Ultimate Market Recap: Sony Shrinking, AOL Up 40% After Announcing Microsoft Deal
Wall Street Watch: Sony’s Downsizing, AT&T Avoids Walkout, Alcoa On Deck
Sony (NYSE:SNE) is getting ready to slash 10,000 jobs, or approximately 6% of its workforce, reported the Nikkei. Close to half of the cuts will occur in businesses that produce chemicals and small-and medium-sized panels. New CEO Kazu Hiriai had recently said that “painful” steps will take place at the company to turn it around and this could be what he was talking about. Sony is expected to report its fourth consecutive annual loss soon.
On Sunday, AT&T (NYSE:T) dodged a large walkout after negotiations had been extended between the Communications Workers of America union, representing 40,000 employees, and the company, reported The Wall Street Journal. On Saturday, the CWA wrote on its website, “Both sides are still far apart. The pace of progress is slow and frustrating.” AT&T is trying to get its workers to take pension cuts and increase their health-care premiums and co-pays to help balance the revenue declines the company has faced in its wireline division; this encompasses old school home and business telephones and the AT&T’s U-verse television offering.
For March, China’s CPI increased 3.6% from the previous year, according to the National Bureau of Statistics. This number was higher than median expectations of 3.4% while food-related costs increased 7.5%. Caution will need to be used for adding stimulus to get growth going for the country. In addition, China’s PPI dropped 0.3 in March from the previous year after reporting no change in February.
Yahoo! (NASDAQ:YHOO) pink slips are making the rounds. Blake Irving is out as Head of Products.
Great Wolf Resorts (NASDAQ:WOLF) got a raised takeover bid of $7 a share in cash from KSL Capital Partners. The bid was upped from the rejected $6.25 bid.
The first quarter earnings season will kick off on Tuesday with Alcoa (NYSE:AA). Analysts estimate that average results will be flat to slightly lower, but growth should increase later in the year and in 2013. According to The Financial Times, only three of the S&P’s 10 major sectors including industrials, financials and technology are likely to expand.
Radar Stocks: AOL Finally Pops, AT&T Cuts a Big Deal, Sony Slashes
AOL Inc. (NYSE:AOL) shares are rocketing over 35% higher after the media giant cut a deal with Microsoft (NASDAQ:MSFT) to sell more than 800 patents and related applications, along with a non-exclusive license to its remaining portfolio of patents. The deal is valued at $1.056 billion deal.
AT&T (NYSE:T) announced today that an affiliate of Cerberus Capital Management, L.P. (Cerberus) has agreed to acquire AT&T Advertising Solutions and AT&T Interactive. As part of the transaction, AT&T will receive a 47-percent equity interest in the new entity, YP Holdings LLC.
The U.S. Food and Drug Administration gave the greenlight for marketing an Eli Lilly & Co. (NYSE:LLY) test designed to help clinicians diagnose Alzheimer’s disease earlier and more accurately.
Sony (NYSE:SNE) is is getting ready to slash 10,000 jobs, or approximately 6% of its workforce, reported the Nikkei. Close to half of the cuts will occur in businesses that produce chemicals and small-and medium-sized panels.
Avon Products Inc. (NYSE:AVP) named Sherilyn McCoy CEO. McCoy was a 30-year veteran of Johnson & Johnson.
AOL, Molina Healthcare, Zep Attract High Trading Interest April 9th
AOL, Inc. (NYSE:AOL): AOL has entered into a definitive agreement to sell over 800 of its patents and their related patent applications to Microsoft (NASDAQ:MSFT) and to grant Microsoft a non-exclusive license to its retained patent portfolio for aggregate proceeds of $1.056B in cash. Following the sale, AOL will continue to hold a significant patent portfolio of over 300 patents and patent applications spanning core and strategic technologies, including advertising, search, content generation/management, social networking, mapping, multimedia/streaming, and security among others. AOL also received a license to the patents being sold to Microsoft. The patent sale includes the sale of the stock of an AOL subsidiary upon which AOL expects to record a capital loss for tax purposes and as a result, cash taxes in connection with the sale should be immaterial. Additionally, AOL expects to utilize approximately $40M of its existing deferred tax assets, representing approximately 20% of its total deferred tax assets, to offset any ordinary income taxes resulting from the license of its remaining patent portfolio. Shares of AOL, Inc. are trading 40.72% higher today.
Molina Healthcare, Inc. (NYSE:MOH): Molina Healthcare disclosed on Friday that the Ohio Department of Jobs and Family Services, or ODJFS, notified Molina Healthcare of Ohio that it had not been selected to participate under the recently issued Ohio Medicaid Managed Care Plan Request for Applications, or RFA. As a result, Molina Healthcare said its existing contract with the state will expire without renewal on December 31, 2012. Molina added that it is evaluating the scoring of the RFA and whether to pursue its rights of appeal. The company is affirmed it’s previously issued guidance for FY12 earnings of $1.75 per diluted share, versus the consensus estimate of $1.77. Shares of Molina Healthcare, Inc. are trading 23.51% lower today.
Zep, Inc. (NYSE:ZEP): Says expects improvement in gross margin in 2H due to customer pricing actions, product line management actions taken. Says quarter to quarter variability may occur due to swings in inventory levels. Long-term financial goals include revenue growth in excess of market growth, 50bp of annualized EBITDA margin improvement, 11%-13% annualized EPS improvement, ROIC target of 15%+. Comments from slides that will be presented on the Q2 earnings conference call. Shares of Zep, Inc. are trading 0.63% higher today.
The Greenbrier Companies (NYSE:GBX): Reported Q2 revenue $458.2M versus consensus $444.51M. Shares of The Greenbrier Companies are trading 3.91% higher today.
Sherwin-Williams, Carrolton, Centene Among Hot Stock Movers Monday
Sherwin-Williams Company (NYSE:SHW): Sherwin-Williams (NYSE:SHW) is climbing, after the company raised its Q1 EPS guidance to 92c-95c, from 56c-74c. Analysts’ consensus estimate was 72c. The paint maker said that it’s benefiting from strong sales by its Paint Stores Group. Net sales in the Paint Stores Group increased approximately 20% in Q1, due primarily to improving domestic architectural paint sales volume across all end market segments and price increases, Sherwin-Williams reported. In early trading, Sherwin-Williams rose $1.44, or 1.30%, to $112.21. Shares of Sherwin-Williams Company are trading 1.01% higher today.
Carrollton Bancorp (NASDAQ:CRRB): Jefferson Bancorp and Carrollton Bancorp announced the execution of a definitive agreement for merger of Jefferson Bancorp, Inc and Carrollton Bancorp. The subsidiary banks, Bay Bank, FSB and Carrollton Bank will also merge, with Bay Bank, FSB being the surviving entity. The transaction is currently valued at approximately $25M in stock and cash, representing $15.4M in consideration to Carrollton shareholders and repayment of $9.1M in TARP funding to the US Treasury. The transaction will combine the strengths of the two organizations in the Maryland market with a combined 12 bank branches in the Baltimore/Washington market. Carrollton will be the surviving holding company in the merger and the transaction is structured as a tax-free reorganization. Shares of Carrollton Bancorp are trading 23.46% higher today.
Centene Corp (NYSE:CNC): Ohio state officials have selected Aetna Better Health of Ohio (NYSE:AET), United Healthcare Community Plan of Ohio (NYSE:UNH), Meridian Health Plan, Paramount Advantage and CareSource for new state Medicaid contracts, the Associated Press reports. The companies will provide health-care services for over 1.5M poor and disabled people. Shares of Centene Corp are trading 12.07% lower today.