Wall St. Buzz: Facebook’s Mobile Problem, Costco Climbs, Tiffany Tainted
Deutsche Telekom AG (NYSE:DTE) doesn’t view a complete sale of its U.S. wireless unit T-Mobile USA as likely after the failed attempt to sell the division to AT&T Inc. (NYSE:T) last year said Chief Executive Rene Obermann on Thursday. In remarks from it annual meeting, Oberman said, “We continue to look for a long-term solution to improve earnings in our U.S. business. However, a complete sale like the one to AT&T is considered unlikely.” He added that Deutsche Telekom will seek different ways to either increase its return on capital or reduce its U.S. capital investment.
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Facebook (NASDAQ:FB) is contemplating a NYSE (NYSE:NYX) proposal for the company to list its stock there, reported Reuters. Although, the NYSE is denying the claims. Meanwhile, Jim Cramer thinks that Facebook’s alleged guidance leak to analysts came from its May numbers being “really bad.” Facebook is seeing a quick shift in its user activity from PCs to mobile devices, and for now, mobile monetization will stay very limited.
EU’s second-highest court denied Mastercard’s (NYSE:MA) appeal that alleged excessive interchange fees on cross-border card payments. The company didn’t convince the court that either the fees were fundamental or that a large number of European banks would discontinue using Mastercard if they were lowered.
Costco’s (NASDAQ:COST) fiscal quarter three earnings exceeded analysts’ predictions as its earnings per share rose to $0.88 from $0.73 and its revenue increased 8.2% to $22.3 billion. Comparable sales jumped 5% as the retailer saw increases in the U.S. and abroad. The company’s earnings report came just one day after Fitch affirmed its AA- rating, noting its strong competitive position, operating performance, and cash flow.
On Thursday, Tiffany & Co. (NYSE:TIF) cut is 2012 profit outlook partly after noting “decelerating rates of economic growth” for the balance of the year. The retailer’s first-quarter profit slightly increased to $81.5 million ($0.64 per share), from $81.1 million ($0.63 per share), in the previous year. Sales increased 8% to $819 million, but Tiffany’s Americas region underperformed.
Daily Buzz: H-P and Facebook Fade, Pandora Jams, Tiffany Tarnishes
Hewlett-Packard Co. (NYSE:HPQ) shares rose over 3 percent at Thursday noon time. The world’s largest PC supplier reported that adjusted net income for the second-quarter came in at 98 cents per share, beating the mean estimate of 91 cents per share. HP also announced plans to layoff 27,000 employees by October 2014. “We are making progress in our multi-year effort to make HP simpler, more efficient and better for customers, employees, and shareholders,” said Meg Whitman, HP president and chief executive officer. “This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do.”
Facebook (NASDAQ:FB) shares gained nearly 2 percent in morning trading, yet have sold off to flat by noon. Rumors surfaced that after the company’s botched initial public offering listing on the Nasdaq (NASDAQ:NDAQ) last week, it was considering a stock listing with the New York Stock Exchange (NYSE:NYX). However, NYSE responded in a statement that there “have been no discussions with Facebook.”
Shares of Pandora Media Inc. (NYSE:P) surged 15 percent in early market trading. Late Wednesday, the internet music company reported a first-quarter loss of $20.2 million (12 cents per share), compared to a loss of $9.1 million (61 cents per share) a year earlier. However, analysts expected Pandora to report a loss of 17 cents per share.
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Tiffany & Co. (NYSE:TIF) shares fell more than 8 percent in trading. The high-end jeweler reported that first-quarter net income edged slightly higher to $81.5 million (64 cents per share), compared to $81.1 million (63 cents per share) a year earlier. The company fell short of the mean analyst estimate of 70 cents per share. Full-year expectations were also reduced by the company. Earnings is expected to come in at $3.70-$3.80 per share, down from prior full-year guidance of $3.95 to $4.05 per share.
Costco Wholesale Corp. (NASDAQ:COST) shares increased over 1.5 percent Thursday afternoon. The membership warehouse company reported that net income for the fiscal third-quarter increased 19.1 percent to $386 million (88 cents per share), compared to $324 million (73 cents per share) a year earlier. Revenue also jumped 8.2 percent to $21.85 billion.
Apple Inc. (NASDAQ:AAPL) shares edged slightly lower in afternoon trading action. IBM (NYSE:IBM) recently announced it is banning voice-activated digital assistant on its networks due to the fact that a log of conversations with Siri goes into Apple’s black hole of information, also known as Apple’s data center in Maiden, North Carolina. According to Apple’s iPhone Software License Agreement, “When you use Siri or Dictation, the things you say will be recorded and sent to Apple in order to convert what you say into text.” There is no explicit time limit on how long Apple stores the data it collects from your conversations with Siri.
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Tiffany & Co. (NYSE:TIF): Following its earnings report and profit warning, Tiffany’s dropped 9%. Oppenheimer believes this is is an attractive buy because of this and other factors such as easing input costs, decent Q1 sales, soon to be moderate comps, and the firm’s belief that new guidance is possible.
A Closer Look: Tiffany Earnings Cheat Sheet>>
Signet Jewelers Ltd. (NYSE:SIG): Same store sales in Q2 are up to the mid to high single digit range. The company benefited from the calender shift, and from Q2 to date, including Mother’s Day, same store sales increased by strong double digits.
NetApp Inc. (NASDAQ:NTAP): Although NetApp has cut down some losses brought about by poor FQ1 guidance that accompanied its FQ4 beat, it is still off a great deal. Because of concerns about revenue visibility and operating expenses, Murray is pushing the shares down to Hold. Needham continues to be bullish, and expresses Asia-Pac and U.S. commercials as strenghts, but lists defense, financial services, and some top accounts as weaknesses.
H.J. Heinz Company (NYSE:HNZ): Global Ketchup organic sales increased by 8.3%. Emerging market sales increased 17% year over year with assistance from the Quero acquisition in Brazil. Payout is now $2.06 per share. FY13 EPS is $3.52-$3.62.
A Closer Look: H.J. Heinz Earnings Cheat Sheet>>
The Toro Company (NYSE:TTC): Toro’s board of directors announced a two-for-one division of its common stock, effected as a stock dividend of 100%. On June 29, the stock dividend should be distributed to shareholders of record before June 15.
Spotlight Stocks to Evaluate Thursday
Hewlett-Packard Company (NYSE:HPQ): BMO sees H-P as a better play than Dell (NASDAQ:DELL). This is after H-P’s announcement about FQ1 beat and restructuring. BMO states that Dell’s attempts to improve margins “will take too long to play out,” but due to H-P’s restructuring, it should improve over the next few quarters. Dell is underperfoming this morning which could mean the Street is using H-P’s results to decide that Dell might be partly to blame for its issues.
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Ku6 Media Co., Ltd. (NASDAQ:KUTV): Ku6 Media is up majorly after announcing an aggreement in which it will, acting as the video hosting provider, supply technology support to all Kaixin001 video uploading activities.
PVH Corp (NYSE:PVH): After its moderate earnings beat and Q2 guidance, Phillips- Van Heusen ran up an outsized gain. In response, Jim Cramer tweeted that there is a “huge short sqeeze” behind this action.
VSE Corporation (NASDAQ:VSEC): The National Institutes of Health, and agency of the Department of Health and Human Services has awarded a prime, multiple award health and info tech contract, worth up to $20B, to VSE. This is a 10-year, indefinite-deliver/indefinite-quantity government-wide acquisition, and ceiling dollars should be 100% federally funded.
The Big 5: Stocks Demanding Your Attention Now
Bank of America (NYSE:BAC): After flaws were discovered in the manner in which Freddie Mac’s home loans were created, Bank of America plans to repurchase $330M in these loans. The most of the loans are current states a spokesperson for Bank of America.
Featured Reading: BofA: We’re Smarter Than JPMorgan, You Know>>
Apple Inc. (NASDAQ:AAPL): The International Data Corporations reports, more than 8 out of 10 smartphones shipped in Q1 of 2012 were powered by the Android and iOS mobile operating systems. Android held shares of 59% and iOS held 23% of the 152.3M smartphones that were shipped in Q1. This confirms that Android and iOS have minimized association with previous market leaders such as Symbian, BlackBerry, Linux, and Windows Mobile. iPhone shipments have increased to 35.1M units, up 88.7% over Q1 last year, and in contrast, BlackBerry decreased to 9.7 units, down 29.7%.
Facebook, Inc. (NASDAQ:FB): In a blog post, Mark Cuban confirmed his purchase of 150K Facebook shares. 50K shares were purchased at $33, 50K shares were bought at $31.97, and 50K shares purchased at “around $32.50.” Cuban maintains, “It’s a trade, not an investment.” Capital Research & Management decided to not invest in Facebook’s IPO because the WSJ reports that Facebook is foreseeing and underwriting bank of cuts. While this type of disclosure is generally illegal, it is not for IPOs because of laws preventing underwriting banks’ analysts from issuing research until 40 days post first day of trading.
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AT&T, Inc. (NYSE:T): The NVIDIA Icera 410 LTE multimode data modem chipset for tablets and clamshell devices have officially been tested and validated to be used on the AT&T 4G LTE newtwork. NVIDIA’s SVP of Mobile Communications stated, “Validation with AT&T is an achievement that paves the way for NVIDIA Icera-powered LTE devices on the AT&T network through this year and next.”
Nokia Corporation (NYSE:NOK): iVolatility states that Nokia option implied volatility is entering the top of its 52-week range.
Market Recap: Apple Rejects the U.S. Government, HP Rocks, Oil Rebounds
Markets closed mixed on Wall Street today: Dow +0.27%, S&P +0.14%, Nasdaq -0.38%, Oil +1.20%, Gold +0.68%.
Investing Insights: Gold and Silver Climb Higher, Euro Sinks to New Lows.
Here’s your Cheat Sheet to today’s top stock stories:
Hewlett-Packard Co.’s (NYSE:HPQ) shares increased on Thursday as Wall Street reacted positively to its positive earnings results and its plan to slash 27,000 employees to cut costs. The company saw a better-than-expected profit and revenue and its stock was the Dow Jones Industrial Average’s top best performer. It rose 3.27% to close at $21.77.
Berkshire Hathaway (NYSE:BRKA) earlier this month struck a deal to acquire 63 newspapers, and now Chairman and CEO Warren Buffett says he may buy more publications as the industry rethinks the prevailing model of offering free content online. In a letter to editors and publishers of Berkshire’s daily newspapers, Buffett said offering free content is “an unsustainable model,” noting that some papers have already begun to make progress in “moving to something that makes more sense” — that is, finding a way to charge readers rather than depending wholly upon advertising.
Apple (NASDAQ:AAPL) is rejecting the U.S. government’s antitrust lawsuit in which it stands accused of conspiring with publishers to fix e-book prices. In a filing in U.S. District Court in Manhattan on Tuesday, Apple denied having conspired with anyone, and said it has not fixed prices to e-books in an effort to thwart Amazon (NASDAQ:AMZN), whose pricing model made it the most popular e-book seller before Apple joined the mix.
Pandora Media (NYSE:P) shares jumped 12% on Thursday, reaching its highest point in two months. The company reported better-than-expected quarterly results on Wednesday afternoon and it raised its full-year outlook, attributing it to greater listener hours. It also had good revenue numbers with a 60% rise in advertising ad a 55% rise in mobile ad revenue.
Late Radar Movers: BlackRock Increases CHK Stake, VeriFone Crashes 10%
After closing 3.25 percent higher during regular trading, Chesapeake Energy Corp. (NYSE:CHK) gained another 1.73 percent after the closing bell. CNBC reported that BlackRock Inc. (NYSE:BLK) has been aggressively buying shares in the troubled natural gas giant and now holds around 4 million to 5 million shares.
Facebook (NASDAQ:FB) has now logged a two-day winning streak. Shares also continued to climb higher in late trading. On a conference call with brokers, lead underwriter Morgan Stanley (NYSE:MS) explained that customers caught up in the initial public offering debacle will not have to pay more than $43 per share. Shares traded as high as $45 per share, thus the bank will be responsible for filling in the $2 gap.
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VeriFone Systems Inc. (NYSE:PAY) shares crashed nearly 10 percent in extended trading hours. The company reported that net income in the second-quarter fell 42.5 percent to $14.5 million (13 cents per share), compared to $25.2 million (27 cents per share) a year earlier. On the positive, revenue increased 61.4 percent to $472 million. “We are very pleased with our performance, particularly the acceleration in organic growth and the increase in Hypercom-brand sales,” said Douglas G. Bergeron, Chief Executive Officer. “We remain confident in our outlook for the year. VeriFone is continuing to prove that widespread incumbency combined with market-leading innovation is a winning formula for the payments marketplace.” Verifone and eBay Inc. (NASDAQ:EBAY) are currently planning on bringing PayPal accounts to cash registers at brick-and-mortar stores.
Despite falling almost 7 percent on Thursday, shares of Tiffany & Co. (NYSE:TIF) bounced .71 percent higher in late trading. The luxury jeweler recently reported flat net income of $81.5 million (64 cents per share) for the first-quarter, compared to $81.1 million (63 cents per share) a year earlier. Michael J. Kowalski, chairman and chief executive officer, said, “In terms of our sales for the first quarter, regions outside the Americas performed generally as expected. However, the Americas region underperformed, continuing a soft trend that began in the last quarter of 2011 and compounded by the difficult comparison to substantial sales growth in last year’s first quarter. These sales results led to net earnings modestly trailing our expectations.”
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