Ultimate Market Recap: Greek Tragedy Continues, LinkedIn Up 11%
11 Stocks Hitting Trader Radars: EA Falls 3%, Diamond Blows Pringles Deal and LinkedIn Surges 11%
Shares of Electronic Arts (NASDAQ:EA) declined 3.4 percent early Friday. The video game publisher was downgraded to neutral at Macquarie, and also received a price target cut from $25 to $18. Activision Blizzard Inc. (NASDAQ:ATVI) edged slightly higher.
Arch Coal Inc. (NYSE:ACI) fell more than 4 percent after announcing fourth quarter results. Net income increased to $70.9 million (33 cents per share), compared to $47.8 million (29 cents per share) a year earlier. Revenue came in at $1.23 billion, falling short of the average estimate of $1.3 billion. Shares of Patriot Coal Corp. (NYSE:PCX) and Alpha Natural Resources Inc. (NYSE:ANR) also declined.
NYSE Euronext (NYSE:NYX) shares declined 1 percent after reporting a declined of 18.5 percent in net income to $110 million (43 cents per share). “Last week, the European Commission formally issued a prohibition against our merger with Deutsche Boerse and we have mutually agreed to terminate our business combination agreement,” said Duncan L. Niederauer, CEO, NYSE Euronext. “We are extremely disappointed with the decision, and as I have stated, we believe that it stems from a fundamentally different view of the competitive dynamics in the global markets.”
Procter & Gamble Co. (NYSE:PG) edged slightly lower Friday morning. The company has decided to see if it can halt the sale of its Pringles brand to Diamond Foods (NASDAQ:DMND). Diamond, the seller of Emerald Nuts, has experienced enormous turmoil after its board discovered that the books had been cooked for two years by misrepresenting payments to walnut growers.
Shares of LinkedIn Corp. (NYSE:LNKD) surged more than 11 percent after reporting better-than-expected results. The social network company reported net income of $6.9 million (6 cents per share) for the fourth quarter. This represents a 30 percent increase from the prior year. Other Internet companies such as Shutterfly Inc. (NASDAQ:SFLY) and Groupon Inc. (NASDAQ:GRPN) declined in morning trading.
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Wall Street Watch: Greece’s Debt Drama, LinkedIn and NYSE Earnings
The Greek debt drama continues one day after Greece Prime Minister Lucas Papademos and his coalition government reached an agreement. Now European finance minister have listed conditions that the country has to meet before it can receive another round of bailout funds. Without them, the country will be unable to make a EUR 14.5 billion ($19 billion) in March. The country has asked for additional austerity measures and on Sunday, the Greek Parliament is expected to vote on the aid package.
In December, the trade deficit expanded to a six-month high, according to the Commerce Department. The number widened 3.7 percent to $48.8 billion, up from November’s $47.1 billion. This is the greatest increase since June and it’s been attributed to the economy’s pickup from additional imported goods. For the year, the U.S. trade deficit was $558 billion, an 11.6 percent rise from 2010.
NYSE Euronext (NYSE:NYX) reported its fourth quarter earnings on Friday morning. The exchange’s net profit almost dropped 19 percent to $110 million from the previous year’s $135 million. This decline came from pre-tax merger expenses and a tax settlement charge, according to MarketWatch. NYSE Euronext’s fourth-quarter revenue increased to $628 million, up from $613 million in the previous year. Look ahead with a two-year plan for the exchange, it will focus on decreasing expenses, returning capital to shareholders and extending its electronic trading services.
LinkedIn (NYSE:LNKD) reported strong fourth quarter earnings and a 2012 guidance. Investors responded by driving up the stock’s price. Analyst Michael Graham from Canaccord Genuity was impressed by the numbers and increased full year estimates by raising his price target to $95. He wrote in a note, “LinkedIn takes another step on the path toward becoming the default global hiring solution.”
Active Stock Watch: Activision, True Religion, LinkedIn, Nuance, Cobalt
Activision Blizzard, Inc. (NASDAQ:ATVI): Cowen said Activision Blizzard is well positioned for 2012 and beyond citing its robust pipeline, stabilized sales trends, and potential for an emerging franchise in “Skylanders”. Shares are Outperform rated. Shares of Activision Blizzard, Inc. are trading 2.76% lower today.
True Religion Apparel, Inc. (NASDAQ:TRLG): Caris downgraded True Religion and lowered its price target for shares to $37 from $40 following the company’s weaker than expected Q4 results. Note True Religion shares were also downgraded this morning at Brean Murray, Citigroup and Benchmark Co., while Needham recommended using the post-earnings weakness as a buying opportunity. Shares of True Religion Apparel, Inc. are trading 24.06% lower today.
LinkedIn Corporation (NYSE:LNKD): The company Sees FY12 adjusted EBITDA of $155M-$165M and expects depreciation and amortization in the range of $70M-$80M, and stock-based compensation in the range of $65M-$75M. Shares of Linkedin Corporation are trading 11.64% higher today.
Nuance Communications Inc. (NASDAQ:NUAN): Nuance (NASDAQ:NUAN), which provides of voice and language solutions, reported Q1 EPS of 34c, compared with analysts’ consensus estimate of 36c. The company’s revenue also came in lower than expected. Nuance said that its relationship with mobile customers has “become more… complex, which has resulted in delayed revenues in some cases.” Conversely, the company noted that its revenue rose 20% and its operating cash flow jumped 41% during the quarter, as a result of what it called strong performances by its health care, mobile and consumer, and imaging businesses. In a note to investors, FBR Capital said that Nuance’s miss appears to have been caused solely by the delay of several large, complex mobile deals. The firm sees the stock’s weakness as “a golden buying opportunity,” and believes Nuance’s fundamental outlook for FY12 is still very strong. In mid-morning trading, Nuance dropped $3.71, or 12.19%, to $26.74. Shares of Nuance Communications Inc. are trading 13.79% lower today.
Cobalt International Energy, Inc. (NYSE:CIE): Cobalt International Energy provided additional data confirming the significance of its Cameia Pre-salt oil discovery in Block 21 offshore Angola. The Cameia-1 Well was drilled in 5,518 feet of water to a total depth of 16,030 feet, at which point an extensive wire line evaluation program was conducted. The results of this wire line evaluation program confirmed the presence of a 1,180 foot gross continuous oil column with over a 75% net to gross pay estimate. No gas/oil nor oil/water contact was evident on the wire line logs. An extended Drill Stem Test, or DST, has now been performed on Cameia-1 to provide additional information. The DST flowed at an un-stimulated sustained rate of 5,010 barrels per day of 44-degree API gravity oil and 14.3M cubic feet per day of associated gas – approximately 7,400 BOEPD – with limited drawdown. The flow rate, which was restricted by surface equipment, facility and safety precautions, confirmed the presence of a very thick, continuous, high quality reservoir saturated with light oil. Shares of Cobalt International Energy, Inc. are trading 51.59% higher today.
Alcatel-Lucent, LyondellBasell, Halcon, GSE, Taleo Attract Trading Interest Feb. 10th
Alcatel-Lucent (NYSE:ALU): Alcatel-Lucent plans to reorganize its European work force, and union officials say that could mean the loss of 1,800 jobs, reports the Wall Street Journal. Also, Alcatel-Lucent announced that it will offer access to its worldwide portfolio, which includes approximately 29,000 issued patents, through a licensing syndicate to be formed by RPX Corporation (NASDAQ:RPXC). Alcatel-Lucent’s worldwide patent portfolio is relevant to a broad range of technologies, including fixed line and wireless communications, semiconductors, consumer electronics, multimedia, optical, software, cloud computing, applications and network security. We have chosen to undertake an innovative approach to realizing the value of our world-class patent portfolio, and while retaining ownership of our patents, we seek to expand access to them for a diverse set of industries,” Alcatel-Lucent’s CEO said. Shares of Alcatel-Lucent are trading 14.69% higher today.
LyondellBasell Industries NV (NYSE:LYB): Reports Q4 revenue $11.44B vs. $10.61B in Q4 of 2010. There is no consensus. The Q4 net loss negatively impacted by $448M, or $0.79 diluted loss per share, of charges relating primarily to refinancing and the Berre refinery Shares of LyondellBasell Industries NV are trading 0.94% lower today.
Halcon Resources Corp (NASDAQ:HK): After Halcon Resources closed its recapitalization and Floyd Wilson became CEO of the company, RBC Capital expects the company to make near-term ,accretive acquisitions. The firm notes that Wilson typically builds up and then sells companies, and it maintains an Outperform rating on the stock. Shares of Halcon Resources Corp are trading 213.25% higher today.
GSE Holdings Inc (NYSE:GSE): GSE Holding priced 7M shares at $9.00. Oppenheimer and FBR Capital acted as joint book running managers for the offering. Shares of GSE Holdings Inc are trading 23.67% higher today.
Market Recap: Rally Sours as Greek Deal Falls Apart
Markets closed down on Wall Street today: Dow -0.69%, S&P -0.69%, Nasdaq -0.80%, Oil -0.83%, Gold -1.13%.
On the commodities front, Oil (NYSE:USO) fell to $99.01 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,721.50 an ounce while Silver (NYSE:SLV) fell 1.30% to settle at $33.48.
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Today’s markets were down because:
1) Greece. The Greek deal isn’t done. Though Prime Minister Lucas Papademos’ coalition has taken some important steps this week, they have by no means reached the finish line. Today markets soured as euro-zone finance ministers called the new Greek austerity deal into question, saying it simply wasn’t enough. Now it’s back to the drawing board for Parliament, which must somehow find another 325 million euros to cut from the federal budget, among other things, if it is to secure another bailout, the only thing standing between Greece and default.
2) Consumers. Consumer sentiment dropped sharply and unexpectedly in February, according this month’s edition of the Thomson Reuters/University of Michigan Consumer Sentiment Index, which declined to 72.5 from 75 last month. Only 23 percent of all consumers surveyed in early February reported an improving financial situation, down from 29 percent in January, as one in four families reported declines in income, despite an improving job market.
3) Companies. Alcatel-Lucent (NYSE:ALU) and LinkedIn (NYSE:LNKD) shares jumped after the two companies announced better-than-expected earnings, the latter reporting a 30 percent jump in profit during the fourth quarter. Barclays (NYSE:BCS) tacked on about 1 percent despite posting an unexpected loss for the fourth quarter, as it also announced that it would cut its bonus pool by 25 percent. Activision Blizzard (NASDAQ:ATVI), Nuance Communications (NASDAQ:NUAN), and First Solar (NASDAQ:FSLR) were all trading lower, with one earnings beat, one earnings miss, and one delay of funding for a massive solar farm planned for the Los Angeles area.
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