- Enterprise bids for Duncan Energy. **Breaking: Enterprise Products Partners (EPD) offers $42/share to buy Duncan Energy (DEP), a 29% premium to Duncan's closing price yesterday. More details to follow.
- Libyan unrest roils markets. A former aide to Libyan leader Muammar Gaddafi says it's a 'matter of days' before Gaddafi's regime falls, while Gaddafi promises to fight the rebellion until his 'last drop of blood' even as army units defect. The growing unrest in the country, as well as in Bahrain and the broader region, is roiling markets and boosting oil prices, with crude futures up nearly 9% yesterday to $93.57. A major oil producer, Libya has closed all its ports, and as many as 550K barrels per day of production, or a third of Libya's normal production, may now be shut in. In the meantime, a growing number of oil companies have suspended their operations there, and Eni (E) shut down a pipeline that brings natural gas from Libya across the Mediterranean Sea to Italy.
- Nasdaq mulls rival NYSE bid. Nasdaq OMX Group (NDAQ) is reportedly considering making a rival bid for NYSE Euronext (NYX), as it tries to avoid getting left on the sidelines of a major consolidation among traditional exchanges. Nasdaq may join up with IntercontinentalExchange (ICE) or CME Group (CME) on a joint bid, with ICE said to be the more willing of the two. If Nasdaq finds itself unable to compete with Deutsche Boerse's (OTCPK:DBOEY) $10.2B takeover offer for NYSE, sources say Nasdaq may also consider selling itself or buying another competitor.
- Barclays bests Lehman in court ruling. In a closely-watched case, U.S. Bankruptcy Judge James Peck ruled late yesterday that Lehman Brothers' (OTC:LEHMQ) hurried 2008 sale of much of its U.S. operations to Barclays (BCS) was fair, and Lehman's bankruptcy estate is therefore not entitled to recover an $11B 'windfall.' Lehman had argued that Barclays received a sweetheart deal, buying Lehman's U.S. investment banking and brokerage operations for around $1.85B just days after Lehman's bankruptcy filing. But Peck found that "the sale process may have been imperfect, but it was still adequate under the exceptional circumstances of Lehman Week."
- Huawei wins preliminary ruling against Motorola. China's Huawei Technologies won a preliminary injunction to protect its confidential information, with a federal court barring Motorola Solutions (MSI) from disclosing the information to Nokia Siemens Networks (NOK, SI). However, Motorola Solutions claimed the ruling as a victory as well, and said it was pleased the judge denied Huawei's request to block the $1.2B sale of MSI's networks business to Nokia Siemens. Huawei had argued the sale should be blocked and terms of the deal changed to protect its trade secrets and intellectual property rights.
- H-P falls on sales miss, lower outlook. Hewlett-Packard (HPQ) reported quarterly earnings last night (see details below), beating earnings estimates but falling short on revenue and sales due to weak consumer demand. The company also trimmed its full-year revenue outlook to $130B-131.5B, from a previous $132B-$133.5B. CEO Leo Apotheker said it's "clear that we have isolated areas that we need to improve," but maintained that "H-P is well-positioned to lead the IT industry." Analysts were cautiously optimistic, saying there's "no reason to run away from the stock," but disappointed investors clearly felt otherwise; shares fell 12% in after-hours trading.
- Apple board faces showdown. A group of Apple (AAPL) investors has put forward a resolution that would require the company's board to disclose its plans for eventually replacing CEO Steve Jobs and detailing how the board is nurturing the executive team beneath Jobs. Apple says the resolution, which will be voted on today at the company's annual shareholder meeting, is counterproductive and potentially harmful, and that disclosing confidential plans would aid competitors and make it harder to retain top talent.
- SEC probes private-share trade. The SEC is turning its focus to potential conflicts of interest in the market for trading shares of private companies. Officials are concerned that market makers like SecondMarket and SharesPost could face conflicts of interest, particularly when it comes to setting fair valuations, as they broker between holders of private-company stock and potential buyers. The investigation is in an early-stage but appears to be gathering steam.
- WellPoint boosts buyback. WellPoint (WLP) reaffirmed its FY'11 earnings guidance of at least $6.30/share, and declared a quarterly dividend of $0.25/share. The company also increased its buyback program to $1.6B and plans to utilize the full buyback authorization by the end of the year.
- Suit claims Citi ignored Madoff red flags. According to a recently unsealed lawsuit against Citigroup (C), Madoff trustee Irving Picard claimed the bank accepted repayment of a $300M loan from a Madoff feeder fund even as it "knew or should have known of possible fraud." Picard is trying to recover $430M from Citi, which allegedly ignored multiple 'red flags.' Citi disputes the claim, calling it "entirely without merit and completely false."
- CBS, Netflix in streaming deal. CBS (CBS) and Netflix (NFLX) both tumbled yesterday after announcing the signing of a two-year, non-exclusive agreement to stream select shows from the CBS library over the Netflix service. Financial terms of the agreement, which CBS has an option to extend for an additional two years, were not disclosed. Netflix's shares were also down after Amazon (AMZN) announced earlier in the day that it had launched an unlimited streaming-video service, putting it into more direct competition with Netflix. In yesterday's trading, CBS -4.1%, NFLX -5.9%.
Earnings: Wednesday Before Open
- Lowe's (LOW): Q4 EPS of $0.21 beats by $0.03. Revenue of $10.4B (+3.1% Y/Y) in-line. (PR)
- Quanta Services (PWR): Q4 EPS of $0.16 in-line. Revenue of $1.1B (+12% Y/Y) beats by $0.1B. (PR)
- Toll Brothers (TOL): FQ1 EPS of $0.02 beats by $0.09. Revenue of $334M (+2.3% Y/Y) beats by $17M. (PR)
Earnings: Tuesday After Close
- Chesapeake Energy (CHK): Q4 EPS of $0.70 beats by $0.07. Revenue of $2B (-11% Y/Y) misses by $0.4B. Shares +0.1% AH. (PR)
- Exelixis (EXEL): Q4 EPS of -$0.16 beats by $0.05. Revenue of $40.8M (-7.5% Y/Y) misses by $8.2M. Shares -1.2% AH. (PR,earnings call transcript)
- Hertz Global Holdings (HTZ): Q4 EPS of $0.10 beats by $0.03. Revenue of $1.83B (+5.5% Y/Y) in-line.. Shares +0.9% AH. (PR)
- Hewlett-Packard (HPQ): FQ1 EPS of $1.36 beats by $0.07. Revenue of $32.3B (+936% Y/Y) misses by $0.65B. Shares -10.6% premarket. (PR,earnings call transcript)
- Leap Wireless International (LEAP): Q4 EPS of -$3.28 may not be comparable with consensus of -$1.10. Revenue of $708M (+13% Y/Y) beats by $76M. Shares -2.7% AH. (PR)
- Questar (STR): Q4 EPS of $0.36 beats by $0.04. Revenue of $363M (+5% Y/Y) beats by $62M. (PR)
- RadioShack (RSH): Q4 EPS of $0.51 misses by $0.02. Revenue of $1.37B (+4% Y/Y) in-line. Shares -1.1% AH. (PR)
- In Asia, Japan -0.8% to 10579.1. Hong Kong -0.4% to 22907. China +0.3% to 2863. India -0.6% to 18178.
- In Europe, at midday, London -0.5%. Paris +0.2%. Frankfurt -0.3%.
- Futures at 7:00: Dow +0.4%. S&P +0.4%. Nasdaq +0.5%. Gold +0.1% to $1401.90.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 Existing Home Sales
1:00 PM Results of $35B, 5-Year Note Auction
- Notable earnings before Wednesday's open: AMT, CHS, DLTR, DNR, DTV, FLR, FTR, GRMN, LOW, PWR, SKS, SNH, TJX, TOL
- Notable earnings after Wednesday's close: AUY, AVGO, GSS, HLX, HT, IDCC, LTD, RIG, TLCR, TS, XCO
The SA Currents team contributed to this post.
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