Today - Friday, December 6, 2013
2:44 AMFCC commissioner doubts Comcast-TWC merger would be approved
- The Obama administration probably wouldn't authorize any attempt by Comcast (CMCSA) to acquire Time Warner Cable (TWC), FCC Republican commissioner Ajit Pai has told the WSJ.
- Precedents such as the government's blocking of AT&T's purchase of T-Mobile US suggest a Comcast-TWC deal "could face a number of hurdles in the Obama administration," Pai said. "A Republican administration likely would be more inclined to approve a deal."
- TWC has already turned down two bids from Charter Communications (CHTR), the WSJ reports, adding that Comcast and Charter are unlikely to make a joint offer.
- While the interest in TWC has sent the telecom carrier's shares soaring, it has also hurt its bonds, due to fears about a debt overhang that a deal could bring. The price of TWC's 30-year bond that matures in 2042 has tumbled 17% since the merger chatter began.
Thursday, December 5, 2013
7:01 PMCiena, Alliance Fiber up in response to Finisar's results/guidance
- Ciena (CIEN) +1.5% AH and Alliance Fiber (AFOP) +1.1% after Finisar beat FQ2 estimates and issued strong FQ3 guidance.
- Ciena, which reports on the morning of Dec. 12, is now up 10% from Tuesday's close, thanks in large part to an FBR note predicting a strong report and arguing the company will benefit from a long-term trend towards shifting more network intelligence to the optical layer (as compared with the switching/routing layer).
6:51 PMKeystone South won't deliver oil before mid-January
- TransCanada (TRP) tells shippers the Gulf coast portion of its Keystone pipeline won’t be in service before mid-January, three days after it had told regulators it anticipated beginning service Jan. 3.
- Prices for West Texas crude had jumped on the initial news, narrowing WTI's discount to Brent prices,
- Plans for the southern segment show it will be able to move 700K bbl/day of crude to Port Arthur, home to 6.1% of U.S. refining capacity; Motiva Enterprises (RDS.A, RDS.B), Valero Energy (VLO) and Total (TOT) all operate plants there.
6:43 PMBroadcom reportedly scores LTE baseband wins in challenge to Qualcomm
- JPMorgan reports Broadcom (BRCM +1.6%) will ramp shipments of 4G baseband chips to Samsung in Q1 for use in mass-market phones, and has also scored 4G baseband wins with another top smartphone vendor.
- The report comes as Broadcom gets ready to begin selling its BCM21892 4G baseband (first announced in February), and works to integrate Renesas' 4G baseband ops (acquired for $164M).
- Any 4G share gains by Broadcom would likely come at Qualcomm's (QCOM +0.1%) expense. Qualcomm had a 97% 4G baseband share earlier this year (per Strategy Analytics), and just announced a new baseband modem that leverages TSMC's next-gen 20nm manufacturing process.
- Investors have already expected Qualcomm's 4G baseband share to fall some in 2014, thanks to fresh competition from Broadcom, Intel, and Nvidia.
- The JPMorgan report is a breath of fresh air for Broadcom investors, given the company's disappointing Q4 guidance was partly due to baseband weakness.
6:32 PMLKQ to acquire Keystone Automotive Operations for $450M
- LKQ Corp. (LKQ) agrees to acquire Keystone Automotive Operations, a distributor and marketer of specialty aftermarket equipment and accessories, for $450M.
- Keystone serves more than 20K specialty retailers and equipment installers in North America offering products in the truck and off-road, speed and performance, recreational vehicle, towing, tires and performance handling, and accessories segments.
- Keystone's 2014 revenue is expected to total ~$700M.
- LKQ +1.5% AH.
6:17 PMAlexco Resources +2.4% AH on Keno Hill economic assessment
- Alexco Resources (AXU) +2.4% AH after releasing a preliminary economic assessment for expanded silver production from the eastern part of its Keno Hill Silver District in Yukon.
- AXU projects average annual delivery of 3.1M oz. of payable silver, 6.8M lbs. of lead, 6.6M lbs. of zinc and 1,050 oz. of gold from ~150K metric tons/year of consolidated mine and mill production.
- AXU's forecast 38% internal rate of return includes its silver purchase agreement with Silver Wheaton (SLW); initial capital requirements are ~$25M.
6:09 PMJ.C. Penney discloses SEC inquiry in 10-Q, shares -1.1% AH
- In its newly-filed FQ3 10-Q, J.C. Penney (JCP) discloses it received a letter of inquiry from the SEC on Oct. 7 regarding its "liquidity, cash position, and debt and equity financing," as well as its recent stock offering.
- The retailer says it's cooperating by providing the SEC with requested materials.
- Previous: J.C. Penney falls in wild swing
6:03 PMBallard +22.4% AH, inks MOU with Van Hool for buses, joint proposals
- Ballard Power Systems (BLDP) shares fly 22.4% higher AH after the company signs a non-binding Memorandum of Understanding with Van Hool, Europe's 4th largest bus manufacturer, in support of manufacturing/deploying zero emission fuel cell buses.
- The two companies intend to jointly submit proposals under the EU Hydrogen Fuel Cell Joint Undertaking and under future calls of the Horizon 2020 program, which has an incremental budget of €700M.
- 27 Van Hool buses powered by Ballard fuel cell modules will be deployed in 2014 and a dedicated service/parts center will be established in Belgium to support the buses.
6:00 PMOn the hour
- S&P +0.06%.
- 10-yr -0.02%.
- Euro +0.04% vs. dollar.
- Crude +0.09% to $97.42.
- Gold +0.09% to $1225.
5:58 PMAT&T discounts shared data plans for unsubsidized users
- Looking to both cut its smartphone subsidies and better compete against new/aggressively-priced service plans (I, II) from T-Mobile USA and Sprint, AT&T (T) is offering sizable discounts for its relatively costly Mobile Share plans to consumers who either buy a phone unsubsidized, sign up for AT&T's Next smartphone upgrade program, or have seen a contract tied to a subsidized phone sale expire.
- Ma Bell is also launching an 18-month payment tier for Next, which allows users to obtain a smartphone with no money down, and pay for it on a monthly basis. Until now, Next required payments to be made over 12 months.
- AT&T has already taken steps to lower its subsidy expenses, including the elimination of early upgrade promotions and the hiking of phone upgrade activation fees.
- The discounts follow a Q3 during which AT&T saw a mere 363K wireless postpaid net adds, with growth only positive due to 388K tablet adds. Verizon, on the other hand, saw 927K retail postpaid net adds.
5:56 PMUkraine, under Russian pressure, is no-show to sign gas import deal
- Ukrainian officials failed to show to sign a deal that could open up a natural gas supply route via Slovakia, WSJ reports, raising concerns that Ukraine was walking away from an agreement the European Union spent months brokering.
- The deal would have opened up a major gas supply route to Ukraine that could have greatly reduced the country's dependence on Russian supplies, but Pres. Yanukovych's government had warned it may put the deal on hold, citing trade pressure from Russia.
- Russia's Gazprom (OGZPY) meets a quarter of the EU's gas needs, the bulk of which flows via Ukraine, and supplies the vast majority of Ukraine's energy needs.
5:40 PMFive Below falls 12.4% AH on Q3 top-line miss, damp guidance
- Five Below (FIVE) shares are taking a 12.4% drubbing in AH trading following a top-line Q3 miss and lighter-than-expected guidance.
- Comparable sales grew 6.6% (the same rate as in Q2). The company opened 60 net new stores, compared to 51 in Q3 2012.
- Management expects Q4 revenue of $214M-$217M on a 4% comparable store sales increase. Analysts had expected the figure in the range of $211M to $223M, with an average of $218.3M. EPS is seen at $0.49-$0.51 vs. an analyst range of $0.49-$0.54 and average expectation of $0.52.
5:27 PMFacebook roundup: Instagram event, advertising push, infrastructure talk
- Instagram (FB) has sent out invites for a Dec. 12 NYC event. The fact many of the invites featured a wooden box with an Instagram photo printed on it has fueled speculation the event will feature the launch of a printing service.
- Some think Instagram, which just began monetizing its service via ads, could make hundreds of millions annually simply by adding a print button to its apps, and taking a cut on orders placed through it.
- AdAge reports Facebook is not-so-subtly telling marketers they won't be able to reach users as effectively going forward via posts published on brand pages (and then distributed for free onto the news feeds of users who "liked" the page), as the company attempts to "make sure people have a meaningful experience on the site."
- While advertisers might view Facebook's efforts as an attempt to sell more ads, they do come amid worries certain users (particularly younger ones) are cutting their Facebook usage as a result of finding their news feeds filled with uninteresting material. AdAge's report comes shortly after Facebook tweaked its news feed algorithm to display more "relevant" news stories.
- During a Credit Suisse conference talk (transcript), infrastructure chief Jason Taylor shined a light on the huge investments that go into optimizing the performance, cost structure, and power efficiency of Facebook's data centers. Among other things, Taylor asserted Facebook only needs one technician for every 20K servers it owns, compared with a 1:450 ratio at other data centers.
5:25 PMU.S. Silica in 4.5M-share secondary offering, -3.5% AH| 2 Comments
5:19 PMCallon Petroleum the latest Permian producer to warn of lower production
- Callon Petroleum (CPE) is the latest Permian producer to warn about the impact of recent severe weather on its operations, lowering its FY 2013 production guidance for Permian operations to 2,150-2,250 boe/day, ~4% below previous guidance.
- Laredo Petroleum (LPI) warned yesterday that more than half of its wells can't pump oil and gas, while the remainder are producing less than normal, and Energen (EGN) said Tuesday that power outages and other weather effects will hurt its Q4 bottom line.
- Apache (APA) and Pioneer Natural (PXD) said their Permian operations were been affected but haven't yet provided details.
- The cold weather power outages aren't likely to affect the long-term outlook for the companies, according to Iberia analyst Eli Kantor, but more freezing weather is expected to settle on the area through the weekend.