- Barnes & Noble may sell itself. Barnes & Noble (BKS) disclosed yesterday that its board is looking at "strategic alternatives" to boost share value, including a possible sale of the company. Chairman Leonard Riggio, the company’s founder and largest stockholder, said he would consider putting together an investor group to acquire the company. Shares had closed down 7.1% in regular trading, but soared 26.2% after-hours following the company's announcement.
- Dollar Thrifty turns down Avis offer. Dollar Thrifty (DTG) rebuffed a $1.35B offer from Avis (CAR), even though the offer trumps the one Dollar Thrifty already agreed to with rival Hertz (HTZ). While acknowledging that Avis' bid is financially superior, Dollar Thrifty said it was concerned about Avis' ability to close the deal given the antitrust concerns associated with a merger of the two firms. In after-hours trading, Dollar Thrifty fell 1%, Hertz fell 2.3%, and Avis was unchanged.
- Medicines Co. soars on court ruling. Shares of Medicines Co. (MDCO) surged 34% in late trading yesterday after a U.S. District Court judge ruled the patent office should consider MDCO's Dec. 2000 patent extension application as timely. The decade-long saga centers on whether a patent filing for MDCO's blood-thinning drug Angiomax was mistakenly made one day late.
- FTC confirms Intel settlement. Confirming earlier media reports, the FTC said Intel (INTC) had agreed to settle an antitrust complaint filed in Dec. 2009 and that details of the settlement will be disclosed at a press conference later today. The settlement is expected to be non-financial, requiring behavioral changes from Intel in the graphics chips market. Premarket: INTC -0.4% (7:00 ET).
- BP succeeds with static kill. BP (BP) said its "static kill" operation to seal the Macondo well appeared to have been successful, calling it a "significant milestone" in its efforts to bring an end to the Gulf oil spill disaster. A relief well "remains the ultimate solution to kill and permanently cement the well," BP said, and the company hopes to have the first of two relief wells ready by mid-August. The news came as upwardly revised estimates of the spill's size significantly increased the potential fines faced by BP; penalties could top $20B if the company is found liable for gross negligence. Premarket: BP -2.1% (7:00 ET).
- Continental to detail UAL talks. In a securities filing yesterday, Continental (CAL) said it would disclose more details about its merger talks with United Airlines (UAUA) as part of a settlement with shareholders who had sued the company for selling itself too cheaply. Shareholders agreed to drop their charges against the two airlines in exchange for the information disclosures.
- Santander buys RBS branches. As expected, Banco Santander (STD) agreed to buy 318 U.K. branches from Royal Bank of Scotland (RBS) for about £1.65B ($2.6B) (the price of the deal could be adjusted when it completes, which is expected to be in Dec. 2011). The transaction will have a positive effect on Santander's earnings per share from the first year and of more than 2% in the third year.
- July car sales rise. U.S. car sales rose 5.1% in July from the year before to 1,049,101 cars and light trucks. An uptick in consumer buying and purchases by commercial fleets helped GM, Ford and Chrysler deliver slightly higher sales compared to the month before and the year before, though Toyota's sales fell, hurt by the cash-for-clunkers comparison and ongoing image problems. Among the highlights:
-General Motors: +5.4% to 199,692, vs. Edmunds expectations of +9.9%.
-Toyota (TM): -6.8% to 169,224 vehicles.
-Chrysler (FIATY.PK): +5% to 93,313 vehicles, vs. Edmunds expectations of +3.9%; fourth straight month of Y/Y increase.
-Ford (F): +3.1% to 170,411 vehicles, vs. Edmunds expectations of +13.2%.
- Toyota posts a profit. Toyota (TM) reported a net profit of ¥190.5B ($2.2B) for its fiscal first quarter, reversing a net loss of ¥77.8B in the year-earlier period. Robust demand in Asia, government buying incentives in Japan, and a reviving U.S. market canceled out the impact of the strong yen. The upbeat results prompted Toyota to raise its outlook; for the full fiscal year, the company expects net profit of ¥340B vs. earlier guidance of ¥310B, and expects sales of ¥19.5T vs. ¥19.2T prior guidance.
- Lloyds returns to profitability. Lloyds Banking Group (LYG) returned to profitability for the first time since its acquisition of HBOS forced the bank to take a government bailout. Pro-forma pretax profit was £1.6B in the first six months of the year, compared with a loss of £3.96B a year earlier and analysts' expectations of a £694.5M profit. Bad loan provisions were down 51% to £6.56B. Premarket: LYG +2.4% (7:15 ET).
- Citigroup scrambles to find Egg buyer. Citigroup (C) is reportedly preparing to put its online U.K. bank Egg up for auction as it works to reduce its non-core assets. It's unclear what sale price Citigroup could get for the business, which it bought three years ago for £575M ($916M). Sources said Citi has been holding informal talks with potential buyers for some time, but will now formally open an auction for the business, most likely after the summer months. Possible bidders include Santander (STD) and Tesco's (TSCDY.PK) Metro Bank.
- Banks mull divestitures due to Volcker, Basel. The proposed Basel III capital requirements and the Volcker Rule are prompting banks to start looking at divestitures. Goldman Sachs (GS) is reportedly thinking about spinning off all or part of its massive private-equity arm, concerned the Volcker Rule will create enormous uncertainty that will send investors fleeing, while Morgan Stanley (MS) is considering a spin-off of FrontPoint Partners, the hedge fund it bought in 2006. Bank of America (BAC) and PNC Financial (PNC) may be forced to sell their stakes in asset manager BlackRock (BLK) as the Basel rules would effectively prevent banks from holding large stakes in other companies; the new rules are years away from implementation, but banks are already preparing for the worst. BofA may also have to sell its 11% stake in China Construction Bank.
- EU conditionally approves Teva-Ratiopharm deal. The European Commission approved Teva's (TEVA) €3.7B ($4.9B) takeover of German generic-drug maker Ratiopharm as long as the companies divest sixteen products in the Netherlands and Hungary. Canadian regulators cleared the deal several days ago.
- Ally Financial looks ahead to IPO. Ally Financial, formerly known as GMAC, may go public next year and could be worth as much as $30B, according to CEO Michael Carpenter. After receiving a $17B bailout, Ally is 56% owned by the government; Carpenter sees an IPO as "the obvious route" to repayment, adding he has no doubts "about our ability to repay the U.S. Treasury."
Earnings: Wednesday Before Open
- AOL, Inc.: Q2 EPS of -$9.89 may not be comparable to consensus of $0.41. Revenue of $584.1M (-26.2%) vs. $602.1M. (PR)
- Quanta Services (PWR): Q2 EPS of $0.22 beats by $0.04. Revenue of $870.5M (+7%) vs. $935.6M. (PR)
- R.R. Donnelley & Sons Company (RRD): Q2 EPS of $0.47 beats by $0.11. Revenue of $2.41B (+3.1%) vs. $2.36B. (PR)
- Spectra Energy (SE): Q2 EPS of $0.27 misses by $0.02. Revenue of $1.06B (+13.4%) vs. $1.04B. (PR)
- United Microelectronics (UMC): Q2 EPS of $0.07 beats by $0.01. Revenue of $927M (+34.3%) vs. $919M. (PR)
Earnings: Tuesday After Close
- American Capital Strategies (ACAS): Q2 EPS of $0.09 misses by $0.05. (PR)
- AmeriCredit (ACF): FQ4 EPS of $0.61 beats by $0.21. Revenue of $338M (-19.2%) vs. $352M. Shares -0.1% AH. (PR)
- Anadarko (APC): Q2 EPS of $0.49 beats by $0.14. Revenue of $2.6B (+36.1%) vs. $2.8B. Shares +1.6% AH. (PR)
- AvalonBay Communities (AVB): Q2 EPS of $1.04 beats by $0.03. Shares -1.9% AH. (PR)
- BRE Properties (BRE): Q2 EPS of $0.46 beats by $0.01. Revenue of $84.8M (+2.9%) vs. $81.2M. (PR)
- Brigham Exploration Company (BEXP): Q2 EPS of $0.16 beats by $0.07. Revenue of $41.4M (+185%) vs. $38M. Shares +3.6% AH. (PR)
- CBL & Associates Properties (CBL): Q2 EPS of $0.49 beats by $0.05. Revenue of $262M (-1.7%) vs. $258M. (PR)
- CBS (CBS): Q2 EPS of $0.25 beats by $0.04. Revenue of $3.3B (+10.6%) vs. $3.2B. Shares +2.5% AH. (PR, earnings call transcript)
- Chesapeake Energy (CHK): Q2 EPS of $0.75 beats by $0.06. Revenue of $2B (+20.3%) vs. $2.5B. Shares +0.1% AH. (PR)
- Electronic Arts (ERTS): FQ1 EPS of -$0.24 beats by $0.11. Revenue of $539M (-33.9%) vs. $502M. Shares +4.6% AH. (PR, earnings call transcript)
- Exco Resources (XCO): Q2 EPS of $0.11 misses by $0.02. Revenue of $118M (-25.7%) vs. $141M. (PR)
- Harris (HRS): FQ4 EPS of $1.24 beats by $0.01. Revenue of $1.5B (+12.5%) in-line. Shares -0.7% AH. (PR, earnings call transcript)
- Hertz Global Holdings, Inc Comm (HTZ): Q2 EPS of $0.14 beats by $0.01. Revenue of $1.9B (+7.1%) in-line. Shares -2.3% AH. (PR)
- Liberty Global (LBTYA): Q2 EPS of -$2.66 may not be comparable to consensus of -0.14$. Revenue of $2.2B (+20%) in-line. (PR)
- Molex (MOLX): FQ4 EPS of $0.39 beats by $0.01. Revenue of $847M (+48.5%) vs. $820M. Shares +0.9% AH. (PR, earnings call transcript)
- Pitney Bowes (PBI): Q2 EPS of $0.48 misses by $0.09. Revenue of $1.3B (-5.7%) vs. $1.4B. Shares -4.7% AH. (PR, earnings call transcript)
- Priceline.com (PCLN): Q2 EPS of $3.09 beats by $0.44. Revenue of $767M (+27.1%) vs. $733M. Shares +12.6% AH. (PR)
- UnumProvident (UNM): Q2 EPS of $0.69 beats by $0.01. Revenue of $2.5B (-4.5%) in-line. Shares +0.3% AH. (PR)
- Whole Foods Market (WFMI): FQ3 EPS of $0.38 in-line. Revenue of $2.2B vs. $2.1B. Shares -4.4% AH. (PR, earnings call transcript)
- XL Group plc (XL): Q2 EPS of $0.71 beats by $0.07. Revenue of $1.5B (+0.4%) vs. $1.2B. (PR, earnings call transcript)
- In Asia, Japan -2.1% to 9489. Hong Kong +0.4% to 21550. China +0.4% to 2639. India +0.6% to 18217.
- In Europe, at midday, London -1.1%. Paris -0.7%. Frankfurt -0.4%.
- Futures: Dow -0.2%. S&P -0.3%. Nasdaq -0.3%. Crude -0.7% to $81.95. Gold +0.8% to $1196.80.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
9:00 Treasury Quarterly Refunding
9:30 Treasury's Barr: Implementing Wall Street Reform and the Consumer Protection Act
10:00 ISM Non-Manufacturing Index
10:00 FTC Details the Terms of Intel's Settlement
10:30 EIA Petroleum Inventories
4:00 PM Geithner: 'A Pro-Growth Strategy on Tax and Fiscal Policy'
- Notable earnings before Wednesday's open: AGU, ANR, AOL, AYE, CAM, CNP, CTL, DVN, EP, EP, FTR, GRMN, OC, PCG, PHM, PWR, Q, RL, RRD, SE, SIRI, TRW, TWX, UMC, XEC
- Notable earnings after Wednesday's close: ADCT, ALL, AMKR, ATML, AUY, CAR, CECO, CLWR, CXO, HCN, HIG, KGC, MELI, MUR, NWSA, ONNN, ONXX, PRU, REG, RIG, SD, TS
Seeking Alpha's Market Currents team contributed to this post.
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