Barclays profit drops 26% but beats forecasts. Barclays' (BCS) adjusted Q3 pretax profit fell 26% to £1.4B, although that topped estimates of £1.25B. Earnings were hurt by a sharp drop in revenue from fixed-income trading, as well as the £101M spent on a restructuring program. Barclays has joined Deutsche Bank (DB) and UBS (UBS) in saying that it has received inquiries from authorities about possible forex manipulation; as a result, Barclays is reviewing several years of trading.
World shares rise ahead of FOMC announcement. Global equities were higher at the time of writing as investors threw caution to the wind ahead of a FOMC policy announcement later today. With the Fed expected to keep the money printing presses ramped up, the stock gains could be leaving markets open to a surprise. "If they do something, or even hint at moves in the not too distant future, the effects could be dramatic," says analyst Patrick Perret-Green.
Disappointing guidance hits LinkedIn's shares. LinkedIn's (LNKD) Q3 earnings beat analyst forecasts, but shares in the online professional network slumped 3.3% in post-market trading after the company provided lower-than-expected Q4 revenue guidance. Management cited faster-than-anticipated growth in recent quarters as a factor in its projections, which would represent a slowdown in the company's expansion. In Q3, LinkedIn swung to a net loss of $3.4M from a profit of $2.3M last year, EPS came in at $0.39, and revenues jumped 56% to $393M.
Top Stock News
Sanofi profit slumps 19%, warns on full year. Sanofi's (SNY) Q3 earnings missed analyst expectations as adjusted net income dropped 19% to €1.79B and net sales slid 6.7% to €8.43B. The drug-maker's sales in China grew by only 5% to €351M, hurt by investigations into possible bribery. Brazilian revenue tumbled 17% to €269M due to lower sales of generic drugs. Sanofi warned that FY adjusted EPS will fall 10% from 2012, the low end of previous guidance for a drop of 7-10%. Notwithstanding, shares were +1% premarket.
Blackstone's Brixmor raises $825M in IPO. Blackstone (BX) portfolio company Brixmor Property Group (BRX) is due to start trading today on the NYSE after raising $825M in its IPO by selling 41.25M shares at $20 each, which gives the U.S.'s second-largest shopping-center landlord a market cap of $6B. Brixmor's listing is expected to be followed by IPOs for other Blackstone firms, including hotel chains Extended Stay America and Hilton Worldwide.
Honda's net profit rises but misses expectations. Honda's (HMC) FQ2 net profit jumped 46% to ¥120.3B ($1.225B), although it undershot predictions of ¥134.9B. Revenues climbed 27.3% to ¥2.89T, mainly due to "increased revenue in automobile and motorcycle business operations," as well as due to the weaker yen. Honda projected that FY 2014 net profit will rise 58% to ¥580B - below consensus of ¥610.8B - and that revenues will grow 22.5% to ¥12.1T. Meanwhile, Honda has agreed to sell its Elesys electronic parts subsidiary to Japan's Nidec (NJ), with a report putting the price at ¥50B.
Barclays may have to pay up to $700M in derivatives case. Barclays (BCS) faces a bill of $700M after last week losing an appeal in a five-year old lawsuit by the hedge fund Black Diamond Capital Management, the FT reports. Barclays was found liable for a breach of contract in a derivatives transaction, and, as was known, must return $300M that it withheld in collateral. The British bank may also have to pay a further $300-400M in interest charges and legal costs, with a hearing needed to decide the exact amount.
Earnings growth seen at Facebook, Starbucks and Visa. Facebook (FB), Starbucks (SBUX) and Visa (V) are among the Tsunami of companies scheduled to release earnings after the bell today. Facebook is expected to report that Q3 EPS increased to $0.19 from $0.12 and that revenue jumped 51% to $1.91B. Starbucks' FQ4 EPS is seen rising to $0.60 from $0.46 and its revenue 13.2% to $3.81B. Analysts estimate that Visa's FQ4 EPS climbed to $1.85 from $1.54 and its revenue 10.6% to $3.02B.
SAC to admit securities fraud, to pay $1.2B. SAC Capital will reportedly pay a penalty of $1.2B and plead guilty to securities fraud to settle a criminal investigation into insider trading. The fine would be the largest ever for such misconduct. In a deal that could be announced next week, SAC will also stop managing external money. The penalty is in addition to the $616M that SAC agreed to pay to the SEC in a civil case.
Top Economic & Other News
Spain exits long and hard recession. As flagged by Spain's central bank last week, the country exited recession after over two years in Q3, with GDP rising 0.1% on quarter vs -0.1% in Q2. Meanwhile, CPI has risen 0.1% on year this month, putting Spain close to deflation. "Growth seems to be due to the strength of the external sector, which is encouraging," says economist Ben May. "However, domestic demand is still contracting and against that backdrop it's hard to see a strong and sustained recovery."
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In Asia, Japan +1.2% to 14502. Hong Kong +2% to 23304. China +1.55% to 2162. India +0.5% to 21034.
In Europe, at midday, London +0.6%. Paris +0.5%. Frankfurt +0.4%.
Futures at 6:20: Dow +0.35%. S&P +0.3%. Nasdaq +0.4%. Crude -0.5% to $97.72. Gold +0.2% to $1348.
Ten-year Treasury Yield -2 bps to 2.49%.
Today's economic calendar:
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Consumer Price Index
10:30 EIA Petroleum Inventories
1:00 PM Results of $29B, 7-Year Note Auction
2:15 PM FOMC Announcement
Notable earnings before today's open: ACCO, ADP, AEGR, AMT, AUDC, AUO, BAH, BWA, CEVA, CFR, CMCSA, DBD, EGN, EXC, GAS, GLW, GM, GPK, GRMN, H, HEP, HES, HPY, INGR, JNY, KCG, LGND, LPLA, LVLT, MCGC, MDXG, MSM, NICE, NOR, NVMI, PCG, PEG, PES, PSX, PX, S, SAVE, SEE, SO, SODA, SPW, TASR, TEL, TFX, WEC,WLT
Notable earnings after today's close: ACTV, AFFX, ALL, ARII, ARRS, ATML, AXS, AXTI, BOOM, BYI, CAR, CAVM, CHUY, CJES, CNW, COHR, CROX, CSC, CUZ, CYH, DRE, DRIV, DXPE, EDMC, ELGX,ELX, EQR, ESS, EXEL, EXP, EXPE, FARO, FB, FLT, GLUU, GMED, HBI, HOS, HR, INT, IPI, IRF, ISIL, ITMN, ITRI, JAH, JDSU, JIVE, KEG, KEYW,KONA, KRFT, KS, MANT, MAR, MASI, MCHP, MDAS, MERU, MET, MMLP, MOH, MTGE, MUR, NEWP, NSR, OI, OIS, OTEX, PFPT, PGTI, PKI, PL, PPC, PRAA,PSMT, PVA, QUIK, RAIL, RATE, REG, RKUS, ROVI, SAM, SBUX, SGI, SHOR, SKUL, SPRT, SPWR, SSNI, SSW, STAA, STR, SU, SWKS, THOR, TRN, TSYS, TTMI, TTS, UNTD, V, VNR, WMB, WPZ, WTW, XL
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