- Sanofi preps formal Genzyme bid. Sanofi-Aventis (SNY) is likely to make a formal offer for Genzyme (GENZ) in the coming days, with sources saying the company's board has authorized an offer of up to $70 per share, or around $18.7B. Sanofi is counting on acquisitions to help replace revenue lost to competition from generic drugs, but analysts believe a $70/share bid won't do the trick and that Genzyme is unlikely to acquiesce until it gets a price closer to $75-85/share.
- Avis tops Hertz bid for Dollar Thrifty. Avis Budget Group (CAR) offered $46.50 per share for Dollar Thrifty (DTG), topping a $39/share bid from rival Hertz (HTZ). Avis' cash-and-stock offer, which is valued at more than $1.3B, also removes some of the terms that are in the Hertz-Dollar deal, such as a break-up fee, and promises to make more divestitures to secure antitrust approval. In after-hours trading, CAR -0.5%, DTG -1.4%, HTZ +2.6%.
- Profitable Panasonic to buy out two subsidiaries. Along with reporting a better-than-expected FQ1 profit of ¥43.7B ($501M), Panasonic (PC) said it would buy out two of its subsidiaries to streamline management and increase the group's green technology business. Panasonic is offering a maximum of ¥818.4B ($9.4B) to buy the shares it doesn't yet own of Sanyo Electric (OTC:SANYY) and Panasonic Electric Works. To finance the tender offer, which will take place between Aug. 23 and Oct. 6, the company has filed a shelf registration for up to ¥500B in shares, while "any external financing will be carefully considered, based on the actual purchase amount."
- California declares fiscal emergency. California Governor Arnold Schwarzenegger declared a state of fiscal emergency yesterday, as California faces a $19B shortfall in a budget that is already more than a month overdue. Schwarzenegger ordered state employees to take three unpaid days off a month, starting in August, in order to preserve cash for paying the state's debt and for essential services; the decision will affect tens of thousands of state employees. Any additional delay in the budget threatens California's already-weak credit rating, but analysts expect it will be weeks before lawmakers reach an agreement.
- P-E firms hungry for California Pizza Kitchen. Private equity firm American Securities is reportedly bidding for California Pizza Kitchen (CPKI). The restaurant chain had said in April that it's considering changes in its capital structure or a possible sale, among other options. Private equity firm Harvest is also said to be eyeing California Pizza, though its level of interest is unclear. The takeover rumors helped lift CPKI's stock 9.6% yesterday.
- Rio, Chinalco sign iron ore deal. Rio Tinto (RTP) and Chalco, a subsidiary of Chinalco (ACH), set aside recent tensions and announced they will establish an iron ore joint venture in Guinea. Chalco will provide $1.35B to fund development work in the next 2-3 years, receiving in return a 47% stake in Rio's Simandou project. "Developing our relationship and business links with China is a key priority for Rio Tinto," said Rio Tinto Chairman Jan du Plessis. Premarket: RTP +1.7% (7:00 ET).
- Moody's: U.S. needs debt plan. The U.S. government needs to lay out a credible plan to address its rising debt if it wants to maintain its triple-A credit rating, said Steve Hess, Moody's top sovereign analyst for the U.S., East Asia and Australasia. At present, the U.S. appears to have "no plan" to deal with its fiscal outlook. The U.S. rating remains on a stable outlook at Moody's.
- Beige Book shows economic fragility. U.S. economic activity continued to be "weak" in June and into July, the Federal Reserve said in its Beige Book report, in the latest sign that the recovery may be running out of steam. Though most districts reported continued improvements in economic conditions, the improvements were modest; gains were limited for retail sales, housing and construction remained weak, and banking lending remained tight.
- Kindle aims for the masses. Amazon (AMZN) is making a mass-market push with its Kindle e-reader, announcing a new Wi-Fi only model that will sell for just $139, making it among the cheapest wireless-equipped e-readers currently being sold. Though the Kindle was initially developed for "serious readers," CEO Jeff Bezos believes "at these price points, it may be much broader than that. People will buy them for their kids. People won't share Kindles any more." The goal, of course, isn't just to sell more Kindles, but to set up stronger sales for Amazon's digital books. The company also announced improvements for its Wi-Fi/3G model which sells for $189.
- SEC exempted from public disclosure. Here's another of the unexpected loopholes created by the financial reform regulation: The SEC no longer has to comply with nearly all requests for information releases from the public, including those filed under the Freedom of Information Act. This is because the law exempts the SEC from disclosing information derived from "surveillance, risk assessments, or other regulatory and oversight activities," and as a regulatory agency, this covers nearly every SEC action. It's "hard to imagine how the bill could be more counterproductive," said one former SEC staff attorney.
Earnings: Thursday Before Open
- Bunge (BG): Q2 EPS of $11.15 may not be comparable to consensus of $1.28; recorded an $11.72/share total gain on the sale of its fertilizer nutrients business. Revenue of $11B (-0.2%) vs. $12.2B. "The second quarter was disappointing, due primarily to low volumes and margins in agribusiness. Cuts its 2010 EPS guidance to $3.25-3.50, vs. consensus of $5.20. Shares -6.9% (7:00 ET). (PR)
- Hornbeck Offshore Services (HOS): Q2 EPS of $0.48 beats by $0.34. Revenue of $112M (+14%) vs. $95M. (PR)
- Potash Corp. (POT): Q2 EPS of $1.38 beats by $0.19. Revenue of $1.4B (+68%) in-line. Shares +2.2% premarket (7:00 ET). (8-K)
- RadioShack (RSH): Q2 EPS of $0.41 in-line. Revenue of $1B (+5%) in-line. (PR)
- Suncor Energy (SU): Q2 EPS of $0.50 beats by $0.14. Revenue of $9B vs. $6.9B. (PR)
- Tyco International (TYC): FQ3 EPS of $0.72 beats by $0.08. Revenue of $4.3B (+3%) in-line. (PR)
Earnings: Wednesday After Close
- Agnico-Eagle Mines (AEM): Q2 EPS of $0.64 may not be comparable to consensus of $0.39 $. Revenue of $354M (+155%) vs. $342M. Shares +0.9% AH. (PR)
- Akamai Technologies (AKAM): Q2 EPS of $0.34 in-line. Revenue of $245M (+19.9%) vs. $243M. Shares -5.1% AH. (PR, earnings call transcript)
- Ameriprise Financial (AMP): Q2 EPS of $0.98 beats by $0.21. Revenue of $2.6B (+37.5%) vs. $2.3B. Shares +2% AH. (PR)
- Arris Group (ARRS): Q2 EPS of $0.24 misses by $0.01. Revenue of $280.4M (+0.7%) vs. $288M. Shares +0.9% AH. (PR)
- AsiaInfo (ASIA): Q2 EPS of $0.35 beats by $0.03. Revenue of $67M (+14.2%) in-line. Shares -1.9% AH. (PR)
- Assurant (AIZ): Q2 EPS of $1.46 beats by $0.29. Revenue of $2.1B (-5.9%) in-line. Shares +0.1% AH. (PR)
- BMC Software (BMC): FQ1 EPS of $0.62 misses by $0.02. Revenue of $461M (+2.4%) vs. $473M. Shares -0.3% AH. (PR, earnings call transcript)
- Brandywine Realty Trust (BDN): Q2 EPS of $0.34 beats by $0.01. (PR)
- Cadence (CDNS): Q2 EPS of $0.07 beats by $0.04. Revenue of $227M (+8.1%) vs. $221M. Shares +3.1% AH. (PR)
- Cincinnati Financial (CINF): Q2 EPS of $0.26 in-line. (PR)
- Citrix Systems (CTXS): Q2 EPS of $0.48 beats by $0.03. Revenue of $458M (+16.7%) vs. $437M. Shares +3.5% AH. (PR, earnings call transcript)
- Cliffs Natural Resources (CLF): Q2 EPS of $1.92 misses by $0.14. Revenue of $1.2B (+202%) in-line. Shares -1.2% AH. (PR)
- CommScope (CTV): Q2 EPS of $0.55 beats by $0.01. Revenue of $838M (+6.9%) vs. $833M. Shares -12.4% AH. (PR, earnings call transcript)
- Crown Castle International (CCI): Q2 EPS of -$0.36 misses by $0.37. Revenue of $456M (+11.3%) vs. $447M. Shares +0.3% AH. (PR)
- DryShips (DRYS): Q2 EPS of $0.30 beats by $0.08. Revenue of $224M (+8.1%) vs. $217M. Shares +1.8% AH. (PR)
- Duke Realty (DRE): Q2 EPS of $0.29 beats by $0.01. Revenue of $216M (-1.5%) vs. $219M. (PR)
- Equinix (EQIX): Q2 EPS of -$0.05 may not be comparable to consensus of $0.25. Revenue of $296M (+38.9%) in-line. Shares +1% AH. (PR, earnings call transcript)
- Equity Residential (EQR): Q2 EPS of $0.58 beats by $0.03. Revenue of $511M (+6.4%) vs. $491M. Shares +0.4% AH. (PR)
- Express Scripts (ESRX): Q2 EPS of $0.60 beats by $0.01. Revenue of $11.3B (+105.4%) in-line. Shares -3.6% AH. (PR)
- Extra Space Storage (EXR): Q2 EPS of $0.23 beats by $0.02. Revenue of $69M (-0.4%) vs. $62M. (PR)
- Flowserve (FLS): Q2 EPS of $1.62 may not be comparable to consensus of $1.65. Revenue of $961M (-11.8%) vs. $1M. Shares -2.9% AH. (PR)
- Goldcorp (GG): Q2 EPS of $0.27 misses by $0.01. Revenue of $844M (+34.3%) vs. $900M. Shares -0.2% AH. (PR)
- Green Mountain Coffee Roasters (GMCR): FQ3 EPS of $0.19 beats by $0.01. Revenue of $311M (+63.5%) vs. $307M. Shares +0.4% AH. (PR)
- GSI Commerce (GSIC): Q2 EPS of -$0.41 misses by $0.18. Revenue of $264M (+41%) in-line. Shares -5.8% AH. (PR)
- Highwoods Properties (HIW): Q2 EPS of $0.64 beats by $0.03. Shares +0.3% AH. (PR)
- Lam Research (LRCX): FQ4 EPS of $1.17 beats by $0.20. Revenue of $695M (+219%) vs. $656M. Shares +0.9% AH. (PR, earnings call transcript)
- Lincoln National (LNC): Q2 EPS of $0.86 beats by $0.06. Revenue of $2.6B (+38.4%) in-line. Shares +1.7% AH. (PR)
- LSI Logic (LSI): Q2 EPS of $0.11 in-line. Revenue of $639M (+0.3%) vs. $654M. Shares -8.2% AH. (PR, earnings call transcript)
- Mylan Laboratories (MYL): Q2 EPS of $0.37 in-line. Revenue of $1.4B (+8%) in-line. Shares -1% AH. (PR)
- NBTY (NTY): FQ3 EPS of $1.03 beats by $0.19. Revenue of $696M (+6.7%) vs. $699M. (PR)
- NetLogic Microsystems (NETL): Q2 EPS of $0.38 beats by $0.06. Revenue of $95M (+192.5%) in-line. Shares -2.4% AH. (PR)
- O'Reilly Automotive (ORLY): Q2 EPS of $0.81 beats by $0.07. Revenue of $1.38B (+10.4%) vs. $1.35B. Shares -0.8% AH. (PR)
- Owens-Illinois (OI): Q2 EPS of $0.90 misses by $0.01. Revenue of $1.7B (-5.6%) vs. $1.8B. (PR)
- Pioneer Natural Resources Company (PXD): Q2 EPS of $0.43 beats by $0.01. Revenue of $662M (+142.6%) vs. $508M. Shares +0.3% AH. (PR)
- PSS World Medical (PSSI): Q2 EPS of $0.24 misses by $0.02. Revenue of $479M (-3%) vs. $500M. Shares -2.2% AH. (PR)
- Skechers U.(SKX): Q2 EPS of $0.82 beats by $0.38. Revenue of $505M (+68.9%) vs. $428M. Shares +9.6% AH. (PR)
- Superior Energy Services (SPN): Q2 EPS of $0.43 beats by $0.05. Revenue of $425M (+17.6%) vs. $397M. Shares +0.5% AH. (PR)
- Symantec (SYMC): FQ1 EPS of $0.35 in-line. Revenue of $1.4B (+0.1%) vs. $1.5B. Shares -6.6% AH. (PR, earnings call transcript)
- Teradyne (TER): Q2 EPS of $0.69 beats by $0.22. Revenue of $455M (+168.2%) vs. $408M. Shares +6.9% AH. (PR)
- Tesoro (TSO): Q2 EPS of $0.30 beats by $0.10. Revenue of $5.1B (+23%) vs. $4.6B. Shares -0.8% AH. (PR)
- TriQuint Semiconductor (TQNT): Q2 EPS of $0.20 beats by $0.05. Revenue of $208M (+14.8%) vs. $206M. Shares -0.7% AH. (PR, earnings call transcript)
- Varian Medical Systems (VAR): FQ3 EPS of $0.74 beats by $0.09. Revenue of $578M (+13.3%) vs. $570M. (PR, earnings call transcript)
- Vertex Pharmaceuticals (VRTX): Q2 EPS of -$0.71 beats by $0.13. Revenue of $31.6M (+65.4%) vs. $28M. (PR)
- Visa (V): FQ3 EPS of $0.97 beats by $0.04. Revenue of $2B (+23.3%) in-line. Shares -0.4% AH. (PR, earnings call transcript)
- Walter Industries (WLT): Q2 EPS of $2.16 beats by $0.23. Revenue of $411M (+143%) vs. $409M. Shares -1.8% AH. (PR)
- Willis Group (WSH): Q2 EPS of $0.54 misses by $0.03. Revenue of $799M (+1.9%) vs. $810M. (PR)
- In Asia, Japan -0.6% to 9696. Hong Kong flat at 21094. China +0.6% to 2648. India +0.2% to 17992.
- In Europe, at midday, London +0.8%. Paris +0.4%. Frankfurt +0.6%.
- Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.4%. Crude +0.3% to $77.21. Gold +0.5% to $1165.80.
Thursday's Economic Calendar
- 8:30 Initial Jobless Claims
10:30 EIA Natural Gas Inventory
1:00 PM $29B, 7-Year Note Auction
3:00 PM Kansas City Fed Mfg Survey
1:20 PM Fed's Fisher: 'Current Issues Affecting the Economy'
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: ABX, ADP, AVP, BC, BDX, BEN, BG, BLL, CE, CELG, CL, CLI, CNX, COV, CRI, DPS, EGO, EQT, GR, GT, GTI, HP, IPG, IRM, K, KBR, LIFE, LINE, LUV, MCO, MJN, MOT, NBL, NIHD, NOC, NOV, PDE, POT, PTEN, RDS.A, RSH, RTN, SBH, SNE, SU, TEN, TLCR, TRI, TSM, TYC, VTR, WM, WMB, WYNN, XEL, XOM, XRAY
- Notable earnings after Thursday's close: AMGN, APKT, CSTR, DTE, EMN, EXPE, FSLR, GNW, IM, KLAC, MET, MFE, MWW, MXIM, PTV, RGC, ROVI, RSG, SUN, VALE, WFR
Seeking Alpha's Market Currents team contributed to this post.
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