Wall Street Breakfast: Must-Know News

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 |  Includes: AMD, AW, BP, BRL, BRO, BXS, C, CELL, CHK, COF, CRBC, DIA, ELY, ESLRQ, FBC, FMCC, GAP, GILD, GLD, GOOG, HON, IBM, INFA, LEG, MAN, MAT, MER, MSFT, PBCT, PMCS, QQQ, RSG, SLB, SNP, SNY, SPY, SWKS, SYK, TEVA, TPX, USO, WERN, WIT, WM, WTS, YHOO, ZION
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.
  • Freddie mulls $10B share sale. Sources say Freddie Mac (FRE) may try to raise as much as $10B through a share sale - a move that would likely help it avoid a government bailout. Shares surged more than 29% on Wednesday after the SEC put limits in place on shorting its shares; they added another 22% Thursday - all of which means a share sale could actually be worth something, even though prices are still 76% lower YTD. The main buyers would likely be existing shareholders.
  • Teva buys Barr. Teva (NYSE:TEVA) is acquiring Barr Pharma (BRL) for $66.50/share ($7.46B) in cash and stock - a 42% premium to its Wednesday close. Teva also assumes $1.5B in debt. Teva says Barr's product offerings are 'highly complementary' to its own.
  • After you finish reading Wall Street BreakfastSeeking Alpha's Market Currentswill keep you current all day long.
  • Zentiva resists Sanofi. Czech drug maker Zentiva rejected a $2.7B offer from French sanofi-aventis (NYSE:SNY), which already owns 25% of the firm. Zentiva says the offer fails to reflect the value of its future prospects.
  • BP buys U.S. stake from Chesapeake. BP (NYSE:BP) is betting $1.75B on a natural gas field in Oklahoma, buying out Chesapeake Energy (NYSE:CHK) stake. For years oil majors have essentially ignored U.S.-based assets in favor of offshore and overseas ventures. They appear to be returning to the States amid declining production and shrinking reserves. Separately, TNK-BP chief Robert Dudley was given a 10-day visa by Russian authorities. Presumedly he will use the time to try and reduce friction between BP and the JV's Russian stakeholders.
  • Republic likes Allied's bid better than WMI's. Republic Services (NYSE:RSG) concludes Waste Management's (WMI) July 14 bid is not superior to the merger it's currently working on with Allied Waste (AW) - and it therefore has no intent of entering negotiations with WMI.
  • SIV auction bodes ill for SIV investors. A $7B auction of Cheyene's SIV portfolio drew bids of just $0.44 on the dollar - giving investors a gloomy guide to the amount of cash they can expect to recover from structured investment vehicles - which were at the very heart of the credit crunch.
  • And you thought driving was expensive. Utilities analysts estimate it will cost families 30-50% more to heat their homes with natural gas this winter, while families who use heating oil could face increases of 50-100%. One official says it could cost families $1,600-1,700 a month to cover heating oil, electricity and gasoline costs this winter. Natural gas storage levels remain 2% below their five-year average, despite increase drilling, partially due to a fall in imports and Eurasia buyers outbid their U.S. counterparts.
  • Oil prices pinch Sinopec. Sinopec (NYSE:SNP) warns it sees profits falling by 50% from a year ago, despite pumping 2.4% more oil and refining 6.7% more crude, as high oil prices squeeze its margins.
  • C'mon guys - vote for us! Yahoo (NASDAQ:YHOO) sent another letter to its shareholders Thursday. Yahoo says the Icahn-Microsoft (NASDAQ:MSFT) 'odd couple' will destroy shareholder value. It tells investors to be wary of confuse "a modestly improved offer with a good offer."
  • June Housing Starts of 1.07M were way ahead of the 0.96M consensus. New permits of 1.09M also exceeded expectations of 0.96M.
  • Initial Claims of 366K were less than the 380K consensus. The four-week moving average falls by 4.5K to 381K. Despite the stronger-than-expected housing starts, single-family starts - the key number - hit their lowest level since 1991. Most of the 9.1% gain was due to a change in NYC building codes, net of which starts would have dropped 4%.
  • Philly Fed Business Outlook -16.3 vs. -15 consensus, up from -17.1 last month. Manufacturing has now been negative for eight consecutive months.

Earnings: Thursday After Close

  • Advanced Micro Devices (NASDAQ:AMD): Q2 EPS of -$0.60 misses by $0.08. Revenue of $1.35B vs. $1.45B. Shares -7.4%. [PR]
  • BancorpSouth (NYSE:BXS): Q2 EPS of $0.06 misses by $0.01. Shares +9.3%. [PR]
  • Brightpoint (NASDAQ:CELL): Sees Q2 revenue of $1.2B vs. $1.25B. Shares -3.5%. [PR]
  • Brown & Brown (NYSE:BRO): Q2 EPS of $0.33 beats by $0.01. Revenue of $242M (-2%) vs. $248M. "The good news is we think 2009 should be better." Shares +0.5%. [PR]
  • Callaway Golf (NYSE:ELY): Sees Q2 EPS of $0.56-0.58 vs. $0.62 consensus, and revenue of $366M vs. $375M. Strong international sales are helping offset weak U.S. growth. [PR]
  • Capital One (NYSE:COF): Q2 EPS of $1.24 misses by $0.07. Revenue of $3.35B (-4.6%) vs. $4.37B. Shares -4.5%. [PR]
  • Citizens Republic Bancorp (NASDAQ:CRBC): Q2 EPS of -$2.53 misses by $0.22. "We expect to return to profitability for the third and fourth quarters of 2008, assuming our provision for loan losses stabilizes as we expect." [PR]
  • Evergreen Solar (ESLR): Q2 EPS of -$0.08 beats by $0.02. Revenue of $22.8M vs. $22.1M. Sees Q3 EPS of -$0.10 vs. -$0.08. Shares -12.7%. [PR]
  • Gilead Sciences (NASDAQ:GILD): Q2 EPS of $0.49 beats by $0.01. Revenue of $1.28B (+21.9%) in-line. Shares -4%. [PR]
  • Google (NASDAQ:GOOG): Q2 EPS of $4.63 misses by $0.11. Revenue of $3.9B (+43.2%) in-line. Paid clicks up 19% Y/Y vs. 20% in Q1. Shares -8% to $491. [PR]
  • IBM (NYSE:IBM): Q2 EPS of $1.98 beats by $0.16. Revenue of $26.8B vs. $25.92B. Shares -0.3%. [PR]
  • Informatica (NASDAQ:INFA): Q2 EPS of $0.17 beats by $0.01. Revenue of $113.8M vs. $109.9M. [PR]
  • Leggett & Platt (NYSE:LEG): Q2 EPS of $0.25 misses by $0.02. Revenue of $1.06B (-0.7%) in-line. Sees full-year EPS of $1-1.30 vs. $1.09 consensus. [PR]
  • Merrill Lynch (MER): Q2 EPS of -$4.95 misses by $3.04. Net losses on CDOs of $3.5B and hedging losses of $2.9B. Estimated book value per share falls to $21.43 from $25.93 in Q1. Shares -6.8%. [PR]
  • Microsoft (MSFT): Q2 EPS of $0.46 misses by $0.01. Revenue of $15.84B vs. $15.65B. Shares -5.85%. [PR]
  • People's United Financial (NASDAQ:PBCT): Q2 EPS of $0.13 misses by $0.01. "We take great comfort in our fortress balance sheet." [PR]
  • PMC-Sierra (NASDAQ:PMCS): Q2 EPS of $0.13 beats by $0.01. Revenue of $140M (+33.5%) vs. $137M. SHares -1.9%. [PR]
  • Skyworks Solutions (NASDAQ:SWKS): FQ3 EPS of $0.18 beats by $0.01. Revenue of $215M (+22.9%) vs. $211M. Shares +4.15%. [PR]
  • Stryker (NYSE:SYK): Q2 EPS of $0.73 in-line. Revenue of $1.71B (+17%) in-line. Sees full-year EPS of $2.88 in-line. Shares -2.1%. [PR]
  • Tempur-Pedic (NYSE:TPX): Q2 EPS of $0.27 beats by $0.04. Revenue of $239M vs. $232M. Shares +4.9%. [PR]
  • Watts Water Technologies (NYSE:WTS): Sees Q2 EPS of $0.52-0.54 vs. $0.41 consensus, and revenue of $389M (+11%) vs. $344M. Shares +8.8%. [PR]
  • Werner (NASDAQ:WERN): Q2 EPS of $0.25 beats by $0.05. Revenue of $578M vs. $548M. Shares +4%. [PR]
  • Zions Bancorp (NASDAQ:ZION): Q2 EPS of $0.65 misses by $0.09. Shares -4.6%. [PR]

Earnings: Friday Before Open

  • Citigroup (NYSE:C): Q2 EPS of -$0.49 beats by $0.17. Revenue of $18.65B (-29.2%) vs. $17.55B. $7.2B writedown in securities and banking, and a $4.5B increase in credit costs. Shares -2.1%. [PR]
  • Flagstar Bancorp (NYSE:FBC): Q2 EPS of $0.22 beats by $0.24. Revenue of $162M vs. $125M. [PR]
  • Great Atlantic & Pacific Tea Company (GAP): FQ1 EPS of -$0.48 misses by $0.07. Revenue of $2.92B (+74.1%) in-line. [PR]
  • Honeywell (NYSE:HON): Q2 EPS of $0.96 beats by $0.02. Revenue of $9.67B vs. $9.22B. Sees full-year EPS of $3.75-3.85, up from $3.70-3.80 vs. $3.79 consensus, and revenue of $37.6-38.2B vs. $37.2B. [PR]
  • Manpower (NYSE:MAN): Q2 EPS of $1.52 beats by $0.02. Revenue of $5.9B (+17.3%) in-line. Sees Q3 EPS of $1.45-1.49, short of $1.58 consensus. [PR]
  • Mattel (NASDAQ:MAT): Q2 EPS of $0.03 beats by $0.01. Revenue of $1.11B (+11%) vs. $1.04B. [PR]
  • Schlumberger (NYSE:SLB): Q2 EPS of $1.16 beats by $0.04. Revenue of $6.75B (+19.6%) vs. $6.48B. [PR]
  • Wipro (NYSE:WIT): FQ1 EPS of $0.13 misses by $0.01. Revenue of $1.39B (+34.7%) in-line. [PR]

Today's Markets

  • Asia markets were mainly higher Friday: Nikkei -0.65% to 12,804. Hang Seng +0.64% to 21,874. Shanghai +3.49% to 2,778. BSE +3.99% to 13,635.
  • In Europe, markets look strong at midday. London +1.08%. Paris +0.71%. Frankfurt +1.58%.
  • Futures are inching up in pre-market trading. Dow +0.31%. S&P +0.4%. Nasdaq +0.03%. Crude +1.14% to $130.75. Gold -1.3% to $957.70.

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