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  • BP posts $17.15B loss, bids adieu to Hayward. Beleaguered BP (NYSE:BP) CEO Tony Hayward will step down as of October 1, and will be replaced by American Bob Dudley who has been heading up the company's Gulf spill response. Hayward will be nominated as a non-executive director of TNK-BP, the company's Russian joint venture. "It will be a different company going forward," BP said in a statement, "requiring fresh leadership supported by robust governance and a very engaged board." BP also posted its Q2 results today, reporting a $17.15B loss from a year-earlier profit of $4.4B. It recorded a pre-tax charge of $32.2B related to the Gulf spill, which includes the $20B escrow account, and plans to sell up to $30B in assets, mostly upstream, over the next 18 months to pay for the spill. Premarket: BP +0.8% (7:00 ET).
  • IBM faces EU antitrust probes. The European Commission launched two formal antitrust probes against IBM (NYSE:IBM) on suspicions the company has abused its dominant position in the mainframe computer markets. The first probe will examine whether IBM improperly blocks customers from using the mainframe's operating system without IBM's expensive hardware. The second probe will examine whether IBM is squeezing third-party providers of spare mainframe parts. Concerns about IBM's dominance in mainframes go back more than fifty years, but scrutiny of the matter had died down in recent years.
  • Canadian pension fund, P-E firm buy Tomkins. Canadian private equity firm Onex (OTCPK:ONEXF) and the Canada Pension Plan Investment Board agreed to buy British car-parts maker Tomkins (TKS) for £2.89B ($4.5B). The deal marks a 41% premium to Tomkins' closing price on July 16, the day before the potential takeover was announced. It's the latest example of North American buyers capitalizing on the pound's relative weakness to snap up British assets.
  • Rambus wins patent fight. Rambus (NASDAQ:RMBS) won a patent-infringement case against Nvidia (NASDAQ:NVDA), with the International Trade Commission ruling that Nvidia chips infringed three Rambus patents. The ITC also issued an order that would ban imports of certain products containing the chips, though Nvidia will be able to continue sales through a licensing arrangement. Rambus also has a civil suit pending against Nvidia to collect "past damages for the eight years they were infringing our patents." The ruling, which will be appealed, is significant because it could prompt other companies to sign licensing deals with Rambus rather than try to fight in court. In after-hours trading, RMBS +8.5%, NVDA -0.7%.
  • UBS back to profitability. UBS (NYSE:UBS) reported a Q2 net profit of 2.01B Swiss francs ($1.9B), helped in part by a 595M franc gain on its own debt. The results are a strong turnaround from the net loss of 1.4B francs the year before, and beat analysts' expectations of a 1.26B franc gain. UBS also noted that withdrawals narrowed at its private banking arm to 5.2B francs from 8B francs in Q1, indicating wealthy clients are regaining trust in the bank. Premarket: UBS +7.3% (7:00 ET).
  • Deutsche Bank caves on missing stress test details. Deutsche Bank (NYSE:DB) reported its Q2 earnings this morning, booking a €1.16B ($1.5B) net profit for the quarter vs. $1.09B the year before. The 6.2% increase was partly due to a sharp drop in its provision for bad loans and gains from its acquisition of ABN Amro's commercial-banking assets in the Netherlands. The company said it's on track to earn a pretax profit of €10B by 2011. Deutsche also provided new details about its sovereign debt holdings, which include €1B in exposure to Spain, €8.1B in exposure to Italy and €1.1B to Greece. Premarket: DB +2.5% (7:00 ET).
  • Basel Committee scales back rules. The Basel Committee will scale back many of its proposals to shore up bank capital and liquidity rules, a concession as much to "common sense" as to heavy lobbying by banks and governments. Changes to the Basel III reform draft, originally published in December, include; longer phase-ins for leverage caps, a weaker requirement to exclude from a bank's Tier 1 the capital held by affiliated banks in which it has a minority stake, and an easing in the way counterparty credit risk is calculated.
  • Genzyme considers takeover offer. Genzyme (GENZ) is reportedly weighing an informal takeover offer from Sanofi-Aventis (NYSE:SNY), but isn't looking to sell the company and may wait to see if other firms present better bids. Some analysts believe it's just a matter of time until Genzyme receives a competing offer, with a bid in the $75-85/share range likely to do the trick, “given that Genzyme has activists on its board, frustrated shareholders, and a management team generally perceived to be on thin ice." GENZ rose 7.8% in trading yesterday.
  • Lions Gate faces Icahn suit. Carl Icahn is taking legal action against Lions Gate Entertainment (NYSE:LGF), accusing the studio of using "scorched earth" tactics to block his takeover bid. The lawsuit seeks "a preliminary and permanent injunction rescinding the note exchange and the issuance of shares" that reduced Icahn's stake to 33.5% from 37.9%. Icahn also wants to be paid punitive damages.

Earnings: Tuesday Before Open

  • BP (BP): Q2 net loss of $17.15B, vs. a year-earlier profit of $4.4B. Pre-tax charge of $32.2B related to the Gulf spill, which includes the $20B escrow account. Plans to sell up to $30B in assets, mostly upstream, over the next 18 months to pay for the spill. (PR)
  • CIT Group (NYSE:CIT): Q2 EPS of $0.71 beats by $0.38. (PR)
  • DuPont (NYSE:DD): Q2 EPS of $1.17 beats by $0.24. Revenue of $8.61B (+25.6%) vs. $8.27B. Shares +3.3% premarket. (PR)
  • SAP AG (NYSE:SAP): Q2 EPS of $0.62 beats by $0.03. Revenue of $3.74B (+6.8%) vs. $3.50B. Shares -3.3% premarket. (PR)
  • Talisman Energy (NYSE:TLM): Q2 EPS of $0.13 beats by $0.02. Revenue of $1.59B (-6%) vs. $1.88B. (PR)
  • Teva Pharmaceutical Industries (NYSE:TEVA): Q2 EPS of $1.08 beats by $0.04. Revenue of $3.80B (+11.8%) in-line. Shares +3.2% premarket. (PR)
  • Thermo Fisher (NYSE:TMO): Q2 EPS of $0.84 in-line. Revenue of $2.64B (+6.6%) vs. $2.66B. (PR)

Earnings: Monday After Close

  • Aaron's (NYSE:AAN): Q2 EPS of $0.30 may not be comparable to consensus of $0.37. Revenue of $445M (+6.6%) vs. $442M. Shares -4.4% AH. (PR)
  • Health Management Associates (NYSE:HMA): Q2 EPS of $0.16 beats by $0.01. Revenue of $1.2B (+10%) vs. $1.3B. Shares +0.7% AH. (PR)
  • Legg Mason (NYSE:LM): FQ1 EPS of $0.30 misses by $0.01. Revenue of $674M (+10%) vs. $652M. Shares -5.1% AH. (PR, earnings call transcript)
  • Masco (NYSE:MAS): Q2 EPS of $0.16 may not be comparable to consensus of $0.13. Revenue of $2B (+1.7%) vs. $2.1B. Shares -3.2% AH. (PR)
  • Plum Creek Timber (NYSE:PCL): Q2 EPS of $0.21 beats by $0.06. Revenue of $258M (+-5%) vs. $248M. Shares -0.1% AH. (PR, earnings call transcript)
  • Range Resources (NYSE:RRC): Q2 EPS of $0.09 misses by $0.02. Revenue of $207M (+7.4%) vs. $225M. Shares -2.6% AH. (PR)
  • Sanmina-SCI (NASDAQ:SANM): FQ3 EPS of $0.32 misses by $0.02. Revenue of $1.6B (+34%) in-line. Shares -6.1% AH. (PR, earnings call transcript)
  • SL Green Realty (NYSE:SLG): Q2 EPS of $0.60 beats by $0.07. Revenue of $260M (+3.1%) vs. $229M. (PR)
  • Universal Health Services (NYSE:UHS): Q2 EPS of $0.68 misses by $0.02. Revenue of $1.3B (+2.7%) vs. $1.4B. Shares -0.3% AH. (PR)
  • Veeco Instruments (NASDAQ:VECO): Q2 EPS of $1.01 beats by $0.18. Revenue of $253M (+251%) vs. $232M. Shares +4.6% AH. (PR)

Today's Markets

  • In Asia, Japan -0.1% to 9497. Hong Kong +0.6% to 20973. China -0.5% to 2575. India +0.3% to 18078.
  • In Europe, at midday, London +0.8%. Paris +1.1%. Frankfurt +0.6%.
  • Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +0.1% to $79.07. Gold -0.1% to $1182.

Tuesday's Economic Calendar

Seeking Alpha's Market Currents team contributed to this post.


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Source: Wall Street Breakfast: Must-Know News