Today - Wednesday, December 11, 2013
9:25 AMThe NRF pushes for quick passage of budget deal
- The National Retail Federation issues a statement in which it says it approves of the early (relatively) short-term budget agreement in Congress. The organization says it urges a quick passage of the legislation.
- The retail industry faces a significant risk if a budget stalemate were to occur. A swipe of President Obama's pen on the spending bill could offer some late holiday season support to consumer sentiment.
- Related ETFs: XLY, XRT, VCR, RTH, RETL, IYK, IYC, SCC, FXD, UCC, PMR, UGE, RCD, FDIS, SZK, PEZ, PSCD
9:15 AMAnalysis: A Discovery Communications-Scripps deal is no sure thing
- Sterne Agee doesn't think Discovery Communications (DISCA) will end up buying Scripps Networks Interactive (SNI).
- The investment firm rates the chances of a deal at 10% with the Variety report perhaps overstating the level of interest by Discovery to buck up.
- SNI has peeled back some of its gains with some of the bloom off the rose, up 5.9% premarket.
8:43 AMUrban Outfitters busts out of retail malaise
- Urban Outfitters (URBN) gains after disclosing it's running a rosy-sounding mid single-digit comp for FQ4.
- What to watch: The solid report isn't expected to give a lift to the sector, according to analysts. The out-performance compared to other mall-based retailers could be based on the company's vibrant e-commerce business and an assortment that is seen as fashion-forward.
- URBN +4.1% premarket to $37.20.
8:36 AMViacom's Paramount lets Ron Burgundy run wild
- Anchorman 2 is forecast to almost double the box office haul of the original movie to earn $165M for Paramount (VIAB).
- Like the original, the film is expected to have a healthy afterlife on Netflix, streaming, and DVD as it registers as a cult classic.
- Paramount has unleashed one of the largest viral marketing campaigns in history with the buildup to the film including mobile games, museum exhibits, Dodge commercials, a naming of a business school at a college (?), and a Ben & Jerry's ice cream flavor which all feature Will Ferrell in character as Ron Burgundy.
- Ferrell and director Adam McKay are well-entrenched in the creation of Internet buzz through their Funny or Die website, but have rattled Hollywood with the extraordinary lengths they have gone to with Anchorman 2.
- Ron Burgundy on Sportscenter
8:16 AMMoody's cautiously watching Lands' End spinoff
- Moody's is reportedly keeping a sharp eye on the plan by Sears Holdings (SHLD) to spin off Lands' End.
- The ratings agency issued a report yesterday saying the spinoff could have "negative credit implications" but didn't fire off any ratings changes.
- SHLD +1.1% premarket, as shares hope to break a 9-session losing streak.
8:08 AMCostco lower after expenses cut into profits
- Costco (COST) slips in early trading after an increase in expenses cut into profitability during the retailer's FQ1.
- Retail analysts are still finding plenty to like in Costco's report. For starters, amid a promotional retail atmosphere selling margin was higher and membership income grew at a nice clip during the period.
- An important note on Costco (h/t SA contributor The Investment Doctor): This year's FQ1 doesn't include Black Friday like it did last year.
- COST -2.5% premarket.
7:58 AMMedia watch: Mergers on the left, mergers on the right
- Analysts think a combination of Discovery Communications (DISCA) and Scripps Networks (SNI) would make a strategic fit due to the complementary nature of their programming. It's a common theme in the sector as negotiations over licensing deals and carriage fees gets easier with scale.
- The merger activity within the sector is seen as a recognition that the Pay-TV industry is set to see more major changes. One of the biggest takeaways from the UBS Global Media and Communications Conference this week was that programmers such as Disney (DIS), Time Warner (TWX), and CBS (CBS) are prepared to work out deals with virtual MPVD (online TV) players that emerge from the tech industry.
- Merger scuttlebutt: DirecTV (DTV)-Dish Network (DISH), Madison Square Garden (MSG)-Time Warner, Charter (CHTR)-Time Warner Cable (TWC).
7:37 AMFisker Automotive cruising through bankruptcy
- The bankruptcy case for Fisker Automotive Holdings is plugging right along after attorneys convinced the judge to speed up the pace of the case.
- Newly-formed Hybrid Tech Holdings is the company looking to take over the assets of Fisker on the other side of bankruptcy. The entity is led by Hong Kong tycoon Richard Li.
- Previous: Fisker dies but Karma EV might live
7:12 AMHome Depot lifts some financial targets
- Home Depot (HD) issues a business update and highlights some strategic priorities.
- The company reaffirms 2013 sales and EPS guidance as it sees comparable store sales growth of 7% for the year.
- Financial targets for 2014 include sales growth of 5%, operating margin expansion of 70 bps, and EPS growth of 17%. Only 8 new stores are expected to be added to Home Depot's store count during the period.
- In 2015, operating margin of 13% is set as a target with the home improvement retailer on a pace to exceed its previous target early.
- HD +0.1% premarket
7:03 AMDemand for guns in the U.S. slows down
- Demand for guns in the U.S. is in a downward swing as it appears more likely that Congress will enact legislation to ban semiautomatic rifles.
- In November, federal background checks on potential gun purchasers were 10% lower Y/Y.
- Despite sales trends which are starting to slow, manufacturers and retailers have seen more women become buyers.
- Sector watch: SWHC earnings
- Related stocks: RGR, SWHC, CAB
6:55 AMBig licensing deal for Sony in India
- Sony (SNE) scores a licensing deal which will see it represent and manage the distribution of Warner Music's catalog in India.
- Execs with Sony think the digital music opportunity in India is enormous.
- The company's recent purchase of Parlophone Label Group makes it an even more formidable player in global markets.
5:09 AMCisco fails in challenge to Microsoft-Skype deal
- The European Union's General Court, the bloc's second highest court - has rebuffed a request by Cisco (CSCO) to revisit the EU's approval of Microsoft's $8.5B acquisition of Skype in 2011.
- Cisco argued that the deal led to a monopoly and that the EU should have demanded concessions from Microsoft.
- However, the judges disagreed. "The merger does not restrict competition either on the consumer video communications market or on the business video communications market," the judges said.
- Cisco can now appeal to the EU Court of Justice.
3:44 AMGM to end Australian production in four years
- GM (GM) intends to follow in Ford's footsteps and halt manufacturing in Australia by 2017.
- GM will take pretax charges of $400-$600M in Q4, while 2,900 workers will lose their jobs.
- "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market, and arguably the most competitive and fragmented auto market in the world," outgoing GM CEO Dan Akerson said.
- GM's decision will leave Toyota (TM) as the last major car manufacturer in Australia, although the latter might now also leave. The move will "place unprecedented pressure on the local supplier network and our ability to build cars in Australia," Toyota said.
- The country's car industry is now in serious danger of collapse; it supports over 40,000 workers and 150 supplier companies. (PR)
- Australia ETFs: EWA, AUSE, FAUS
3:14 AMCostco EPS misses forecasts| Comment!