Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Revolution at RIM as earnings slump again. RIM (RIMM) would consider selling itself if a strategic review found that this was its best option, CEO Thorsten Heins said yesterday after the BlackBerry maker once again missed earnings forecasts. RIM's FQ4 adjusted EPS almost halved on year to $0.80 as revenue slumped 25% to $4.19, while the company said it would discontinue "providing specific quantitative guidance." RIM also said former chairman and co-CEO Jim Balsillie is leaving the company, as are the CTO and COO. In addition, RIM is reviewing "strategic opportunities" such as partnerships and licensing deals, plans to abandon most consumer markets, and it wants to achieve over $1B in annual cost savings.

Greece says it may need another bailout as finmins set firewall. Eurozone finance ministers are meeting today in Copenhagen, where they're expected to agree to increase the eurozone's firewall, although Finland's Jutta Urpilainen said the projected figure of €940B is too high. The Irish want €1T. Either way, more of the money could be needed for Greece, which, admits PM Lucas Papademos, may require a third bailout.

Spain's Rajoy to stay the course despite unrest. While eurozone finance ministers decide about the firewall, Spanish PM Mariano Rajoy will today show how he will attempt to prevent Spain - whose bond yields have been rising lately - from needing to use it. Rajoy is expected to announce the country's most severe budget since before it became a democracy in 1978, even though the measures risk deepening its recession and despite a general strike yesterday.

PetroChina wants to get even bigger. PetroChina (NYSE:PTR), already the world's largest publicly-traded crude producer, plans to "buy assets on a large scale" to expand output. "Large" might be an understatement; the company intends to invest at least $60B this decade in global oil and natural gas assets to increase the share of overseas output to half of its total.

India plays risky game with $2B Vodafone tax threat. Vodafone (NASDAQ:VOD) is urgently reviewing its options in India and overseas as the country moves toward a law that would retroactively apply a tax of over $2B on Vodafone's 2007 purchase of Hutchison Whampoa's Indian telecom venture. The law would come despite a recent ruling by India's top court that Vodafone wasn't liable for back-taxes. It might also give other foreign companies pause for thought about investing in the country.

Japanese factory production clouds optimism. Japan's factory output slipped 1.2% in February vs. expectations for a 1.3% increase, with the surprise fall clouding an increasingly positive economic outlook. Still, unemployment dipped to 4.5% in February from 4.6% the month before and consumer prices (excluding fresh food) unexpectedly rose 0.1%.

Foxconn pledges to improve factory conditions. Apple (NASDAQ:AAPL) and Foxconn have forged an agreement in which the latter will hire tens of thousands of workers, halt illegal overtime, improve safety and upgrade workers' housing. The deal follows a scathing report from the Fair Labor Association about conditions at Foxconn's Chinese facilities, and could have far-reaching effects for the rest of the sector.

MS braces for downgrade, Citigroup stays sanguine. Morgan Stanley (NYSE:MS) is making preparations for a major downgrade from Moody's, which is due to decide in May whether to cut ratings for 17 global institutions. CEO James Gorman has met with Moody’s several times to limit any fallout, and the bank has been in talks with trading partners. Another vulnerable firm, Citigroup (NYSE:C), said it doesn't believe a downgrade would have a material impact.

BATS may hold back on corporate listings. BATS (BATS:BATS) is thinking about suspending its efforts to recruit corporate listings after last Friday's trading glitch and IPO fiasco, The Wall Street Journal reports. The move would be a major defeat for the company, which has viewed such listings as critical in its efforts to compete with larger rivals NYSE Euronext (NYSE:NYX) and Nasdaq (NASDAQ:NDAQ).

Scammers milk the IRS for billions of dollars. The IRS may have been defrauded of billions of dollars in a widespread and long-running scheme that uses the stolen IDs of Puerto Rican citizens - who don't have to pay income tax - to file fake returns, The Wall Street Journal reports. The Feds are struggling to tackle the scam but have prevented false disbursements and achieved convictions, including that of a certified fraud examiner.

BRICs make IMF power play. The BRIC nations and South Africa have threatened to withhold additional funding for the IMF unless they're given greater voting power. The five countries said there is an urgent need to "enhance the voice and representation of emerging market and developing countries" at the fund.

Eurozone CPI falls. Eurozone March inflation slowed to +2.6% from +2.7% previously and against forecasts for 2.5%.

BHP's Ashby to leave. BHP's (NYSE:BHP) iron-ore chief, Ian Ashby, will unexpectedly step down on July 1. Ashby spooked his company's shares and markets worldwide last week with his admission that Chinese demand for ore is flattening out. A spokesman said the comments have nothing to do with his departure.

Today's Markets:
In Asia, Japan -0.3% to 10084. Hong Kong -0.3% to 20556. China +0.5% to 2263. India +2.0% to 17404.
In Europe, at midday, London +0.7%. Paris +1.4%. Frankfurt +1.0%.
Futures at 7:00: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +0.4% to $103.21. Gold +0.6% to $1665.30.

Friday's economic calendar:
8:30 Personal Income and Outlays
9:45 Chicago PMI
9:55 Reuters/UofM Consumer Sentiment

Earnings Results: Companies that beat EPS expectations last night and today include Tibco Software (NASDAQ:TIBX). Those that missed forecasts include Research In Motion (RIMM). For full real-time earnings coverage, please click here.