- Bernanke navigates first presser. Ben Bernanke avoided any serious gaffes at the first ever post-FOMC press conference by a Fed Chairman. Bernanke said rates would stay at 0-0.25% for another "couple of meetings" at least. He also expects the end of QE2 in June to have little impact on markets. The Fed is wary of doing more to lower unemployment - which it now predicts will fall as low as 8.4% - for fear further stimulus could lead to higher inflation. The Fed now expects inflation to rise 2.8% this year, and for GDP to grow 3.3%. SA contributor Tim Duy thought Bernanke came across 'more hawkish' than he'd anticipated, especially when talking about jobs. Bernanke's comments sent the Nasdaq to a ten-year high, but the dollar fell to a three-year low on the prospect of the bank continuing its loose monetary policy, fueling a rise in crude oil to $113.70, its highest since September 2008.
- Power industry consolidation continues. Electricity company Exelon (NYSE:EXC) will buy rival Constellation Energy Group (NYSE:CEG) for $7.9B in stock, a 12.5% premium - the latest in a series of deals in the power sector. The combo will become the number one competitive energy products and services supplier by load, and the number two residential electricity and gas distribution company. On a conference call Wednesday, Exelon CEO John Rowe declined to comment on the speculated tie-up, but did say that "consolidation... is essential in this industry."
- Quake shockwaves felt in Japan's economy. Last month's disaster led to record drops in factory production and consumer spending in Japan: Output plummeted 15.3% month-on-month following widespread power outages and devastation to Japan's industrial north-east. Spending dropped 8.5% from a year earlier, while deflation predictably continued for the 25th consecutive month as CPI slipped 0.1%. Unemployment remained unchanged at 4.6%, although the figure excludes three prefectures hardest hit by the disasters. Given the state of the economy, the Bank of Japan unsurprisingly left interest rates at 0-0.1% in a bid to support growth.
- NYSE profit strengthens, as does shareholder pressure. NYSE-Euronext (NYSE:NYX) faces investors at its AGM today after reporting improved profits in its Q1 earnings - but most of the focus is likely to be on its potential mergers. Major shareholder Legg Mason (NYSE:LM) joined fellow NYSE investor T. Rowe Price Group (NASDAQ:TROW) in urging NYSE to explore an $11.3B bid led by Nasdaq-OMX (NASDAQ:NDAQ), which is higher than the $10.2B package from Deutsche Boerse (OTCPK:DBOEY). The vote on NYSE directors will tell the tale: Approval of 70% or less would signal dissent, while 90% or above may indicate support for NYSE's strategy.
- Pepsi's profit falls. PepsiCo's (NYSE:PEP) Q1 net profit fell to $0.74 a share from $0.89 a year earlier, hurt by higher costs, although revenue increased to $11.94B from $9.37B. Expectations were for $0.73/share and revenue of $11.7B.
- Starbucks falls despite profit increase. Starbucks' (NASDAQ:SBUX) shares fell 1.9% in AH trading after the coffee retailer said rising dairy and fuel prices would hit earnings more than it previously thought; full-year guidance of $1.46-1.48 a share was short of consensus of $1.49. In FQ2, Starbucks' net income met expectations as it jumped 20% to $0.34 a share, while revenues beat forecasts by increasing nearly 10% to $2.79B. Meanwhile, a new survey shows that Starbucks has moved ahead of Burger King (BKC) to become the third-largest U.S. restaurant chain in domestic sales.
- Q1 GDP seen soft. Economists expect GDP growth to have fallen to 2% or less in Q1 from 3.1% in Q4, as higher food and gasoline prices limited consumer spending. Harsh winter weather and a widening trade gap also probably helped put the brakes on the economy.
- Berkshire abandons Sokol. Berkshire Hathaway (NYSE:BRK.A) said yesterday that former executive David Sokol broke the company's insider-trader laws and misled the firm about his stake in Lubrizol (LZ), which Berkshire is buying for $9B after Sokol recommended the deal to Warren Buffett. The company's audit committee also said Sokol failed to meet his disclosure obligations under state law in Delaware, where Berkshire is incorporated. The report is harsher than Buffett's description of the incident when he first disclosed it in March, with one analyst describing it as "something of a reprimand" to the Berkshire chief for not fully vetting Sokol's trades and statements. The findings come just days before Berkshire's AGM this weekend.
- Panasonic slashes 35,000 jobs. Panasonic (PC) will cut 17,000 jobs over the next two years, or 5% of its workforce, adding to the 18,000 it has already axed over the past year. The cull is one of the biggest in Japanese manufacturing history, and comes as Panasonic's losses swell from restructuring costs and damage from the March earthquake. "The (jobs) figure is huge, but so is the company, and for an old-fashioned one like Panasonic, this is a big move," said one analyst. In fiscal Q4, losses widened to ¥40.7B yen ($499M) from ¥8.89B a year earlier, largely due to ¥61B in restructuring costs.
- Shell net profit soars 60%. Higher oil prices, growth in upstream production and continued cost-cutting helped Shell's (NYSE:RDS.A) Q1 net profit soar 60% to $1.42/share as revenues jumped to $114.84B from $88.03B. An ING analyst said Shell's headline profit numbers were impressive, although its exploration and production division slightly undershot expectations, while some questions remain about whether it can sustain its strong downstream performance.
Earnings: Thursday Before Open
- Aetna (NYSE:AET): Q1 EPS of $1.43 beats by $0.46. Revenue of $8.34B (-2.3% Y/Y) misses by $0.04B. (PR)
- Ball (NYSE:BLL): Q1 EPS of $0.58 beats by $0.10. Revenue of $2.01B (+26.3% Y/Y) beats by $0.12B. (PR)
- Bunge (NYSE:BG): Q1 EPS of $1.49 beats by $0.18. Revenue of $12.19B (+18% Y/Y) beats by $0.10B. (PR)
- Colgate-Palmolive Company (NYSE:CL): Q1 EPS of $1.16 in-line. Revenue of $3.99B (+4.3% Y/Y) beats by $0.08B. (PR)
- Dow Chemical (NYSE:DOW): Q1 EPS of $0.82 beats by $0.15. Revenue of $14.73B (+20% Y/Y) beats by $0.71B. (PR)
- Host Hotels & Resorts, Inc. (NYSE:HST): Q1 EPS of $0.11 misses by $0.01. Revenue of $903M (+9.7% Y/Y) misses by $32M. (PR)
- International Paper (NYSE:IP): Q1 EPS of $0.78 beats by $0.19. Revenue of $6.38B (+10% Y/Y) beats by $0.02B. (PR)
- Iron Mountain (NYSE:IRM): Q1 EPS of $0.26 misses by $0.01. Revenue of $799M (+2.8% Y/Y) beats by $8M. (PR)
- Medco Health Solutions (NYSE:MHS): Q1 EPS of $0.91 beats by $0.03. Revenue of $17.01B (+4.3% Y/Y) misses by $0.05B. (PR)
- NII (NASDAQ:NIHD): Q1 EPS of $0.56 misses by $0.04. Revenue of $1.62B (+26.5% Y/Y) beats by $0.04B. (PR)
- Patterson-UTI Energy (NASDAQ:PTEN): Q1 EPS of $0.46 beats by $0.02. Revenue of $567M (+108% Y/Y) beats by $16M. (PR)
- Potash (NYSE:POT): Q1 EPS of $0.84 beats by $0.04. Revenue of $2.20B (+28.6% Y/Y) beats by $0.19B. Shares +1.42% premarket. (PR)
- Starwood Hotels (NYSE:HOT): Q1 EPS of $0.30 beats by $0.05. Revenue of $1.29B (+9% Y/Y) beats by $0.02B. Shares (PR)
- Time Warner Cable (TWC): Q1 EPS of $0.94 misses by $0.04. Revenue of $4.82B (+5% Y/Y) beats by $0.04B. (PR)
- Tyco International (NYSE:TYC): FQ2 EPS of $0.73 beats by $0.05. Revenue of $3.99B (-2.5% Y/Y) in-line. (PR)
Earnings: Wednesday After Close
- AFLAC (NYSE:AFL): Q1 EPS of $1.63 beats by $0.11. (PR)
- Akamai Technologies (NASDAQ:AKAM): Q1 EPS of $0.38 beats by $0.01. Revenue of $276M (+15% Y/Y) beats by $4M. Shares -0.93% AH. (PR)
- Allstate (NYSE:ALL): Q1 EPS of $0.93 beats by $0.25. Revenue of $6.21B (-7% Y/Y) in-line. Shares +4.07% AH. (PR)
- Arris Group (NASDAQ:ARRS): Q1 EPS of $0.16 misses by $0.01. Revenue of $267M (+0.5% Y/Y) misses by $3M. Shares -7.62% AH.(PR)
- Baidu.com (NASDAQ:BIDU): Q1 EPS of $0.47 beats by $0.02. Revenue of $372M (+89% Y/Y) beats by $5M. Shares +0.44% AH. (PR)
- Brandywine Realty Trust (NYSE:BDN): Q1 EPS of $0.33 beats by $0.01. Revenue of $149M (+5% Y/Y) beats by $7M. (PR)
- Cadence (NASDAQ:CDNS): Q1 EPS of $0.09 beats by $0.01. Revenue of $266M (+20% Y/Y) beats by $6M. (PR)
- Citrix Systems (NASDAQ:CTXS): Q1 EPS of $0.50 beats by $0.08. Revenue of $491M (+19% Y/Y) beats by $16M. Shares +3.5% AH. (PR)
- Community Health Systems (NYSE:CYH): Q1 EPS of $0.67 vs.consensus of $0.79. Revenue of $3.40B (+9% Y/Y) in-line. Shares -3.5% AH. (PR)
- Crown Castle (NYSE:CCI): Q1 EPS of $0.12 beats by $0.04. Revenue of $499M (+12% Y/Y) beats by $14M. (PR)
- Developers Diversified Realty (NYSE:DDR): Q1 EPS of $0.24 beats by $0.03. Revenue of $203M (+4% Y/Y) beats by $1M. (PR)
- Duke Realty (NYSE:DRE): Q1 EPS of $0.28 in-line. Revenue of $387M (+19% Y/Y) beats by $156M. Shares -0.24% AH. (PR)
- eBay (NASDAQ:EBAY): Q1 EPS of $0.47 beats by $0.01. Revenue of $2.54B (+16% Y/Y) in-line. Shares -2.6% AH. (PR, earnings call transcript)
- Equinix (NASDAQ:EQIX): Q1 EPS of $0.53 beats by $0.33. Revenue of $363M (+46% Y/Y) beats by $8M. Shares +2.48% AH. (PR, earnings call transcript)
- Equity Residential (NYSE:EQR): Q1 EPS of $0.56 in-line. Revenue of $521M (+12% Y/Y) beats by $2M. Shares -0.17% AH. (PR)
- Flextronics International (NASDAQ:FLEX): FQ4 EPS of $0.21 misses by $0.01. Revenue of $6.9B (+16% Y/Y) misses by $0.4B. Shares -7.46% AH. (PR)
- Fortinet (NASDAQ:FTNT): Q1 EPS of $0.17 beats by $0.03. Revenue of $93M (+34% Y/Y) beats by $6M. Shares +6.69% AH. (PR)
- InterDigital Communications (NASDAQ:IDCC): Q1 EPS of $0.51 beats by $0.02. Revenue of $79M (-32% Y/Y) beats by $3M. Shares -2.62% AH. (PR)
- International Coal Group (NYSE:ICO): Q1 EPS of $0.10 beats by $0.01. Revenue of $302M (+5% Y/Y) misses by $9M. Shares +1.1% AH. (PR)
- Intersil (NASDAQ:ISIL): Q1 EPS of $0.11 in-line. Revenue of $199M (+5% Y/Y) beats by $2M. Shares +1.35% AH. (PR)
- Lincoln National (NYSE:LNC): Q1 EPS of $1.08 beats by $0.16. Shares +1.61% AH. (PR)
- LSI Logic (NYSE:LSI): Q1 EPS of $0.10 in-line. Revenue of $629M (-1.3% Y/Y) beats by $6M. Shares +2.9% AH. (PR, earnings call transcript)
- Nektar Therapeutics (NASDAQ:NKTR): Q1 EPS of -$0.33 misses by $0.06. Revenue of $11M (-66% Y/Y) misses by $6M. Shares -0.10% AH. (PR)
- Norfolk Southern (NYSE:NSC): Q1 EPS of $1.00 beats by $0.10. Revenue of $2.6B (+17% Y/Y) beats by $1B. Shares +2.69% AH. (PR, earnings call transcript)
- Novellus Systems (NASDAQ:NVLS): Q1 EPS of $1.04 beats by $0.01. Revenue of $413M (+50% Y/Y) beats by $3M. (PR, earnings call transcript)
- Owens-Illinois (NYSE:OI): Q1 EPS of $0.47 beats by $0.02. Revenue of $1.72B (+11% Y/Y) in-line. Shares +0.91% AH. (PR)
- Parametric (PMTC): FQ2 EPS of $0.26 beats by $0.01. Revenue of $269M (+16% Y/Y) beats by $3M. Shares +1% AH. (PR)
- Qiagen (NASDAQ:QGEN): Q1 EPS of $0.21 in-line. Revenue of $264M misses by $5M. Shares -0.97% AH.(PR)
- Service International (NYSE:SCI): Q1 EPS of $0.17 beats by $0.01. Revenue of $580M (+9% Y/Y) beats by $12M. (PR)
- Starbucks (SBUX): FQ2 EPS of $0.34 in-line. Revenue of $2.8B (+10% Y/Y) in-line. Shares -1.7% AH. (PR, earnings call transcript)
- Talecris Biotherapeutics Holdings (NASDAQ:TLCR): Q1 EPS of $0.45 beats by $0.03. Revenue of $407M (+7% Y/Y) misses by $3M. (PR)
- TriQuint Semiconductor (TQNT): Q1 EPS of $0.15 in-line. Revenue of $224M (+24% Y/Y) beats by $3M. Shares -6.53% AH. (PR, earnings call transcript)
- Varian Medical Systems (NYSE:VAR): FQ2 EPS of $0.86 beats by $0.01. Revenue of $648M (+11% Y/Y) beats by $9M. (PR, earnings call transcript)
- Whiting Petroleum (NYSE:WLL): Q1 EPS of $0.84 misses by $0.05. Revenue of $432M (+23% Y/Y) beats by $21M. (PR)
- Xilinx (NASDAQ:XLNX): FQ4 EPS of $0.59 beats by $0.07. Revenue of $588M (+11% Y/Y) beats by $10M. Shares +2.13% AH. (PR, earnings call transcript)
- Asia: Japan +1.6%. Hong Kong -0.4%. China -1.3%. India -0.8%.
- Europe at midday: London flat. Paris +0.6%. Frankfurt +0.4%.
- Futures at 7:00: S&P flat. 10-yr +0.21%. Euro +0.1% vs. dollar. Crude -0.15% to $112.59. Gold +1% to $1532.
Thursday's Economic Calendar
8:30 GDP Q1
8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: ABC, AET, AHL, APA, AVT, BC, BG, BLL, BMS, BMY, BWA, CAH, CAM, CCE, CELG CL, CLI, CMS, CNX, CRUS, D, DISCA, DLR, DOW, EQT, HGSI, HOT, HP, HST, IP, IPG, IRM, KBR, LINE, MFA, MHS, MJN, MSI, NBL, NHD, OCR, OMX, ORI, OSK, OXY, PEP, PG, PHM, POT, PTEN, RCL, RTN, S, SAP, SNH, SWY, TWC, TYC, VIA.B, WM, XEL, XOM, ZMH
- Notable earnings after Thursday's close: AEM, AMKR, ARBA, BEXP, CAVM, CBL, CLF, CROX, CSTR, DECK, DOX, EMN, EXPE, GSIC, HLIT, IM, KEG, KLAC, LEG, MMI, MSFT, MTW, MWW, NCR, PMCS, RGC, RMD, RSG, SBAC, SWKS, SWN, TSO, VRSN, VSEA, WFR
The SA Currents team contributed to this post.
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