Peugeot's losses fall as France, China's Dongfeng mount rescue. Peugeot Citroën's (OTC:PEUGF) recurring operating losses narrowed to €177M in 2013 from €560M in 2012 even as revenue slipped 2.4% to €54.09B, with the ailing French car-maker slashing its cash consumption by 86% to €426M. Peugeot's results came after it announced a €3B capital raising in which China's Dongfeng Motor Group (OTCPK:DNFGF) and the French state will invest €800M each and receive a 14% stake in Peugeot. The Peugeot family will lose control of the 204-year-old company for the first time.
John Malone starts succession planning. John Malone has given the rights of first refusal to the CEOs of Discovery Communications (DISCA) and Liberty Global (LBTYA) to buy his holdings in their respective companies. Discovery chief David Zaslav will be able to purchase Malone's 29% voting stake in the TV broadcaster; at Liberty, Michael Fries will be able to acquire Malone's 27% voting interest. However, Malone has no intention of reducing his involvement in the businesses just yet; rather, the rights given to Zaslav and Fries represent planning for the future.
Top Stock News
Herbalife's net profit climbs 10%, ups guidance. Herbalife's (HLF) Q4 net profit rose 10% to $123.5M as earnings at the nutrition-supplements company topped expectations, with Q4 EPS coming in at $1.28 and revenue jumping 20% to $1.27B. Herbalife's sales in China surged over 120%, prompting the company to raise its 2014 EPS guidance to $1.25-1.29 from a previous prediction of $1.24-1.28. However, it's worth noting that direct-marketing companies have come under fire in China recently amid a probe into Herbalife rival Nu Skin Enterprises (NUS). Herbalife's shares were +1.45% premarket.
Devon to sell Canadian assets for $3.13B. Devon Energy (DVN) has agreed to sell some of its liquids-rich natural gas assets in Canada for $3.13B to Canadian Natural Resources. Before royalties, the properties produced the equivalent of 383M cubic feet of natural gas per day, 10,800 bpd of light crude oil and 12,000 bpd of natural gas liquids.
Colgate warns of possible Q1 losses from Venezuelan currency. Colgate-Palmolive (CL) has warned that it could book one-time losses of $180M-200M in Q1 following Venezuela's recent moves related to the exchange rate for foreign investments. Colgate's warning has come a week after Procter & Gamble (PG) cut its FY 2014 profit guidance, citing the devaluation of the country's bolivar.
Foreign banks facing major shortfalls under new Fed rules. The Federal Reserve has passed regulations for foreign banks on capital, debt levels and annual "stress tests" that could force 15-20 of them to raise billions of dollars in capital. Overseas banks with U.S. assets of over $50B would have to form special holding companies in the country and maintain higher capital buffers than other nations require. Deutsche Bank (DB), for example, would have an estimated hole of $7B under the new rules.
Chelsea Therapeutics soars after FDA approval of Northera drug. Chelsea Therapeutics' (CHTP) shares surged 44% premarket after the FDA yesterday approved the company's Northera treatment for preventing sudden drops in blood pressure, which can lead to dizziness and fainting, in patients with disorders of the nervous system. Deutsche Bank estimates that Northera's peak U.S. sales could hit $450M.
Amazon and Apple find Madison Ave. a tough sell - Ad Age. Amazon (AMZN) and Apple (AAPL) are experiencing growing pains as they try to increase their advertising operations, Ad Age reports. Amazon's approach has not been helping. "It's almost like going into a room and them putting a gun to your head and showing you your future," says an executive at ad giant GroupM about Amazon's sales methods.
Top Economic & Other News
U.K. unemployment rate unexpectedly edges up. U.K. unemployment for the three months to December rose to 7.2% from 7.1% previously and topped estimates that were 7.1% also. However, the number of those out of work dropped by 125,000 to 2.34M. Meanwhile, the Bank of England's Monetary Policy Committee voted unanimously - as expected - to keep interest rates at 0.5% and against more quantitative easing at a meeting earlier this month, the minutes of that meeting show. The pound slid after the release of the data and BOE minutes, and was -0.1% at $1.6671 at the time of writing.
Household debt grows at fastest in six years. Household debt rose by $241B in Q4 to $11.52T, a NY Fed report shows, with the increase the highest since Q3 2007 - just before the great recession started. Mortgages rose by $16B on year to $8.05T following four consecutive years of declines. Retail analyst David Strasser is skeptical about what the figures mean. "The problem is you're not seeing job growth; you're not seeing wage growth," Strasser says. "We're still over-leveraged by any historical measure."
CBO paints mixed picture of effect of minimum-wage hike. President Obama's proposal to raise the minimum wage to $10.10 an hour by 2016 from $7.25 currently would lead to the loss of 500,000 jobs, a report from the Congressional Budget Office has found. However, the CBO also said the plan would increase pay for 16.5M people and lift 900,000 out of poverty. A total of 45M are projected to be categorized as poor in 2016.
Top Ideas: Movers and Great Calls
1) On January 6, Trading the Spread called out automotive supplier TRW Automotive (TRW) as a high flyer that still had room to run. After a strong Q4 report last week, shares hit an all-time high and are +12% since the call. Read article »
2) Buddy Lyons, CFA, said in October that it was finally time for investors to buy Forest Laboratories (FRX), as a broader, lower-risk drug pipeline would drive the stock higher. After a $25B buyout offer from Actavis yesterday, the stock is +111.9% since Buddy Lyons' recommendation. Read article »
Top Ideas To Watch
1) Fund manager Igor Novgorodtsev says nutrition-supplement vendor FitLife (OTCQB:FTLF) is cheap - but not for long, as high growth, several catalysts, and a pending uplisting should boost shares. Read article »
2) Chris DeMuth Jr. says the recent FDA approval of Xiaflex should lead to nearly 50% upside for Auxilium Pharmaceuticals (AUXL). Read article »
Top Ideas are the best long and short ideas on Seeking Alpha. SA PRO subscribers receive early access to these Top Ideas, which often move markets. For more information about SA PRO and becoming a subscriber, click here.
In Asia, Japan -0.5% to 14767. Hong Kong +0.3% to 22665. China +1.1% to 2143. India +0.4% to 20723.
In Europe, at midday, London -0.3%. Paris -0.3%. Frankfurt -0.4%.
Futures at 6:20: Dow -0.2%. S&P -0.2%. Nasdaq -0.1%. Crude +0.3% to $102.78. Gold -0.4% to $1318.70.
Ten-year Treasury Yield -2 bps to 2.69%.
Notable earnings after today's close: ACHC, AMTG, ARII, ARRS, ASGN, AVG, AWAY, AXLL, BAS, BJRI, CAR, CSGP, CW, CXO, DENN, ELNK, EPAM, EQIX, ESV, ETE, ETP, GDP, HAWK, HLS, HLX, HOS, HR, IAG, IVR, JACK, LGCY, LOCK, MANT, MAR, MM, OIS, PGTI, PVA, RBCN, REXX, RGP, SNPS, STR, SWY, SXL, TILE, TRN, TSLA, TSRO, UNTD, VECO, VVC, WMB, WPZ
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