- Goldman is TARP-free at last. Goldman Sachs (NYSE:GS) became the first major bank to completely shed its bailout ties, paying $1.1B to redeem the government's TARP warrants and calling the Treasury's valuation 'full and fair' given the government's support of the financial system. With the warrant redemption and the $318M Goldman paid in dividends on its $10B TARP aid, taxpayers received a 23% annualized return for the nine-month transaction.
- S&P flip-flops on ratings. Standard & Poor's unexpectedly switched its rating of some bonds backed by commercial mortgages, upgrading the bonds to AAA just days after the same bonds had been sharply downgraded. The unusual move further damaged S&P's credibility and unsettled investors in the $700B market for commercial mortgage-backed securities [CMBS]. The reversal came after S&P realized bonds with a shorter lifespan were less risky than similarly structured bonds with a longer lifespan, a mistake that could reflect a basic misunderstanding of the way cash flows are distributed across CMBS.
- Bristol-Myers buys biotech firm. Bristol-Myers Squibb (NYSE:BMY) agreed to acquire Medarex (MEDX), the biotech firm it already owns a 2% stake in, for $2.4B in cash. Bristol-Myers said the $16/share deal, which marks a 90% premium to Medarex's closing price on Wednesday, buys it proven antibody discovery technology and rights to an immunotherapy the companies developed. MEDX +89% premarket (7:00 ET).
- Intel fights antitrust fine. Intel (NASDAQ:INTC) is fighting back against a record €1.06B ($1.45B) fine levied by EU antitrust regulators in May, saying the fine violates protections granted by European human rights law. Since the EU antitrust body handles both the investigation and judgment of a given case, companies don't have the opportunity to fully defend themselves as they would in a court. However, the appeal is a bit of a long shot as no EU antitrust appeal has ever won on this argument.
- Amazon's shoe-in to online apparel. Amazon (NASDAQ:AMZN) will buy online shoe retailer Zappos.com for around $928M, an aggressive expansion into online apparel after Amazon's solo attempts at selling footwear were unsuccessful. Zappos is known for its fiercely loyal customer base, good customer service and free shipping/free returns policy. AMZN +0.6% premarket (7:00 ET).
- Bair wants large firms to pay. FDIC's Sheila Bair is scheduled to testify before the Senate Banking Committee this morning, and will ask lawmakers to impose fees on the country's biggest financial firms. Bair wants Congress to create an industry-supported Financial Company Resolution Fund which will provide working capital and cover unanticipated losses if the government has to wind down a failed firm. In addition to minimizing government outlays, this would also "provide an economic incentive for an institution not to grow too large."
- SEC targets pay-to-play. The SEC voted unanimously to propose rules preventing investment advisers from managing public programs for two years if they make political contributions. The proposal is an attempt to curb pay-to-play practices, in which public contracts are awarded to those who make political contributions.
- Chrysler warns on dealership legislation. Chrysler warned it could face liquidation for a second time if lawmakers move forward with a plan to reinstate terminated dealership agreements. The House of Representatives has already approved a measure to restore contracts with 789 dealerships, but the bill's future in the Senate is less certain.
- Moody's rebuffed in Berkshire sale. Moody's (NYSE:MCO) fell 10.3% in after-hours trading following a disclosure by Berkshire Hathaway (NYSE:BRK.A) that it sold 7.99M shares of the ratings company this week. Though Berkshire remains Moody's largest shareholder, the sale reduced its stake by 17%. Moody's has reported a profit decline for seven consecutive quarters.
- Porsche CEO, CFO resign. Porsche's CEO Wendelin Wiedeking and CFO Holger Haerter both resigned from the company with immediate effect, after coming to "the conclusion that the further strategic development of Porsche... is better off, if they are not on board as acting persons," said a company spokesman. The move is expected to facilitate a merger agreement with Volkswagen (OTCPK:VLKAY).
- eBay beats as Paypal, marketplace show signs of life. eBay (NASDAQ:EBAY) managed to beat quarterly earnings expectations (see details below), even as profit fell 29% and revenue fell 4%. The company's PayPal online-payments unit continued to grow strongly and a decline in eBay's core marketplace leveled off.
- ING may sell private banking unit. ING Group (NYSE:ING) reportedly hired JPMorgan Chase (NYSE:JPM) to advise it on the possible sale of its private banking business in Europe and Asia. A deal could be worth over $1B.
- House prices rise. The FHFA House Price Index was up 0.9% in May vs. -0.2% consensus, after falling 0.3% in April (revised). Nationwide prices are down 5.6% from a year earlier, and 10.7% from the April 2007 peak.
Earnings: Thursday Before Open
- 3M (NYSE:MMM): Q2 EPS of $1.20 beats by $0.26. Revenue of $5.7B (-15%) vs. $5.4B. Adjusts guidance for FY '09 - sees EPS of $4.10-4.30 vs. prior guidance of $3.90-4.30. Shares +1.3% premarket (7:40 ET). (PR)
- Alexion Pharmaceuticals (NASDAQ:ALXN): Q2 EPS of $0.20 beats by $0.04. Revenue of $92M (+55%) vs. $89M. Shares +1.9% premarket (8:00 ET). (PR)
- AT&T (NYSE:T): Q2 EPS of $0.54 beats by $0.03. Revenue of $30.7B (-0.4%) in-line. Shares +2.9% premarket (7:45 ET). (PR)
- Bristol-Myers Squibb (BMY): Q2 EPS of $0.56 beats by $0.09. Revenue of $5.4B (+3.5%) vs. $5.3B. Issues upside EPS guidance for FY '09 of $1.95-2.05 vs. prior guidance of $1.85-2.00. (PR)
- Bunge (NYSE:BG): Q2 EPS of $2.28 beats by $1.57. Revenue of $11B (-23.5%) vs. $12B. (PR)
- Celestica (NYSE:CLS): Q2 EPS of $0.11 beats by $0.01. Revenue of $1.4B (-25%) in-line. (PR)
- Celgene (NASDAQ:CELG): Q2 EPS of $0.46 in-line. Revenue of $629M (+10%) vs. $621M. Shares +8.9% premarket (7:45 ET). (PR)
- CME Group (NASDAQ:CME): Q2 EPS of $3.37 beats by $0.14. Revenue of $648M (+15%) vs. $652M. (PR)
- Danaher (NYSE:DHR): Q2 EPS of $0.89 beats by $0.01. Revenue of $2.7B (-19%) vs. $2.8B. (PR)
- Diamond Offshore Drilling (NYSE:DO): Q2 EPS of $2.79 beats by $0.15. Revenue of $946M (-0.8%) vs. $942M. (PR)
- EMC (EMC): Q2 EPS of $0.18 beats by $0.01. Revenue of $3.3B (-11%) vs. $3.2B. Sees FY '09 EPS of $0.82 vs. &0.78 consensus. Shares +4.8% premarket (7:30 ET). (PR)
- EnCana (NYSE:ECA): Q2 EPS of $1.22 beats by $0.25. Revenue of $3.8B (-49%) vs. $4.4B. (EnCana news release (.pdf))
- Fifth Third Bancorp (NASDAQ:FITB): Q2 EPS of $1.15 vs. consensus of -$0.34 (may not be comparable). Tier 1 ratio of 12.9%. Shares +7% premarket (7:30 ET). (PR)
- FLIR Systems (NASDAQ:FLIR): Q2 EPS of $0.35 in-line. Revenue of $278M (+6.5%) vs. $297M. Shares +1.9% premarket (7:50 ET). (PR)
- Ford Motor (NYSE:F): Q2 EPS of -$0.21 beats by $0.27. Revenue of $27.2B (-34%) vs. $24.8B. (PR)
- Goodrich (NYSE:GR): Q2 EPS of $1.15 beats by $0.04. Revenue of $1.7B (-8%) in-line. (PR)
- Hershey (NYSE:HSY): Q2 EPS of $0.43 beats by $0.08. Revenue of $1.2B (+6%) vs. $1.1B. (PR)
- Huntington Bancshares (NASDAQ:HBAN): Q2 EPS of -$0.40 misses by $0.22. Increased provision for credit losses 42% from Q1 to $413.7M. Tier 1 capital ratio of 11.86%. Shares -3.1% premarket (7:50 ET). (PR)
- ITT Educational Services (NYSE:ESI): Q2 EPS of $1.87 beats by $0.14. Revenue of $317M (+29%) vs. $307M. (PR)
- JetBlue Airways (NASDAQ:JBLU): Q2 EPS of $0.05 beats by $0.03. Revenue of $807M (-6%) vs. $800M. (PR)
- Kimberly-Clark (NYSE:KMB): Q2 EPS of $1.16 beats by $0.22. Revenue of $4.7B (-5.6%) vs. $4.6B. Issues upside FY '09 EPS guidance of $4.10-4.25 vs. $4.12 consensus. (PR)
- Newmont Mining (NYSE:NEM): Q2 EPS of $0.43 misses by $0.04. Revenue of $1.6B (+7%) in-line. (PR)
- NII Holdings (NASDAQ:NIHD): Q2 EPS of $0.79 beats by $0.23. Revenue of $1.1B (-4%) vs. $1B. (PR)
- Omnicom Group (NYSE:OMC): Q2 EPS of $0.75 beats by $0.01. Revenue of $2.9B (-17%) in-line. (PR)
- PNC Financial Services Group (NYSE:PNC): Q2 EPS of $0.14 vs. consensus of $0.45 (may not be comparable). Revenue of $4B (+95.5%) vs. $3.65B. (PR)
- Potash Corp. (NYSE:POT): Q2 EPS of $0.62 misses by $0.07. Revenue of $856M (-67%) vs. $981M. Issues downside Q3 EPS guidance of $0.80-1.20 vs. $1.56 consensus. Issues downside FY '09 EPS guidance of $4.00-5.00 vs. $5.24 consensus. Shares -2.3% premarket (6:50 ET). (PR)
- Raytheon (NYSE:RTN): Q2 EPS of $1.24 beats by $0.11. Revenue of $6.1B (+4%) vs. $6.2B. (PR)
- Starwood Hotels & Resorts Worldwide (HOT): Q2 EPS of $0.22 beats by $0.05. Revenue of $1.2B (-23%) in-line. Issues downside guidance: sees Q3 EPS of $0.06-0.10 vs. $0.21 consensus, FY '09 EPS of $0.65 vs. $0.76 consensus. (PR)
- Terra Industries (TRA): Q2 EPS of $0.81 misses by $0.10. Revenue of $453.5M (-46%) vs. $568M. (PR)
- Thermo Fisher Scientific (NYSE:TMO): Q2 EPS of $0.74 beats by $0.08. Revenue of $2.5B (-8%) vs. $2.4B. (PR)
- Wyeth (WYE): Q2 EPS of $0.94 beats by $0.09. Revenue of $5.7B (-4%) vs. $5.6B. Issues upside FY '09 EPS guidance of $3.48-3.58 vs. prior guidance of $3.33-3.53. (PR)
- Xerox (NYSE:XRX): Q2 EPS of $0.16 beats by $0.05. Revenue of $3.7B (-18%) in-line. (PR)
Earnings: Wednesday After Close
- Alliance Data Systems (NYSE:ADS): Q2 EPS of $0.95 misses by $0.07. Revenue of $460M (-9%) vs. $481M. Sees Q3 EPS of $1.34 in-line. Maintains 2009 EPS guidance of $5.15 vs. $5.00. (PR)
- Amdocs (NYSE:DOX): Q3 EPS of $0.53 beats by $0.05. Revenue of $690M (-16%) vs. $679M. Sees Q4 EPS of $0.47-0.51 vs. $0.48. Sees Q4 revenue of $670M-690M vs. $668M. (PR)
- Citrix Systems (NASDAQ:CTXS): Q2 EPS of $0.39 beats by $0.01. Revenue of $393M (+0%) vs. $387M. Sees Q3, FY09 revenues flat vs. 2008. (PR)
- Covanta Holding Corp. (NYSE:CVA): Q2 EPS of $0.21 beats by $0.01. Revenue of $376M (-11%) vs. $391M. Reaffirms 2009 EPS $0.65-0.80 vs. $0.71 and adjusted EBITDA of $500M-540M. (PR)
- C.R. Bard (NYSE:BCR): Q2 EPS of $1.23 beats by $0.02. Revenue of $625M (+1%) vs. $634M. (PR)
- eBay (EBAY): Q2 EPS of $0.37 beats by $0.01. Revenue of $2.1B (-4%) vs. $2B. Sees Q3 EPS of $0.34-0.36 vs. $0.35. Sees Q3 revenue of $2.05B-2.15B vs. $2B. (PR)
- Equifax (NYSE:EFX): Q2 EPS of $0.57 in-line. Revenue of $455M (-9%) vs. $453M. Sees Q3 EPS of $0.52-0.57 vs. $0.59. (PR)
- Equinix (NASDAQ:EQIX): Q2 EPS of $0.44 beats by $0.11. Revenue of $213M (+7%) vs. $209M. Sees Q3 revenue of $221M-225M vs. $220M. Sees FY09 revenue of $860M-$875M vs. $861M. (PR)
- F5 Networks (NASDAQ:FFIV): Q3 EPS of $0.40 beats by $0.03. Revenue of $158M (-4%) vs. $154M. Sees Q3 EPS of $0.40-0.42 vs. $0.39. Sees Q3 revenue of $160M-164M vs. $159M. (PR)
- Intersil (NASDAQ:ISIL): Q2 EPS of $0.05 misses by $0.10. Revenue of $147M (-32%) in-line. Sees Q3 revenue of $156M-162M vs. $154M. (PR)
- Intuitive Surgical (NASDAQ:ISRG): Q2 EPS of $1.62 beats by $0.37. Revenue of $261M (+19%) vs. $230M. (PR)
- Jarden (NYSE:JAH): Q2 EPS of $0.60 beats by $0.05. Revenue of $1.3B (-7%) in-line. (PR)
- Knight Transportation (NYSE:KNX): Q2 EPS of $0.15 in-line. Revenue of $144M (-7%) vs. $160M. (PR)
- LaSalle Hotel Properties (NYSE:LHO): Q2 FFO of $0.70 beats by $0.12. Revenue per available room of $134.15. (PR)
- Mosaic Company (NYSE:MOS): Q4 EPS of $0.33 beats by $0.23. Revenue of $1.6B (-54%) in-line. (PR)
- Newfield Exploration (NYSE:NFX): Q2 EPS of $1.28 beats by $0.18. Revenue of $287M (-58%) vs. $483M. EPS adjusted to exclude $1.58/share net unrealized loss on commodity derivatives. (PR)
- Noble (NYSE:NE): Q2 EPS of $1.49 misses by $0.01. Revenue of $868M (+11%) vs. $900M. (PR)
- Omniture (OMTR): Q2 EPS of $0.13 beats by $0.01. Revenue of $88M (+22%) in-line. Sees Q3 EPS and revenue "approximately the same as" Q2. (PR)
- OSI Pharmaceuticals (OSIP): Q2 EPS of $0.28 misses by $0.05. Revenue of $99M (+3%) vs. $100M. (PR)
- Qualcomm (NASDAQ:QCOM): Q3 EPS of $0.54 beats by $0.02. Revenue of $2.75B (unchanged) in-line. (PR)
- Raymond James Financial (NYSE:RJF): Q3 EPS of $0.36 beats by $0.14. Revenue of $625M (-16%) vs. $637M. (PR (.pdf))
SanDisk (SNDK): Q2 EPS of $0.36 beats by $0.52. Revenue of $731M (-10.4%) vs. $710M. Says return to profitability was driven by increased pricing and higher royalty revenue. (PR)
- Skyworks Solutions (NASDAQ:SWKS): Q3 EPS of $0.16 beats by $0.02. Revenue of $191M (-11%) vs. $183M. Sees Q4 adjusted EPS of $0.19 vs. $0.17. Sees Q4 revenue of $210M vs. $196M. (PR)
- Steel Dynamics (NASDAQ:STLD): Q2 EPS of -$0.08 beats by $0.03. Revenue of $792M (-67%) vs. $740M. (PR)
- Terex (NYSE:TEX): Q2 EPS of $0.78 misses by $0.50. Revenue of $1.3B (-55%) vs. $1.5B. Results include a $0.32/share restructuring charge and $0.08/share SEC penalty. (PR)
- TriQuint Semiconductor (TQNT): Q2 EPS of $0.08 beats by $0.05. Revenue of $169M (+33%) vs. $146M. Sees Q3 adjusted EPS of $0.08-0.10 vs. $0.08. Sees Q3 revenue of $170M-180M vs. $159M. (PR)
- VMware (NYSE:VMW): Q2 EPS of $0.20 beats by $0.01. Revenue of $456M (unchanged) vs. $452M. Sees Q3 revenue of $465M-480M vs. $471M. Sees FY09 revenue up 1-3% vs. FY08. (PR)
- Walter Energy (NYSE:WLT): Q2 EPS of $0.21 beats by $0.26. Revenue of $169M (-38%) vs. $164M. (PR)
Asian markets closed broadly up, but European markets are trending down and U.S. futures are just barely in positive territory.
- In Asia, Nikkei +0.7% to 9,793. Hang Seng +3% to 19,818. Shanghai +1% to 3,328. BSE +2.6% to 15,231.
- In Europe at midday, London -0.2%. Paris -0.7%. Frankfurt -0.2%.
- Futures: Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude -0.8% to $64.88. Gold flat.
Thursday's Economic Calendar
8:30 Jobless Claims
9:30 FDIC's Bair and SEC's Schapiro testify on regulatory reform
10:00 Mass Layoffs
10:00 Existing Home Sales
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet
4:30 PM Money Supply
- Notable earnings before Thursday's open: ALXN, BG, BLL, BMY, CBE, CELG, CLS, CME, DHR, DO, ECA, EMC, ESI, ESV, F, FITB, FLIR, GR, HBAN, HOT, HSY, IGT, JBLU, KMB, LCC, LLL, MMM, NCR, NEM, NIHD, NOC, NUE, NYT, OMC, ORI, OXY, PLD, PM, PNC, POT, R, RAI, RS, RTN, RX, SIAL, SPNC, T, TIN, TMO, TRA, UNP, UPS, WYE, XRX, ZMH
- Notable earnings after Thursday's close: AMP, AMZN, AXP, BIDU, BLUD, BNI, BRCM, BUCY, CA, CAKE, CB, CENX, CNW, COF, COG, CPWR, DDR, DDUP, EMN, FII, INFA, JNPR, KLAC, LEG, MSFT, NFLX, PMCS, RFMD, RMBS, RVBD, SNV, SPWRA, STAR, TCO, WFR, WRE
Seeking Alpha editor Eli Hoffmann contributed to this post.
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