Wall Street Breakfast: Must-Know News

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 |  Includes: AEO, ATHR, BLOAQ, CAKE, CEPH, EBAY, EXPE, F, FMCC, FNMA, GLD, GOOG, IM, KMI, MDLZ, MSFT, NFLX, NOK, QQQ, RAX, RSG, SPY, TCO, USO, WYNN
by: Rachael Granby
Rachael Granby
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

  • Nokia unveils major strategy revamp. Nokia (NYSE:NOK) announced early this morning that it would be making changes to its leadership and operational structure as part of a 'new strategic direction' designed to turn the struggling company around. The moves include a broad mobile phone partnership with Microsoft (NASDAQ:MSFT), "focused investments in next-generation disruptive technologies," the departure of Alberto Torres from the management team, and a restructured leadership team that will "expedite decision-making and improve time-to-market of products and innovations." The company is also splitting into two distinct units, one focused on 'smart devices' and one focused on mobile phones. As a result of these changes, Nokia expects 2011 and 2012 to be transition years, followed by faster-than-market sales growth for its Devices & Services business and non-IFRS operating margin of at least 10% for its Devices & Services business. Premarket: NOK -8.8% (7:00 ET).
  • Blockbuster on the blocks. Blockbuster (OTC:BLOAQ) reportedly plans to put itself up for sale instead of reorganizing in bankruptcy court, after creditors disagreed on a plan to give Blockbuster more money to help it exit bankruptcy protection. The movie rental chain could ask a judge to approve bidding procedures as soon as next week. Carl Icahn and a group led by Monarch Alternative Capital are said to be among the potential bidders, and an offer could fetch around $300M plus the assumption of various liabilities, including some store leases.
  • Fed's Warsh resigns. Federal Reserve Board Governor Kevin Warsh submitted his resignation yesterday, and will step down around March 31, creating a second vacancy on the seven-member board. Warsh is a close associate of Bernanke's, but has been skeptical of some of the Fed's larger market interventions, including its more recent round of quantitative easing.
  • American Eagle jumps on takeover rumors. Shares of American Eagle (NYSE:AEO) jumped 9% yesterday on more than three times average volume on speculation the teen clothing retailer may be a takeover target. Rumors have long surrounded the company, but "volume is too strong this time for something not to be up, either a deal type announcement or... an executive change," according to one analyst.
  • eBay looks to boost growth. eBay (NASDAQ:EBAY) outlined a new three-year strategy yesterday, and projected the company's revenue would rise at least 41% over the next two years, from $9.2B in 2010 to $13B-15B in 2013. PayPal will be driving much of this growth, as eBay plans to double the unit's revenue by 2013 and believes PayPal could displace eBay's core marketplace unit as the company's biggest business in three to five years. The projections helped eBay's shares climb 8% yesterday.
  • Treasury readies housing solutions. The Treasury is set to release a report today laying out three possible solutions for winding down Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC), but won't endorse any specific option. The decision to present the three solutions without backing any one in particular came from the White House, which hopes to jumpstart a discussion on the topic without locking President Obama into a single course of action. The report's three scenarios are: 1) No government role in housing, except for existing agencies like the FHA; 2) An explicit government guarantee of mortgages only when the market is in trouble; and, 3) A government role in the housing market at all times, but not through government-sponsored entities.
  • Ford to cut debt. Ford (NYSE:F) announced it will cut its debt by another $3B by redeeming all of its outstanding 6.5% cumulative convertible trust preferred securities on March 15. The conversion will result in a Q1 charge of up to $60M, but will cut annualized debt costs by around $190M. The company is working to regain its investment-grade credit rating in the final stage of its four-year turnaround. Shares of Ford rose 1.2% in after-hours trading.
  • Tilson gives up on Netflix shorts. Hedge fund manager Whitney Tilson confirmed he's giving up his highly-publicized short position in Netflix (NASDAQ:NFLX). Tilson said the decision was prompted by a strong quarter that weakened his investment thesis, a survey that showed high customer satisfaction with Netflix's streaming service, and CEO Reed Hastings' revealing letter, which led Tilson to question his assumptions. Tilson had hinted at such a change of heart in a recent letter to investors.
  • Google in talks to buy video site. Google (NASDAQ:GOOG) is said to be in late-stage talks to buy video website Next New Networks, with a deal announcement possible in the coming week. With a price range expected to be in the tens of millions of dollars, the acquisition certainly wouldn't break the bank for Google; the potential deal is significant because it marks Google's latest effort to keep YouTube ahead of competition from Hulu and Netflix (NFLX), and highlights how internet companies are racing to gain scale in media as growth slows in other key areas. Premarket: GOOG -0.6% (7:00 ET).
  • Kinder Morgan beats IPO expectations. In its initial public offering, Kinder Morgan (NYSE:KMI) sold a more-than-expected 95.5M shares at a higher-than-expected price of $30 each, raising around $2.86B in the largest U.S. energy IPO since 1998. Kinder Morgan had originally planned to sell 80M shares for $26-29 each.

Earnings: Thursday After Close

  • Atheros Communications (NASDAQ:ATHR): Q4 EPS of $0.57 beats by $0.07. Revenue of $227M (+22% Y/Y) beats by $5M. Shares +0.3% AH. (PR)
  • Cheesecake Factory (NASDAQ:CAKE): Q4 EPS of $0.36 beats by $0.01. Revenue of $417M (+4% Y/Y) in-line. Shares -1.2% AH. (PR, earnings call transcript)
  • Cephalon (NASDAQ:CEPH): Q4 EPS of $2.19 beats by $0.25. Revenue of $771M (+34% Y/Y) beats by $40M. Shares -0.2% AH. (PR, earnings call transcript)
  • Expedia (NASDAQ:EXPE): Q4 EPS of $0.32 misses by $0.04. Revenue of $808M (+16% Y/Y) beats by $7M. Shares -12.7% AH. (PR, earnings call transcript)
  • Ingram Micro (NYSE:IM): Q4 EPS of $0.71 beats by $0.04. Revenue of $9.9B (+12% Y/Y) beats by $0.3B. Shares -3.8% AH. (PR, earnings call transcript)
  • Kraft (KFT): Q4 EPS of $0.46 in-line. Revenue of $13.7B (+30% Y/Y) beats by $0.3B. Shares -1.9% AH. (PR, earnings call transcript)
  • Rackspace Hosting (NYSE:RAX): Q4 EPS of $0.10 in-line. Revenue of $215M (+27% Y/Y) beats by $4M. Shares -0.6% AH. (PR)
  • Republic Services (NYSE:RSG): Q4 EPS of $0.42 in-line. Revenue of $2B (+1.1% Y/Y) in-line. Shares -4.6% AH. (PR, earnings call transcript)
  • Taubman Centers (NYSE:TCO): Q4 EPS of $1.06 beats by $0.09. Shares +0.1% AH. (PR)
  • Wynn Resorts (NASDAQ:WYNN): Q4 EPS of $0.91 beats by $0.25. Revenue of $1.2B (+53% Y/Y) beats by $0.11B. Shares -1.1% AH. (PR, earnings call transcript)

Today's Markets

  • In Asia, Japan -0.1% to 10606. Hong Kong +0.5% to 22829. China +0.3% to 2828. India +1.5% to 17729.
  • In Europe, at midday, London -0.3%. Paris -1.0%. Frankfurt -0.2%.
  • Futures at 7:00: Dow -0.3%. S&P -0.4%. Nasdaq -0.4%. Crude +0.4% to $87.11. Gold -0.1% to $1361.10.

Friday's Economic Calendar

The SA Currents team contributed to this post.


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