U.S. Financial Market Review: Apple Inc Battles, Caterpillar Strong, Ford Wobbles
Following a week of massive earnings reports and new direction for the U.S. financial markets, we took a snapshot at everything you need to know in the past week. Investors and traders are a bit more optimistic about the U.S. as opposed to Europe right now.
Apple Inc. (NASDAQ:AAPL): Samsung’s Galaxy Nexus, developed in cooperation with Google (NASDAQ:GOOG), is not one of the devices that Apple (NASDAQ:AAPL) is seeking to ban in Germany due to alleged patent infringement, according to The Korea Herald, which cited an unnamed Samsung official. Meanwhile, a ruling against Apple in two cases in Germany – set to be decided tomorrow and February 2 – would cause sales of Apple’s iPhone to be banned in the country until an appeal, the newspaper added. Shares of Apple Inc. are trading 6.87% higher today.
The Boeing Company (NYSE:BA): Boeing and Norwegian have announced a firm order for 100 fuel-efficient 737 MAX airplanes and 22 Next-Generation 737-800s. The total order is valued at $11.4B at list prices and represents the largest-ever Boeing order from a European airline. Oslo-based Norwegian is the first European carrier to finalize an order for the 737 MAX. The order supports Norwegian’s plans to build on the success provided by its fleet of Next-Generation 737-800s for its rapidly expanding operations. This order continues the momentum for the 737 MAX. With the Norwegian order, the 737 MAX has orders and commitments for more than 1,000 airplanes from 15 customers and the Next-Generation 737 family has orders for more than 6,300 airplanes. Shares of The Boeing Company are trading 2.12% lower today.
Illumina, Inc. (NASDAQ:ILMN): Roche (RHHBY) announced that it is proposing to acquire all outstanding shares of Illumina (NASDAQ:ILMN) for $44.50 per share in cash, or an aggregate of approximately $5.7 billion on a fully diluted basis. This offer represents a 64% premium over Illumina’s stock price on Dec. 21, 2011 the day before market rumors about a potential transaction between Roche and Illumina drove Illumina’s stock price significantly higher a 61% premium over the one-month historical average and a 43% premium over the three-month historical average of Illumina’s share price, both as of December 21. It also represents a 30.1x multiple of Illumina’s projected forward earnings based upon analysts’ current consensus estimates for 2012. Shares of Illumina, Inc. are trading 42.98% higher today.
WellPoint, Inc. (NYSE:WLP): On January 24, 2012, the Board of Directors increased the Company’s dividend by 15% and declared a quarterly dividend to shareholders for the first quarter of 2012 of $0.2875 per share. The first quarter dividend is payable on March 23, 2012, to shareholders of record at the close of business on March 9, 2012. Shares of WellPoint, Inc. are trading 5.63% lower today.
Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC): The company saw increased operator cautiousness during Q4 — due to uncertainties such as economic development and political unrest in some countries. Shares of Telefonaktiebolaget LM Ericsson are trading 15.98% lower today.
3M Company (NYSE:MMM): Says Electronics industry still adjusting inventories; toughest optical film comps in Q1. Says Western Europe continues to contract,China growth slower in 1H, re-accelerates in 2H. Estimating Q1 early retirement/restructuring costs of (4c) per share; reflected in EPS guidance. Says well positioned for a successful 2012. Comments from slides that will be presented on the Q4 earnings conference call. Shares of 3M Company are trading 1.17% higher today.
SanDisk Corporation (NASDAQ:SNDK): Morgan Stanley views SanDisk’s guidance as conservative and would use weakness as a buying opportunity. Shares are Overweight rated with a $70 price target. Shares of SanDisk Corporation are trading 10.21% lower today.
Symantec Corporation (NASDAQ:SYMC): CLSA downgraded Symantec citing headwinds from developed market PC weakness, FX, and competition. Price target lowered to $20 from $24. Shares of Symantec Corporation are trading 1.05% lower today.
Under Armour Inc (NYSE:UA): The company had seen 2012 revenue growth at the high-end of 20%-25% view. Shares of Under Armour Inc are trading 5.02% lower today.
Monster Worldwide, Inc. (NYSE:MWW): Sees Q1 revenue down 3%-7% compared to 1Q11′s $253M vs. consensus $262.41M. Shares of Monster Worldwide, Inc. are trading 17.37% lower today.
Time Warner Cable Inc. (NYSE:TWC): Netflix (NASDAQ:NFLX) is much more concerned about TV Everywhere (CMCSA, TWC) and similar services than over-the-top pure players like Amazon Prime (NASDAQ:AMZN) and Hulu Plus, according to a letter to shareholders sent following its Q4 earnings, reported The Next Web. Shares of Time Warner Cable Inc. are trading 7.08% higher today.
Caterpillar Inc. (NYSE:CAT): The company said, “Prospects for economic growth have improved over the past quarter, and we expect the world economy to grow about 3.3% in 2012, a small improvement from about 2.8% in 2011. In response to economic concerns, some central banks began easing policies late in 2011. Underpinning our growth expectations for 2012, we expect this easing to continue and contribute to the improvement in growth…Our outlook assumes most commodity prices will increase slightly in 2012 and continue at levels that encourage investment. We expect that copper will average over $4 per pound, Central Appalachian coal about $75 per ton and West Texas Intermediate crude oil about $100 per barrel.” Shares of Caterpillar Inc. are trading 3.33% higher today.
RealNetworks Inc (NASDAQ:RNWK): RealNetworks (NASDAQ:RNWK) announced that it has signed an agreement to sell a significant number of its patents and its next generation video codec software to Intel (NASDAQ:INTC) for a purchase price of $120M. Under terms of the sale, RealNetworks retains certain rights to continue to use the patents in current and future products. In addition to the sale of the patents and next-generation video codec software, RealNetworks and Intel signed a memorandum of understanding to collaborate on future support and development of the next-generation video codec software and related products. Shares of RealNetworks Inc are trading 33.03% higher today.
Micromet Inc. (NASDAQ:MITI): Amgen (NASDAQ:AMGN) and Micromet (NASDAQ:MITI) announced that the companies have entered into a definitive merger agreement under which Amgen will acquire Micromet, a biotechnology company founded in Germany with its research and development center in Munich and headquarters in Rockville, Md., for $11 per share in cash. The transaction, which values Micromet at approximately $1.16B, was unanimously approved by both the Amgen and Micromet Boards of Directors. The acquisition includes blinatumomab, a Bispecific T cell Engager, or BiTE, antibody in Phase 2 clinical development for acute lymphoblastic leukemia, or ALL. Blinatumomab is also in clinical development for the treatment of non-Hodgkin’s lymphoma, or NHL, and could have applications in other hematologic malignancies. The tender offer is not subject to a financing condition. The transaction is expected to close in Q1. Shares of Micromet Inc. are trading 31.88% higher today.
Bank of America Corporation (NYSE:BAC): Bank of America and Citigroup (NYSE:C) are among lenders that may find it more difficult to increase profits and capital after the Fed said it would keep its benchmark interest rate low until at least late 2014, Bloomberg reports. Shares of Bank of America Corporation are trading 0.14% lower today.
Toyota Motor Corporation (NYSE:TM): Toyota Managing Officer Kazuo Ohara says the automaker is looking to sell about 510,000 of its Lexus cars globally in 2012, the Nikkei reports. Sales of the luxury vehicles were limited to about 404,000 units last year due to parts shortages. Shares of Toyota Motor Corporation are trading 0.38% higher today.
The Procter & Gamble Company (NYSE:PG): On its Q4 earnings conference call, Proctor & Gamble (NYSE:PG) said in reference to the planned divestiture of it Pringles brand to Diamond Foods (NASDAQ:DMND), that “we’re just at this point following Diamond’s public representations that they’re going to have concluded the internal investigation in the middle of February and we’ll obviously be able to talk with them in more detail about that at that time.” An analyst noted that the company “kept in the gain from the divestiture by fiscal year end” but the company did not give guidance as to when it expected any sale to close. Shares of The Procter & Gamble Company are trading 0.86% lower today.
Solutia Inc. (NYSE:SOA): Eastman expects the transaction to be immediately accretive to earnings, excluding acquisition-related costs and charges. Eastman has identified annual cost synergies of approximately $100M that are expected to be achieved by year-end 2013. Further, Eastman expects to realize significant tax benefits from Solutia’s historical net operating losses and other tax attributes that are expected to contribute to free cash flow of approximately $1B through 2013. The transaction, which was approved by the Boards of Directors of both companies, remains subject to approval by Solutia’s shareholders and receipt of required regulatory approvals as well as other customary closing conditions. The transaction is expected to close in mid-2012. Shares of Solutia Inc. are trading 39.57% higher today.
Infinity Pharmaceuticals Inc. (NASDAQ:INFI): Infinity Pharmaceuticals announced interim data from its double-blind, randomized, placebo-controlled Phase 2 study comparing saridegib in combination with gemcitabine to placebo plus gemcitabine in 122 patients with previously untreated, metastatic pancreatic cancer. The primary endpoint of the Phase 2 study is overall survival. While the final analysis is not complete, a preliminary analysis of data from the study that was completed yesterday showed a difference in survival favoring the placebo plus gemcitabine arm due to a higher rate of progressive disease in the saridegib plus gemcitabine arm. The median survival for patients receiving saridegib plus gemcitabine was less than the historical median survival for single-agent gemcitabine of approximately six months, as compared to a median survival for the placebo plus gemcitabine arm of greater than six months. The adverse events observed in both arms were consistent with the known safety profile of each agent, with no unexpected toxicities. Based on this interim analysis, Infinity is voluntarily stopping the trial. The company expects to present the final data after the analyses are complete. Shares of Infinity Pharmaceuticals Inc. are trading 39.64% lower today.
Inergy, L.P. (NYSE:NRGY): For the twelve months ended December 31, Inergy generated distributable cash flow of approximately 68% of the total cash distributions paid for the period. Market conditions, primarily in its propane operations and to a lesser extent in the Texas gas storage market, remain challenging. Although there are a number of factors that may impact its operations through the remainder of this fiscal year, a material improvement in distribution coverage is not expected. In light of these factors, management is conducting an evaluation of the operating businesses at Inergy, and is in the process of a major cost reduction initiative in its propane operations. In addition, management and the board of directors of Inergy are evaluating a reset of the quarterly distribution to a level that is supportable by the cash flow expected to be generated from Inergy’s businesses in the near term. Shares of Inergy, L.P. are trading 23.1% lower today.
Ford Motor Company (NYSE:F): Sees 675K units production in North America, 100K in South America, 410K in Europe, and 215K in Asia Pacific/Africa. Guidance from slides for Q4 earnings conference call. Shares of Ford Motor Company are trading 4.08% lower today.
Eastman Chemical Company (NYSE:EMN): Eastman expects the transaction to be immediately accretive to earnings, excluding acquisition-related costs and charges. Eastman has identified annual cost synergies of approximately $100M that are expected to be achieved by year-end 2013. Further, Eastman expects to realize significant tax benefits from Solutia’s historical net operating losses and other tax attributes that are expected to contribute to free cash flow of approximately $1B through 2013. The transaction, which was approved by the Boards of Directors of both companies, remains subject to approval by Solutia’s shareholders and receipt of required regulatory approvals as well as other customary closing conditions. The transaction is expected to close in mid-2012. Shares of Eastman Chemical Company are trading 4.65% higher today.
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