- Borders soars on credit deal. Shares of Borders (BGP) jumped 34% in after-hours trading yesterday, after the company said it received a commitment for a $550M credit line from GE Capital (NYSE:GE). Borders said the new credit facility, which matures in 2014 and refinances the company's existing debt, will allow it to pay its vendors, fix its business, expand online and in the e-book market, and cut its costs. However, the company indicated a bankruptcy filing might still be an option, and the GE credit line is contingent on several conditions, including Borders securing another $125M of financing by finding other lenders or getting publishers to forgive payments.
- Verizon buys Terremark. Verizon (NYSE:VZ) announced it will buy Terremark Worldwide (NASDAQ:TMRK) for $1.4B in cash, or $19 per share, a 35% premium to Terremark's closing price yesterday. Calling the deal one that will "decisively reshape the rapidly evolving global business technology solutions market," Verizon will launch its tender offer between Feb. 10 and Feb. 17, and expects to close the offer towards the end of Q1 2011. Three Terremark shareholders, representing around 27.6% of outstanding shares, have already agreed to tender their shares. In after-hours trading, TMRK +35.3% to $19.01.
- Investors punish Amazon over margins. Amazon (NASDAQ:AMZN) posted its Q4 earnings results yesterday (see details below), beating analysts' estimates on earnings but falling short on both revenue and operating margins. The company also provided Q1 guidance indicating operating margins could decline, raising concerns among investors that Amazon's heavy spending may be hurting the company's underlying fundamentals. Shares fell 9.4% in after-hours trading, a possible over-reaction considering the company's guidance was fairly broad and the company has performed fairly well over the past year.
- Sara Lee looks to breakup, not sale. Sara Lee's (SLE) board has now rejected both takeover offers it received, sources said, arguing that the bids from Brazilian meat processor JBS and from an Apollo-led private-equity consortium were both too low. Instead, the company is considering separating its meat and coffee businesses, though it hasn't entirely ruled out the idea of a full sale if it receives a sufficiently high offer and could sell the individual businesses post-split.
- Sanofi cancer drug disappoints. Sanofi-Aventis (NYSE:SNY) said yesterday that a clinical trial showed its drug candidate iniparib did not improve survival or slow disease progression in patients with breast cancer. Sanofi's late-stage trial showed no significant difference between patients that took iniparib and those that didn't. Premarket: SNY -3.3% (7:00 ET).
- FCIC spreads the blame. The Financial Crisis Inquiry Commission released its official report yesterday on the causes of the financial crisis, spreading the blame between Wall Street excesses and regulatory failures for a crisis that could have been avoided. The commission, which split along party lines, also produced two dissenting reports, which analysts believe will dull the impact of the broader report. Among the commission's more salient notes: Bernanke told the FCIC in 2009 that of the 13 most important U.S. financial firms, only one 'was not at serious risk of failure' during the height of the credit crisis; Goldman Sachs (NYSE:GS) posted huge profits from derivatives during the crisis and gained $2.9B from the AIG (NYSE:AIG) bailout; and, the shadow banking system helped trigger a more than tenfold surge in financial-sector debt.
- Citigroup seeks EMI buyer. Citigroup (NYSE:C) has reportedly contacted several parties, including British financier Guy Hands, to find a potential buyer for music company EMI Group. Citigroup is expected to seize control of debt-laden EMI in the coming months, and wants to get back the cash it tied up in EMI as soon as possible. Hands' buyout firm, Terra Firma Capital, currently owns EMI, and Citigroup's willingness to engage Hands as a potential buyer is somewhat surprising after the two fought a bitter court battle last year over Terra Firma's 2007 acquisition of EMI.
- LinkedIn targets IPO. Networking site LinkedIn filed for an initial public offering, and is likely to be the first of several high-profile internet IPOs in the coming months. LinkedIn didn't detail how many shares it would offer or the price range.
- Smucker raises dividend, buyback. J.M Smucker (NYSE:SJM) raised its quarterly dividend by 10% to $0.44 per share, and authorized the buyback of another 5M shares. In after-hours trading, SJM +1.3%.
- Home Depot leaves Beijing. Home Depot (NYSE:HD) has closed its last Beijing retail location, according to the state-run China Daily. The report said 'operational difficulties' were behind the shut-down, and cited problems including a cultural bias for smaller kitchens compared to those in U.S. homes and a consumer preference to hire external contractors to carry out home-improvement works.
Earnings: Friday Before Open
- Ford Motor (NYSE:F): Q4 EPS of $0.30 misses by $0.18. Revenue of $32.5B beats by $2.1B. (PR)
Earnings: Thursday After Close
- Amazon.com (AMZN): Q4 EPS of $0.91 beats by $0.03. Revenue of $12.9B (+36% Y/Y) misses by $0.06B. Shares -10.3% AH. (PR, earnings call transcript)
- BancorpSouth (NYSE:BXS): Q4 EPS of $0.19 may not be comparable with consensus of $0.01. Shares +3.1% AH. (PR)
- Chubb (NYSE:CB): Q4 EPS of $2.02 beats by $0.45. Revenue of $2.9B (+2.5% Y/Y) in-line. Shares -0.6% AH. (PR, earnings call transcript)
- Compuware (NASDAQ:CPWR): FQ3 EPS of $0.15 in-line. Revenue of $247M (+7.4% Y/Y) in-line. Shares -1.6% AH. (PR, earnings call transcript)
- Federated Investors (NYSE:FII): Q4 EPS of $0.45 beats by $0.02. Revenue of $245M (-7.4% Y/Y) misses by $8M. Shares -2.9% AH. (PR)
- Fidelity National Financial (NYSE:FNF): Q4 EPS of $0.58 beats by $0.28. Revenue of $1.6B (+10% Y/Y) beats by $2B. (PR)
- KLA-Tencor (NASDAQ:KLAC): FQ2 EPS of $1.10 beats by $0.04. Revenue of $766M (+74% Y/Y) beats by $49M. Shares +0.9% AH. (PR, earnings call transcript)
- Microsoft (NASDAQ:MSFT): FQ2 EPS of $0.77 beats by $0.09. Revenue of $19.9B (+4.7% Y/Y) beats by $0.75B. Shares flat (PR, earnings call transcript)
- Monster Worldwide (NYSE:MWW): Q4 EPS of $0.06 in-line. Revenue of $258M (+21% Y/Y) misses by $4M. Shares -4.2% AH. (PR, earnings call transcript)
- PMC - Sierra (NASDAQ:PMCS): Q4 EPS of $0.15 misses by $0.01. Revenue of $159M (+14% Y/Y) beats by $2M. Shares -12.9% AH. (PR, earnings call transcript)
- QLogic (NASDAQ:QLGC): FQ3 EPS of $0.53 beats by $0.06. Revenue of $156M (+5% Y/Y) in-line. Shares +0.1% AH. (PR, earnings call transcript)
- ResMed (NYSE:RMD): FQ2 EPS of $0.37 beats by $0.01. Revenue of $306M (+11% Y/Y) in-line. Shares -3.2% AH. (PR)
- Riverbed Technology (NASDAQ:RVBD): Q4 EPS of $0.19 beats by $0.01. Revenue of $306M (+11% Y/Y) in-line. Shares -2% AH. (PR, earnings call transcript)
- SanDisk (SNDK): Q4 EPS of $1.27 beats by $0.19. Revenue of $1.3B (+7% Y/Y) in-line. (PR, earnings call transcript)
- Thoratec (NASDAQ:THOR): Q4 EPS of $0.28 misses by $0.02. Revenue of $97.6M (+% Y/Y) misses by $1M. Shares -10.3% AH. (PR)
- VeriSign (NASDAQ:VRSN): Q4 EPS of $0.31 beats by $0.01. Revenue of $179M (+13% Y/Y) in-line. Shares -0.8% AH. (PR, earnings call transcript)
- In Asia, Japan -1.1% to 10360. Hong Kong -0.7% to 23617. China +0.1% to 2753. India -1.5% to 18,396.
- In Europe, at midday, London -0.7%. Paris +0.1%. Frankfurt +0.2%.
- Futures at 7:00: Dow +0.05%. S&P flat. Nasdaq flat. Crude +0.3% to $85.88. Gold -0.4% to $1313.60.
Friday's Economic Calendar
8:30 GDP Q4
8:30 Employment Cost Index
9:55 Reuters/UofM Consumer Sentiment
10:30 ECRI Leading Index
- Notable earnings before Friday's open: AAI, AEP, CVX, D, DOV, F, HON, OSK, SNV, TROW
The SA Currents team contributed to this post.
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