- Big Lots considers sale. Big Lots (NYSE:BIG) is exploring strategic options, including a possible sale of the company, sources said. The discount retailer has been hurt by aggressive discounting and promotions by larger rivals like Wal-Mart (NYSE:WMT) and Dollar General (NYSE:DG), and has missed analysts' sales estimate for the last two quarters. At least two buyout firms have expressed interest in the company. Big Lots shares surged 15% yesterday in late afternoon trading in anticipation of a possible sale.
- Kindred Healthcare to buy RehabCare. Kindred Healthcare (NYSE:KND) announced it would buy rival RehabCare Group (NYSE:RHB) for around $900M in cash and stock and will assume around $400M in RehabCare debt. RehabCare shareholders will receive $35/share, a 37% premium to yesterday's close. The deal, driven by relentless cost-cutting, will create the largest 'post-acute' health company in the country, with more than $6B in revenue. Premarket: KND +1.1% (7:00 ET).
- Conexant jumps on buyout offer. Shares of Conexant Systems (NASDAQ:CNXT-RETIRED) jumped 14.6% in after-hours trading to $2.40, following the disclosure that the company received an acquisition offer of $2.35-2.45 per share from private-equity firm Golden Gate. Last month, Conexant had entered a definitive merger agreement in which it would be acquired by Standard Microsystems (NASDAQ:SMSC) for $2.25 per share in stock and cash. The Conexant board said Golden Gate's offer could constitute a superior proposal, and has authorized Golden Gate to access information about Conexant.
- China hikes interest rates. China raised its key interest rates for the third time since October, as inflation remained above 4% for the third month in a row. The benchmark one-year lending rate will increase to 6.06% percent from 5.81%, effective tomorrow. The one-year deposit rate will rise to 3% from 2.75%.
- U.K. banks prep for more disclosure. HSBC (HBC) and Lloyds (NYSE:LYG) are reportedly preparing to switch to quarterly financial reporting, ending the long-standing tradition of reporting results only twice a year in conjunction with non-numerical updates in the spring and fall. The change comes as Europe pushes for greater transparency among its banks.
- ArcelorMittal swings to a loss. ArcelorMittal (NYSE:MT) reported a Q4 net loss of $780M this morning, down from a net profit of $1.1B in the year-earlier period. The company cited challenging market conditions as the source of its weak performance, but noted evidence of 'a slow and progressive recovery' which should lead to higher demand and higher production in 2011. Q4 sales rose 19% to $20.7B. Capacity-utilization fell to 69% from 71% in the previous quarter, but should rise to 76% in Q1. Premarket: MT +4.7% (7:00 ET).
- Toyota's profit falls. Toyota (NYSE:TM) reported FQ3 profit fell 47.6% to ¥99.1B, hurt by both a slump in Japanese car sales and a strong yen which increased the company's exposure to loss-making exports. Though other Japanese carmakers like Nissan (OTCPK:NSANY) and Honda (NYSE:HMC) faced similar challenges, Toyota's decline looks like it will be the steepest among its domestic competitors. For the full year ending March 31, Toyota lifted its forecast for annual operating profit to ¥550B ($6.7B) from ¥380B. Premarket: TM +0.4% (7:00 ET).
- UBS reports profit, client inflows. UBS (NYSE:UBS) reported Q4 profit rose 7% to 1.29B Swiss francs ($1.35B), and inflows from wealthy clients added a net 6.1B francs to its wealth management units. The bank expects client inflows to 'strengthen noticeably' this year. Pre-tax profit at UBS' investment bank fell 75% to 75M francs on higher costs and a 509M franc charge related to the bank's own debt; UBS expects 'some improvement' in the unit's trading results this quarter. Premarket: UBS +1.9% (7:00 ET).
Earnings: Tuesday Before Open
- ArcelorMittal (MT): Q4 EPS of -$0.51 may not be comparable with consensus of $0.18. Revenue of $20.7B (+19% Y/Y) misses by $0.07B. (PR)
- Coventry Health Care (CVH): Q4 EPS of $0.96 beats by $0.08. Revenue of $3.03B (-11.8% Y/Y) beats by $0.02B. (PR)
- Elan (NYSE:ELN): Q4 EPS of -$0.09 misses by $0.05. Revenue of $309M (+3% Y/Y) beats by $22M. (PR)
- NYSE Euronext (NYSE:NYX): Q4 EPS of $0.46 beats by $0.03. Revenue of $613M (-4% Y/Y) in-line. (PR)
- Teva Pharmaceutical Industries (NASDAQ:TEVA): Q4 EPS of $1.25 misses by $0.03. Revenue of $4.4B (+16% Y/Y) misses by $0.23B. (PR)
Earnings: Monday After Close
- Aspen Insurance (NYSE:AHL): Q4 EPS of $1.02 beats by $0.31. Revenue of $500M (+5% Y/Y) beats by $54M. Shares +2.6% AH. (PR)
- Becton Dickinson (NYSE:BDX): FQ1 EPS of $1.35 beats by $0.06. Revenue of $1.8B (-1.4% Y/Y) misses by $0.05B. Shares -3.4% AH. (PR)
- Biomed Realty Trust (NYSE:BMR): Q4 EPS of $0.30 beats by $0.02. Revenue of $105M (+19% Y/Y) beats by $3M. (PR)
- Principal Financial Group (NYSE:PFG): Q4 EPS of $0.66 misses by $0.02. Revenue of $2.1B (+44% Y/Y) beats by $0.06B. Shares -4.4% AH. (PR)
- Pioneer Natural Resources Company (NYSE:PXD): Q4 EPS of $0.51 beats by $0.09. Revenue of $472M (+13% Y/Y) misses by $72M. Shares +1.1% AH. (PR)
- UDR Inc. (NYSE:UDR): Q4 EPS of $0.28 in-line. Shares -0.4% AH. (PR)
- Veeco Instruments (NASDAQ:VECO): Q4 EPS of $1.62 beats by $0.01. Revenue of $300M (+152% Y/Y) misses by $2M. Shares -7% AH. (PR)
- In Asia, Japan +0.4% to 10636. Hong Kong -0.3% to 23484. China closed. India -1.45% to 17776.
- In Europe, at midday, London -0.2%. Paris -0.1%. Frankfurt +0.2%.
- Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude -1.3% to $86.33. Gold +0.3% to $1351.60.
Tuesday's Economic Calendar
7:30 NFIB Small Business Optimism Index
7:45 ICSC Retail Store Sales
8:45 Fed's Lacker: Economic Outlook
8:55 Redbook Chain Store Sales
10:00 IBD/TIPP Economic Optimism
12:30 PM Fed's Lockhart: Economic Outlook
1:00 PM Results of $32B, 3-Year Note Auction
1:30 PM Fed's Fisher: 'A Report on the Economy'
- Notable earnings before Tuesday's open: AGCO, AVP, CVH, ELN, ETR, FIS, MT, NYX, SLE, SRX, TEVA, TIN, VSH
- Notable earnings after Tuesday's close: AGNC, ATML, AXL, CBL, DCT, DEI, DIS, ILMN, MFE, PBI, TTWO, XL
The SA Currents team contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.