bernanke announced another round of quantitative easing, or QE4. He announced that the Fed will be purchasing $85 billion of Treasuries per month until the unemployment rate falls below 6.5% and inflation projections remain no higher than 0.5% above 2%.

Bernanke's announcement signaled a shift in the Fed's forward guidance from a calendar-based guidance to one closely tied to economic factors, most importantly, inflation and unemployment. The surprise announcement resulted in a rise in stock markets, with the 10-year Treasuries falling to 1.65% and gold rising slightly in price.

The 10-year Treasury note yield finished the week at 1.71% while the 30-year Treasury note yield finished the week at 2.87%.

Freddie Mac released the results of its weekly Primary Mortgage Market Survey (PMMS) on December 13. The results showed that average fixed mortgage rates continue to remain near their record lows, keeping home buying affordable and attractive to homeowners looking to refinance.

The 30-year FRM averaged 3.32% this week. This represents a decrease from last week when it averaged 3.34%. Last year at this time, the 30-year FRM averaged 3.94%.

The 15-year FRM averaged 2.66% this week. This represents a decrease from last week when it averaged 2.67%. One year ago, the 15-year FRM averaged 3.21%

Frank Nothaft, Vice President and Chief Economist at Freddie Mac, said, "Mortgage rates held relatively steady following the November employment report. Although 146,000 jobs were created, above the market consensus forecast of 85,000, revisions subtracted 49,000 workers over the September and October period. The unemployment rate fell from 7.9 to 7.7%. However, in its December 12 monetary policy statement, the Federal Reserve (Fed) noted that this rate remains elevated and modified the statement to tie any increases to its target rate to the unemployment rate falling below 6.5%. The latest Fed central-tendency forecast is for unemployment to be between 7.4 and 7.7% in the fourth quarter of 2013 and between 6.8 and 7.3% by late 2014."

The money market fund finished this week at 0.5%. The 1-year CD finished at 0.7%.