Wall Street Breakfast: Must-Know News

• BofA comes up short. Bank of America's (BAC) Q1 EPS of $0.23 fell way short of estimates (+$0.41), causing futures to drop sharply. Revenue of $17.3B beat estimates of $16.4B. Loss provisions grew: Provision for credit losses rose to $6.01B from $3.31B last quarter and $1.24B a year ago. CEO Kenneth Lewis predicted minimal GDP growth at best in the U.S. for Q2.
• NatCity on verge of $6-7B cash infusion. National City (NCC) is in the final stages of sealing a $6-7B cash infusion from major shareholders and a private-equity firm. Similar to recent deals at Washington Mutual (WM) and Wachovia (WB), investors will receive shares (Fri: $8.33) at a discount -- reportedly $5/share. NatCity was under pressure to find a buyer or strengthen its balance sheet before reporting Q1 earnings tomorrow. KeyBank (KEY) and Scotiabank (BNS) both declined a bid after performing due diligence; sources say they were put off by a regulation that would have required them to write down NCC's loan portfolio upon acquisition. Shares were up $0.08 in Frankfurt this morning.
• BoE plan mimics Fed. The Bank of England introduced a $100B+ (£50B+) program through which banks can swap mortgage-based securities for government bonds for up to one year (renewable to three). "There is no arbitrary limit on this so it could well go higher," Governor Mervyn King said. The important thing is that banks know "this is there for them to access as needed." The move was partly prompted by a lack of mortgage lending. "We will make sure there is enough liquidity in the economy to make sure people can buy their own houses," PM Gordon Brown said. "We can get markets working again in a way that we can ensure that jobs." The BoE will accept AAA-rated securities, but not securities backed by U.S. mortgages. The pound fell on the news.
• Eli Lilly just misses. Eli Lilly (LLY) reported Q1 EPS of $0.92, $0.04 short of consensus estimates. Revenue of $4.8B (+11.9%) was in line. For the year, the company sees EPS of $3.85-4.00 (consensus: $3.95). Broken down by drug: Zyprexa +1% to $1.12B; Cymbalta +37% to $605M; Cialis +74% to $337M; Humlin +14% to $258M.
• Novartis rises on earnings beat. Novartis (NVS) posted Q1 EPS of $1.02, beating consensus estimates of $0.89. Revenue of $9.9B (+8.6%) also exceeded estimates of $9.52B. Novartis expects record sales and earnings in 2008; it reaffirmed its mid-single-digit sales growth forecast. Novartis benefited from a weak dollar; net of currency fluctuation, earnings were flat or even declined. Shares gained 4.9% in Zurich.
• Slick quarter for Halliburton. Oilfield servicer Halliburton's (HAL) Q1 EPS of $0.66 was $0.02 better than estimates. Revenue of $4.03B (+17.7%) was in line. International revenue grew 24%. "The fundamentals of the world oil and gas market are projecting that the next leg up in this extended cycle is near. It is evident that we have taken the right steps in our development of technology and service quality to win the important large-scale projects that are likely to characterize this industry for years to come," CEO Dave Lesar said.
• Hasbro posts a winner. Hasbro (HAS) posted a solid $0.11 Q1 EPS beat of $0.25. Revenue of $704M (+12.6%) was way ahead of analyst estimates of $583M. "We had a strong 2007 and the momentum continues in 2008, with growth driven primarily by Transformers and Littlest Pet Shop, as well as Playskool, Star Wars, Baby Alive, My Little Pony and board games," CEO Alfred Verrecchia said. "Our first quarter performance reinforces the confidence we have in achieving our full-year financial goals."
• Sales slip at Mattel. Sales Mattel (MAT) swung to a Q1 loss of $46.6M ($0.13/share); analysts expected flat EPS. Sales fell 2% to $919.3M, reflecting flat Barbie sales and a drop in Fisher-Price brand sales. "Results were not completely surprising compared to last year's strong first quarter," CEO Robert Eckert said. Mattel said price increases which kick in June should help it in the second half.
• China Mobile earnings grow 37%; comes up short. China Mobile (CHL) said its Q1 net profit jumped 37% to 24.1B yuan ($3.44B) on strong subscriber growth. Profits fell short of analyst estimates of 24.65B yuan. The company said today it plans to build more than 3,000 3G base-stations in Shanghai this year, and will apply WiFi and HSDPA throughout the city's wireless infrastructure.

Today's Markets

• Asian markets were broadly higher Monday. Nikkei +1.63% to 13,697. Hang Seng +2.17% to 24,722. Shanghai +0.72% to 3,117. BSE +1.57% to 16,739.
• In Europe, markets are lower at midday following BofA's earnings miss. FTSE -0.24% to 6,042. CAC -1.05% to 4,909. DAX -1.08% to 6,768.
• U.S. futures are trading to the downside at 7:20 AM. Dow -0.3% to 12,772. S&P -0.31% to 1,383.50. Nasdaq -0.33% to 1,897.

Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.