Wall Street Watch: Amazon and Starbucks Diverge, Spain’s Credit Rating Slashed
Samsung’s (SSNLF.PK) first quarter net income jumped 81 percent to 5.05 trillion won, exceeding analyst expectations thanks to strong Galaxy sales burying its declining chip business earnings. From 44.5 million Galaxy shipments, Samsung regained the lead from Apple Inc. (NASDAQ:AAPL) in the segment and with its overall volume of 93.5 million units, Samsung overtook Nokia’s (NYSE:NOK) 14-year reign as the largest vendor of mobile phones according to Strategy Analytics.
Amazon.Com Inc. (NASDAQ:AMZN) shares surged nearly 15 percent after hours as the world’s largest online retailer reported impressive first-quarter earnings after the closing bell. Net income for the quarter was $130 million (28 cents per share), compared to $201 million (44 cents per share) a year earlier. Although profits declined, the results beat expectations. Revenue also jumped 33.8 percent to $13.19 billion.
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Starbucks Corp. (NASDAQ:SBUX) reported a higher quarterly profit, but sales from cafes open at least one-year in Europe declined. Earnings for the fiscal second quarter came in at $309.9 million (40 cents per share), compared to $261.6 million (34 cents per share) a year earlier. For more, check out OUCH! Starbucks Earnings Miss the Mark >>
Regulators are expanding their investigation into the possible involvement of Goldman Sachs (NYSE:GS) employees in the Galleon Group insider trading ring, according to the Wall Street Journal. Investigators have their eye on whether a senior investment banker gave Galleon traders advance knowledge of pending healthcare deals. The banker, identified as Matthew Korenberg, is a San Francisco-based managing director for Goldman–a senior role.
S&P cut Spain’s debt rating by two notches to “BBB+” from “A” on a negative outlook. The agency said that the country’s “budget trajectory will likely deteriorate against a background of economic contraction in contrast with our previous projections.” Adding to Spain’s woes, its unemployment increased to 24.4 percent in the first quarter, up from the 22.9 percent in the fourth quarter. This represented its highest figure in 18 years.
The People’s Bank of China has enabled the yuan to hit a second consecutive record day against the dollar with its exchange rate set at 6.2787. The move came after the Secretary of Treasury, Timothy Geithner, asked the Bank on Thursday to allow the renminbi to additionally appreciate ; this comes as China’s economy undergoes a slowdown.
Merger deals under review by the Securities and Exchange Commission: the 2009 acquisition by Abbott Laboratories (NYSE:ABT) of Advanced Medical Optics and the acquisition of APP Pharmaceuticals Inc. by Fresenius (FRE).
5 Buzzing Stocks: Amazon Surges 18%, Ford Tops Estimates and Starbucks Declines 3.8%
Amazon.com Inc. (NASDAQ:AMZN) shares surged almost 18 percent in early trading. The world’s largest online retailer reported earnings for the first quarter late Thursday. Amazon beat the mean analyst estimate of 7 cents per share by reporting 28 cents per share. Revenue also gained 33.8 percent to $13.19 billion from the previous quarter.
Procter & Gamble Co. (NYSE:PG) shares declined 2.2 percent early Friday after reporting financial results for the third-quarter. The company earned $2.41 billion (82 cents per share), compared to $2.87 billion (96 cents per share) a year earlier. For three quarters in a row, the company’s net income has fallen.
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Shares of Ford Motor Co. (NYSE:F) jumped 1 percent before the opening bell. The company reported a decline in net earnings by 45.1 percent, but still topped expectations. Ford reported adjusted net income of 39 cents per share, beating the mean estimate of 35 cents per share. “Our team delivered a solid performance during the first quarter, with particularly strong results in North America, despite a challenging global external environment,” said Alan Mulally, Ford president and CEO.
Starbucks Corp. (NASDAQ:SBUX) shares dropped 3.8 percent after reporting earnings late Thursday. The company reported a higher quarterly profit, but sales from cafes open at least one-year in Europe declined. Earnings for the fiscal second quarter came in at $309.9 million (40 cents per share), compared to $261.6 million (34 cents per share) a year earlier.
Western Digital Corp. (NYSE:WDC) fell 12.5 percent early Friday. The company reported financial results after Thursday’s closing bell. Net income for the most recent quarter increased to $483 million ($1.96 per share), compared to $146 million (62 cents per share) a year earlier. “Our third-quarter performance demonstrates the potential of the new Western Digital, with just three and a half weeks of HGST results combined with the standalone WD business,” said John Coyne, chief executive officer of Western Digital.
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Active Stocks: P&G, Deckers Outdoor, V.F. Corp April 27th
The Procter & Gamble Company (NYSE:PG): Says were a few category/country combinations where brands lost significant share when P&G increased list prices and competitors did not. Says in U.S. auto category effectively reversed the 80% list price increase taken last Summer and in U.S. powder laundry detergent notified the trade of decision to adjust list prices in Summer. Says steps taken to correct price gaps in U.K. laundry detergent business. Notes a few additional category country combinations where market share lost due to increased competitive promotional activity. Says does not expect broad scale reversal of the price increases implemented over the past five quarters or those implementing now. Sees progressive improvement in market share as the pricing gaps are addressed. Shares of The Procter & Gamble Company are trading 3.02% lower today.
Deckers Outdoor Corp (NASDAQ:DECK): Susquehanna lowered its price target on Deckers Outdoor following its Q1 earnings miss and lowered guidance. The firm maintains its Positive rating citing better than expected UGG orders for fall, positive US comps, and lower sheepskin prices. Shares of Deckers Outdoor Corp are trading 25.81% lower today.
V.F. Corporation (NYSE:VFC): Looking ahead to the second quarter, earnings per share comparisons will be particularly challenging due to several factors. First, while Timberland is on track for significant revenue and earnings accretion in 2012, it is a highly seasonal business. Accordingly, Timberland has historically posted a substantial loss in the second quarter. This loss is expected to approximate $30 million (equal to about $0.20 per share) in the second quarter, which is comparable to the loss reported by Timberland in its second quarter last year. Second quarter earnings will also reflect the continued negative impact from foreign currency translation and higher pension expense, which together should impact earnings per share by $0.09. Additionally, second quarter 2011 earnings benefitted by $0.07 from a gain from a facility closure. These factors are expected to negatively impact second quarter earnings comparisons by a combined $0.36 per share. Shares of V.F. Corporation are trading 1.86% lower today.
Amazon.com Among Friday’s Hottest Stocks in Market Action
Amazon.com, Inc. (NASDAQ:AMZN): Texas Comptroller of Public Accounts Susan Combs and Amazon.com announced an agreement that will lead to the creation of thousands of new jobs in Texas. According to the agreement Amazon plans over the next four years to create at least 2,500 jobs and make at least $200M in capital investments in the state and will begin to collect and remit Texas sales tax on July 1. The agreement resolves all sales tax issues between Texas and Amazon. Combs said, This is an important step in leveling the playing field in Texas; however, Congress should enact federal legislation that will give states access to revenues that are already due, which would resolve this issue fairly for all retailers and all states. Amazon’s Vice President of Global Public Policy Paul Misener said, We strongly support the creation of a simplified and equitable federal framework, because Congressional action will protect states’ rights, level the playing field for all sellers, and give states like Texas the ability to obtain all the sales tax revenue that is already due. Shares of Amazon.com, Inc. are trading 12.43% higher today.
Expedia Inc (NASDAQ:EXPE): Lazard Capital raised its price target for Expedia citing the company’s strong Q1 results and keeps a Buy rating on the stock. Shares of Expedia Inc are trading 27.52% higher today.
Warner Chilcott Plc (NASDAQ:WCRX): After the Times of London reported that Bayer (BAYRY) may make a $32 per share offer for Warner Chilcott (NASDAQ:WCRX), Cantor says a potential deal would make strategic sense for Bayer. Further, the firm believes a takeout would represent an ideal exit for Warner Chilcott, as the company faces challenges from a government marketing investigation and generic overhangs. Shares of Warner Chilcott Plc are trading 10.35% higher today.
Aware, Inc. (NASDAQ:AWRE): Aware announced that it has signed an agreement for the sale of selected patents and patent applications to Intel (NASDAQ:INTC) for approximately $75M, subject to customary closing conditions and any required regulatory approvals. The patents and patent applications relate to WiFi 802.11n/ac, LTE and Wireline Home Networking. The sale is part of our patent management operation’s efforts to sell and/or license portions of our patent portfolio. Global IP Law Group, LLC represented Aware in this transaction. Shares of Aware, Inc. are trading 54.54% higher today.
5 Stocks Hitting Radars: Yahoo Really Dislikes Facebook, Amazon on Fire and Apple TV
After closing 15.75 percent higher on Friday, Amazon.Com Inc. (NASDAQ:AMZN) shares edged slightly lower in late-market trading. The company recently reported strong quarterly profits. The company earned 28 cents per share, beating estimates of only 7 cents per share. The Kindle Fire was the company’s best selling item in the quarter, shipping 4.7 million units.
Yahoo! Inc. (NASDAQ:YHOO) shares closed .26 percent higher. Late Friday, the company announced it filed additional claims related to two more patents in its ongoing lawsuit against Facebook.
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Vivus Inc. (NASDAQ:VVUS) shares jumped almost 2 percent after the closing bell. On Friday, the Food and Drug Administration approved a new drug from the company called Stendra, which treats erectile dysfunction.
Despite closing .77 percent lower, shares of Apple Inc. (NASDAQ:AAPL) edged slightly higher after the closing bell. Jefferies & Co.’s Peter Misek believes that an Apple television set could hit shelves later this year. He cites that display makers such as Samsung have been reducing TV unit estimates, but are also “citing likely sequential improvements in glass demand.”
Expedia Inc. (NASDAQ:EXPE) shares closed 23.5 percent higher on Friday and added another .17 percent in late trading. The company recently reported adjusted net income of 26 cents per share. By that measure, the company beat the mean estimate of 5 cents per share. Revenue also jumped 12.2 percent to $816.5 million, beating estimates of $791.1 million.
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