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  • Applied Materials to buy Varian for $4.9B. Applied Materials (NASDAQ:AMAT) agreed to acquire Varian Semiconductor Equipment Associates (NASDAQ:VSEA) for $4.9B, or $63 a share. The price represents a 55% premium to Varian's closing price yesterday of $40.55. Applied is betting that demand for energy-efficient technology and popular gadgets such as smartphones will drive growth at the combined company. The acquisition would be one of the largest recent deals between companies that make equipment used in the manufacture of integrated circuits. Applied expects to fund the transaction with a combination of existing cash balances and debt. Premarket: VSEA +50.4% to $61 (6:40 ET).
  • ConAgra Foods takes $4.9B bid to Ralcorp's shareholders. ConAgra Foods (NYSE:CAG) has made a public $4.9B offer for Ralcorp Holdings (RAH) after the latter rejected an in initial bid made in March. ConAgra has raised its offer to $86 a share from $82 for the cereal and bakery products maker and will also assume $2.5B in debt. ConAgra believes the proposed combination will result in approximately $250M in annual cost savings by the third year after closing. Premarket: RAH +16.4% to $97, suggesting investors expect ConAgra to ultimately come back with a better offer.
  • U.S. hits Deutsche Bank with $1B lawsuit. The Justice Department is suing (.pdf) Deutsche Bank (NYSE:DB) for over $1B, accusing the German bank of 'recklessly' lying about the quality of loans made by its MortgageIT unit and guaranteed by the government. Among the allegations: when an outside auditor found problems in the mortgages, the findings were literally shoved in a closet. Deutsche Bank said the claims were 'unfair' and that 90% of the activity covered by the accusations occurred before Deutsche bought MortgageIT. Meanwhile, U.S. prosecutors are reviewing the findings of a Senate report that heavily criticized Deutsche Bank and Goldman Sachs (NYSE:GS) for their actions in the lead up to the financial crisis.
  • Glencore valued at $60B in IPO pricing. Glencore has priced its long-awaited IPO at £4.80-£5.80 ($7.90-$9.55) a share, valuing the commodities trading house at $60B at the mid-point of the price range. Glencore hopes to raise up to $11B in London and Hong Kong and has struck agreements with cornerstone investors, who will take up around 31% percent of the total offer. Abu Dhabi's IPIC Aabar will be the largest with a committment of $850M. However, one commodities broker says Glencore's listing may be coming too late, as commodities prices are set for a sustained correction. Ahead of the IPO, Glencore yesterday increased a loan refinancing by $3.5B to $11.88B on “strong demand.”
  • Portugal secures €78B bailout. Portugal has reached a deal with the EU and IMF for a €78B ($116B) three-year bailout that sets a target of reducing the budget deficit to 3% of GDP by 2013 from 9.1% last year. Details of the interest payments for Portugal's loans weren't disclosed, although caretaker Prime Minister Jose Socrates says the agreement is less severe than those of Ireland and Greece. While a previous austerity plan helped bring down the government and sparked an election for next month, the opposition helped create the EU-IMF package and the main leader said he will support it.
  • Time Warner Q1 profit slips. Time Warner's (NYSE:TWX) Q1 2011 adjusted EPS slipped to $0.58 from $0.61 even as revenues rose 6% to $6.7B, reflecting growth at its Networks segment. The company continues to expect that its full-year 2011 adjusted EPS will grow in "the low teens" from the 2010 figure of $2.41.
  • Green Mountain gains altitude on sizzling Q2. Shares in Green Mountain (NASDAQ:GMCR) soared 19% post market after the company, which makes brewing systems for hot drinks, reported Q2 2011 earnings that beat expectations and increased its full-year outlook. Green Mountain now expects to earn $1.43-$1.50 a share, well above analysts' forecasts and the company's previous estimate of $1.19-$1.29. In Q2, revenue and net profit more than doubled to $647.7M and $65.4M respectively, partly helped by price hikes and the acquisition of Van Houtte. Separately, Green Mountain plans to offer 7.1M shares in an underwritten public offering, but as the surge in the company's stock shows, investors seem unfazed by the dilution.
  • Comcast puts on good Q1 show. Comcast's (NASDAQ:CMCSA) shares rose 2.5% in post-market trading after the country's largest cable TV company reported Q1 2011 earnings that beat expectations, with net income rising 9% to $943M and revenue jumping 32% to $12.1B. Comcast's performance was boosted by good results at its cable operations and its newly acquired NBC Universal unit. One investment manager was particularly pleased with Comcast's show, noting "bondholders can take a lot of comfort in the results."
  • CBS rises as Q1 beats forecasts; doubles dividend. Shares in CBS climbed 5% in post-market trading after the TV broadcaster reported Q1 2011 earnings that beat forecasts and said it was doubling its dividend to $0.10 a share. While revenue slipped 1% to $3.5B, CBS swung to a net profit of $202M from a loss a year earlier by overhauling unprofitable businesses. Ad sales grew, although CBS is looking to lessen its dependence on this revenue stream by selling its content for downloading on the Internet, a strategy that one analyst said would make the company 'more balanced.' (Earnings call transcript)
  • GE again puts $3B railcar leasing unit up for sale. General Electric (NYSE:GE) is attempting to sell its railcar leasing business, which could be worth over $3B, a source said. In what is the second attempt in three years to offload the unit, GE has sent information to potential buyers and expects to receive initial bids next week. The auction comes as the conglomerate trims its GE Capital unit and refocuses on its industrial businesses. GE last tried to sell its railcar leasing operations in 2008 but failed to secure a deal because of financing problems due to the credit crisis.

Earnings: Wednesday Before Open

  • AOL (NYSE:AOL): Q1 EPS of $0.04 vs consensus of $0.19. Revenue of $551M (-17% Y/Y) beats by $15M. (PR)
  • Quanta Services (NYSE:PWR): Q1 EPS of -$0.08 misses by $0.12. Revenue of $849M (+13.5% Y/Y) beats by $48M. (PR)
  • R.R. Donnelley & Sons Company (NASDAQ:RRD): Q1 EPS of $0.33 misses by $0.04. Revenue of $2.58B (+7% Y/Y) in-line. (PR)
  • Talisman Energy (NYSE:TLM): Q1 EPS of $0.15 vs consensus of $0.25. (PR)

Earnings: Tuesday After Close

  • American Capital Strategies (NASDAQ:ACAS): Q1 EPS of $0.19 beats by $0.01. Shares +4.73% AH. (PR)
  • American Medical Systems (NASDAQ:AMMD): Q1 EPS of $0.33 beats by $0.03. Revenue of $141M (+4% Y/Y) beats by $4M. Shares +0.10% AH. (PR)
  • Avis Budget Group (NASDAQ:CAR): Q1 EPS of $0.11 beats by $0.06. Revenue of $1.2B (+4% Y/Y) in-line. Shares +2.10% AH. (PR)
  • Brigham Exploration Company (BEXP): Q1 EPS of $0.29 beats by $0.04. Revenue of $76M (+158% Y/Y) in-line. Shares -1.76% AH. (PR)
  • CBS (NYSE:CBS): Q1 EPS of $0.29 beats by $0.10. Revenue of $3.5B (-6% Y/Y) in-line. Shares +4.44% AH. (PR)
  • Century Aluminum Company (NASDAQ:CENX): Q1 EPS of $0.25 misses by $0.04. Revenue of $326M (+14% Y/Y) misses by $9M. Shares +0.92% AH. (PR)
  • Cephalon (NASDAQ:CEPH): Q1 EPS of $2.09 beats by $0.05. Revenue of $736M (+28% Y/Y) misses by $15M. (PR)
  • Charles River Laboratories International (NYSE:CRL): Q1 EPS of $0.61 beats by $0.06. Revenue of $286M (-2% Y/Y) beats by $7M. Shares -0.65% AH. (PR)
  • Comcast (CMCSA): Q1 EPS of $0.36 beats by $0.02. Revenue of $12.13B (+32% Y/Y) misses by $1B. Shares =1.84% AH.(PR)
  • DigitalGlobe (NYSE:DGI): Q1 EPS of $0.02 in-line. Revenue of $77M (+% Y/Y) in-line. (PR)
  • Exco Resources (NYSE:XCO): Q1 EPS of $0.13 vs.consensus of $0.12. Revenue of $161M (+23% Y/Y) misses by $14M. (PR)
  • Exelixis (NASDAQ:EXEL): Q1 EPS of -$0.24 misses by $0.05. Revenue of $36M (-15% Y/Y) misses by $1M. (PR)
  • First Solar (NASDAQ:FSLR): Q1 EPS of $1.33 beats by $0.17. Revenue of $567M (+% Y/Y) beats by $23M. Shares -2.35% AH. (PR)
  • Genco Shipping & Trading Limited (GNK): Q1 EPS of $0.38 misses by $0.01. Revenue of $101M (+7% Y/Y) misses by $5M. Shares -2.96% AH. (PR)
  • Genworth Financial (NYSE:GNW): Q1 EPS of $0.20 misses by $0.01. Revenue of $2.6B (+6% Y/Y) in-line.(PR)
  • Great Plains Energy (NYSE:GXP): Q1 EPS of $0.01 misses by $0.01. Revenue of $493M (-3% Y/Y) misses by $21M. (PR)
  • Green Mountain Coffee Roasters (GMCR): Q2 EPS of $0.48 beats by $0.10. Revenue of $648M (+101% Y/Y) beats by $19M. Shares +15.55% AH. (PR)
  • Harris (NYSE:HRS): Q3 EPS of $1.16 beats by $0.01. Revenue of $1.4B (+6% Y/Y) misses by $1B. (PR)
  • Jack Henry & Associates (NASDAQ:JKHY): Q3 EPS of $0.38 in-line. Revenue of $240M (+12% Y/Y) misses by $2M. (PR)
  • Jazz Pharmaceuticals (NASDAQ:JAZZ): Q1 EPS of $0.59 beats by $0.02. Revenue of $51M (+45% Y/Y) in-line. Shares -0.38% AH. (PR)
  • Kinross Gold (NYSE:KGC): Q1 EPS of $0.16 beats by $0.02. Revenue of $937M (+43% Y/Y) beats by $28M. Shares +1.14% AH. (PR)
  • Las Vegas Sands (NYSE:LVS): Q1 EPS of $0.37 misses by $0.07. Revenue of $2.1B (+58% Y/Y) in-line. Shares -9.55% AH.(PR)
  • McKesson (NYSE:MCK): Q1 EPS of $1.66 beats by $0.06. Revenue of $28.9B (+8% Y/Y) in-line. Shares -1.72% AH. (PR)
  • Myriad Genetics (NASDAQ:MYGN): Q3 EPS of $0.31 beats by $0.06. Revenue of $102M (+13% Y/Y) beats by $4M. (PR)
  • Molex (NASDAQ:MOLX): Q3 EPS of $0.22 vs. consessus of $0.42. Revenue of $875M (+16% Y/Y) beats by $3M. Shares -0.01% AH.(PR)
  • Motricity (MOTR): Q1 EPS of $0.03 beats by $0.01. Revenue of $32M (+11% Y/Y) in-line. Shares -12.18% AH. -11.40% AH. (PR)
  • Open Solutions (NASDAQ:OPEN): Q1 EPS of $0.28 beats by $0.05. Revenue of $33M (+59% Y/Y) in-line. Shares -7.67% AH. (PR)
  • Peet's Coffee & Tea (NASDAQ:PEET): Q1 EPS of $0.41 beats by $0.07. Revenue of $89M (+9% Y/Y) in-line. shares -2.03% AH. (PR)
  • Plantronics (NYSE:PLT): Q4 EPS of $0.61 beats by $0.01. Revenue of $173M (+7% Y/Y) beats by $3M. Shares -11.92% AH. (PR)
  • Pioneer Natural Resources Company (NYSE:PXD): Q1 EPS of $0.68 vs consensus of $0.51. Revenue of $528M (+4% Y/Y) misses by $6M. Shares -0.94% AH. (PR)
  • Quest Software (NASDAQ:QSFT): Q1 EPS of $0.20 misses by $0.09. Revenue of $188M (+10% Y/Y) misses by $10M. Shares -15.93% AH. (PR)
  • Sonus Networks (NASDAQ:SONS): Q1 EPS of -$0.04 misses by $0.04. Revenue of $67M (+8% Y/Y) beats by $3M. (PR)
  • TECO Energy (NYSE:TE): Q1 EPS of $0.24 vs. consensus of $ 0.30. Revenue of $796M (-13% Y/Y) misses by $84M. Shares (PR)
  • Thoratec (NASDAQ:THOR): Q1 EPS of $0.34 beats by $0.01. Revenue of $100M (+2% Y/Y) in-line. (PR)
  • THQ (THQI): Q4 EPS of $0.15 beats by $0.04. Revenue of $249M (+30% Y/Y) misses by $6M. Shares +4.61% AH. (PR)
  • UnumProvident (NYSE:UNM): Q1 EPS of $0.69 misses by $0.01. Revenue of $2.5B (+1% Y/Y) in-line. Shares -0.08% AH. (PR)
  • ValueClick (VCLK): Q1 EPS of $0.21 beats by $0.03. Revenue of $117M (+22% Y/Y) beats by $2M. Shares +1.34% AH. (PR)
  • Vertex Pharmaceuticals (NASDAQ:VRTX): Q1 EPS of -$0.91 beats by $0.18. Revenue of $74M (+229% Y/Y) beats by $49M. Shares +0.57% AH. (PR)
  • XL Group (NYSE:XL): Q1 EPS of -$0.52 misses by $0.07. (PR)
  • Yamana Gold (NYSE:AUY): Q1 EPS of $0.21 misses by $0.01. Revenue of $476M (+38% Y/Y) misses by $44M. Shares -0.50% AH. (PR)

Today's Markets

  • In Asia, Japan closed. Hong Kong -1.3% to 23324. China -2.2% to 2867. India -0.4% to 18461.
  • In Europe, at midday, London -0.9%. Paris -0.4%. Frankfurt -0.4%.
  • Futures at 7:00: Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude flat at $111.04. Gold -0.3% to $1535.80.

Wednesday's Economic Calendar

The SA Currents team contributed to this post.


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