Services Sector Review: McDonald’s Earnings, Collective Brands Big Premium

R.R. Donnelley & Sons Co. (NASDAQ:RRD) announced that it has been awarded a multi-year multi-million dollar agreement by Metro Inc., a leading grocery and pharmacy chain in Quebec and Ontario with more than 65,000 employees. Under the terms of the agreement, which renews and expands the companies’ relationship, Metro will draw upon RR Donnelley’s Canadian production, distribution and technology platform for its administrative and operational documents.

The shares closed at $21.33, up $6.87, or 47.51%, on the day. Its market capitalization is $4.38 billion.

Collective Brands Inc. (NYSE:PSS) could be worth as much as $27 a share in a buyout, an 87% premium over its average price in the last 20 days, according to Morningstar, reported Bloomberg. The report lists Leonard Green, Irving Place Capital and KKR (NYSE:KKR) among potential private equity buyers, and DSW (NYSE:DSW), Finish Line (NYSE:FL), Iconix (NASDAQ:ICON), VF Corp. (NYSE:VFC) and Wolverine Worldwide (NYSE:WWW) as potential fits among corporations.

The shares closed at $15.89, up $0.95, or 6.36%, on the day. Its market capitalization is $962.54 million.

Brinker Intl., Inc. (NYSE:EAT): Reports Q2 revenue $681.9M vs. consensus $686.07M.

The shares closed at $25.66, down $1.95, or 7.06%, on the day. Its market capitalization is $2.07 billion.

Google Inc (NASDAQ:GOOG): When Google (NASDAQ:GOOG) introduced the Android operating system in 2007, its strategy was to give it to developers at no cost and make money when consumers click ads on the Web or through apps. That approach is running into trouble, reports Bloomberg Businessweek. While Amazon.com (NASDAQ:AMZN), Baidu (NASDAQ:BIDU) and Tencent Holdings are using Android to build their devices, they’re not using preloaded applications such as Gmail, Google Maps and YouTube that generate ad revenue for Google and its app store. Amazon’s Kindle Fire tablet, fast closing in on Apple’s (NASDAQ:AAPL) iPad, comes with none of those apps.

The shares closed at $581.03, down $4.49, or 0.77%, on the day. Its market capitalization is $188.19 billion.

McDonald’s Corporation (NYSE:MCD): CEO Jim Skinner commented: “As we begin 2012, we are intensifying our efforts toward the global priorities that represent our greatest opportunities under the Plan to Win optimizing and evolving our menu, modernizing the customer experience and broadening accessibility to our Brand. In 2012, we plan to invest about $2.9B of capital roughly half dedicated to opening more than 1,300 new McDonald’s restaurants and the other half allocated to investing in our existing locations, including the reimaging of over 2,400 restaurants. I am confident that the investments we are making today will yield long-term value for our shareholders.”

The shares closed at $98.75, down $2.2, or 2.18%, on the day. Its market capitalization is $101.04 billion.

Verizon Communications (NYSE:VZ) added 1.5 million retail customers, including 1.2 million retail postpaid customers. While the wholesale channel grew during the fourth quarter, a loss of telematics customers resulted in a net decrease of 490,000 wholesale and other connections in the quarter. At year-end 2011, smartphones accounted for 44% of the Verizon Wireless retail postpaid customer phone.

The shares closed at $37.79, down $0.61, or 1.59%, on the day. Its market capitalization is $106.99 billion.

Intl. Business Machines (NYSE:IBM) and the Vermont Electric Power Co., or VELCO, announced an agreement to build an intelligent fiber optic and Carrier Ethernet communications and control network across the State of Vermont. Spanning more than 1000 miles, this advanced fiber communications network will connect transmission substations to Vermont’s distribution utilities, delivering reliable electric service and the capabilities required for the state’s future Smart Grid.

The shares closed at $191.93, up $1.95, or 1.03%, on the day. Its market capitalization is $226.21 billion.

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