- Lloyds posts hefty Q1 loss. Lloyds's (LYG) shares are -8.7% premarket after the company said that it made a £2.44B ($4B) net loss in Q1 2011 (.pdf) after setting aside £3.2B to cover the potential costs of customer payouts over mis-sold payment-protection insurance. This follows a court ruling two weeks against an appeal by banks over the matter and following discussions with regulators. Underlying revenue at the U.K. bank slipped to £5.2B from £5.9B, reflecting lower banking net-interest margins, which are being squeezed by its higher funding costs, as well as losses on sales of non-core treasury assets.
- GOP and Democrats to meet on debt ceiling. Vice President Joe Biden is due to lead a bipartisan meeting today as the Democrats and the Republicans look to forge a deal that will raise the U.S.'s $14.3T debt limit by August 2 in order to avoid a default. The sides are considering an agreement that would enact strict deficit targets and some spending cuts to win Republican votes for lifting the ceiling, while deferring contentious decisions about Medicare, Medicaid and taxes until after the 2012 elections. The Treasury has reportedly told legislators that it would need a $2T rise in the debt limit to ensure that the government can keep borrowing through the 2012 presidential election; the Treasury plans to issue $72B in new long-term debt next week, auctions that will take the government right up to its ceiling.
- Social network Renren soars on debut. Shares in Chinese social network Renren (RENN) soared 29% on their debut on the NYSE in an IPO that is seen as a prelude to a Facebook listing. Renren, which means everyone in Chinese, raised $743.4M after issuing 53.1M ADSs at $14 each. Shares closed at $18.01, giving the unprofitable firm a market cap of $7.4B, or slightly over 80 times annualized revenues. That's well above Facebook, valued at 35 times last year's sales in gray market trading. "There is no doubt this just adds to the allure to a potential Facebook IPO," said a Morningstar IPO strategist.
- News Corp profit slumps 24%. News Corp's (NWS) FQ3 net profit dropped to $639M from $839M last year, when the blockbuster movie 'Avatar" boosted results. The bottom line was also hit by the settling of an $80M lawsuit at its publishing division, while revenue dropped 6% to $8.26B. With earnings missing expectations, shares slid 2.8% in after-hours trading. On a conference call, COO Chase Carey expressed caution about News Corp's pending $12.4B offer for the 61% of British Sky Broadcasting (OTC:BSYBY) it doesn't own. Last June, News Corp bid £7 a share ($11.56) but the stock is now well above that, closing at £8.45 yesterday. "We will pursue other options with our capital if we can't reach a reasonable deal," Carey said.
- Avon widens bribery probe. As Avon Products (AVP) heads into its annual meeting today, a top concern is expected to be an internal investigation into the bribery of foreign officials. The company has widened the probe beyond its initial China focus, and has reportedly discovered millions of dollars of questionable payments to officials in Brazil, Mexico, Argentina, India and Japan. Following irregular payments in China, Avon has fired its former head of global internal audit and security, and three top executives in the country. On Tuesday, Avon reported that Q1 2011 earnings more than tripled as revenue jumped 7.5% to $2.63B.
- Warner Music close to sale. Warner Music Group (WMG) could reach an agreement to sell itself today, when its board will meet to make a decision after receiving final-round offers this week. Sources said that Access Industries, a conglomerate controlled by investor Len Blavatnik, was the leading bidder late yesterday with an offer that would value Warner at around $3.3B including the assumption of debt. However, the deal hasn't been finalized and could be beaten by a higher last-minute offer.
- Ralcorp rejects ConAgra, adopts poison pill. Ralcorp (RAH) has rejected an increased $4.9B bid from ConAgra Foods (CAG) and adopted a shareholder rights plan, or 'poison pill,' to resist the takeover. Ralcorp, which makes private-label store-branded products such as pasta, cereals and cookies, has other tools as well to scuttle a deal. However, ConAgra and Ralcorp have significant overlap among their shareholders, and a source says some of those investors have shown support for a merger.
- Glencore IPO fully covered.Glencore's $11B IPO in London and Hong Kong was fully covered on the first day, sources said, with investors placing orders for all the shares on offer, including a 10% overallotment option. The commodities trading house yesterday priced its IPO at £4.80-£5.80 ($7.90-$9.55) a share, valuing the company at around $60B at the mid-point. The listing is set to makes five of its executives billionaires.
- Silver corrosion continues. Silver prices are set for their fifth straight day of losses, with July silver falling 1.7% to $38.72 per troy ounce in late East Asian trading. The slide came after CME Group raised margin requirements by another 33%; overall, CME, the main U.S. metals exchange, will have increased margin requirements by 84% in two weeks, spread over four separate changes.
- States urge court to quash Obama's health law. Twenty-six states have filed an appeals court motion to uphold an earlier ruling which found that requiring nearly all Americans to carry health insurance is unconstitutional. The filing comes about a month after the Justice Department appealed the earlier ruling. The issue looks to be playing out along party lines in the courts, as two judges who ruled against the law were both GOP appointees and three judges that have upheld the act were Democratic appointees. A panel of three randomly selected judges is set to consider oral arguments in the appeals court case in June.
Earnings: Thursday Before Open
- CIGNA (CI): Q1 EPS of $1.37 beats by $0.28. Revenue of $5.41B (+4% Y/Y) beats by $0.03B. (PR)
- CVS Caremark (CVS): Q1 EPS of $0.57 beats by $0.02. Revenue of $25.88B (+9% Y/Y) beats by $0.01B. (PR)
- Fortress Investment Group LLC (FIG): Q1 EPS of -$0.58 vs consensus of $0.15. Revenue of $244M (+18% Y/Y) beats by $34M. (PR)
- Huntsman (HUN): Q1 EPS of $0.47 beats by $0.23. Revenue of $2.67B (+28% Y/Y) beats by $0.29B. (PR)
- NRG Energy (NRG): Q1 EPS of -$1.06 misses by $1.17. Revenue of $1.99B (-10% Y/Y) misses by $0.32B.
- ON Semiconductor (ONNN): Q1 EPS of $0.27 beats by $0.07. Revenue of $870M (+50% Y/Y) beats by $40M. Shares +3.6% premarket. (PR)
- Petrohawk Energy (HK): Q1 EPS of $0.15 beats by $0.01. Revenue of $492M (+12.3% Y/Y) beats by $16M. (PR)
- PMI Group (PMI): Q1 EPS of -$0.89 vs consensus of-$0.38. Revenue of $136M (-31% Y/Y) misses by $10M. (PR)
- PPL Corp. (PPL): Q1 EPS of $0.84 beats by $0.09. Revenue of $2.91B (-3.2% Y/Y) misses by $0.06B. (PR)
- Teradata (TDC): Q1 EPS of $0.48 beats by $0.02. Revenue of $506M (+18% Y/Y) beats by $16M. Shares -0.4% premarket. (PR)
- Western Refining (WNR): Q1 EPS of $0.17 beats by $0.13. Revenue of $1.83B (-4% Y/Y) beats by $0.18B. Shares -1.55% premarket. (PR)
Earnings: Wednesday After Close
- Ace (ACE): Q2 EPS of $0.79 beats by $0.16. Revenue of $3.4B (-4% Y/Y) in-line. Shares +0.8% AH. (PR)
- ARIAD Pharmaceuticals (ARIA): Q1 EPS of -$0.29 misses by $0.16. Shares -3.7% AH. (PR)
- Atmel (ATML): Q1 EPS of $0.16 beats by $0.01. Revenue of $461M (+8% Y/Y) beats by $8M. Shares +0.1% AH. (PR)
- Biomed Realty Trust (BMR): Q1 EPS of $0.30 in-line. Revenue of $106M (+14% Y/Y) in-line. (PR)
- BMC Software (BMC): FQ4 EPS of $0.78 beats by $0.01. Revenue of $562M (+14% Y/Y) beats by $23M. Shares +2.6% AH. (PR)
- Clearwire (CLWR): Q1 EPS of -$0.97 misses by $0.44. Revenue of $258M (+142% Y/Y) beats by $20M. Shares -2.3% AH.
- Concho Resources (CXO): Q1 EPS of $0.79 beats by $0.02. Revenue of $361M (+81% Y/Y) beats by $33M. Shares +3.1% AH.(PR)
- Electronic Arts (ERTS): FQ4 EPS of $0.25 beats by $0.03. Revenue of $995M (+17% Y/Y) beats by $71M. (PR)
- Energy Transfer Partners L.P. (ETP): Q1 EPS of $0.71 misses by $0.31. Revenue of $1.7B (-10% Y/Y) misses by $0.4B. (PR)
- Expeditors International of Washington (EXPD): Q2 EPS of $0.42 beats by $0.05. Revenue of $1.5B (+22% Y/Y) in-line. Shares +1.9% AH. (PR)
- Goldcorp (GG): Q1 EPS of $0.50 beats by $0.03. Revenue of $1.2B (+70% Y/Y) misses by $0.05B. Shares +1.7% AH. (PR)
- Input/Output (IO): Q1 EPS of $0.03 misses by $0.04. Revenue of $91M (+2% Y/Y) beats by $31M. Shares -11.1% AH. -11.1% AH. PR)
- JDS Uniphase (JDSU): FQ3 EPS of $0.22 beats by $0.02. Revenue of $454M beats by $6M. Shares +10% AH. (PR)
- Kimco Realty (KIM): Q1 EPS of $0.28 misses by $0.02. (PR)
- Leap Wireless International (LEAP): Q1 EPS of -$1.26 misses by $0.19. Revenue of $780M (+14% Y/Y) beats by $41M. Shares +0.04% AH. (PR)
- Liberty Global (LBTYA): Q1 EPS of $1.22 beats by $0.01. Revenue of $2.4B (+12% Y/Y) in-line. (PR)
- MEMC Electronic Materials (WFR): Q1 EPS of $0.09 misses by $0.04. Revenue of $736M (+68.1% Y/Y) beats by $97M. Sees full-year revenue of $2.8-3.1B vs. $3.4B consensus. Shares -0.5% AH. (PR)
- MasTec (MTZ): Q1 EPS of $0.26 beats by $0.02. Revenue of $619M (+37% Y/Y) beats by $47M. (PR)
- MetLife (MET): Q1 EPS of $1.33 beats by $0.07. (PR)
- Murphy Oil (MUR): Q1 EPS of $1.38 beats by $0.38. Shares -3.1% AH.(PR)
- News Corp. (NWS): FQ3 EPS of $0.26 misses by $0.01. Revenue of $8.26B (-6% Y/Y) misses by $0.16B. Shares -3.5% AH. (PR)
- Prudential Financial (PRU): Q1 EPS of $1.69 beats by $0.21. Revenue of $9.2B (+28% Y/Y) beats by $1B. Shares -0.1% AH.(PR)
- Cloud Peak Energy (CLD): Q1 EPS of $0.44 beats by $0.02. Revenue of $357M (+15% Y/Y) beats by $1M. (PR)
- Tesla Motors (TSLA): Q1 EPS of -$0.44 misses by $0.08. Revenue of $49M (+136% Y/Y) beats by $6M. Shares +3.6% AH. (PR)
- Whole Foods Market (WFMI): FQ2 EPS of $0.51 beats by $0.05. Revenue of $2.4B (+12% Y/Y) in-line. Shares +2.9% AH. (PR)
- Williams Companies (WMB): Q1 EPS of $0.36 in-line.(PR)
- Windstream (WIN): Q1 EPS of $0.05 vs. consensus of $0.19. Revenue of $1.02B (+21% Y/Y) in-line. Shares -3.7% AH. (PR)
- In Asia, Japan closed. Hong Kong -0.2% to 23259. China +0.3% to 2873. India -1.6% to 18169.
- In Europe, at midday, London -0.9%. Paris -1.3%. Frankfurt -0.8%.
- Futures at 7:00: Dow -0.4%. S&P -0.4%. Nasdaq -0.4%. Crude -2.35% to $106.67. Gold -0.9% to $1501.80.
Thursday's Economic Calendar
- Thursday's economic calendar:
Chain Store Sales
6:00 Monster Employment Index
7:00 BoE Announcement
7:45 ECB Announcement
8:15 Chicago Fed Banking Conference (Bernanke, Bair, Evans...)
8:30 Initial Jobless Claims
8:30 Productivity and Costs
9:30 Bernanke: Keynote speaker at Chicago Fed conference
10:30 EIA Natural Gas Inventory
1:15 PM Fed's Kocherlakota: Contingent Planning for Monetary Policy
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: AEE, BPO, CI, CNP, CTL, CVC, CVS, DNR, DTV, DPZ, EL, EP, FIG, FO, FTO, FTR, GM, GPOR, HK, HOC, HUN, ING, LYG, NOG, NRG, ONNN, PDE, PEG, PGN, PMI, PNCL, PPL, PXP, RVSN, SLE, SNI, SPR, TDC, VTR, WNR, WWE
- Notable earnings after Thursday's close: AIG, CF, CFN, CIM, CNQ, ED, EGO, EOG, FLR, KFT, KOG, LYV, MCHP, MDRX, PCLN, PKI, QLGC, SD, SAPE, SUN, TIE, TS, V, YOKU
The SA Currents team contributed to this post.
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