Wall Street Breakfast: Must-Know News

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Includes: BE, BYI, CKEC, CSIQ, DISH, EDS, EPE, FLR, FOSL, HPQ, IBM, KATE, KO, LDK, LMT, MDR, NSANY, NUAN, PVH, S, SIRI, TA, TEL, TGIC, TOL, TWTC, VSUNQ, WBK, WINN, WMT, WNR, XFML, ZOLT
by: SA Eli Hoffmann
SA Eli Hoffmann
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.
  • Wal-Mart beats as consumers skimp. Wal-Mart Stores (NYSE:WMT) posted a 7% rise in quarterly profit, slightly outdoing Street expectations. International sales surged 22%, compared with 6.6% domestic growth at Wal-Mart-branded stores and 7.6% at Sam's Club. "The consumer is getting squeezed right now," said Jim Wright of Harvest Financial Partners. "More and more consumers are going to look for good deals. Wal-Mart does a pretty good job at that. This is an environment where they should outperform." "Our business is even more relevant to our customers today, given the current economic pressures," CEO Lee Scott said.
  • HP courts EDS in challenge to IBM. HP (NYSE:HPQ) is in advanced talks to acquire Electronic Data Systems Corp. (NASDAQ:EDS) for about $13B. Buying EDS would vault HP to the number-two position in global IT services, behind IBM (NYSE:IBM), whom the deal obviously targets. WSJ notes the strikingly different cultures at the two companies, and says a deal could spark a major round of tech industry consolidation. Last year, IBM controlled 7.2% of the tech services market, EDS was second at 3%, and HP was fifth at 2.3%.
  • Nissan rolls back growth outlook amid strong yen. Nissan Motor's (OTCPK:NSANY) five-year business plan includes an all-electric car in the U.S. and Japan by 2010, and targets an average 5% revenue growth over the next five years, led by 60 new models and an increased focus on emerging markets such as Russia, China, India, Brazil and the Middle East. FQ4 net profit rose 67% to 137.6B yen, but sales fell 17% to 2.99T yen and operating profit dropped 14% to 211.7B yen. For the coming year, Nissan sees operating profit falling 31% and sales declining 4.4% due largely to a stronger yen.
  • Lockheed has satellite contract all but locked up. Lockheed Martin (NYSE:LMT) is likely to beat out Boeing for a $1.8B contract to build the military's next-generation navigation satellites. Sources say the Air Force will announce as early as today a LMT win for the first eight satellites of a planned constellation called Global Positioning System III. At least 16 more satellites are planned, potentially worth billions more.
  • IEA pleads with OPEC to boost output. The International Energy Agency [IEA] urged OPEC to boost oil production to dampen sky-high oil prices. Still, it lowered its global 2008 demand growth forecasts to 1.2% (1M barrels/day) from 1.5% last month as high prices curb demand. "The key question is how to halt the upward spiral in prices," the report said. "OPEC could kick-start the process by giving at least a clear indication that it will rapidly provide more oil if stocks do not build in the very near future. An even more powerful signal would be to provide more oil now," it said.
  • Coke looking for deals. Coca-Cola (NYSE:KO) CEO Muhtar Kent says he wants to expand the company through acquisitions. "You will see us grow organically as well as through targeted acquisitions," he says. Kent also said high commodity prices are "here to stay" due to a "perfect storm" of conditions including ethanol demand, emerging market growth and weather factors.
  • Aussie banks to merge. Westpac (NYSE:WBK) is buying St. George Ltd. for $17.5B in stock, a 29% premium over its Friday close. Both banks are based in Sydney.
  • Tyco sells off unit. Tyco Electronics (NYSE:TEL) is selling its Radio Frequency Components and Subsystem business to Cobham plc for $425M in cash.

Earnings: Monday After Close

  • Bally Tech (NYSE:BYI): FQ3 EPS of $0.52 beats consensus of $0.48. Revenue of $233M vs. consensus of $231M. Sees 2008 EPS of $1.78-1.90, better than previous guidance of $1.60-$1.90; consensus was $1.79. The company expects 2008 revenue to exceed $885M; consensus was $894M. Shares: +4.35%.
  • BearingPoint (BE): Q1 EPS of -$0.10 beats consensus of -$0.13. Revenue of $830M vs. consensus of $853M. Shares: +5.4%.
  • Carmike Cinemas (NASDAQ:CKEC): Q1 EPS of -$0.34 in-line. Revenue of $117.8M vs. consensus of $113.3M. Shares: flat.
  • Clearwire (CLWR): Q1 EPS of -$1.08 misses consensus of -$0.95. Revenue of $51.5M vs. consensus of $48.5M. Clearwire added 48K net subscribers in Q1 to 443K. Shares: +1.5%.
  • Enterprise GP (EPE): Q1 EPS of $0.38 beats consensus of $0.31. Revenue of $8.5B vs. consensus of $7.7B. Shares: flat.
  • Fluor (NYSE:FLR): Q1 EPS of $1.50 beats consensus of $1.27. Revenue of $4.8B vs. consensus of $4.64B. Sees full-year EPS of $6.25-6.55, better than consensus of $5.63. Shares: +7.6%.
  • LDK Solar Co (NYSE:LDK): Q1 EPS of $0.45 beats consensus of $0.39. Revenue of $233M vs. consensus of $217M. Sees Q2 revenue of $278-288M vs. consensus of $251M, and 2008 revenue of $1.08-1.18B vs. consensus of $1.08B. LDK expects annualized wafer production capacity to be 1.1 GW by the end of 2008 and 2 GW by the end of 2009. It sees 2008 wafer shipments of 560MW to 580MW. Shares: -5.3%.
  • McDermott (NYSE:MDR): Q1 EPS of $0.54 in-line. Revenue of $1.45B vs. consensus of $1.48B. Consolidated backlog was $10.2B, vs. $7.9B and $9.8B last year and last quarter. Shares: -0.6%.
  • Nuance Communications (NASDAQ:NUAN): FQ2 EPS of $0.18 in-line. Revenue of $203M vs. consensus of $214M. Shares: -5.05%.
  • Sirius Satellite (NASDAQ:SIRI): Q1 EPS of -$0.07 in-line. Revenue of $270M vs. consensus of $272M. Total subscribers grew 31% from a year ago to 8.6M. Shares: -1.4%.
  • Time Warner Telecom (NASDAQ:TWTC): Q1 EPS of -$0.01 beats consensus of -$0.03. Revenue of $283M vs. consensus of $284M. Shares: -0.95%.
  • TravelCenters of America (NYSEMKT:TA): Q1 EPS of -$3.41 misses consensus of -$2.78. Revenue of $1.9B vs. consensus of $1.81B. Shares: flat.
  • Triad Guaranty (OTC:TGIC): Q1 EPS of -$10.09 misses consensus of -$2.61. Revenue of $84.3M vs. consensus of $82.7M. Shares: +2.4%.
  • Warnaco Group (WRNC): Q1 EPS of $0.99 beats consensus of $0.79. Revenue of $575M vs. consensus of $507M. Sees full-year EPS of $2.65-2.75, better than consensus of $2.58 Shares: +3.9%.
  • Winn-Dixie Stores (NASDAQ:WINN): FQ3 EPS of $0.28 beats consensus of $0.21. Revenue of $1.7B in-line. Shares: +0.55%.
  • Xinhua Finance Media (XFML): Q1 EPS of $0.02 beats consensus of -$0.09. Revenue of $36.7M vs. consensus of $27.8M. Sees Q2 EPS of $0.07-0.09, better than consensus of $0.03, and full-year EPS of $0.31-0.33, better than consensus of $0.12. Shares: -4.5%.

Earnings: Tuesday Before Open

  • Canadian Solar (NASDAQ:CSIQ): Q1 EPS of $0.65 beats consensus of $0.31. Revenue of $171M vs. consensus of $152M. Sees Q2 Revenue of $185-190M vs. consensus of $168M.
  • DISH Network (NASDAQ:DISH): Q1 EPS of $0.58 beats consensus of $0.52. Revenue of $2.8B in-line.
  • Fossil (NASDAQ:FOSL): Q1 EPS of $0.43 beats consensus of $0.40. Revenue of $356M vs. consensus of $348M.
  • Liz Claiborne (LIZ): Q1 EPS of $0.28 beats consensus of $0.11. Revenue of $1.12B vs. consensus of $950M. Sees full-year EPS of $1.40-1.60, short of prior guidance of $1.50-1.70; consensus was for $1.51.
  • Toll Brothers (NYSE:TOL): FQ2 Revenue of $818M beats consensus of $753M. Toll reported a Q2 backlog of $2.08B, gross contracts of 1,237 homes (-39%), and 308 cancellations. It forecast Q2 writedowns of $225-375M.
  • VeraSun Energy (VSE): Q1 EPS of $0.08 misses consensus of $0.16. Revenue of $516.5M vs. consensus of $500M.
  • Wal-Mart (WMT): Q1 EPS of $0.76 just beats consensus of $0.75. Revenue of $95.3B vs. consensus of $92.44B. Sees Q2 EPS of $0.78-0.81, short of consensus of $0.81.
  • Western Refining (NYSE:WNR): Q1 EPS of -$0.60 misses consensus of -$0.09. Revenue of $2.55B.
  • Zoltek (NASDAQ:ZOLT): FQ2 EPS of $0.19 misses consensus of $0.22. Revenue of $49.6M vs. consensus of $50.35M.

Today's Markets

  • With the exception of China, Asian markets closed broadly higher Tuesday. Nikkei +1.53% to 13,954. Hang Seng +1.95% to 25,553. Shanghai -1.84% to 3,560. BSE Sensex +0.32% to 16,915.
  • In Europe, shares are markedly lower at midday. FTSE -0.84% to 6,186. CAC -0.21% to 4,966. DAX -0.2% to 7,022.
  • U.S. futures are trading down at 7:00 AM. S&P -0.34% to 1,400. Nasdaq -0.2% to 1,994.50.

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