Today - Wednesday, April 1, 2015
- The CFTC says it has charged Kraft Foods (NASDAQ:KRFT) and Mondelez (NASDAQ:MDLZ) with manipulating wheat futures and cash wheat prices.
- KRFT and MDLZ are also facing CFTC claims that they violated speculation limits by holding wheat futures positions in excess of thresholds established by the CFTC and the Chicago Board of Trade.
- The CFTC filed a civil complaint against the two companies in federal court in Illinois.
5:08 PM| Comment!
- American Tower (NYSE:AMT) gained 2.5% as Raymond James upgraded shares to Strong Buy, from Outperform.
- Rollout of wireless companies' new spectrum should restart revenue growth in 2016, RJ's Ric Prentiss says, pointing to "second-half 2015 and 2016 leasing trends" with T-Mobile deploying its low-band spectrum, Sprint expanding its high-band, and AT&T and Verizon "spending a steady amount of wireless capex."
- It's a bit of a rebound for a stock that's down 8% from its November high.
- The analysts set a slightly lower price target on the stock, to $112 from $114. Shares closed today at $96.46.
- Kelyn Brannon, Arista's (NYSE:ANET) CFO since July 2013, is leaving for "personal reasons." Founder/chairman Andy Bechtolsheim will serve as interim CFO while the company looks for a successor.
- The announcement comes a day after Arista unveiled a subscription pricing model for its EOS operating system as an alternative to traditional up-front licenses. The week has also seen Arista announce a partnership with server OEM Super Micro to offer joint solutions aimed at Web-scale data center architectures; Microsoft and Facebook are among Arista's clients.
- Shares -0.9% AH to $69.00.
- Sanchez Energy (NYSE:SN) signs a revised $1.5B credit facility agreement with lenders, including a $100M cut in its borrowing base to $550M to reflect a recent sale of properties in the Eagle Ford shale.
- The new first lien revolving credit facility also changes a covenant lowering its senior secured leverage ratio to 2.25x from its current 4x total assets; the banks left a $300M elected commitment unchanged.
- Communications Sales & Leasing (Pending:CSAL) -- the coming REIT spinoff from Windstream Holdings (WIN -1.9%) -- is looking for $3.65B in financing, Bloomberg is reporting.
- Sources say the company has approached lenders for a 7.5-year $2B loan, along with plans to raise $1.65B in bonds that would partially pay a Windstream dividend.
- The spinoff may be coming to closure on April 24.
- Previously: Windstream REIT spinoff taps Wallace as CFO (Mar. 30 2015)
- Previously: Windstream receives final approval for REIT spinoff and declares dividend (Mar. 26 2015)
- Though it beat FQ2 estimates, Micron (NASDAQ:MU) has guided in its earnings slides (.pdf) for FQ3 revenue of $3.8B-$4.05B, below a $4.29B consensus. At the same time, a light outlook was expected by many.
- Lifting FQ2 sales: Trade NAND sales rose 12% Q/Q, in spite of guidance for production to be flat to down by a low-single digit %. DRAM sales fell 9%; production guidance was for a high-single to low-double digit drop.
- DRAM and trade NAND ASPs respectively fell 6% and 9% Q/Q, below guidance of flat to down low-single digits. However, DRAM cost/bit fell 4% (better than guidance for a flat cost/bit), and trade NAND cost/bit fell 3% (better than guidance for a mid-single digit increase).
- FQ3 DRAM guidance: High-single digit production growth (20nm transition), high-single digit ASP decline (PC price pressure), low single-digit cost/bit decline. FQ3 trade NAND guidance: Low-single digit production decline, mid-single digit ASP growth, mid-single digit cost/bit growth.
- FQ2 gross margin was 34%, down from FQ1's 36% and flat Y/Y. SG&A spend rose 6% Y/Y to $187M; R&D spend rose 10% to $379M. DRAM was 65% of revenue, NAND 32% (trade NAND 29%), and other products (e.g. NOR flash) 3%.
- Free cash flow was (op. cash flow - capex) was $399M. The FY15 capex budget remains at $3.6B-$4B. Micron ended FQ2 with $6.35B in cash/marketable investments, and $6.7B in debt.
- MU +1.3% AH to $27.48.
- FQ2 results, PR
- Assured Guaranty (NYSE:AGO) paid $804.5M in cash for the business. As of year-end Radian Asset's statutory capital was about $1.3B, and as of Feb. 28, its statutory net par outstanding was about $13.9B.
- The deal boosts the capital base and policyholders' surplus, and is accretive to AGO's earnings, operating shareholders equity, and adjusted book value, says CEO Dominic Frederico.
- Source: Press Release
- Shares +0.5% after hours.
- Previously: Radian +7.8% after agreeing to sale of financial guaranty unit (Dec. 23, 2014)
- ONEOK Partners (OKS, OKE) says it is forming a 50-50 joint venture with a subsidiary of Mexico's Fermaca Infrastructure to construct a pipeline that will transport natural gas from the Permian Basin in west Texas to Mexico.
- The first phase of the project for 170MM cf/day of available capacity is scheduled for completion by Q1 2016; final completion is expected by 2019 and will increase available capacity on the pipeline to 640MM cf/day.
- OKS will manage project construction and become operator of the pipeline upon completion; the project is estimated to cost $450M-$500M.
- Looking for some kind of growth wherever they can find it, banks are about to get their wish as Fair Isaac is set to launch a new credit scoring metric which should expand by tens of millions the field of those eligible to get credit.
- The new score will pull payment histories for things like utilities to calculate credit scores for consumers who might otherwise not have one. Other things - like how often someone changes address - will be used to help calculate a score.
- FICO and 10 unnamed credit card issuers have been testing the new score since November, and Fair Isaac intends to roll things out nationwide by year-end. Right now, about 15M of the 53M previously unscorable Americans can be scored using the new system.
- Source: WSJ
- Among those of interest: WFC, C, BAC, JPM, COF, DFS, AXP
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
4:27 PM| Comment!
- Silver Bay (SBY -0.6%) acquired 2,373 properties in the deal and has another 89 properties under contract with the seller. The purchase price of $252.2M was paid in cash using proceeds from the company revolver.
- Source: Press Release
- Previously: Silver Bay boosts portfolio size nearly 40% with purchase (Feb. 18)
- Joshua Claman, most recently the president of local online ad firm ReachLocal and before that a 10-year Dell vet and 17-year NCR vet, has been hired by Stratasys (NASDAQ:SSYS) to fill the newly-created role of chief business officer. He'll report to CEO David Reis.
- The position makes Claman Stratasys' sales chief, as well as the head of its service and sales channel operations.
- Stratasys' move comes two months after a big 2014 sales warning was issued, and 5 weeks after the company named a new MakerBot CEO. Rival 3D Systems has also been busy shaking up its C-Suite.
- Stocks fell after soft economic reports on U.S. manufacturing private employment added to concerns about U.S. growth and corporate profits.
- Also, with the stock market closed Friday for the Good Friday holiday, some investors surely are sitting things out.
- The health care sector (-1.2%) was the weakest performer, with large cap sector stocks struggling along with high-beta biotech names.
- The energy sector (+0.2%) was supported by crude oil, which spiked 5.2% to ~$50/bbl after the latest inventory report showed a larger than expected build.
- Investor participation was ahead of recent averages, with ~780M shares changing hands at the NYSE floor.
- Treasury prices climbed through the day to send the 10-year yield lower by 7 bps to 1.87%.
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