Finances

Sonic Corp. (SONC), the nation's largest chain of drive-in restaurants, announced its first quarter 2013 earnings on January 3.

Sonic reported revenue of $126 million for the quarter. This represents a slight decrease from the same period last year when the company reported revenue of $128 million.

The company also reported net income of $17.2 million for the quarter. This number was an increase over the same period last year when the company reported net income of $16.8 million.

"We are pleased the momentum in our business continues to build with a strong start in fiscal 2013," said Cliff Hudson, Chairman and Chief Executive Officer. "Sustaining positive same-store sales during the quarter was the result of our improved day-part promotional strategy and effective creative messaging, complemented by our long-standing initiatives to improve customer service, product quality and value perception. This growth in sales led to an 80 basis point improvement in drive-in margins. In addition, during the quarter, we purchased $18 million of stock representing more than 1.8 million shares or approximately 3% of our outstanding stock. These three factors–same-store sales growth, operating leverage and use of free cash flow–are key components in our multi-layered growth strategy."

Sonic operates over 3,000 restaurants in 43 states and serves 3 million customers per day. The company is known as "America's Drive-In."

Sonic Corp. (SONC) shares ended the week at $10.65.

Family Dollar Reports Strong Quarterly Results

Family Dollar Stores, Inc. (FDO), a regional chain of variety stores, reported its quarterly earnings on January 3.

Family Dollar reported net sales for the quarter of $2.42 billion, an increase of 12.7% from the same period last year when the company reported net sales of $2.15 billion.

The company also reported net income of $80.3 million. This is a slight decrease compared to last year's first quarter net income of $80.4 million.

"The investments we have made to increase our relevance to the customer are delivering results. We are driving more traffic, and we are increasing our market share," said Howard R. Levine, Chairman and Chief Executive Officer. "While the near-term economic environment remains difficult to predict, I continue to be excited about the long-term opportunity for our business. We are seeing tangible benefits from our margin-enhancing investments in global sourcing and private brands, and as we work to drive further benefit from the investments we are making to expand profitability, I remain confident that our efforts will deliver stronger results as we progress through fiscal 2013 and beyond."

Family Dollar, headquartered in Matthews, North Carolina, opened its first store in 1959. The company now operates 7,100 stores in 45 states and the District of Columbia.

Family Dollar Stores, Inc. (FDO) shares ended the week at $56.65.

Worthington Reports Second Quarter Fiscal 2013 Earnings

Worthington Industries, Inc. (WOR), a steel processor and manufacturer, reported its second quarter results on January 3.

The company reported second quarter sales of $622.6 million, which represents a 10% increase over the same period last year when the company reported net sales of $565.7 million.

Worthington also reported net earnings of $31.8 million for the quarter. This represents an increase from the same period last year when the company reported net earnings of $12 million.

"We had strong performances from most of our businesses in the second quarter, with volume increases in Pressure Cylinders, and a steady performance from Steel Processing, offset by softness in Engineered Cabs," said John McConnell, Chairman and Chief Executive Officer. "Our year-over-year performance improved despite declining steel prices, thanks to contributions from recent acquisitions. We are very pleased with the results of our latest acquisition, Westerman, whose products include tanks for use in on-site production in shale drilling activity."

Worthington Industries was founded in 1955 and has been recognized four times by Fortune magazine as one of the "100 Best Companies to Work for in America."

Worthington Industries, Inc. (WOR) shares ended the week at $27.10.

The Dow started the week at 12,938 and closed at 13,435. The S&P 500 started the week at 1,402 and ended at 1,466. The NASDAQ started the week at 2,960 and finished at 3,102.

Treasury yields fell from an eight-month high on Friday, January 4, after the U.S. unemployment rate in December was higher than forecast.

The 10-year Treasury note yield rose to 1.93% early Friday after having reached 1.97% earlier in the day, the highest level since April 26. The 30-year bond yield was little changed late Friday at 3.12% after reaching 3.18% earlier in the day, the highest level since April 25.

Treasury yields on Friday were driven down following the most recent jobs report from the Labor Department showing the U.S. unemployment rate was 7.8% in December, matching November's revised rate.

"The unemployment rate upticked, and it didn't go up because of more people entering the labor force-it seems like a legitimate unemployment uptick," said David Ader, head of U.S. government-bond strategy at CRT Capital Group LLC. "It says it's going to be a grinding decline, and so it provided a degree of solace to a market that over the course of the last month has backed up almost 40 basis points."

Treasuries had extended losses yesterday after the minutes of the most recent Federal Reserve meeting indicated that policy makers may end the fourth round of quantitative easing, known as "QE4," sometime in 2013. The Fed had earlier announced on December 12 that QE4 would continue as long as the unemployment rate remained above 6.5%.

The most recent jobs report, however, indicates that QE4's end probably won't be anytime soon. "At 7.8%, that tells us we still have an unemployment problem and the Fed will still be engaged," said Mohamed El-Erian, Chief Executive Officer of Pacific Investment Management Company.

The 10-year Treasury note yield finished the week at 1.93% while the 30-year Treasury note yield finished the week at 3.1%.

Freddie Mac released the results of its weekly Primary Mortgage Market Survey (PMMS) on January 3. The results showed that average fixed mortgage rates continue to remain near their record lows, which should continue to keep home buying affordable and aid in the housing recovery.

The 30-year FRM averaged 3.34% this week. That represents a decrease from last week when it averaged 3.35%. Last year at this time, the 30-year FRM averaged 3.91%.

The 15-year FRM averaged 2.64% this week. This represents a decrease from last week when it averaged 2.65%. One year ago, the 15-year FRM averaged 3.23%.

Frank Nothaft, Vice President and Chief Economist at Freddie Mac, said, "Mortgage rates started the year near record lows which should continue to aid the ongoing housing recovery. New home sales rose in November to a two-year high and were up 15.3% from the previous November. Similarly, pending sales on existing homes increased for the third month in November to the strongest pace since April 2010."

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