Green Mountain swings wildly after earnings report. Green Mountain Coffee Roasters' (GMCR) shares were +12.8% premarket after falling sharply immediately following its FQ3 report yesterday. Net profit jumped 30% to $73.3M, while EPS of $0.52 beat consensus and revenue missed slightly despite climbing 21% to $869M. Green Mountain again cut its FY guidance, which probably helped send shares lower, but it's also buying back $500M in stock and it's building inventory ahead of strong anticipated holiday-season sales.
Jury orders DuPont to pay $1B to Monsanto over IP breach. Monsanto (MON) has won a $1B judgment against DuPont (DD) in a patent infringement suit over Monsanto's Roundup Ready technology for growing soybeans, which is almost the foundation of its business and allows farmers to kill weeds with herbicide while leaving crops unscathed. The damages could increase, as the jury found that DuPont's infringement was willful, although the company plans to appeal.
Oracle faces massive damages after losing dispute with H-P. Oracle (ORCL) could have to pay H-P (HPQ) damages of billions of dollars after a judge yesterday ordered Oracle to keep writing databases that support Intel's (INTC) high-end Itanium server CPUs, for which H-P is the only real supporter. However, barring any payout, the decision could soon be water under the bridge, since many firms have joined Oracle in ending Itanium support, while H-P is focusing on developing high-end servers based on Intel's Xeon CPUs.
Top Stock News
Brazil bans Chevron, Transocean oil activities. A Brazilian court has banned Chevron (CVX) and Transocean (RIG) from extracting or transporting oil in the country and said they have 30 days to halt their activities or face daily fines of 500M reais ($245M). The injunction is based on a request by the public prosecutor's office following a November oil spill in Chevron's offshore Frade Field.
U.K. mulls fully nationalizing RBS. With the U.K.'s recession worsening, cabinet ministers are discussing the possibility of buying the 18% of RBS (RBS) that the government doesn't own, the FT reports, in order to be able to compel the bank to lend more money to companies and so help spark growth. However, finance chief George Osborne is opposed to the move, which would cost £5B and need clearance from the EU.
AIG aims to reduce government stake to below 50%. AIG (AIG) is looking to repurchase a significant amount of its stock from the government, the WSJ reports, in a move that could reduce the government's 61% stake to below 50% by the autumn but would then bring greater Fed oversight. The Treasury and NY Fed have so far made a profit of $14B on the bailout of AIG, and that could top $18B by the fall.
Coca-Cola eyes Fraser & Neave's $3B beverage ops. Coca-Cola (KO) is reportedly considering a bid for the beverage operations of Singapore’s Fraser & Neave (OTCPK:FNEVF), which include F&N’s dairy and soft-drinks divisions and could be worth up to $3B. The speculation comes as a battle between Heineken (OTC:HINKY) and Thai billionaire Charoen Sirivadhanabhakdi for Asia Pacific Brewery (OTC:APBRF), in which F&N owns 40%, nears a climax, with F&N set to decide on a $4.1B bid from Heineken for its holding.
Bain to buy 30% stake in Genpact for $1B. Bain Capital has agreed to pay $1B to acquire a 30% holding in Genpact (G) from General Atlantic and Oak Hill Capital, which will retain a 10% stake in the process management and technology services company. Bain is paying $14.76 a share, somewhat below Genpact's close yesterday of $17.15.
LinkedIn growth set to continue. LinkedIn (LNKD) is due to report Q2 earnings after the bell today, with analysts estimating that EPS jumped 60% to $0.16 and revenue 78% to $215.7M. LinkedIn is "an impressive corporation," says SA author Skyler Greene, but "investors shouldn't be rushing to buy shares." That's because "the company is dramatically overvalued," a situation that has prompted many commentators to predict that "LinkedIn will be the next social stock to fall."
Sony net loss grows, cuts FY forecast. Sony's (SNE) FQ1 net loss widened to ¥24.64B ($314M) from ¥15.5B last year and came in way below consensus, while revenue edged up 1.4% to ¥1.515T. The company continues to suffer from rivals eating into demand for its TVs and other devices, and it cut its FY forecast for net profit and revenues. Shares were -3.1% premarket.
Top Economic & Other News
Attention shifts to ECB after FOMC stands pat. The FOMC did even less than expected yesterday and announced neither additional stimulus, nor an extension of the low-rate pledge past late-2014. The Fed did talk about closely monitoring the economy, which is a bit of a change from the previous statements and is being taken by Goldman Sachs to mean "a strengthening of the committee's 'easing bias.'" Next up very shortly is the ECB and Mr Draghi.
U.S. oil and gas reserves in record growth. The U.S.'s proven oil reserves jumped 13% in 2010 to 25.2B barrels and those of natural gas 12% to 318T cubic feet, the EIA said in its annual report yesterday, with the gains the largest since the agency started keeping records in 1977. Horizontal drilling and fracking played a major role in the increases, which underscore the idea that the U.S. can meet more of its own energy demand.
San Bernardino files for Chapter 9. San Bernardino yesterday became the third Californian city to file for bankruptcy protection, saying it owes over $1B to 10,000-25,000 creditors. San Bernardino's filing, as well as those of Stockton and Mammoth Lakes, will be major test cases of whether distressed cities will be permitted to go back on their bond and pension obligations.
S&P maintains Germany's outlook at stable. S&P has affirmed Germany's AAA rating and stable outlook, citing the country's "strong economic fundamentals" and saying it expects the nation to "continue to withstand potential financial and economic shocks." S&P's confirmation comes after Moody's last month cut its outlook on Germany to negative.
In Asia, Japan +0.1%. Hong Kong -0.7%. China -0.6%. India -0.2%.
In Europe, at midday, London +0.5%. Paris +0.5%. Frankfurt +0.8%.
Futures at 7:00: Dow +0.4%. S&P +0.4%. Nasdaq +0.4%. Crude +0.15% to $89.04. Gold -0.2% to $1603.80.
Today's economic calendar:
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: AEE, APA, ARIA, BDX, CAH, CI, CNP, DNR, DTV, DUK, ENB, GM, INCY, K, MFA, NNN, OCN, PH, PRX, PWR, PXP, RDC, SBH, SE, SEE, SHO, SNE, SRE, TDC, TE, TEVA, TIE, TWC, UPL, VIAB, VRX, WNR, XEL
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