- UBS is profitable but still bleeding clients. UBS (UBS) reported its first profit in more than a year, earning 1.2B Swiss francs ($1.1B) in Q4 thanks to lower debt-related costs, a tax credit and gains at the investment bank. However, UBS said withdrawals by wealthy clients are accelerating, rising to 45.2B francs from 26.6B francs in the previous quarter, and far exceeding analysts' estimates of 17.5B francs in outflows. CEO Oswald Gruebel expects outflows to continue "in the immediate future." Shares +1.8% premarket (7:00 ET).
- Continued recalls test Toyota. As expected, Toyota (TM) will recall 437,000 hybrid cars globally to correct faulty braking systems. President Akio Toyoda apologized again to consumers in a Washington Post op-ed and promised to work "to restore trust in our word and in our products," but consumer confidence will be hard to regain and Toyota has lost around $31B in market value since the recalls began on Jan. 21. In more bad news for the firm, a congressional hearing is set for Wednesday to investigate whether Toyota and federal regulators have fully grasped what caused the brake problems. Shares +3% premarket (7:00 ET).
- Exxon feels less than jubilant. Ghana has blocked the sale of a $4B stake in its Jubilee oil field, ending months of talks with potential buyer Exxon Mobil (XOM). A Ghanaian official said state-run Ghana National Petroleum Corp would be the only entity allowed to buy the stake. This is Exxon's second recent setback in Africa, after plans to buy a stake in a major Uganda field also fell through. Shares +0.8% premarket (7:00 ET).
- American Airlines faces major safety fine. American Airlines (AMR) may face a civil penalty of $10M-20M for serious maintenance lapses. This would represent the largest penalty the Federal Aviation Administration has ever levied against a company. Separately, the Department of Transportation is preparing to release a report that outlines American Airlines' apparent failures to identify and promptly resolve aircraft-maintenance problems in 2008.
- JAL jilts Delta. Confirming yesterday's local media reports, Japan Airlines says it has decided to stick with American Airlines (AMR) and its Oneworld alliance, and will end talks with Delta (DAL). Without directly addressing JAL's decision, Delta issued a statement that it remains a big player in Asia. American Airlines said JAL had made the right choice and that the two companies "will now focus on building a joint venture that can offer JAL significant revenue growth beyond the stability that Oneworld offers today."
- Massive short of the euro. Traders and hedge funds have bet nearly $8B against the euro in the largest ever short position of the currency. Concerned about a eurozone debt crisis, traders have built up more than 40,000 contracts against the euro.
- Trichet travel change prompts bailout speculation. European Central Bank President Jean-Claude Trichet sparked rumors of an imminent Greece bailout when he abruptly left a summit in Sydney today, a day earlier than planned. An ECB spokesman said the travel change was purely due to logistics "because there was some concern that he would not catch a connecting flight and therefore miss the EU summit" this Thursday. Speculation of a Greek bailout helped lift the euro 0.4% against the dollar (7:00 ET).
- Rakoff to rule on BofA. Judge Jed Rakoff promised to rule by the end of next week on Bank of America's (BAC) proposed $150M settlement with the SEC. He wants to hear from lawyers on both sides first, and has made clear that the deal will require some changes, including possibly allowing the court to oversee important issues at the bank such as compensation. Rakoff also questioned whether the revised settlement still unfairly punishes shareholders. Shares +0.8% premarket (7:00 ET).
- AgFeed to sell 20% of unit in IPO. Chinese hog producer AgFeed Industries (OTC:FEED) announced it plans to sell up to 20% of its animal nutrients feed subsidiary through an IPO in order to raise $20M-25M. The move is meant to "enhance the ability of our animal nutrition business to pursue strategic initiatives and growth, upgrade personnel, foster innovation and raise capital."
- Boeing going ahead with its largest plane. Boeing (BA) successfully completed a test flight of its 747-8 freighter yesterday, the largest plane the company has ever built. The test happened a year later than originally planned, and delays in producing the new freighter prompted Boeing to say late last year that it's recording a $1B charge. The company now expects assembly to begin in mid-2010, with the first delivery in Q4 2011.
- Opel offers up restructuring plan. General Motors' Opel unit outlined a restructuring plan this morning that asks for €2.7B ($3.7B) in loans and loan guarantees from European governments. Opel plans to invest a total of €11B through 2014 and will cut around 8,300 jobs across Europe.
- Report on Lehman collapse coming soon. The court-appointed examiner looking into the collapse of Lehman Brothers said he has completed his 2,200-page report on the matter and it will be made public as soon as possible. The examiner was asked to investigate Lehman's collapse, its sale of key assets to Barclays (BCS) and whether there were any signs of fraud, dishonesty or misconduct.
- Xstrata sees value in Glencore merger. Xstrata (OTC:XSRAF) has acknowledged that a merger with privately held commodities trader Glencore could create value. Glencore owns 34% of Xstrata and the prospect of a merger has risen in recent months as Glencore tapped capital markets and Xstrata pursued deals to gain scale. Separately, Xstrata reported a 60% drop in annual profits yesterday, but said it will resume its dividend payments after a 19-month hiatus.
- Areva gets aggressive on solar energy. Areva (OTCPK:ARVCF), the world's largest nuclear plant builder, says it's diversifying into solar energy with the intent of becoming a world leader in the sector by 2012. The company is starting with a purchase of U.S.-based solar thermal player Ausra. Terms of the acquisition were not disclosed.
- Job growth on the horizon. Conference Board's Employment Trends Index rose 1% in January to 93.2 vs. 91.8 in December. "The continued rise in the ETI makes us more optimistic that job growth will resume in the first quarter of 2010," said researcher Gad Levanon. "The improvement is widespread across all eight components," and the "large decline in the number of involuntary part-time workers was the first time this component showed a strong signal of improvement."
Earnings: Tuesday Before Open
- Cognizant Technology Solutions (CTSH): Q4 EPS of $0.47 beats by $0.01. Revenue of $903M (+20%) vs. $888M. Shares +2.4% premarket. (PR)
- Coventry Health Care (CVH): Q4 EPS of $0.74 beats by $0.18. Revenue of $3.42B (+15%) vs. $3.48B. Shares +2.5% premarket. (PR)
- NYSE Euronext (NYX): Q4 EPS of $0.58 beats by $0.10. Revenue of $640M (-6.3%) vs. $638M. Shares +1.3% premarket. (PR)
Earnings: Monday After Close
- Apollo Investment (AINV): FQ3 EPS of $0.48 beats by $0.17. Total investment income of $85.6M. Shares +0.8% AH. (PR)
- Atmel (ATML): Q4 EPS of $0.04 beats by $0.04. Revenue of $343M (+2.7%) vs. $318M. Shares -0.4% AH. (PR, earnings call transcript)
- Axis Capital (AXS): Q4 EPS of $1.87 beats by $0.56. Revenue of $868M (+50%) vs. $341M. Shares +1.4% AH. (PR)
- Camden Property Trust (CPT): Q4 FFO of $0.71 beats by $0.08, after excluding a $1.24/share impact from impairment losses. Revenue of $153M (-3%) vs. $132M. Shares -1.5% AH. (PR)
- Chimera Investment Corp. (CIM): Q4 EPS of $0.12 misses by $0.02. Revenue of $101M (+325%). Shares +0.3% AH. (PR)
- Electronic Arts (ERTS): FQ3 EPS of $0.33 beats by $0.02. Revenue of $1.35B (-23%) in-line. Sees Q4 EPS of $0.02-0.06 vs. $0.13, on sales of $800M-850M vs. $851M. Sees fiscal 2011 EPS of $0.50-0.70 vs. $0.74. Shares -8.2% AH. (PR, earnings call transcript)
- Hartford Financial (HIG): Q4 core EPS of $1.51 beats by $0.11. Expects 2010 core EPS of $3.70-4.00 vs. $3.96. Shares -4% AH.(PR)
- Lincoln National (LNC): Q4 EPS of $0.90 beats by $0.07. Revenue of $2.4B (+12%) vs. $2.5B. Shares -2.8% AH. (PR)
- Nuance Communications (NUAN): FQ1 EPS of $0.29 beats by $0.02. Revenue of $285M (+16%) vs. $269M. Shares -0.1% AH. (PR, earnings call transcript)
- Pharmaceutical Product Development (PPDI): Q4 EPS of $0.16 misses by $0.07. Revenue of $357M (-2%) vs. $314M. Shares +0.5% AH. (PR)
- Principal Financial Group (PFG): Q4 EPS of $0.62 misses by $0.03. Revenue of $2.4B (-6%) vs. $2.5B. Shares -1.9% AH. (PR)
- Qiagen (QGEN): Q4 EPS of $0.24 beats by $0.02. Revenue of $289M (+21.9%) vs $237M. Shares -2.0% AH. (PR)
- Teck Resources (TCK): Q4 EPS of C$0.70 beats by C$0.18. Revenue of C$2.2B (+37.5%). (PR)
- Tw Telecom (TWTC): Q4 EPS of $0.07 beats by $0.02. Revenue of $308M (+5%) in-line. (PR, earnings call transcript)
- Veeco Instruments (VECO): Q4 EPS of $0.41 beats by $0.07. Revenue of $146M (+32.7%) vs. $110M. Shares -2.4% AH. (PR, earnings call transcript)
- W.R. Berkley (WRB): Q4 EPS of $0.81 includes gains from investments of $0.10/share and may not be comparable to estimate of $0.67. Revenue of $1.18B (+9%) vs. $1.15B. (PR)
- In Asia, Nikkei -0.2% to 9933. Hang Seng +1.2% to 19790. Shanghai +0.5% to 2949. BSE +0.7% to 16042.
- In Europe at midday, London +0.2% to 5100. Paris -0.3% to 3595. Frankfurt -0.1% to 5479.
- Futures: Dow +0.4%. S&P +0.6%. Nasdaq +0.7%. Crude +0.3% to $72.09. Gold +0.1% to $1,067.
Tuesday's Economic Calendar
- 7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 Wholesale Trade
1:00 PM 3-Yr Note Auction
5:00 PM ABC Consumer Confidence Index
- Notable earnings before Tuesday's open: AGCO, AGU, ANR, BIIB, BJS, CAM, CE, CTSH, CVH, IACI, KO, NYX, PHM, TAP, TIN, VSH
- Notable earnings after Tuesday's close: BIDU, CERN, CFN, CXW, DIS, EOG, UDR, XL
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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