- Compellent considers a sale. Compellent Technologies (CML) has reportedly held preliminary talks with investment banks about its options, including a possible sale of the company. The data storage provider's revenue has grown rapidly over the past few years, and the recent bidding war between Dell (DELL) and Hewlett-Packard (HPQ) over 3Par highlights the strong demand for the few assets in the high-end storage area network market. Potential suitors could include Dell, H-P, IBM (IBM), Oracle (ORCL) and others. Shares of Compellent closed +11% yesterday on heavy volume, and added another 7.6% in after-hours trading.
- Cardinal denies buyout talks. Cardinal Health (CAH) flatly denied buyout rumors, telling shareholders the company "is not in discussions with any party regarding an acquisition of Cardinal Health." Some of the speculation had stemmed from a widening of the spread of Cardinal's credit default swaps, which could have signaled a pending LBO requiring the company to take on heavy debt. Cardinal's direct denial of the possibility pared the stock's gains, with shares closing +1.8% after reaching a high of +5.6% yesterday. Shares subsequently lost 2% in after-hours trading.
- Investors dismiss rumor of Apple buying Sony. Yesterday's market chatter included a rumor that Sony (SNE) might be bought by Apple (AAPL). While Apple can certainly afford the price tag of a possible deal, it's not exactly a logical tie-up: Apple's strengths are product and brand management, not turning around a giant and struggling company. Investors seemed to agree, for the most part dismissing the rumor as just that. Shares of Sony closed up a modest 1% in yesterday's trading, down from an intraday high of +3%. Further rumors are likely to follow, as analysts try to guess what Apple will do with its hefty $51B cash pile.
- Constellation, EDF to part ways. Constellation Energy (CEG) and Electricite de France (ECIFF.PK) agreed to part ways following the deterioration of their partnership over the last several months. EDF will acquire Constellation's 50% ownership in their five-year old joint venture, known as UniStar, and Constellation will receive $250M in stock and cash. The separation agreement also eliminates a disputed requirement under which EDF would have been forced to buy 12 power plants from Constellation for as much as $2B.
- Deutsche Bank posts quarterly loss. Deutsche Bank (DB) posted a Q3 net loss of €1.2B ($1.7B), down from a €1.4B profit the year before but better than analysts' expectations of a €1.5B loss. The loss was largely tied to Deutsche Bank's increased stake in Deutsche Postbank; excluding Postbank, net profit came in at €1.1B. Deutsche Bank said it's on track to deliver €10B in pre-tax profits in 2011, and remains committed to paying shareholder dividends despite the Postbank costs it's carrying. Premarket: DB +1.4% (7:00 ET).
- Glaxo reaches drug settlement. GlaxoSmithKline (GSK) agreed to pay $750M and plead guilty to a criminal charge to settle a federal investigation of manufacturing deficiencies at its former plant in Puerto Rico. Glaxo had disclosed in July that it had reached an agreement in principle to settle the probe, but the final settlement was only announced yesterday afternoon. Justice Department officials said there was no evidence of patient harm, but it was critical to pressure companies to follow the rules. The former Glaxo employee who sparked the federal probe by filing a suit against the company will receive $96M from the settlement under a federal whistleblower law. Premarket: GSK -1.6% (7:00 ET).
- Creditors back Dubai World restructuring. Dubai World said it has received full approval from creditors to restructure nearly $25B in debt. The agreement ends more than ten months of negotiations, but some creditors are unhappy with the terms, which include extending payments years into the future, with minimal commitment to raise cash through asset sales; "It appears that Dubai's government has only deferred the debt concerns," said one analyst.
- HSBC said to be mulling Northern Trust bid. Shares of Northern Trust (NTRS) rose 5.3% yesterday after a report in the Daily Mail suggested HSBC (HBC) may be planning to make a bid. An offer of $65/share would represent a 35% premium to Northern Trust's close yesterday, and a deal would boost HSBC's assets while giving it a lead in the fledgling prime custody arena.
- Banks appeal to Supreme Court on Fed disclosure. The Clearing House Association, a who's who of big banks, asked the Supreme Court yesterday to review a March ruling requiring the Fed to disclose who used the discount window during the crisis. The Justice Department said the Fed itself won't be joining in the appeal. The association, which includes banks such as Bank of America (BAC), Citigroup (C), and JPMorgan (JPM), said disclosure of the information "threatens to harm the borrowing banks by allowing the public to observe their borrowing patterns during the recent financial crisis and draw inferences - whether justified or not - about their current financial conditions."
- Icahn intensifies MGM effort. Carl Icahn intensified his efforts to derail a proposed tie-up between studio Metro-Goldwyn-Mayer and Spyglass Entertainment. Icahn, who wants MGM to combine with Lions Gate Entertainment (LGF), offered to buy $1.6B in MGM secured loans at a price of 53 cents per $1 of principal. Icahn had previously offered to buy up to $963M of MGM senior debt on condition shareholders vote down the Spyglass proposal. Both offers will expire at Friday's voting deadline for the Spyglass plan.
- CFTC regular urges action on silver probe. At a CFTC hearing yesterday, commissioner Bart Chilton pressured the agency to take action in its high-profile, two-year-old investigation of the silver market. Chilton said market players have made "repeated" and "fraudulent efforts to persuade and deviously control" silver prices, and he believes there have been violations of CFTC rules that deserve to be prosecuted. Though Chilton declined to name specific offenders, sources said that the agency began to look into allegations earlier this year that JPMorgan (JPM), one of the largest silver traders, was involved in manipulative trading.
- Google goes building shopping. Google (GOOG) is apparently close to buying New York City's 111 Eighth Ave. building, one of the largest buildings in Manhattan, for nearly $2B. Google already rents over 550K square feet in the 2.9M square foot building that covers an entire city block; the purchase could help facilitate the company's growth plans for New York City.
Earnings: Wednesday Before Open
- Alliance Resource Partners L.P. (ARLP): Q3 EPS of $1.48 misses by $0.21. Revenue of $410M vs. $413M. (PR)
- AU Optronics (AUO): Q3 EPS of $0.004 misses by $0.28. Revenue of $4B (+14.9%) in-line. Shares +1.1% premarket. (PR)
- Brinker International (EAT): FQ1 EPS of $0.21 beats by $0.06. Revenue of $655M (-6%) vs. $660M. Shares -0.1% premarket. (PR)
- Elan (ELN): Q3 EPS of -$0.07 may not be comparable to -$0.05. Revenue of $281M (-2%) vs. $287M. Shares +0.7% premarket. (PR)
- NICE-Systems (NICE): Q3 EPS of $0.45 beats by $0.02. Revenue of $177M (+20.6%) vs. $173M. (PR)
- PATNI COMPUTER SYSTEMS (PTI): Q3 EPS of $0.22 misses by $0.16. Revenue of $179M (+6.9%) in-line. (PR)
- Praxair (PX): Q3 EPS of $1.21 beats by $0.01. Revenue of $2.5B (+10.9%) vs. $2.6B. Shares -0.5% premarket. (PR)
- SAP AG (SAP): Q3 EPS of $0.57 misses by $0.04. Revenue of $4.1B (+13.9%) vs. $3.9B. Shares -5% premarket. (PR)
- Thermo Fisher (TMO): Q3 EPS of $0.90 beats by $0.07. Revenue of $2.7B (+6%) vs. $2.6B. (PR)
- United Microelectronics (UMC): Q3 EPS of $0.11 beats by $0.03. Revenue of $1.1B (+23%) vs. $1B. Shares -0.5% premarket. (PR)
- Whirlpool (WHR): Q3 EPS of $1.02 beats by $0.14. Revenue of $4.5B (+0.5%) in-line. Shares +0.6% premarket. (PR)
Earnings: Tuesday After Close
- AFLAC (AFL): Q3 EPS of $1.46 beats by $0.13. Revenue of $5.4B (+19.3%) vs. $5.3B. Shares +1.5% AH. (PR)
- Broadcom (BRCM): Q3 EPS of $0.60 beats by $0.05. Revenue of $1.8B (+44%) vs. $1.7B. Shares +4% AH. (PR,
- earnings call transcript)
- CB Richard Ellis Group (CBG): Q3 EPS of $0.20 beats by $0.03. Revenue of $1.3B (+23.7%) vs. $1.2B. Shares +0.5% AH. (PR)
- Century Aluminum Company (CENX): Q3 EPS of -$0.18 misses by $0.23. Revenue of $279M (+22.1%) vs. $269M. Shares -6.8% AH. (PR, earnings call transcript)
- C.H. Robinson Worldwide (CHRW): Q3 EPS of $0.62 beats by $0.01. Revenue of $2.4B (+23.8%) vs. $2.5B. Shares -2.8% AH. (PR, earnings call transcript)
- DeVry (DV): FQ1 EPS of $1.03 beats by $0.07. Revenue of $521M (+21%) vs. $520M. Shares +1.2% AH. (PR, earnings call transcript)
- Dreamworks Animation SKG (DWA): Q3 EPS of $0.47 beats by $0.12. Revenue of $189M (+39.5%) vs. $163M. Shares +3.3% AH. (PR)
- Equinix (EQIX): Q3 EPS of $0.24 misses by $0.02. Revenue of $330M (+11.5%) in-line. Shares +4.7% AH. (PR, earnings call transcript)
- F5 Networks (FFIV): FQ4 EPS of $0.79 beats by $0.07. Revenue of $254M (+47.8%) vs. $249M. Sees FQ1 EPS of $0.80-0.82 vs. $0.73 consensus. Approves $200M share repurchase. Shares +6.7% AH. (PR)
- Fiserv (FISV): Q3 EPS of $1.04 beats by $0.04. Revenue of $1B (+3.3%) in-line. Shares +0.3% AH. (PR, earnings call transcript)
- Illumina (ILMN): Q3 EPS of $0.30 beats by $0.06. Revenue of $237M (+49.8%) vs. $218M. Shares +3.1% AH. (PR, earnings call transcript)
- Life Technologies (LIFE): Q3 EPS of $0.87 beats by $0.09. Revenue of $869M (+8%) vs. $856M. Shares +2.9% AH. (PR, earnings call transcript)
- Massey Energy Company (MEE): Q3 EPS of -$0.33 misses by $0.15. Revenue of $810M (+26.3%) vs. $826M. Shares -1.4% AH. (PR)
- McKesson (MCK): FQ2 EPS of $1.03 may not be comparable to consensus of $1.09. Revenue of $27.5B (+1.5%) vs. $28B. Shares +5% AH. (PR, earnings call transcript)
- Molex (MOLX): FQ1 EPS of $0.43 misses by $0.01. Revenue of $898M vs. $867M. Sees FQ2 EPS of $0.38-0.44 vs. $0.45 consensus. Increases dividend by 14.8%. Shares -4.1% AH. (PR, earnings call transcript)
- Mylan Laboratories (MYL): Q3 EPS of $0.43 beats by $0.01. Revenue of $1.4B (+7.2%) in-line. Shares -2.3% AH. (PR, earnings call transcript)
- Nabors Industries (NBR): Q3 EPS of $0.29 beats by $0.06. Revenue of $1.08B (+34.3%) vs. $0.99B. Shares +0.6% AH. (PR)
- Netgear (NTGR): Q3 EPS of $0.45 beats by $0.07. Revenue of $236M vs. $222M. Shares +4.9% AH. (PR, earnings call transcript)
- Novellus Systems (NVLS): Q3 EPS of $0.88 beats by $0.04. Revenue of $367M (+107.6%) vs. $356M. Shares +1% AH. (PR, earnings call transcript)
- Pioneer Natural Resources Company (PXD): Q3 EPS of $0.41 beats by $0.03. Shares flat AH. (PR)
- Questar (STR): Q3 EPS of $0.16 beats by $0.02. Revenue of $145M (+10.9%) vs. $137M. (PR)
- RF Micro Devices (RFMD): FQ2 EPS of $0.19 beats by $0.03. Revenue of $286M (+4.4%) vs. $276M. Shares +2.7% AH. (PR, earnings call transcript)
- STMicroelectronics (STM): Q3 EPS of $0.22 beats by $0.01. Revenue of $2.7B (+17%) vs. $2.6B. Shares +7.5% AH. (PR)
- Walter Industries (WLT): Q3 EPS of $2.57 beats by $0.02. Revenue of $464M (+66.8%) vs. $481M. Shares -0.1% AH. (PR)
- Western Union (WU): Q3 EPS of $0.37 beats by $0.02. Revenue of $1.3B (+1.1%) in-line. Shares +1.7% AH. (PR, earnings call transcript)
- In Asia, Japan +0.1% to 9387. Hong Kong -1.9% to 23165. China -1.5% to 2997. India -1.1% to 20005.
- In Europe, at midday, London -0.5%. Paris -0.2%. Frankfurt +0.1%.
- Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.15%. Crude -0.9% to $81.83. Gold -0.4% to $1333.80.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
8:30 Durable Goods
10:00 New Home Sales
10:00 Hearing: TARP Foreclosure Mitigation Programs
10:30 EIA Petroleum Inventories
12:00 PM Chicago Fed Midwest Manufacturing Index
1:00 PM Results of $39B, 5-Year Note Auction
4:00 PM Fed's Dudley: Challenges for the Nation, the Region and the Fed
- Notable earnings before Wednesday's open: ACXM, ADP, ARLP, ARW, AUO, AVY, AYE, BWA, CFR, CMCSA, COP, CP, DPS, EAT, ELN, GD, HES, HL, IACI, IP, JNY, LAZ, LECO, LM, MWV, NICE, NOC, NYB, OC, ODFL, ODP, PEG, PFCB, PG, PTI, PX, RES, S, SAP, SCG, SEE, SLAB, SO, SUSQ, SVVS, SXT, TMO, UMC, VPHM, WAB, WHR
- Notable earnings after Wednesday's close: AB, ACE, AEM, AHL, AIZ, ALL, AMP, ARRS, AVB, BDN, BEC, BEZ, BYI, CACI, CAVM, CCI, CDNS, CHH, CINF, CYH, DRE, DRYS, EEP, EFX, EQR, ESRX, FLEX, FLS, FMC, FTI, GG, GSIC, HBI, HLX, HMA, HRC, ICO, IDCC, ITRI, KEG, KEX, LOGI, LSI, MANT, MDAS, MORN, NSC, O, OI, ORLY, OTEX, PLXS, PRAA, RNR, RRC, SCI, SKX, SPN, SRCL, SXL, SYMC, TER, TMK, TQNT, TRN, UHS, V, WLL, WRE, WSH
Seeking Alpha's Market Currents team contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.