Seeking Alpha
  • Today - Monday, April 21, 2014

  • 8:20 AM
    • Hillshire Brands (HSH) announces it struck a deal to buy Van's Natural Foods from Catterton Partners for $165M.
    • The move by the company takes it into the gluten-free cereal and snacks business for the first tine.
    • The transaction is expected to be completed in May 2014 after clearing regulatory review.
    | Comment!
  • 8:15 AM
    • Hyundai (HYMLF) showed off its small SUV concept at the Beijing Auto Show.
    • The ix25 model is smaller than the automaker's Tucson compact SUV.
    • A full launch of the ix25 is expected in the second half of the year.
    | Comment!
  • 8:11 AM
    • Calpine (CPN) agrees to sell six U.S. power plants in the southeast and midwest to LS Power for $1.57B, in a deal announced Friday, as the company focuses on its electricity sales businesses in Texas, California and mid-Atlantic states.
    • The six power plants are scattered across the middle of the country where CPN doesn't operate many other electricity generating facilities; CPN says it wanted to sell additional plants but wasn't able to get the price it needed.
    • CPN plans to use proceeds to pay down debt, buy back shares and possibly buy new generation.
    | Comment!
  • 8:10 AM
    • Net interest income of $1.239B fell from $1.251B a year earlier, with net interest margin slipping 14 basis points to 3.19%.
    • Noninterest income of $791M fell from $863M a year ago, with mortgage production income plummeting to $43M from $159M. Higher interest rates, however, boosted servicing income (slower prepayments), which rose to $54M from $38M a year ago. Investment banking income rose to $88M from $68M.
    • Noninterest expense of $1.4B is about flat from a year ago.
    • Average performing loans of $127.6M is up 7% Y/Y. Total nonperforming assets of $1.1B off 6% from a year ago. Net charge-offs of $110M vs. $226M a year earlier.
    • Tangible book value per share of $27.82 is up 3% from the end of 2013. Tier 1 capital ratio of 10.85%. On tap is a $450M buyback through the end of 2015 Q1 and a doubling in the dividend to $0.20 per share.
    • Press release, Q1 results
    • CC is currently streaming live on Seeking Alpha.
    • STI no trades premarket
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  • 8:08 AM
    • Lululemon (LULU) won a final dismissal in a case in which it was accused of hiding information to shareholders about defects with its yoga pants.
    • The judge found that the potential corporate mismanagement didn't approach any violations of federal securities fraud.
    | 1 Comment
  • 8:03 AM
    • Chipotle (CMG) is upgraded by JPMorgan to an Overweight rating from Neutral.
    • Oppenheimer thinks investors should buy shares of the restaurant chain on any weakness.
    • Last week, Chipotle reported sizzling comparable store sales growth in Q1, but also noted it was getting hit by higher food input costs.
    • What to watch: An across-the-menu price increase from Chipotle is expected something this year.
    • CMG +1.0% to $524.53 premarket
    | 1 Comment
  • 8:02 AM
    • Nano cap Prosensa Holding N.V. (RNA) is up 28% premarket on light volume apparently riding on Sarepta's coattails.
    • Prosensa has its own product candidate, drisapersin, for Duchenne Muscular Dystrophy. A Phase 3 clinical trial failed, however, to meet its primary endpoint of demonstrating a statistically significant or clinically meaningful treatment difference compared to placebo. The drug also failed to meet the majority of its secondary endpoints.
    • Retail investors should tread carefully here.
    | Comment!
  • 8:01 AM
    • Lennox International (LII): Q1 EPS of $0.42 beats by $0.01.
    • Revenue of $695M (+4.0% Y/Y) beats by $2.7M.
    • Press Release
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  • 8:00 AM
     
    • S&P +0.13%.
    • 10-yr -0.06%.
    • Euro +0.01% vs. dollar.
    • Crude -0.16% to $103.21.
    • Gold -0.8% to $1283.5.
    | Comment!
  • 7:58 AM
    • “We’re overweight U.S. dollar-denominated bonds relative to local-currency bonds because we think there’s better opportunity in 2014,” says Manulife (MFC) senior director for fixed income Neal Capecci. “As the U.S. economy continues to show improvement, we think that could be dollar-positive, resulting in broad dollar strength relative to Asian currencies.”
    • Manulife manages $41B in Asian fixed-income assets and considers BBB-rated corporate dollar bonds of short duration "not expensive," according to Capecci. Its Asia Total Return Bond Fund has returned 5.3% this year, ahead of 99% of competitors, according to Bloomberg.
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  • 7:55 AM
    • Halliburton (HAL+0.7% premarket after beating estimates for Q1 earnings and revenues, and forecasting Q2 EPS to grow 25% in Q2 to ~$0.91.
    • Unadjusted earnings were $0.73/share vs. a loss of $0.02 in the year-ago period that was weighed down by a charge related to litigation stemming from the 2010 Deepwater Horizon disaster.
    • North America revenue rose 5% and operating income was flat Y/Y, weighed by lower pressure pumping pricing, higher logistics costs and weather-related issues; HAL expects North America margins to approach 20% before the end of the year.
    • Latin America revenue and operating income fell by 9% and 8%, respectively, mostly on a drop in drilling-related activity in Brazil and reduced activity in Mexico; HAL expects full-year Latin America revenue and operating income to be in line with 2013 levels.
    | Comment!
  • 7:54 AM
    • Nike (NKE) has fired most of its employees working on the Fuelband product in a sweeping move which appears to be tied to a dramatic shift in strategy, according to CNET.
    • Sources indicate the company will move away from manufacturing physical products within the wearable technology industry to focus on software.
    | Comment!
  • 7:46 AM
    • Yum Brands (YUM) is downgraded by JPMorgan to a Neutral rating from Overweight on a valuation call.
    • The investment firm thinks a recovery in China by KFC is already priced into Yum's share price.
    • JP has a $80 price target on shares.
    • YUM -0.6% premarket
    | Comment!
  • 7:42 AM
    • Based on updated guidance from the FDA regarding an early approval pathway for eteplirsen, Sarepta Therapeutics (SRPT) plans to file an NDA by the end of 2014.
    • The agency provided specific examples of additional safety and efficacy data for Duchenne muscular dystrophy that would enhance the acceptability of the NDA. The company will conduct several open label confirmatory studies later this year on patients with exon-51 amenable genotypes.
    • The company plans to conduct three studies: 1) ambulatory patients between the ages 7 and 16 years who can walk a minimum distance, 2) patients younger than 7 years, 3) DMD patients who cannot walk a minimum distance or who are non-ambulant.
    • The firm also plans to start a placebo-controlled study with one or more if its follow-on DMD exon-skipping drug candidates by year end.
    • Shares are up 78% premarket on heavy volume.
    | Comment!
  • 7:37 AM
    • Kimberly-Clark (KMB) reports it grew organic sales by 4% in Q1, led by K-C International.
    • Foreign exchange fluctuations and strategic changes by Kimberly-Clark in Europe clipped sales growth.
    • The Consumer Tissue segment saw a 2% sales drop during the period as a soft cold and flu season in North America crimped demand.
    • The company reiterates prior guidance for 2014 EPS of $6.00-$6.20.
    | Comment!
  • 7:31 AM
    • General Mills (GIS) decides to give up its fight to strip consumers of some of their rights to sue the company.
    • The company tried to slip in a change to its legal terms which would have forced consumers to give up their right to sue the company over a dispute to enter arbitration or a round of negotiations.
    • After seeing a considerable amount of backlash over the harsh terms, General Mills released an apology for having started down the path of narrowing the legal options of consumers.
    | Comment!
  • 7:30 AM
    • Kimberly-Clark (KMB): Q1 EPS of $1.48 beats by $0.01.
    • Revenue of $5.27B (-0.9% Y/Y) misses by $50M.
    • Press Release
    | Comment!
  • 7:30 AM
    • Noting a weak quarter driven by lower fee income thanks to slowing mortgage activity, as well as continued pressure on net interest margins, Compass Point's Kevin Barker nevertheless reiterates his Buy rating on BB& T (BBT), though lowering the price target by $1 to $42.
    • Among positives still remaining: Further expense declines to come (management reiterated pledge to boost operating efficiency), and a pickup in loan activity in Q2. "The outlook for loan growth is improving and BB&T is prudently managing its expense base."
    | Comment!
  • 7:26 AM
    • Piper Jaffray upgrades Big Lots (BIG) to an Overweight rating from Neutral.
    • The investment firm has a price target of $45 on the closeout retailer.
    • What to like about Big Lots: An exit from Canada by the company sets it up for more buybacks, while the addition of freezers and coolers could drive sales.
    | Comment!
  • 7:21 AM
    • In preparation for the spin-off of Theravance Biopharma, Theravance (THRX) wholly-owned subsidiary LABA Royalty Sub LLC secures $450M 9% notes via private placement.
    • The net proceeds of $434.3M will be used to pay off THRX shareholders, to pay the remaining product approval and launch milestones to GlaxoSmithKline (GSK) and to fund post-split Theravance.
    • The notes are secured by a 40% royalty rate from global net sales of RELVAR/BREO ELLIPTA, ANORO ELLIPTA and, if developed, VI monotherapy.
    | Comment!
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