Wall Street Watch: Microsoft’s Middle Finger to Motorola, Comcast Earnings
Comcast Corp. (NASDAQ:CMCSA) topped profit and sales estimates for the first quarter on growth in its high-speed Internet subscribers and the start of a turnaround for its NBC broadcast business. Don’t Miss Your Cheat Sheet to Comcast Earnings >>
Microsoft (NASDAQ:MSFT) must remove the Xbox and Windows 7 operating system from Germany after a court ruling the company infringed Motorola’s (NYSE:MMI) (NASDAQ:GOOG) video-compression IP. No worries for now. Microsoft isn’t doing a thing after a preliminary injunction from a U.S. court prevents Motorola from enforcing any German order.
As part of its restructuring, AMR (AAMRQ.PK) will cut five senior position while Jeff Brundage, VP of Human Resources, will resign. Along with its already announced personnel exits, these cuts represent a “20% reduction in the company’s most senior leadership positions.” Brundage’s departure comes just before the company goes to court to battle unions over new labor deals as part of its reorganization for bankruptcy.
Facebook (FB) announced an IPO date for Friday May 18. Shares will price on May 17th.
Private equity firm Carlyle Group (NYSE:CG) is expected to price its IPO on Wednesday and begin trading on Thursday. This comes as it faces challenges distinguishing itself to investors from its peers including Oaktree Capital Management (OAK). Carlyle plans to sell 30.5 million shares priced between $23-$25 and valued at $7 billion to $7.6 billion. To interest investors, the firm’s strategy is to tell them the stock’s price is discounted as compared to its rivals.
Beginning June 1, China’s two main stock exchanges will lower their equity trade transaction fees by 25 percent. The exchanges will lower the fee to 0.0087 percent of a transaction value as compared to the current 0.0122 percent on Shenzen trades and 0.011 percent in Shanghai. The change has been seen by some analysts as an effort to increase confidence in the stock markets prior to this fall’s senior-level leadership change, reported MarketWatch. The moves had been announced by the China Securities Regulatory Commission along other securities market reforms in the last week.
The Eurozone reported the seasonally-adjusted unemployment rate increased to 10.9 percent in March, up from February’s 10.8 percent, according to Eurostat. This figure reaches across the 17 nations that utilize the euro. In addition, the number of unemployed workers in the region increased by 169,000 to hit 17.365 million. Both numbers are the highest since the euro launched in January 1999. One economist sees unemployment rising above 11 percent in the next few months.
Charming Shoppes, P.F. Chang’s, IACI, TRIP Attract Trader Attention May 2nd
Charming Shoppes, Inc. (NASDAQ:CHRS): Ascena Retail Group (NASDAQ:ASNA) and Charming Shoppes (NASDAQ:CHRS) jointly announced that they have entered into a definitive agreement under which Ascena will acquire Charming Shoppes in a cash transaction valued at approximately $890M. Ascena has agreed to make a cash tender offer for all outstanding shares of Charming Shoppes common stock at a price of $7.35 per share. The tender offer is expected to commence within 10 business days. Subject to customary conditions and approvals, the transaction is expected to close during Q2. Transaction expected to be neutral or slightly accretive to Ascena’s earnings in the first full year of combined operations and increasingly accretive thereafter. Shares of Charming Shoppes, Inc. are trading 23.47% higher today.
P.F. Chang’s China Bistro (NASDAQ:PFCB): P.F. Chang’s is being acquired by Centerbridge Partners for $51.50 per share. Shares of P.F. Chang’s China Bistro are trading 0.08% lower today.
Tripadvisor Inc (NASDAQ:TRIP): Online travel research company TripAdvisor (TRIP) last night reported Q1 earnings of 38c, compared with analysts’ consensus estimate of 33c. The company’s revenue was also higher than expected. Shares of Tripadvisor Inc are trading 16.64% higher today.
IAC/InterActiveCorp (NASDAQ:IACI): Reports Q1 revenue $640.6M versus consensus $592.92M. Shares of IAC/InterActiveCorp are trading 5.27% higher today.
UBS AG (NYSE:UBS): A large number of UBS shareholders are preparing to confront the bank’s management by voting against its 2011 pay award, reports the Financial Times. The shareholders are expected to refuse to give management a “clean bill of health” because of the trading scandal and the bank’s admission that the incident revealed “shortcomings” in its risk management. Shares of UBS AG are trading 1.34% higher today.
OpenTable, Comcast, CVS, Energizer Generating Trading Demand May 2nd
OpenTable Inc (NASDAQ:OPEN): Barclays said OpenTable’s miss was not due to competitive factors but industry and macro conditions. The firm said margins are expanding and that mobile growth and restaurant addition trends are solid. The firm recommends buying on weakness and reiterates its Overweight rating and $50 price target. Shares of OpenTable Inc are trading 15.96% lower today.
Phillips 66 (NYSE:PSX): Phillips 66 initiated with an Equal Weight at Barclays with a target of $37. Shares of Phillips 66 are trading 2.84% lower today.
Comcast Corporation (NASDAQ:CMCSA): CBS CEO Leslie Moonves said on the company’s earnings conference call yesterday that the company will “take a look” at Hulu (CMCSA, DIS, NWSA) if it shifts to an authentication model, and also noted that the company been in discussions with virtually”everyone” that is exploring a digital service regarding content deals, the Hollywood Reporter says. Shares of Comcast Corporation are trading 2.75% lower today.
CVS Caremark Corporation (NYSE:CVS): CVS Caremark says in Q1 achieved expected 3c per share benefit from impasse between Walgreens (NYSE:WAG) and Express Scripts (NASDAQ:ESRX). Sees Q2 positive impact of 3c-4c to EPS assuming Walgreens/Express situation remains unresolved for the duration of quarter. Shares of CVS Caremark Corporation are trading 0.94% higher today.
Energizer Holdings, Inc. (NYSE:ENR): Energizer Holdings announced plans to initiate a dividend program commencing later this year. Subject to declaration by the board, the company plans to initiate a quarterly dividend of 40c per share in Q4, which ends September 30. Energizer anticipates paying a cash dividend each quarter, with expected dividend payment dates in March, June, September and December of each year. The dividend announced today implies an annual cash dividend rate of $1.60 per common share. Future declarations of dividends are subject to board approval and may be adjusted in the discretion of the board, including as business needs or market conditions change. In addition, the company announced that its board has approved a new authorization for the company to acquire up to 10M shares of its 1c par value common stock. This authorization replaces a similar authorization to acquire up to 10M shares, which was approved by the board on July 24, 2006, and under which approximately 8M shares of common stock have been repurchased. Shares of Energizer Holdings, Inc. are trading 6.26% higher today.
6 Buzzing Stocks: More Trouble for Chesapeake CEO, Herbalife Bounces and Time Warner Declines
Shares of Chesapeake Energy Corp. (NYSE:CHK) is down 13 percent in trading. The company reported a first-quarter loss of $28 million late Tuesday. Furthermore, Reuters reports that CEO Aubrey McClendon ran a $200 million hedge fund for at least four years. The fund traded the same commodities that Chesapeake produces. Analysts at Ladenburg Thalman & Co. downgraded the natural gas giant to neutral from buy.
A Closer Look: Chesapeake Energy Earnings Cheat Sheet>>
Herbalife Ltd. (NYSE:HLF) shares are down another 4 percent after closing 20 percent lower on Tuesday. On the company’s earnings call, David Einhorn asked questions about Herbalife’s customers, leading some to believe the company may be Einhorn’s next big short.
Despite reporting strong first-quarter earnings, MasterCard Inc. (NYSE:MA) shares are declining 1 percent. Net income for the credit card company increased to $682 million ($5.36 per share), compared to $562 million ($4.29 per share) a year earlier.
Shares of The Clorox Co. (NYSE:CLX) are falling 3.5 percent in trading. The company reported lower-than-expected quarterly profit. Net income came in at $132 million ($1.01 per share) for the fiscal third-quarter, compared to $151 million ($1.09 per share) a year earlier. Sales increased 7.4 percent to $1.40 billion, but rising costs continue to cut into profits.
Time Warner Inc. (NYSE:TWX) shares are declining 1.61 percent early Wednesday. Net income for the first-quarter at the media company fell 10.7 percent to $583 million (59 cents per share), compared to $653 million (59 cents per share) a year earlier. Chairman and Chief Executive Officer Jeff Bewkes said: “We’re off to a great start to the year, and we’re benefiting from strong momentum for our content across our businesses.”
Barrick Gold Corp. (NYSE:ABX) shares are down 2.77 percent in today’s market trading, despite reporting an increase in first-quarter profits. The gold miner earned $1.03 billion ($1.03 per share), compared to $1 billion ($1 per share) a year earlier. The world’s largest gold miner also raised its dividend by 33 percent due to higher gold prices.
Investor Insight: Why Are These Health Stocks Feeling Under the Weather?