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  • Mars sends Wrigley into Orbit. Privately-held Mars and Warren Buffet's Berkshire Hathaway (BRK.A) are taking Wrigley (WWY) private for about $23B. The $80/share price is a 28% premium. Key to the deal is increased global distribution of their combined product lines, they said. Mars will make Wrigley a largely independent subsidiary, leaving its management to run things, but there is still likely plenty of room to exploit cost synergies and increase clout with key suppliers. Buffett said he decided to enter the deal because he loves the companies' foods. He called Berkshire a "very junior partner," although it is putting up $6.5B. The FTC is likely to rubber-stamp the deal.
  • Deutsche Bank swings to loss. Deutsche Bank (DB) reported its first quarterly loss in five years; it lost €131M on revenue of €4.6B (-52%). Trading losses were €1.58B vs. a €3.97B gain a year ago. Writedowns of €2.7B included €1.77B on leveraged loans and €885M on real-estate debt (commercial and residential). DB forecast a €2.5B writedown less than a month ago. "In the month of March, pressure on the banking sector was more intense than at any time since the current credit downturn began. Inevitably, this left its mark on Deutsche Bank's results," CEO Josef Ackermann said. Shares are down 1.1% in pre-market trading.
  • Visa shares slump despite solid beat. Shares of Visa (V) fell 6.1% in extended trading despite a 28% jump in profit in the company's first quarter as a public company. Adjusted FQ2 EPS of $0.52 beat consensus of $0.45. Revenue of $1.45B (+22%) was in line. Visa sees yearly revenue growth at a milder 11-15% and EPS growth of 20% or more. "Expectations for Visa, because of the overdone run-up in the stock price, were likely beyond what Visa could have reached," Caylon's Craig Maurer said. On its conference call, Visa said it sees no discernible trend of a softer U.S. economy meaningfully affecting payment volumes, and that its Q2 was ahead of its internal budget projections.
  • Shell, BP report gusher profits. BP (BP) and Royal Dutch Shell (RDS.A) soared in London trading Tuesday after the duo reported record profits, hardly surprising considering the sky-high price of oil. Q1 income at Shell jumped 25% to $9.08B sending its shares up 6%. Profits at BP soared 63% to $7.62B; its shares rose 5.8%. ConocoPhillips (COP) reported a 17% jump in profits on Apr. 24. ExxonMobil (XOM) reports May 1, and Chevron (CVX) a day later. Expect more of the same.
  • Kerkorian kicks Ford's tires. Kirk Kerkorian's Tracinda Corp. disclosed a 4.7% stake in Ford Motor (F), and wants to boost its stake to 5.6% through a $8.50/share tender offer -- a 13% premium to Friday's close. Kerkorian said he's pleased with Ford's progress to cut costs and refocus. "We have a lot of confidence in him," an adviser said. Kerkorian is famous for trying to muscle a management change at GM (GM); he says he has no such plans with his foray into Ford. Shares gained 9.5%.
  • Fed looks to take charge. Regulators are planning a crackdown on credit-card issuers amid criticism of hidden fees and unfair interest rate hikes. The banking industry, as one might expect, is girding its loins for a fight. Proposals include curbing fees on overdrawn bank accounts; making it harder for firms to hike interest rates due to a drop in customers' credit ratings; and changing the way companies apply payments to outstanding balances.
  • Blockbuster wants stake in new TV channel. Sources say Blockbuster (BBI) is negotiating with Viacom (VIA) to take a stake in its new pay-TV channel, a JV between VIA, MGM (MGM) and Lions Gate Entertainment (LGF). Blockbuster was once owned by Viacom. A BBI spokeswoman had this to say: "We are busy transforming Blockbuster into a multiplatform provider of convenient access to media entertainment. To that end, we're exploring our options so it's not surprising there are rumors out there."
  • Extra, extra, read all about it (online). Circulation fell at most large U.S. newspapers according to data from the Audit Bureau of Circulations. Over the past three semi-annual reporting periods, circulation decline has gone from 2.1% to 2.6% to a current 3.6%. Sunday circulation is down 4.6%. At the Times (NYT), circulation was down 3.9%, and a whopping 9.3% on the Sunday edition. Gannett's (GCI) USA Today posted a 0.3% increase, and WSJ (NWS) inched up 0.4%.
  • Big bear blunder. Former Fed head of monetary affairs Vincent Reinhart says the Fed's bailout of Bear Stearns was "the worst policy mistake in a generation." He said it "eliminated forever the possibility the Fed could serve as an honest broker."

Earnings

  • Archer Daniels (ADM): FQ3 EPS of $0.80 beats consensus of $0.70. Revenue of $18.7B vs. consensus of $13.45B!
  • Avon (AVP): Q1 EPS of $0.47 beats consensus of $0.44. Revenue of $2.5B vs. consensus of $2.43B.
  • Boyd Gaming (BYD): Q1 EPS of $0.34 beats consensus of $0.32. Revenue of $471M vs. consensus of $484M.
  • CBS Corp. (CBS): Q1 EPS of $0.43 beats consensus of $0.33. Revenue of $3.7B vs. consensus $3.55B.
  • Corning (GLW): Q1 EPS of $0.44 beats consensus of $0.42. Revenue of $1.62B in line. Sees Q2 EPS of $0.47-$0.50, better than consensus of $0.43.
  • Daimler AG (DAI): Q1 EPS of €1.29, EBIT of €1.98B and net profit of €1.33B.
  • Domino's Pizza (DPZ): Q1 EPS of $0.21 misses consensus of $0.24. Revenue of $339M vs. consensus of $351M.
  • Enbridge Energy Partners (EEP): Q1 EPS of $0.99 beats consensus of $0.75. Revenue of $2.435B vs. consensus of $2.07B.
  • Fresh Del Monte (FDP): Q1 EPS of $1.07 beat consensus of $1.02. Q1 revenue of $895M vs. consensus of $903M.
  • Lear (LEA): EPS of $1.00 more than doubles consensus of $0.48. Revenue of $3.9B vs. consensus of $3.59B. Sees 2008 revenue of $15.5B vs. consensus of $14.8B.
  • Masco (MAS): Q1 EPS of $0.01 badly misses consensus of $0.21. Revenue of $2.45B vs. consensus of $2.52B. Lowers 2008 EPS view to $0.50-0.64 from $0.85-1.15, vs consensus of $1.03. Shares are down 7.7% in pre-market trading.
  • McGraw Hill (MHP): Q1 EPS $0.25 beats consensus of $0.23. Revenue of $1.22B in line. Sees 2008 EPS of $2.65-2.75, missing consensus of $2.85.
  • Medco Health (MHS): Q1 EPS of $0.55 beats consensus of $0.53. Revenue of $12.96M vs. consensus $12.25B. Sees 2008 EPS of $2.27-$2.31 vs. consensus of $2.30.
  • Office Depot (ODP): Q1 EPS of $0.25 beats consensus of $0.24. Revenue of $3.96B vs. consensus of $4.08B.
  • Penske Automotive (PAG): Q1 EPS of $0.36 beats consensus of $0.33. Revenue of $3.2B in line. Sees 2008 EPS of $1.63-1.71, better than consensus of $1.65.
  • STMicroelectronics (STM): Q1 EPS of $0.13 misses consensus of $0.18. Revenue of $2.5B in line.
  • Taiwan Semi (TSM): Q1 EPS of $0.17 vs. consensus of $0.16. Revenue of $2.77B in line.
  • TheStreet.com (TSCM): Q1 EPS of $0.07 misses consensus of $0.10. Revenue of $18.9M vs. consensus $19.95M. Subscription revenue was down 2% to $8M, while ad revenue increased 18% to $5.1M.
  • US Steel (X): Q1 EPS of $1.98 beats consensus of $1.82. Revenue of $5.2B vs. consensus of $5.09B.
  • Valero Energy (VLO): Q1 EPS of $0.48 beats consensus of $0.29. Revenue of $27.94B vs. consensus of $18.23B!
  • Wausau Paper (WPP): Q1 EPS of -$0.06 misses consensus of -$0.02. Revenue of $299M vs. consensus of $285M. Sees Q2 EPS flat, worse than consensus of $0.03.

Today's Markets

  • In Asia, the Hang Seng gained 0.97%, Shanghai was up 1.40%, and the BSE Sensex gained 2.13%. Tokyo was closed.
  • In Europe Tuesday, markets were mainly lower at midday. FTSE +0.3%. CAC -0.37%. DAX -0.73%.
  • U.S. futures are down about 0.3% at 7:00 AM.

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