Investors run for cover as Amazon misses forecasts. It's not as bad as the bloodbath that hit Netflix (NFLX) yesterday - yet - but Amazon's (AMZN) shares dropped 11.3% post-market after the company said Q3 EPS plunged 73% to $0.14, way below analyst forecasts of around $0.25. Revenues jumped 44% to $10.9B, but Amazon's bottom line was hit by a 48% surge in operating expenses to $10.8B as the company continued its program of investing to support growth. Amazon also spooked investors with its Q4 forecast, when, it said, it could even make an operating loss of up to $200M. And while sales of the Kindle Fire tablet have exceeded expectations, many suspect Amazon is making no profit on the $199 device.
Expectations low for EU summit, Italian government faces collapse. EU leaders are due to meet again today to try to forge a comprehensive plan to solve the Eurozone debt crisis, but following the cancellation of a meeting of finance ministers and comments from a senior official yesterday, the parley is unlikely to lead to a final agreement, as intially hoped. Countries remain profoundly divided over critical aspects of the deal, including how to boost the eurozone's bailout fund. Making matters worse, Italy's government is in danger of collapsing over EU demands for reform, which is a prerequisite for the grand plan to proceed. EU shares are sanguine in midday trading, but Italy's short-term borrowing costs hit a three-year high in an auction today.
IBM names Virginia Rometty as its first female CEO. IBM (IBM) global sales chief Virginia Rometty is set to become one of the most powerful women in corporate America after being appointed to replace Sam Palmisano as CEO on January 1. Rometty, who has been at IBM for almost 30 years, made her mark when she led the 2002 integration of PWC's consulting arm, which turned IBM from a pure technology provider into seller of strategic advice. Rometty's appointment follows that of Meg Whitman at H-P (HP), and brings to 16 the number of female CEOs at Fortune 500 companies. Palmisano will remain at IBM as Chairman.
Nokia provides a Window to the future. Looking to recover vast swathes of territory lost to Apple (AAPL), Google (GOOG) and Samsung (OTC:SSNLF), Nokia (NOK) today unveiled the Lumia 800 and the Lumia 710, the first phones to run on Microsoft's Windows operating system. The handsets, described by one analyst as unexceptional, will go on sale in key European markets by Christmas. Nokia also launched Asha, a family of four low-end Symbian feature phones for the Asian markets. Asha is Hindi for "hope" - it's probably what Nokia should have called its Windows phones.
Ex-Goldman director set to be charged. Federal prosecutors are today expected to file criminal charges against former McKinsey head and Goldman Sachs (GS) director Rajat Gupta for leaking insider information to Galleon founder Raj Rajaratnam, report say. Gupta is suspected of passing on details of Warren Buffett's $5B investment in Goldman and of the bank's first loss as a listed company. However, Gupta isn't alleged to have received any money or direct benefits in exchange, thereby potentially weakening the government's case.
SAP profit growth tops expectations. SAP has provided further evidence that corporate spending in IT remains strong, saying that underlying profit exceeded forecasts in Q3 with growth of 23% to €1.13B ($1.57B). Revenue increased 28% to €841M, with the key metric of license sales rising 28%. SAP, one of the world's largest providers of business software, reiterated that it will reach the high end of a 10%-14% growth range for software and related services, and that operating profit will also be at the top end of a €4.45-4.65B range. In addition, SAP said it is considering a share buyback.
KKR plans new $6B Asia fund. Private-equity firm KKR (KKR) intends to raise up to $6B in a second pan-Asia fund in 2012, reports say, joining peers TPG Capital and Bain Capital in seeking new financing for investments in the region. KKR already has a $4B Asia fund, which it closed in 2007, and a $1B China growth fund.
Yahoo steps up CEO search. Yahoo's (YHOO) board is increasing its focus on finding a new CEO, The Wall Street Journal reports, although given that the company is hawking around its core business to prospective buyers, top-notch candidates may be hard to come by. One who is interested, though, is Yahoo director and Akamai (AKAM) President David Kenny. Yahoo is also looking to divest its 40% stake in Alibaba (OTC:ALBCF), which is worth around $14B, and its 35% stake in Yahoo Japan, which is valued at over $6B.
Nomura mulls slashing $1B in costs. Nomura (NMR) is considering cutting expenses by up to $1B as part of a plan to refocus the bank on its profitable businesses in the U.S., Japan and the rest of Asia at the expense of its loss-making European operations. The reductions would represent a reversal of Nomura's expansionist drive during the financial crisis, when it bought Lehman assets in Europe and Asia. Nomura's shares are down 80% since then and the businesses it bought remain unprofitable.
Nasdaq forecasts pick-up in IPOs. Nasdaq OMX (NDAQ) expects 15-20 companies to list in the U.S. by the end of the year despite market volatility acting as a break over the past few months. And with 105 companies filed to go public, Nasdaq's Bruce Aust told Reuters that the market could be "very, very robust" in 2012 if there is a "return to some sense of normalcy." There is even appetite for Chinese companies, notwithstanding the accounting scandals that have hit firms from the country this year.
Ford profit in line. Ford (F) Q3 EPS of $0.46 in-line. Revenue of $31.1B (+16.5% Y/Y) beats by $1.10B.
In Asia, Japan -0.2% to 8748. Hong Kong +0.5% to 19067. China +0.7% to 2427. India flat at 17255.
In Europe, at midday, London +0.1%. Paris +0.5%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.5%. S&P +0.55%. Nasdaq +0.5%. Crude +0.1% to $93.23. Gold +0.7% to $1712.10.
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
8:30 Durable Goods
10:00 New Home Sales
10:30 EIA Petroleum Inventories
Earnings Results: Companies that beat EPS expectations last night and today include Ace (ACE), Broadcom (BRCM), Express Scripts (ESRX), F5 Networks (FFIV), General Dynamics (GD), Panera Bread (PNRA), PM Nabors Industries (NBR), Questcor Pharmaceuticals (QCOR), Manitowoc (MTW), McKesson (MCK), Wellpoint (WLP), Western Union (WU). Those in line include C.H. Robinson (CHRW), NASDAQ OMX Group (NDAQ), Ford (F). Those that missed forecasts include Amazon.com (AMZN), RadioShack (RSH), Human Genome Sciences (HGSI), Medco Health Solutions (MHS). Full real-time earnings coverage here.
Notable earnings before Wednesday's open: ADP, AEP, AGN, ARW, ATI, AVY, BA, BEAV, COP, CPX, DPS, EAT, EXC, F, GD, GLW, HBI, HCBK, HES, HSP, JBLU, JNY, LMT, MHS, MWV, MYL, NDAQ, NOC, OC, PLD, PX, RES, S, SAP, SEE, SO, TMO, UMC, WLP, WYN
Notable earnings after Wednesday's close: ACOM, AEM, AFL, AIZ, AKAM, AMP, ARRS, BDN, BMC, CA, CDNS, CIM, CMO, COG, CYH, DRE, ENTG, EQR, EXXI, GG, HRS, IDCC, ISIL, KBR, LOGI, LSI, NSC, NVLS, OI, OII, ORLY, PMTC, SFSF, SLG, SOA, SPN, SYMC, TER, TEX, TMK, TQNT, V, WRB
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