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.
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.
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.
“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.
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.
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.
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."