Dell exceeds forecasts but net profit craters. Dell's (DELL) Q2 earnings beat expectations but its net profit slumped 72% to $204M as the company cut prices in order to win corporate customers concerned about the fight over control of the firm. EPS came in at $0.25 while revenue was flat at $14.5B. Enterprise-hardware revenue rose, as did sales from the enterprise solutions, services & software business, but revenue at Dell's key PC division dropped 5%.
Change at the top at Applied Materials amid earnings fall. Applied Materials (AMAT) has appointed company President Gary Dickerson as CEO to replace Michael Splinter, who will retain his role as Chairman. Investors and analysts reacted favorably, with Stifel declaring that Dickerson had "one of the most successful track records in the (chip equipment) industry." However, Applied Materials' shares fell 2.2% in post-market trading after the company's FQ3 results and FQ4 guidance came in below consensus. FQ3 EPS was $0.17, revenue fell 16% to $1.98B and net profit dropped to $168M from $218M.
China to probe U.S. IT giants over security. China's government is reportedly planning to investigate IBM (IBM), Oracle (ORCL) and EMC (EMC) over security issues. The prospective inquiry comes after Edward Snowden's revelations of the National Security Agency's surveillance of user data at major tech companies, and that it hacked into critical networks at Chinese and Hong Kong universities. The probe also follows U.S. accusations of widespread Chinese hacking, and adds to a growing number of Chinese investigations into the business practices of major foreign firms.
Top Stock News
Judge holds back from authorizing AMR-US Airways merger. Judge Sean Lane has refrained from approving AMR's (AAMRQ.PK) plan to exit bankruptcy via an $11B merger with US Airways (LCC), citing the lawsuit from the Department of Justice and some states to block the deal. Instead, Lane has given AMR and its creditors until Friday next week to provide him with guidance about how he should proceed. The judge had otherwise been expected to authorize the transaction, having already given preliminary approval.
Fat finger roils Chinese stocks. A quiet Friday on Chinese markets exploded into life after a "fat finger" execution of a 7B yuan ($1.13B) order at a local brokerage apparently caused the Shanghai Composite Index to swing to a gain of 5.6% from a loss of 1% within minutes. Things calmed down, though, and shares closed -0.6%. Across Asia and Europe, continued fears about the Fed's tapering intentions weighed on sentiment, although U.S. stock futures were higher premarket after heavy declines yesterday.
Thorsten Heins could earn up to $55.6M if BlackBerry sold. Bloomberg has done some digging in BlackBerry's (BBRY) May proxy filing and found that CEO Thorsten Heins would make $55.6M in salary, incentive payments and equity awards if the struggling mobile-device company were to be sold and he was to be fired. However, finding a buyer might not be so simple - the company's bankers have been touting it on the quiet for a year and have met with little interest.
Fox's rookie sports channel set to make debut. Fox's (FOXA) national sports channel is due to launch tomorrow morning "with every major distributor on board" and a reach of 90M households. Fox reportedly persuaded the TV companies to sign up after agreeing not to raise the price of $0.23 per subscriber they were paying for Speed, the auto-racing network that Fox Sports 1 is replacing. Fox had initially asked for $0.80. The rookie channel goes up against the money making machine that is ESPN (DIS).
BHP Billiton faces U.S. corruption probe. The SEC and Department of Justice are stepping up an investigation into potential breaches of anti-corruption laws at BHP Billiton (BHP), including related to the miner's sponsorship of the 2008 Summer Olympics in China. In an internal investigation launched several years ago, BHP found evidence of the possible bribery of foreign government officials. The miner could face unspecified enforcement actions. Shares were +0.2% premarket.
Judge rejects Kodak shareholder request, creditors OK revamp. Judge Allan Gropper has rejected a bid by Eastman Kodak's (EKDKQ.PK) shareholders to create a committee to represent their interests. The ruling clears the way for creditors, who have backed Kodak's restructuring plan to exit bankruptcy, to obtain court approval next Tuesday for the proposal, which will result in equity holders' shares being canceled.
Top Economic & Other News
RBI attempts to boost rupee backfiring. Measures by the Reserve Bank of India to try to boost the rupee seem to be backfiring - for now - with the currency hitting a record low of 62.13 to the dollar. At the time of writing, the USD-INR was +0.6% at 61.815, while shares were -3.9% on fears the RBI is losing credibility. Earlier this week, the RBI said it would cap forex outflows for local firms and residents, steps that could be perceived as "quasi-capital controls."
Alpha-Rich Stock Movers and Great Calls
1) On Wednesday, Amit Ghate said the big jump in Osiris Therapeutics' (OSIR) was overdone, opening the door to a 50% short opportunity. The stock is -16.5% since the article's publication. Read article »
2) On June 25, Nassarius Capital explained why healthcare reform could have Health Insurance Innovations (HIIQ) poised for a banner year. The shares are +34% since. Read article »
Alpha-Rich Stocks To Watch
1) Tumi Holdings (TUMI) had a weak Q2, but that doesn't negate the long-term growth story. A logical acquisition candidate, the company's stock has 15%+ upside. Read article »
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In Asia, Japan -0.8% to 13650. Hong Kong -0.1% to 22518. China -0.6% to 2068. India -3.9% to 18618.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt -0.2%.
Futures at 6:20: Dow +0.1%. S&P +0.3%. Nasdaq +0.3%. Crude -0.1% to $107.24. Gold flat at $1360.90.
Notable earnings before today's open: EJ
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