Toyota net profit more than triples to $3.2B. Toyota's (TM) FQ2 net profit beat expectations and surged to ¥257.92B ($3.2B) from ¥80.42B last year, when the carmaker suffered from the aftermath of the earthquake. Revenue rose 18% to ¥5.41T. With Toyota's focus on improving profitability offsetting the strong yen, the uncertain global economy and plunging sales in China because of the islands dispute, the company lifted its FY net profit guidance to ¥780B from ¥760B. However, it cut its sales and production forecasts.
HSBC earnings hit by over $1B of provisions. HSBC's (HBC) Q3 pretax profit jumped 125% to $5B but missed estimates of $5.6B, while underlying revenue rose 20% to $16.13B. However, the U.K.-listed bank took a provision of $800M to cover a potential U.S. fine for problems with its anti-money laundering controls - adding to $700M set aside in July - and a $353M charge for mis-selling in the U.K., mainly of payment protection insurance.
Top Stock News
Interpublic considers shakeup at top units. Advertising agency Interpublic (IPG) is considering replacing the CEOs of its McCann and DraftFCB units amid falling revenues and the loss of major accounts, the WSJ reports. Interpublic has already started informal talks with possible replacements for Nick Brien at McCann, who's overseen what's likely to become a 10% drop in annual sales to $2.2B since he took the job in early 2010.
Aussie judge rules against S&P over AAA rating. An Australian judge has ruled that S&P (MHP) was "misleading and deceptive" in assigning AAA ratings to two ABN Amro (RBS) structured debt issues in 2006, which plummeted in value during the financial crisis and caused losses of over 90% to 12 municipal investors that brought a lawsuit against the firm. The ruling represents the first time a ratings agency has been held liable for its opinion in this way.
Time Warner Cable net profit more than doubles. Time Warner Cable's (TWC) Q3 net profit more than doubled to $808M as revenue climbed 9.2% to $5.36B, as expected. However, adjusted EPS of $1.41 missed consensus by $0.02. Video revenue rose 3.7% and high-speed data sales 14.3%, with the company adding a net 27,000 business subscribers but losing 125,000 residential customers.
U.K. mulls probe of U.S. firms' tax avoidance. The U.K. parliament's Treasury Select Committee could launch an investigation into tax avoidance by major U.S. companies and look at how to recalibrate the law to end or at least reduce such avoidance. Starbucks (SBUX) hasn't paid any U.K. taxes for three years, while Amazon (AMZN), Facebook (FB) and Google (GOOG) have paid under £30M combined despite sales of £3.1B. Apple (AAPL) avoided taxes of over $550M in 2011.
Tesla losses jump to almost $111M. Tesla Motors' (TSLA) net losses widened to $110.8M in Q3 from $65.08M last year, with adjusted losses per share $0.92 missing consensus. However, a 127% surge in revenue to $50.1M beat forecasts. Tesla maintained its full-year revenue guidance of $400M-$440M, with deliveries of the Model S predicted at 2,500-3,000.
Seadrill to sell $2.9B worth of rigs. Seadrill (SDRL) has signed a memorandum of understanding to sell rigs to Malaysian oil and gas service provider SapuraKencana Petroleum for $2.9B as part of a deal to merge the companies' rig operations. Seadrill will receive at least $350M in new shares in SapuraKencana and two seats on its board. Seadrill plans to use the proceeds from the sale to expand its deep water fleet and invest in the jack up sector. Seadrill shares were -0.8% premarket.
Lloyds could sell £1.2B holding in U.K. wealth manager. Lloyds (LYG) is reportedly thinking about selling its 60% holding in U.K. wealth manager St James's Place, which has a market cap of £1.99B, and could try to place the shares in the market by the end of the year. The speculation comes as Lloyds faces further scrutiny from regulators over its capital position.
India voids patent on Roche hepatitis C drug. India's government has revoked the patent on Roche's (OTC:RHHBY) expensive Pegasys drug for hepatitis C, part of a series of such actions against the treatments of multinational drug companies in the country.
Top Economic & Other News
New Chinese leadership to be "packed with conservatives." The new Standing Committee of China's Politburo will be "packed with conservatives," reports the South China Morning Post, as former premier Jiang Zemin manages to place one of his supporters in charge of the economy, while two reform-minded candidates will miss out. The speculation comes just ahead of China's once-a-decade change of leadership. Ambrose Evans-Pritchard fears that China may not now undertake the vital economic overhaul it needs.
Companies cut staff hours to avoid paying for health insurance. Some low-wage restaurants, hotels and retailers have begun or are planning to limit the schedules of staff to below 30 hours a week to avoid having to provide them with health insurance or face a penalty of at least $2,000 per worker, as prescribed under the Healthcare Act. Darden Restaurants (DRI) is among those modifying its policies, although Marriott (MAR) and Costco (COST) have no plans to change employee hours.
Spanish unemployment claims continue to rise. Spanish jobless claims increased by 128,242 in October, or 2.7%, bringing the total number of unemployed people to 4.83M. If there's a silver lining, the growth was less than that of last year - the fifth consecutive monthly "improvement" on an annual basis.
Two banks shut down. Regulators closed a bank in Illinois and one in Florida on Friday, bringing the number of bank failures this year to 49. The combined hit to the FDIC's deposit-insurance fund is estimated at $110.7M.
In Asia, Japan -0.5% to 9007. Hong Kong -0.5% to 22006. China -0.1% to 2114. India flat at 18763.
In Europe, at midday, London -0.7%. Paris -0.9%. Frankfurt -0.7%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq +0.1%. Crude flat at $84.87. Gold -0.2% to $1715.50.
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