Wall St. Brief: Cisco Ends 7-Year Partnership, Alcoa Earnings on Deck
Alcoa (NYSE:AA) will report its earnings after the bell on Tuesday with analysts forecasting its third-quarter earnings per share falling to $0.01 from $0.15 from the previous year with revenue declining 13.2 percent to $5.57 billion. Since Alcoa is seen as a barometer for global manufacturing, FactSet noted its numbers are a good indicator for upcoming S&P 500 results. When Alcoa missed consensus in 2009, 72.4 percent of component companies followed by exceeding profit estimates.
Cisco (NASDAQ:CSCO) ended a seven-year partnership with ZTE after an investigation into the company for illegally selling equipment to Iran, that included Cisco switches and a telecom surveillance system. ZTE had been “reasonably successful” in reselling the Cisco products in China. On Monday, ZTE and Huawei Technologies Co. had been accused of posing a security threat to the U.S. Both companies have denied the allegations.
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September sales for Japanese automakers in China have painted a picture of how the East China Sea islands conflict is affecting business. Toyota’s (NYSE:TM) sales in the country tanked 48.9 percent year over year, Honda’s (NYSE:HMC) fell 40.5 percent and Nissan’s (NSANF.PK) dove 35.3 percent; Suzuki’s (SZKMF.PK) shipments to dealers declined 42.5 percent.
Barclays (NYSE:BCS) will acquire ING Direct U.K. and assume its deposits of BP 10.9 billion and mortgages of BP 5.6 billion. It will also add 1.5 million customers and 750 employees. As of August 31, the mortgage book has a loan-to-value ratio of 50 percent with Barclays paying a 3 percent discount but purchasing the deposit book at par. From the sale, ING (NYSE:ING) will take a EUR 320 million after-tax loss.
From the break up of its Sears Hometown and Outlet Stores, Sears (NASDAQ:SHLD) should earn $346.5 million after its rights offering was fully subscribed. Sears will receive an additional $100 million from a special cash dividend before the separation. The new company will trade on Nasdaq with the symbol SHOS beginning on Oct. 12. and will operate 944 Sears Hometown Stores, 96 Sears Hardware Stores, and 76 Sears Home Appliance Showrooms.