By Yigal Grayeff and the Market Currents team
EU rejects creditor offer on Greek debt. Eurozone finance ministers have resumed their meeting today after yesterday rejecting an offer from Greece's private creditors over the country's loan restructuring on concerns that the debt still wouldn't be sustainable over the long term. The sides are still haggling over the interest Greece will pay on new long-term bonds, with creditors wanting 4% but Greece, Germany and others arguing for below 3.5%.
TI earnings fall but demand starts to revive. Texas Instruments' (NASDAQ:TXN) Q4 net EPS slumped 68% to $0.25 and its revenue slipped 3% to $3.42B, although the company beat Street estimates and said it has experienced a broad resumption of demand in December and January. The company provided Q1 EPS guidance below analyst estimates but said the weak forecast was due to a decline at its baseband chip segment, which it intends to close by the end of the year. Shares climbed 3.6% in AH trading.
Nokia plunges on STMicro warning. Nokia (NYSE:NOK) shares dropped 7.5% premarket after STMicroelectronics (NYSE:STM) warned that Q1 revenue will fall by up to 10% quarter-on-quarter due to lagging sales at a joint venture that makes components for Nokia phones. STMicroelectronics also reported a Q4 EPS loss of $0.01, which missed expectations, and said that revenue fell 2.5% year-on-year to $2.19B, which was in line. The company's shares were -4%.
Apple's profit seen rising but sustainabilty is a concern. Despite missing analyst forecasts in its previous results, Apple (NASDAQ:AAPL) is expected to report a robust FQ1 when it releases its earnings after the bell, with EPS seen surging 57% to $10.08 and revenues 45.3% to $38.85B. Strong sales of the iPhone 4S are predicted to have driven Apple's performance, although a concern for some is the company's ability to sustain its growth given its size.
BofA to go ahead with $3B cost cuts. Bank of America (NYSE:BAC) is moving forward with plans for the second stage of aggressive cost savings, which will reportedly amount to around $3B in annual expenses at its commercial banking, investment banking and wealth management businesses. The number hasn’t been finalized, with CEO Brian Moynihan saying last week that it would take until April to do so.
Eurozone PMI unexpectedly returns to growth. Eurozone PMI rose to 50.4 this month from 48.3 in December, showing small but unexpected growth. The rebound was driven largely by an upturn in Germany and modest growth in France, and could signal that the eurozone as a whole may yet escape recession. This is despite large parts of the region still suffering from a deep downturn.
Japan seen running first trade deficit in 31 years. Japan is expected to announce tomorrow its first annual trade deficit since 1980, with economists warning the country could run deficits for years to come if the yen remains strong and global demand weak. Today, Japan said it will probably miss its goal of balancing its budget by 2020 even with the proposed doubling of the sales tax. Meanwhile, the Bank of Japan has cut its growth outlook for FY 2012 to +2% from an October estimate of +2.2%.
Blackstone raises $6B so far for property fund. Blackstone (NYSE:BX) has received pledges of over $6B for a new fund that will buy mainly distressed property, Bloomberg reports. The firm intends to raise at least $10B for the vehicle, known as Blackstone Real Estate Partners VII, and expects it be fully funded this year.
Siemens profit falls 27%. Siemens' (SI) FQ1 net income from continuing operations fell 27% to €1.36B ($1.8B), short of the €1.47B consensus. New orders dropped 5% to €19.81B and sales advanced 2% to €17.9B, with both figures also below forecasts. CEO Peter Loescher said that while the debt crisis is taking a toll, he expects a recovery in the second half. Shares were -2.75% premarket.
Baker Hughes' profit slips. Baker Hughes' (NYSE:BHI) Q4 net EPS dropped 6.5% to $0.72 despite revenue rising 22% to $5.39B, with profits at the oilfield services company hurt by rising costs. However, Baker Hughes expects international growth to continue in 2012.
SPX to sell service solutions ops for $1.15B. SPX (SPW) is to sell its service solutions business to Robert Bosch for $1.15B. Upon completion of the transaction, SPX expects to record an after-tax book gain of around $450M, or $8.65 a share.
Efforts to limit pay at rescued firms undermined. Pressure from financial companies and Treasury officials undermined the efforts of former pay czar Ken Feinberg to limit executive compensation at seven firms that were rescued with taxpayer money, TARP's inspector general said in a report. Firms had "significant leverage" over Feinberg in negotiating salaries based on historical pay.
Obama to focus on economy in State of the Union. With his eyes on a second term, President Obama is due to give his State of the Union address tonight, when he is expected to outline yet more new initiatives to boost growth. Obama will reportedly push for tax breaks for insourcing manufacturing, help for the troubled mortgage market, and incentives for alternative energy development. He is also likely to again call for tax hikes for the rich.
In Asia, Japan +0.2% to 8785. Hong Kong and China closed. India +1.5% to 16996.
In Europe, at midday, London -0.9%. Paris -1.1%. Frankfurt -1.3%.
Futures at 7:00: Dow -0.4%. S&P -0.6%. Nasdaq -0.4%. Crude -0.4% to $99.16. Gold -0.55% to $1669.00.
Tuesday's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 Richmond Fed Mfg.
9:00 PM Pres. Obama: State of the Union
Earnings Results: Companies that beat EPS expectations last night and today include Albemarle (NYSE:ALB), Kansas City Southern (NYSE:KSU), Polycom (NASDAQ:PLCM), VMware (NYSE:VMW), Texas Instruments (TXN), Zions Bancorp (NASDAQ:ZION), Quest Diagnostics (NYSE:DGX), Coach (NYSE:COH), Harley-Davidson (NYSE:HOG), Ashland (NYSE:ASH), EMC (NYSE:EMC), DuPont (NYSE:DD).
Those in line include Air Products and Chemicals (NYSE:APD).
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