Q3 2009 Earnings Call

October 29, 2009 1:00 pm ET

• CIT snags $4.5B lifeline. A group of hedge funds including many of its bondholders offered to lend CIT Group (CIT) $4.5B to build creditor support for a controversial debt exchange, pitting them against activist investor Carl Icahn, who wants the swap voted down. The lifeline comes as CIT's lenders must decide by midnight tonight whether to support its proposed debt exchange, a pre-packaged bankruptcy plan, or neither. Sources say the funds bought up CIT debt last summer on a bet the government would bail out the troubled lender, and stand to lose from a freefall bankruptcy, which Icahn is pushing for.
• Mutual funds use Fed bucks to buy bonds. Mutual funds - including those run by T. Rowe Price (TROW) and BlackRock (BLK) - are using Fed financing to reap 15%-plus returns with limited risk. The Fed's TALF (Term Asset-Backed Securities Loan Facility) offers low-cost financing to buy AAA-rated bonds backed by consumer and business loans, as well as commercial mortgages. Investors can borrow up to 95% of the bonds' value by pledging the securities and some additional collateral, and have no obligation to repay the loan beyond the collateral - in essence shifting most of the potential losses to the government. In the words of one fund manager: "This is one of those opportunities that, as an investor, we have to take advantage of."
• IMF boosts Asia growth outlook. The IMF raised its 2009-2010 growth forecast for Asia's economy, but warned that a fragile recovery in advanced economies and lingering problems in the global financial system still pose risks. IMF now sees Asia growth of 2.8% and 5.8% this year and next, up from previous estimates of 1.2% and 4.3% - far higher than the 1.25% growth expected from G-7 economies, but well short of the region's 6.66% average. The report says the region is outpacing other parts of the world, with 'green shoots' of recovery appearing earlier and taking firmer root than elsewhere. (IMF Asia Outlook)
• U.S.-China trade talks open on sour note. China/U.S. trade talks opened on a discordant note Thursday as fresh frictions surfaced after China announced plans to investigate dumping allegations against Detroit's Big Three automakers. Punitive measures are unlikely to cause much harm since most of the vehicles they sell are made in China, but another row - on top of disputes over steel pipes, chicken, movies and music - could further stress their tenuous relationship ahead of Obama's Nov. 15 visit.
• Economists shave GDP estimates after weak orders. Durable goods orders rose 1% in September, short of the 1.5% gain economists expected, but a reverse of August's 2.4% drop. Following the weaker-than-expected gain, Goldman Sachs economist Ed McKelvey dropped his Q3 GDP growth estimate - due out this morning - to 2.7% from a previous 3%. "The headline gain in orders was in line with expectations but not as firm as we had thought," he said. Later, Morgan Stanley and Merrill Lynch followed suit, with Morgan shaving its outlook to 3.8% from 3.9%, and Merrill to 2.3% from 2.5%.
• AIG recoups CDS losses. AIG (AIG) is seeing billions of dollars in inflows from recovering credit-default swaps - the very securities that helped level the insurer. Q2 inflows may have topped $3B, including at least $1B from Goldman Sachs (GS). Credit-default swaps - a type of insurance policy on securities backed by assets such as mortgages - required AIG to put up huge amounts of collateral when the investments they backed fell in value. Many of the sour trades were closed out last year by the government, a move that saved AIG, but may have deprived it of billions of dollars.
• Homebuyer credit extension nears approval. Key senators voiced support for extending and expanding the soon-to-expire homebuyer tax credit, and a vote on the measure could come next week. The current plan would see the $8,000 first-time homebuyer tax credit, set to expire at the end of November, extended through April 2010, and would allow for people who have been in their home for at least five years to receive a $6,500 tax credit if they purchase a new primary residence. The income limit on the credit would also rise to $125,000 from $75,000.
• House panel approves credit rating rules. The House Financial Services Committee signed off (49-14) on legislation aimed at ratings agencies, including barring them from consulting for companies they're also rating, and requiring raters to have outsiders on their boards. The bill also enables investors to sue firms for failing to carry out their duties.
• Fed: To grow or to shrink? A draft bill of new financial-regulation legislation moving through Congress would give the Fed substantial new powers, including the authority to force large firms to shrink if their size threatens the broader economy. The view is likely to conflict with the Senate's, where financial regulation is moving at a much slower pace, and members of both parties remain wary of offering the Fed - seen by many as partially responsible for the collapse - any new authority.
• New home sales flatline. New home sales fell 3.6% in September to an annual rate of 402K, well short of economist consensus of 440K and last month's downward-revised 417K. Months' supply rose to 7.5 from 7.3 in August. Sales were down 7.8% year-over year, and, from the peak of the residential construction boom back in mid-2005, sales are down 71.1%. After adjusting for population growth since the pre-2009 all-time low in 1981, sales are now 15% below previous records. (Census Bureau's New Home Sales (.pdf))
• Norway tightens rates. Norway became the first European country to hike interest rates post-crisis, lifting its key rate by 25 bps to 1.5%. Governor Svein Gjedrem noted inflation is higher than expected, while unemployment was "considerably lower than previously projected," and indicated rates would rise gradually. On Oct. 6, Australia became the first G-20 nation to tighten. (Norges Bank statement)

Earnings: Thur. Before Open

• ABB Ltd. (ABB): Net income of $1.03B (+12%). Sales $7.9B (-10%). Orders $7.06B (-21%). "It remains unclear when and how quickly capital investments by customers will recover from the downturn. In addition, the volatility of raw material prices and the limited availability of project funding continue to influence the timing of many power and industrial investment decision." ABB preannounced on Oct. 19. Shares -2.1% premarket. (PR)
• Aetna (AET): Q3 EPS of $0.69 beats by $0.03. Revenue of $8.72B (+14.4%) in-line. Sees full-year EPS of $2.75 vs. $2.86 consensus. (PR)
• Allegheny Energy (AYE): Q3 EPS of $0.59 beats by $0.06. Revenue of $794M (-6.6%) vs. $952M. (PR)
• Allergan (AGN): Q3 EPS of $0.70 in-line. Revenue of $1.13B (+4.2%) vs. $1.08B. Shares +0.8% premarket. (PR)
• American Electric Power Company (AEP): Q3 EPS of $0.93 beats by $0.08. Revenue of $3.5B (-16.7%) vs. $3.97B. (PR)
• AstraZeneca (AZN): Q3 EPS of $1.46 beats by $0.06. Revenue of $8.2B (+5.5%) vs. $7.9B. Sees full-year core EPS of $6.20-6.40 vs. consensus of $5.99. Shares +0.7% premarket. (PR)
• AutoNation (AN): Q3 EPS of $0.36 beats by $0.01. Revenue of $2.92B (-13.2%) vs. $3.13B. "Cash for Clunkers was a highly effective stimulus program that provided a much needed lift in auto sales and has set the stage going forward for a gradual recovery of new vehicle sales." Says CARS boosted Q3 EPS by $0.07. Approves $250M buyback. (PR)
• Avon (AVP): Q3 EPS of $0.42 beats by $0.02. Revenue of $2.55B (-3.5%) in-line. (PR)
• Barrick Gold (ABX): Q3 EPS of $0.54 beats by $0.07. Revenue of $2.1B (+11.6%) in-line. Significantly reduced gold hedges, and will eliminate within 12 months. (PR)
• BioCryst Pharmaceuticals (BCRX): Q3 EPS of -$0.28 misses by $0.06. Revenue of $10.5M (+18%) vs. $4.6M. BioCryst recently received FDA approval to use its flu I.V. drug peramivir as an emergency treatment against H1N1. (PR)
• Brookfield Properties (BPO): Q3 FFO of $0.34 in-line. Revenue of $657M (-7.1%) vs. $580M. (PR)
• Burger King (BKC): FQ1 EPS of $0.34 misses by $0.03. Revenue of $637M (-5.4%) vs. $653M. Expects the unpredictable consumer environment will persist in fiscal 2010. (PR)
• Brunswick (BC): Q3 EPS of -$1.53 misses by $0.19. Revenue of $666M (-35.9%) vs. $701M. Shares -5.1% premarket. (PR)
• CME Group (CME): Q3 EPS of $3.35 beats by $0.06. Revenue of $650M (-17.4%) in-line. "As the economy continues to stabilize, there is room for further organic growth in our core business. At the same time, we are actively working to ensure that the benefits our business model brings to the financial system are communicated to the legislators and regulators who are charged with regulatory reform." (PR)
• CNOOC (CEO): Q3 revenue of 23.8B yuan ($3.47B, -23.1%) vs. estimate of 21.6B. Avg. selling price -36.6% to $67.83/barrel. Net daily production +18.4% to 647K. Capital expenditure +10.3% to 11.24B yuan. Shares -0.9% premarket. (Bloomberg, PR)
• Colgate-Palmolive (CL): Q3 EPS of $1.12 beats by $0.01. Revenue of $4B (+0.3%) in-line. (PR)
• Corinthian Colleges (COCO): FQ1 EPS of $0.37 beats by $0.09. Revenue of $388M (+34.2%) vs. $378M. Total student population +25% to 93.5K. Sees full-year EPS of $1.55-1.60 vs. $1.35. Shares +5% premarket. (PR)
• Cott (COT): Q3 EPS of $0.18 beats by $0.02. Revenue of $405M (-3.7%) in-line. To sell $200M in senior notes due in 2017, and use proceeds to fund a previously announced tender offer for notes due in 2011. (PR)
• Deutsche Bank (DB): Q3 net profit €1.4B from €414M a year ago. Pre-tax profit of €1.3B from €93M. Net writedowns of €300M. Risk provision of €544M, up from €236M a year ago, but down from €1B in Q2. Return on equity 15% vs. 1% last year. Says it reduced levels of trading risk, "even at the expense of short-term revenue gains." DB released preliminary results last week. Shares -2.6% premarket. (PR)
• Digital Realty Trust (DLR): Q3 FFO of $0.74 beats by $0.02. Revenue of $163M (+14.9%) in-line. Shares (PR)
• Eastman Kodak (EK): Q3 EPS of -$0.23 misses by $0.04. Revenue of $1.78B (-25.9%) vs. $1.89B. Sees revenue decline at high-end of previous 12-18% range. (PR)
• Expedia (EXPE): Q3 EPS of $0.48 beats by $0.05. Revenue of $852M (+2.3%) vs. $829M. "Travelers are clearly responding to our improving value proposition, as we broaden our fee cuts and increase the depth and breadth of our global supply." Shares +6.8% premarket. (PR)
• ExxonMobil (XOM): Q3 EPS of $0.98 misses by $0.05. Revenue of $82.3B (-40.3) vs. $85.2B. Shares -1.5% premarket. (PR)
• France Telecom (FTE): Q3 Ebitda of €4.56B (-8%), in line with consensus. Revenue of €12.69B (-6.4%) vs. €12.85B. Expects Q4 to be similar to Q3, and will thus continue to implement cost savings plans to prevent its Ebitda margin from declining further. Shares -0.5% in Paris. (PR, WSJ)
• GrafTech International (GTI): Q3 EPS of $0.15 beats by $0.09. Revenue of $165M (-47.8%) vs. $162M. (PR)
• Kellogg Company (K): Q3 EPS of $0.94 beats by $0.10. Revenue of $3.28B (-0.3%) in-line. "The current economic environment has placed significant pressure on our consumers." (PR)
• KBR Inc. (KBR): Q3 EPS of $0.45 beats by $0.04. Revenue of $2.84B (-5.9%) in-line. (PR)
• Mack-Cali Realty (CLI): Q3 FFO of $0.81 beats by $0.05. Revenue of $194M (-5.3%) vs. $175M. (PR)
• Monster Worldwide (MWW): Q3 EPS of $0.01 beats by $0.01. Revenue of $215M (-35.2%) vs. $223M. (PR)
• Moody's (MCO): Q3 EPS of $0.43 beats by $0.05. Revenue of $452M (+4.2%) vs. $417M. Declares quarterly dividend of $0.10. (PR I, II)
• Motorola (MOT): Q3 EPS of $0.01 beats by $0.01. Revenue of $5.45B vs. $5.54B. Appoints Edward Fitzpatrick as CFO. Sees Q4 continuing operations EPS of $0.07-0.09 vs. $0.06. Shares +4.3% premarket. (PR)
• MPS Group (MPS): Q3 EPS of $0.06 beats by $0.04. Revenue of $408B (-29.4%) vs. $403B. MPS is being acquired by Adecco. (PR)
• Mylan Laboratories (MYL): Q3 EPS of $0.32 beats by $0.05. Revenue of $1.26B (-23.7%) in-line. Sees 2010 EPS of $1.24-1.28 vs. $1.17. (PR)
• Newmont Mining (NEM): Q3 EPS of $0.79 beats by $0.24. Revenue of $2.05B (+49.5%) vs. $1.72B. (PR)
• Nintendo (NTDOY.PK): H1 net profit of ¥69.5B ($768M, -52%). Sales of ¥548B (-34.5%). Cuts H1 dividend by 37% to ¥270. Sold 5.75M Wii consoles (-43%) and 11.7M DS hand-held player sales (vs. 13.7M last year). Sees full-year net income of ¥230B vs. ¥270B consensus, full operating profit of ¥370B (-33%), sales of ¥1.5T (-18%), and Wii sales of 20M (vs. previous 26M). (PR I, II, III, Bloomberg)
• Noble Energy (NBL): Q3 EPS of $1.10 beats by $0.28. Revenue of $621M (-43.4%) vs. $657M. (PR)
• NRG Energy (NRG): Q3 EPS of $1.02 misses by $0.12. Revenue of $2.92B vs. $2.18B. (PR)
• Office Depot (ODP): Q3 EPS of -$0.08 beats by $0.02. Revenue of $3.03B (-17.2%) in-line. (PR)
• OfficeMax (OMX): Q3 EPS of $0.08 misses by $0.06. Revenue of $1.83B (-12.6%) in-line. Same-store sales -11.5%. Continues to anticipate macro employment trends will not turn positive until well into 2010. (PR)
• Patterson-UTI Energy (PTEN): Q3 EPS of -$0.12 beats by $0.04. Revenue of $176M (-71%) vs. $163M. (PR)
• PG&E (PCG): Q3 EPS of $0.93 beats by $0.02. Revenue of $3.23B (+12.3%) vs. $3.48B. (PR)
• PPL Corp. (PPL): Q3 EPS of $0.52 beats by $0.07. Revenue of $1.8B vs. $3B. (PR)
• Procter & Gamble (PG): FQ1 EPS of $1.06 beats by $0.07. Revenue of $19.8B (-6%) in-line. (PR)
• Shell (RDS.A): Adjusted net income of $2.62B vs. consensus of $2.5B. Revenue of $75B, down from $131.6B a year ago. "Q3 results were affected by the weak global economy. Upstream and downstream profitability has been sharply reduced compared to year-ago levels. We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery." Shares -3.5% in London. (PR)
• Smith International (SII): Q3 EPS of $0.07 misses by $0.08. Revenue of $1.88B (-34.1%) in-line. (PR)
• Sprint Nextel (S): Q3 EPS of -$0.17 misses by $0.02. Revenue of $8.04B (-8.8%) in-line. Net subscribers -135K. Post-paid churn 2.17% vs. 2.05% in Q2, due to seasonality and heightened competition. Pre-paid churn 6.65% vs. 6.38% in Q2. (PR)
• Taiwan Semi (TSM): Q3 EPS of $0.18 in-line. Revenue of $2.74B (-8.1%) in-line. Gross margin +1.5 points from Q2 to 47.7%. Sees Q4 revenue of NT$90-92B vs. consensus of NT$85.8B. (PR)
• Ventas (VTR): Q3 EPS of $0.66 beats by $0.03. Revenue of $236M (+0.3%) vs. $230M. (PR)
• Virgin Media (VMED): Q3 operating cash flow of £348M (+7%) vs. consensus of £337M. Ebitda of £348M. Revenue of £953M (+1.3%) vs. £942M. Net additions of 8,100 vs. 8,000. (PR)
• Williams Companies (WMB): Q3 EPS of $0.24 beats by $0.05. Shares +2.2% premarket. (PR)
• Xcel Energy (XEL): Q3 EPS of $0.48 misses by $0.02. Revenue of $2.31B (-18.8%) vs. $3.01B. (PR)

Earnings: Wed. After Close

• AFLAC (AFL): Q3 EPS of $1.25 beats by $0.05. Revenue of $4.5B (+23%) vs. $4.7B. Shares -0.2% AH. (PR)
• Agnico-Eagle Mines (AEM): Q3 EPS of -$0.11 vs. estimate of $0.20; results include foreign exchange loss and other items accounting for cost of $0.14/share. Revenue of $159M (+91%) vs. $183M. Shares -8.3% AH. (PR)
• Akamai Technologies (AKAM): Q3 EPS of $0.38 beats by $0.03. Revenue of $207M (+5%) vs. $199M. Shares +9.6% AH. (PR)
• Annaly Mortgage Management (NLY): Q3 EPS of $0.75 beats by $0.03. Net interest income of $436M (+24%). Shares +2.3% AH. (PR)
• AvalonBay Communities (AVB): Q3 FFO of $1.09 beats by $0.01. Revenue of $224M (+0.3%). Sees Q4 FFO of $0.61-0.64 vs. $0.97 and full-year FFO of $3.86-3.90 vs. $4.19. (PR)
• Brandywine Realty Trust (BDN): Q3 FFO of $0.44 beats by $0.08. Revenue of $147M (+2%) vs. $141M. Raises full-year FFO guidance to $1.82-1.85 from $1.75-1.80, vs. $1.78. Sees fiscal 2010 FFO of $1.23-1.34 vs. $1.38. Shares -1.9% AH. (PR)
• Cadence (CDNS): Q3 EPS of $0.03 beats by $0.04. Revenue of $216M (-7%) vs. $215M. Sees Q4 EPS of $0.02-0.04 vs. $0.01, and full-year EPS of -$0.08 to -$0.10 vs. -$0.14. (PR)
• Cerner (CERN): Q3 EPS of $0.61 in-line. Revenue of $409M (-3%) vs. $421M. Sees Q4 EPS of $0.68-0.74 vs. $0.74. Shares -1.9% AH. (PR)
• CB Richard Ellis Group (CBG): Q3 EPS of $0.08 misses by $0.02. Revenue of $1B (-23%) in-line. Shares -4% AH. (PR)
• Duke Realty (DRE): Q3 FFO of $0.32 beats by $0.01. Revenue of $224M (+4.1%) vs. $219M. (PR)
• Equity Residential (EQR): Q3 FFO of $0.53 beats by $0.01. Revenue of $493M (-4%) vs. $487M. Sees Q4 FFO of $0.49-0.53 vs. $0.49. (PR)
• Express Scripts (ESRX): Q3 EPS ex-items of $0.99 beats by $0.19. Revenue of $5.6B (+3%) vs. $5.5B. Sees full-year EPS of $3.76-3.82 vs. $3.49. Shares +0.8% AH. (PR)
• First Solar (FSLR): Q3 EPS of $1.79 beats by $0.05. Revenue of $481M (+38%) vs. $529M. Shares -15.9% AH. (PR)
• Genco Shipping & Trading (GNK): Q3 EPS of $1.09 beats by $0.08. Revenue of $93M (-14%) vs. $91M. Shares -2.9% AH. (PR)
• Helix Energy Solutions Group (HLX): Q3 EPS of $0.04 misses by $0.01. Revenue of $216M (-65%) vs. $249M. Shares -0.3% AH. (PR)
• LSI Logic (LSI): Q3 EPS of $0.18 beats by $0.14. Revenue of $578M (-19%) vs. $556M. Sees Q4 EPS of $0.07-0.13 vs. $0.06 and Q4 revenue of $605M-645M vs. $587M. Shares +7% AH. (PR)
• Lincoln National (LNC): Q3 EPS of $0.84 beats by $0.08. Revenue of $2.1B (-8%) vs. $2.4B. Shares +9.2% AH. (PR)
• O'Reilly Automotive (ORLY): Q3 EPS of $0.63 beats by $0.07. Revenue of $1.26B (+13%) vs. $1.23B. Comparable store sales up 5.3%; "Continued improvement in our gross margin results fueled by improved acquisition costs as the result of our increased purchasing power." Shares -0.2% AH. (PR)
• Owens-Illinois (OI): Q3 EPS of $0.74 misses by $0.19. Revenue of $1.9B (-7%) in-line. Shares -6% AH. (PR)
• Questar (STR): Q3 EPS of $0.60 beats by $0.09. Revenue of $600M (-21%) vs. $542M. Raises full-year EPS guidance to $2.45-2.55 from $2.35-2.45, vs. $2.57. (PR)
• Realty Income (O): Q3 FFO of $0.47 beats by $0.01. Revenue of $82M (flat) in-line. Sees full-year FFO of $1.86-1.92 vs. $1.83. Shares +2.3% AH. (PR)
• Ryland Group (RYL): Q3 EPS of -$1.20 misses by $0.31. Revenue of $328M (-40%) vs. $352M. Shares -0.5% AH. (PR)
• Symantec (SYMC): FQ2 EPS of $0.36 beats by $0.03. Revenue of $1.48B (-3%) vs. $1.43B. Shares +6.1% AH. (PR)
• Teck Resources (TCK): Q3 EPS of $0.59 beats by $0.09. Revenue of $2.1B in-line. Sees 2009 coal sales of 19.5-20.5M tons, slightly higher than previous guidance. Shares +4.1% AH. (PR)
• Teradyne (TER): Q3 EPS of $0.14 beats by $0.03. Revenue of $262M (-12%) vs. $256M. Sees Q4 EPS of $0.12-0.17 vs. $0.12 on Q4 revenue of $255M-270M vs. $252M. Shares +2.2% AH. (PR)
• Trinity Industries (TRN): Q3 EPS of $0.29 beats by $0.04. Revenue of $557M (-52%) vs. $564M. Sees Q4 EPS of $0.08-0.13 vs. $0.06. Shares -1.3% AH. (PR)
• XL Capital (XL): Q3 EPS of $0.89 beats by $0.26. Revenue of $1.5B (-15%) vs. $1.7B. Shares +5.2% AH. (PR)

Today's Markets

Asia markets moved sharply lower Thursday, but losses in Europe were mild and U.S. futures have moved higher overnight following Wednesday's losses.

Equity REITs have made a strong move lately. We have expressed our doubts about the wisdom of that move (Are REITs Ahead of Themselves?), and wonder about the quality of the underlying trusts.

click images to enlarge

This week’s distribution increases were mainly focused on two of the energy majors and several master limited partnerships. In one occasion with master limited partnerships, both the general and the limited partners received distribution increases, while in another only the general partners received a raise in quarterly distributions.

Dividend increases typically reflect management’s confidence in companies’ financial performance and their ability to meet shareholders’ expectations. The companies which met these goals include:

Dividend increases aren’t the only thing the Kellogg Company (K) is known for. For anyone over the age of two, Snap, Crackle and Pop are very familiar characters. Since 1933 the three elf characters have been the spokesmen for Kellogg’s Rice Krispies. Snap, the baker, is the oldest and the problem solver. Crackle, middle child with no distinguishable occupation, is the good-hearted leader of the group. Pop, the marching band leader, is the clumsy younger child. He plays jokes, doesn’t take things seriously.

• Reactions to Microhoo. Reactions to the Microsoft (MSFT) and Yahoo (YHOO) search deal announced yesterday have been mixed. Some investors wondered why Yahoo agreed to a deal with no upfront fee, after previously saying any deal would be conditioned on 'a boatload of cash,' and doubts about the deal's benefits to Yahoo helped pull shares down 12% (Microsoft closed up 1.4%, and the deal may mark an important turning point for CEO Steve Ballmer). Still, others felt "dropping the dead weight of search isn’t a horrible idea" for a company that has no realistic chance of beating Google (GOOG). The deal could face antitrust concerns but will likely be approved.
• TARP exit for AmEx. American Express (AXP) has officially exited TARP after repurchasing warrants from the government for $340M. The company said the warrant buyback, along with $74.4M of dividend payments it made, provided taxpayers with an annualized 26% return. Analysts noted the repurchase price was in line with the $1.1B Goldman Sachs (GS) paid, indicating the Treasury has indeed taken a tougher negotiating stance on the warrant purchases in light of congressional pressure.
• FDIC to break up banks. In an effort to entice more buyers, the FDIC is poised to start breaking up failed banks into good and bad pieces. The goal is to sell the most distressed parts of failed banks to private equity firms and other investors that are willing to take a larger risk on bad assets. The 'good' pieces of failed banks, including deposits and branches, could then be sold to traditional banks.
• Sanofi buys out Merck's JV stake. Sanofi-Aventis (SNY) agreed to buy Merck's (MRK) half of their joint Merial animal-health venture for $4B in cash, and said the companies may work together again in the future to form the world’s largest maker of animal treatments. Sanofi and Merck had collaborated on Merial for over ten years, building it into a company with $2.6B in annual sales. The deal should help Merck allay antitrust concerns over its proposed purchase of Schering-Plough (SGP). Premarket: SNY -0.9% (7:00 ET).
• Mortgage fraud probe includes Goldman, Deutsche. A Senate panel reportedly subpoenaed financial firms including Goldman Sachs (GS) and Deutsche Bank (DB) in search of evidence of mortgage fraud during last year's market meltdown. The probe is focused on whether bankers had private doubts about the financial soundness of the mortgage-related securities they were publicly promoting. Washington Mutual, now largely owned by JPMorgan Chase (JPM), may also have been among the firms that received a subpoena.
• Citi advances asset sales. Citigroup (C) is 'moving extremely fast' on asset sales, said CEO Vikram Pandit. Citigroup announced today it had agreed to sell its stake in a Japanese asset management unit to Sumitomo Trust & Banking, Japan’s fifth-largest bank, for ¥112.4B ($1.18B).
• New help for homeowners. The White House is planning to announce new guidelines today to help homeowners struggling with Federal Housing Administration-insured mortgages. The guidelines will narrow the gap between the FHA's mortgage-modification program and the White House's foreclosure-prevention plan, and will "offer borrowers an opportunity to stay in their homes, make payments that are manageable and defer [payment of] the money owed to a later time when, hopefully, home values have improved."
• Fidelity signs IPO pact with Deutsche. Fidelity Investments struck a deal with Deutsche Bank (DB) allowing Fidelity's individual investors to participate in initial public offerings underwritten by Deutsche as of this week. Fidelity reached a similar deal last month with private equity group Kohlberg Kravis Roberts, but the Deutsche deal carries more weight because Deutsche is one of the 10 busiest underwriters of stock offerings in the U.S. For Deutsche, access to Fidelity's customers will broaden the range of IPOs it can land.
• Beige Book sees recession moderating. The Federal Reserve's Beige Book was released yesterday, and noted the recession seems to be growing less severe. Some regions said the downturn's pace has moderated, and others reported that activity is stabilizing. Retail sales are still sluggish, and wages and benefits are steady or falling in most districts. (Read the Fed's Beige Book summary)
• China seeks to reassure on monetary policy. In a volatile day of trading, Chinese stocks managed to close up 1.7% after China's central bank released a statement aimed at calming jittery investors. After the Chinese stock market fell 5% on Wednesday, its largest daily drop in eight months, the central bank pledged to maintain loose monetary policy in order to support an economic recovery and to ensure sustainable credit growth, seemingly without relying on a strict, central bank-directed quota system used in the past.
• Boeing gets squeezed. British Airways (BAIRY.PK) is pressuring Boeing (BA) to renegotiate installment payments on its 787 Dreamliner orders. Predelivery payments can total tens of millions of dollars per jetliner, and as airlines find it increasingly difficult to bankroll the payments, plane makers like Boeing are getting squeezed. In other bad news for Boeing, a contractor said yesterday that the Dreamliner's braking system is still incomplete because of a dispute over who should pay for the work, and S&P downgraded Boeing's credit rating by one notch over concerns of additional production cuts due to airline order deferrals and cancellations.
• PennyMac a few pennies short on IPO. PennyMac Mortgage Investment Trust, the distressed-mortgage investment company run by former Countrywide No. 2 Stanford Kurland and 10 other former Countrywide officials, raised $320M in its initial public offering, $80M less than planned. The company sold 16M shares at $20 each.

Earnings: Thursday Before Open

• AmerisourceBergen (ABC): FQ3 EPS of $0.42 beats by $0.03. Revenue of $18.39B (+2.2%) vs. $18.11B. (PR)
• Aon (AOC): Q2 EPS of $0.76 beats by $0.02. Revenue of $1.9B (-4%) in-line. (PR)
• Art Technology Group (ARTG): Q2 EPS of $0.06 beats by $0.02. Revenue of $44M (+6%) in-line. Shares +3.2% premarket (8:20 ET). (PR)
• AstraZeneca (AZN): Q2 EPS of $1.64 beats by $0.24. Revenue of $8B (+0%) vs. $7.8B. Shares +3.5% premarket (6:40 ET). (AstraZeneca's press release (.pdf))
• Automatic Data Processing (ADP): FQ4 EPS of $0.45 in-line. Revenue of $2.1B (-4.5%) in-line. Issues downside guidance for FY '10, sees EPS of $2.29-2.39 vs. $2.44 consensus, sees revenue down 1-4%, or to roughly $8.51-8.78B, vs. $8.94B consensus. (PR)
• Avon (AVP): Q2 EPS of $0.38 beats by $0.04. Revenue of $2.47B (-9.7%) in-line. (PR)
• Barrick Gold (ABX): Q2 EPS of $0.49 beats by $0.11. Revenue of $2B (+3%) vs. $1.9B. Shares +3.5% premarket (8:10 ET). (PR)
• Becton, Dickinson and Co. (BDX): FQ3 EPS of $1.30 beats by $0.06. Revenue of $1.8B (-2%) in-line. (PR)
• BioCryst Pharmaceuticals (BCRX): Q2 EPS of -$0.23 beats by $0.02. Revenue of $4.8M (+80%) vs. $4.1M. R&D expenses decreased to $11.2M from $13.4M a year ago. (PR)
• CIGNA (CI): Q2 EPS of $1.14 beats by $0.18. Revenue of $4.5B (-8%) vs. $4.8B. (PR)
• Cincinnati Financial (CINF): Q2 EPS of -$0.03 misses by $0.21. Revenue of $874M (-5%) vs. $912M. (PR)
• CMS Energy (CMS): Q2 EPS of $0.26 misses by $0.02. Reaffirms guidance for FY '09, sees EPS of $1.25 vs. $1.27 consensus. (PR)
• Colgate-Palmolive Company (CL): Q2 EPS of $1.07 beats by $0.02. Revenue of $3.75B (-5.5%) in-line. Gross margin increased 2 points to 58.8%, driven by easing raw and packaging material costs, and continued benefit from higher prices already implemented and its ongoing aggressive savings programs. (PR)
• CONSOL Energy (CNX): Q2 EPS of $0.62 misses by $0.19. Revenue of $1.1B (-12%) in-line. (PR)
• Covidien (COV): FQ3 EPS of $0.74 beats by $0.08. Revenue of $2.5B (-3%) in-line. (PR)
• Cummins (CMI): Q2 EPS of $0.30 beats by $0.04. Revenue of $24.3B (+525%) vs. $2.5B. (PR)
• Digital Realty Trust (DLR): Q2 FFO of $0.71 in-line. Revenue of $155M (+25.2%) vs. $161M. (PR)
• Dow Chemical (DOW): Q2 EPS of $0.05 beats by $0.14. Revenue of $11.3B (-40%) vs. $13B. (PR)
• Eastman Kodak (EK): Q2 EPS of -$0.71 misses by $0.34. Revenue of $1.77B (-28.9%) vs. $1.83B. Sees loss from continuing ops at the low end of its previous $200-400M range. Shares -0.9% premarket (8:00 ET). (PR)
• Endo Pharmaceuticals (ENDP): Q2 EPS of $0.73 beats by $0.06. Revenue of $373M (+22%) vs. $358M. (PR)
• ExxonMobil (XOM): Q2 EPS of $0.84 misses by $0.18. Revenue of $74.46B (-46.1%) vs. $71.29M. Production was down 3%. Lower margins reduced earnings by $1B. Shares -1.8% premarket (8:30 ET). (PR (.pdf))
• GrafTech International Ltd (GTI): Q2 EPS of $0.12 beats by $0.08. Revenue of $158M (-51%) vs. $143M. (PR)
• International Paper (IP): Q2 EPS of $0.20 beats by $0.20. Revenue of $5.8B (-0.1%) in-line. (PR)
• Iron Mountain (IRM): Q2 EPS of $0.25 beats by $0.02. Revenue of $746M (-3%) vs. $741M. (PR)
• KBR Inc. (KBR): Q2 EPS of $0.42 beats by $0.01. Revenue of $3.1B (+17%) vs. $2.9B. (PR)
• Kimco Realty (KIM): Q2 EPS of $0.31 misses by $0.01. Revenue of $189M (+3%) in-line. (PR)
• Mack-Cali Realty (CLI): Q2 EPS of $0.87 beats by $0.06. Revenue of $173M (-3%) vs. $167M.
• MasterCard (MA): Q2 EPS of $2.67 beats by $0.25. Revenue of $1.28B (+2.7%) in-line. Net revenue was up 7% on a constant currency basis. Gross dollar volume was down 0.6%; purchase volume was down 0.7%. Shares +7.2% premarket (8:30 ET). (PR)
• Motorola (MOT): Q2 EPS of -$0.01 beats by $0.03. Revenue of $5.5B (-32%) vs. $5.6B. Issues downside guidance for Q4 (Dec), sees EPS of -$0.01 to $0.01 vs. $0.05 consensus. Shares +7.3% premarket (7:45 ET). (PR)
• Mylan (MYL): Q2 EPS of $0.32 beats by $0.02. Revenue of $1.3B (+5%) vs. $1.2B. (PR)
• Newell Rubbermaid (NWL): Q2 EPS of $0.47 beats by $0.12. Revenue of $1.5B (-18%) in-line. (PR)
• Noble Energy (NBL): Q2 EPS of $0.66 beats by $0.11. Revenue of $491M (-59%) vs. $588M. (PR)
• NRG Energy (NRG): Q2 EPS of $1.56 vs. consensus of $0.74 (may not be comparable). Revenue of $2.2B (+70%) vs. $2.1B. (PR)
• NYSE Euronext (NYX): Q2 EPS of $0.51 beats by $0.06. Revenue of $1.1B (+9.5%) in-line. (PR)
• OfficeMax (OMX): Q2 EPS of $0.04 beats by $0.03. Revenue of $1.66B (-16.5%) in-line. "Given the projected weak economic climate and our anticipation of a soft Back-to-School season, OfficeMax remains very cautious in its expectations for the second half of 2009." (PR)
• Oshkosh Truck (OSK): FQ3 EPS of -$0.30 misses by $0.12. Revenue of $1.23B (-36.1%) vs. $1.38B. "For Q4, we expect solid performance from our defense and fire & emergency segments, while we expect that our access equipment and commercial segments will both continue to face tough market conditions." (PR)
• Parker-Hannifin (PH): FQ4 EPS of $0.31 beats by $0.09. Revenue of $2.2B (-34%) in-line. Shares -1% premarket (7:50 ET). (PR)
• Patterson-UTI Energy (PTEN): Q2 EPS of -$0.12 in-line. Revenue of $161M (-69%) vs. $167M. (PR)
• Regal Entertainment Group (RGC): Q2 EPS of $0.26 misses by $0.03. Revenue of $789M (+17%) vs. $769M. (PR)
• Rockwell Collins (COL): FQ3 EPS of $0.91 beats by $0.01. Revenue of $1.1B (-9%) in-line. (PR)
• Royal Dutch Shell (RDS.A): Q2 EPS of $0.62 vs. consensus of $0.93 (may not be comparable). Revenue of $63.9B (-51%) vs. $60.5B. Shares -0.65% premarket (6:50 ET). (PR)
• Sally Beauty (SBH): FQ3 EPS of $0.16 in-line. Revenue of $673M (-0.5%) vs. $684M. (PR)
• Sony (SNE): FQ1 net loss of ¥37.1B ($390M) vs. consensus of -¥110B and vs. a net profit of ¥35B a year ago. Still sees full-year loss of ¥120B. Revenue fell 19% to ¥1.6T. Shares +7.2% premarket (8:10 ET). (DJ)
• Spirit AeroSystems (SPR): Q2 EPS of $0.61 beats by $0.02. Revenue of $1.1B (-0.2%) in-line. Shares +2.3% premarket (8:00 ET). (PR)
• Taiwan Semiconductor (TSM): Q2 EPS of $0.14 beats by $0.01. Revenue of $2.2B (-23%) in-line. (PR)
• Travelers (TRV): Q2 EPS of $1.26 misses by $0.02. Revenue of $6.2B (-2%) in-line. (PR)
• Tyco International (TYC): FQ3 EPS of $0.58 beats by $0.13. Revenue of $4.2B (+0.6%) vs. $4.3B. (PR)
• Ventas (VTR): Q2 FFO of $0.68 beats by $0.06. "Our high-quality, diversified healthcare and seniors housing assets are performing very well due to demographic and need-driven demand." (PR)
• Waste Management (WMI): Q2 EPS of $0.52 misses by $0.02. Revenue of $2.95B (-15.5%) vs. $3B. Company is changing its ticker symbol to WM as of August 5, 2009. Issues downside guidance for FY '09, sees EPS of $1.95-1.99 vs. $2.02 consensus. (PR)
• Xcel Energy (XEL): Q2 EPS of $0.25 in-line. Revenue of $2B (-23%) vs. $2.6B. (PR)

Earnings: Wednesday After Close

• AFLAC (AFL): Q2 EPS of $1.20 beats by $0.06. Revenue of $4.3B (flat) vs. $4.7B. Announced planned acquisition of Continental American for $100M. (PR)
• Agnico-Eagle Mines (AEM): Q2 EPS of $0.01 misses by $0.11. Revenue of $139M (+58%) vs. $126M. EPS includes noncash currency loss of $0.12/share and stock option expense of $0.03/share. (PR)

• Akamai Technologies (AKAM): Q2 EPS of $0.40 misses by $0.01. Revenue of $205M (-2.7%) vs. $211M. (PR)

Continuing the series of State Street presentations on relevant market topics, the latest piece "What are the Implications of the Growing Use of Electronic Trading" focuses on the nuanced difference between "real liquidity" and "liquidity hazard", depending on whether one is a price taker or market maker.

Yet based on limited available public disclosure, non-premium clients of the NYSE and other PT-espousing exchanges have no visibility of who and under what conditions any given broker/dealer and quant become one or the other.

Today, Equinix (EQIX) announced its intention to further expand at 350 E. Cermak in Chicago, with a new offering (IBX shared suite) specifically targeted at the Financial Trading Companies in need for space in close proximity to its existing Financial eXchange (downtown CH1 and CH2 data centers).

The space has been leased from Digital Realty Trust (DLR):

• Chrysler Ch. 11 imminent. Talks between Chrysler lenders and the Treasury broke down Wednesday, making it all but certain that the automaker will file for bankruptcy today. Government officials say everything is in place to ensure the company makes it through court quickly, possibly in as little as a few weeks. Even as the automaker prepares for a likely bankruptcy, Obama said he's hopeful Chrysler will be able to push forward with a Fiat alliance.
• GM bondholders prep counteroffer. General Motors' (GM) bondholders plan to reject GM's April 27 debt exchange offer, and to present a counteroffer that would give them control of the automaker. Sources say the counteroffer proposes that bondholders and a UAW retiree medical fund both exchange all their claims for equity stakes of 58% and 41% respectively. Common shareholders would be left with 1% ownership. A committee representing bondholders will present the alternative plan to the auto task force today. Shares +3.9% premarket (7:00 ET).
• FOMC: recession is easing. As expected, the FOMC kept rates steady at 0-0.25%. The committee pointed to signs of economic improvement, and forecast a gradual recovery amid market weakness: "Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time. Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability." Even as the FOMC took note of some 'green shoots' in markets, it left the door open to boosting emergency financial programs if necessary. (Read the FOMC statement)
• 100+ PPIP applications. More than 100 firms applied to participate in PPIP, the Treasury's toxic-asset purchase program. At least five will get preliminary approval by May 15, at which point they can begin raising the expected minimum of $500M in private capital. (Read the Treasury's statement)
• Lewis ousted as chairman. A shareholder proposal removed Bank of America (BAC) CEO Ken Lewis from his position as chairman of the board, a possible precursor to his eventual replacement as CEO. The proposal passed narrowly, with 50.34% of the vote. Board member Walter Massey will assume the chairman's post.
• State Street probed over mortgage securities. Massachusetts' top securities regulator launched a probe into whether State Street Corp (STT) misled pension funds over the risk level of certain investments. In particular, regulators are investigating whether State Street represented mortgage-backed securities as low-risk vehicles, and whether funds marketed as safe held 'potentially inappropriate' derivatives, swaps and other securities. A State Street spokeswoman declined to comment.
• FBI probes Freddie losses. The FBI is reportedly investigating possible accounting violations at Freddie Mac (FRE), trying to determine whether the mortgage giant improperly delayed the recognition of billions of dollars of losses. The losses, incurred from 2001-2004, were connected to derivatives contracts and are due to be gradually recognized in quarterly earnings statements over the next several years.
• IBM offers pre-stimulus financing. IBM (IBM) is offering $2B in financing to customers who want to invest in broadband and healthcare technologies but are waiting to receive government stimulus funds. Since much of the government funding won't reach companies until 2010 or later, IBM sees this as a way to "jump-start those investments and jump-start the benefits."
• Budget approved. Congress approved a $3.5T budget outline for 2010, which includes special funds to pay for sweeping changes in health care, education and energy. Democrats said their budget outline will cut the deficit by more than 50% in five years. Republicans argued the reduced deficit projections omit costs, such as disaster relief, from future-year expenditures.
• IACI goes match-making. IAC/InterActiveCorp (IACI) is in talks to buy Yahoo Personals, Yahoo's (YHOO) online dating service. Yahoo has considered selling the matchmaking site in the past, and CEO Carol Bartz has expressed her interest in selling or shuttering non-core businesses. The dating site could be worth around $500M.
• Time Warner, AOL prepare to part. Time Warner (TWX) said it's preparing to move ahead with a spinoff of all or part of its struggling AOL unit, and a decision is expected 'very soon.' The company also plans to buy back Google's (GOOG) 5% stake in AOL.
• Visa beats forecast on cost cuts, debit use. Visa (V) posted better-than-expected quarterly results (see details below) as the company increased prices and cut costs. The company also benefited from consumers' increased reliance on debit cards The number of Visa-branded cards grew 8% globally to more than 1.7B, while the number of transactions processed on its network climbed 9%.
• Starbucks to focus on value. Starbucks (SBUX) narrowly beat expectations for quarterly earnings (see details below) on cost cuts. Trying to re-brand itself for the economic times, Starbucks plans to launch a multimillion dollar campaign challenging the view that coffee is an expensive luxury. The company will also selectively lower prices on some of its popular drinks while slightly raising prices on larger, more complex beverages.
• MGM finds project financing. MGM Mirage (MGM) and Dubai World reached an agreement with lenders to fully finance their $8.5B CityCenter project in Las Vegas, and Dubai World dismissed its lawsuit against MGM. The project is on track to open in December 2009.
• Apple builds chip-design team. Apple (AAPL) is shifting strategy with plans to build its own team for chip design. The company hopes the move will shield Apple's work from rivals and lead to the development of exclusive features for its gadgets.
• GDP worse than expected. Advanced Q1 GDP was -6.1% vs. consensus of -4.7% and last quarter's -6.3%. Personal consumption increased 2.2% vs. consensus of +0.9% and prior -4.3%. The price index rose 2.9% vs. consensus of +1.8% and prior +0.5%.
• BoJ holds rates steady. Bank of Japan kept its benchmark rate unchanged at 0.1%. The bank will release its economic outlook today, and will likely forecast a deeper contraction than the 2% drop predicted three months ago.

Earnings: Thursday Before Open

• Alliant Energy (LNT): Q1 EPS of $0.30 misses by $0.24. (PR)
• Ashland (ASH): FQ2 EPS of $0.64 beats by $0.34. Revenue of $2.0B (-3.4%) vs. $2.1B. (PR)
• BorgWarner (BWA): Q1 EPS of -$0.12 beats by $0.08. Revenue of $819.5M (-45.3%) vs. $854M. (PR)
• Cardinal Health (CAH): FQ3 EPS of $0.97 beats by $0.02. Revenue of $24.9B (+8.9%) vs. $24.0B. (PR)
• Celgene (CELG): Q1 EPS of $0.44 beats by $0.01. Revenue of $601M (+29.9%) vs. $602M. (PR)
• CIGNA (CI): Q1 EPS of $0.69 misses by $0.22. Revenue of $4.8B (+4.5%) in-line. (PR)
• CMS Energy (CMS): Q1 EPS of $0.30 in-line. Revenue of $2.1B (-3.6%) in-line. (PR)
• Colgate-Palmolive (CL): Q1 EPS of $0.97 beats by $0.01. Revenue of $3.5B (-5.7%) vs. $3.6B. (PR)
• Comcast (CMCSA): Q1 EPS of $0.27 beats by $0.04. Revenue of $8.4B (-5%) vs. $8.8B. (PR)
• Covidien (COV): FQ2 EPS of $0.69 misses by $0.16. Revenue of $2.7B (+11.3%) vs. $2.6B. (PR)
• Digital Realty Trust (DLR): Q1 EPS of $0.70 beats by $0.03. Revenue of $149M (+30.2%) vs. $147M. (PR)
• Dominion Resources (D): Q1 EPS of $0.97 beats by $0.09. Revenue of $4.8B (+9.8%) vs. $4.1B. (PR)
• Dow Chemical (DOW): Q1 EPS of $0.12 beats by $0.33. Revenue of $9.1B (-38.7%) vs. $11.7B. Shares +1.4% premarket (6:50 ET). (PR)
• Eastman Kodak (EK): Q1 EPS of -$1.34 misses by $1.01. Revenue of $1.5B (-29.4%) vs. $1.6B. (PR)
• Entegris (ENTG): Q1 EPS of -$0.34 misses by $0.09. Revenue of $59M (-60.2%) vs. $71M. (PR)
• EQT Corp. (EQT): Q1 EPS of $0.55 misses by $0.01. Revenue of $260M (-1.6%) vs. $310M. (PR)
• ExxonMobil (XOM): Q1 EPS of $0.92 misses by $0.03. Revenue of $64.03B (-45.2%) vs. $54.03B. Shares +0.6% premarket. (AP)
• GrafTech International Ltd (GTI): Q1 EPS of $0.04 beats by $0.03. Revenue of $134M (-53.8%) vs. $153M. (PR)
• International Paper (IP): Q1 EPS of $0.08 beats by $0.12. Revenue of $5.7B (+0%) vs. $6.3B. (PR)
• Iron Mountain (IRM): Q1 EPS of $0.20 beats by $0.08. Revenue of $723M (-3.5%) vs. $722M. (PR)
• KBR (KBR): Q1 EPS of $0.48 beats by $0.05. Revenue of $3.2B (+27%) vs. $2.9B. (PR)
• Kellogg (K): Q1 EPS of $0.89 beats by $0.10. Revenue of $3.2B (-2.7%) in-line. (PR)
• Kimco Realty (KIM): Q1 EPS of $0.43 misses by $0.01. Revenue of $194M (+2.7%) vs. $191M. (PR)
• LKQ Corp. (LKQX): Q1 EPS of $0.23 beats by $0.02. Revenue of $518M (+5.3%) vs. $523M. (PR)
• LM Ericsson Telephone (ERIC): Q1 EPS of $0.54 misses by $0.17. Revenue of $49.6B (+12.2%) vs. $42.3B. Shares -5.8% premarket (6:50 ET). (PR)
• Motorola (MOT): Q1 EPS of -$0.10 beats by $0.01. Revenue of $5.4B (-27.9%) vs. $5.55B. Shares -16% premarket (7:00 ET). (PR)
• Mylan Laboratories (MYL): Q1 EPS of $0.33 beats by $0.05. Revenue of $1.2B (+12.6%) in-line. (PR)
• Newell Rubbermaid (NWL): Q1 EPS of $0.20 beats by $0.12. Revenue of $1.2B (-16%) in-line. (PR)
• Newmont Mining (Holding Company) (NEM): Q1 EPS of $0.44 beats by $0.02. Revenue of $1.55B (-20.1%) vs. $1.40B. (PR)
• Noble Energy (NBL): Q1 EPS of $0.59 beats by $0.15. Revenue of $441M (-57%) vs. $598M. (PR)
• NRG Energy (NRG): Q1 EPS of $0.70 beats by $0.25. Revenue of $1.7B (+27.3%) vs. $1.2B. (PR)
• NYSE GROUP (NYX): Q1 EPS of $0.43 beats by $0.04. Revenue of $1.1B (+0.2%) in-line. (PR)
• OfficeMax (OMX): Q1 EPS of $0.23 beats by $0.07. Revenue of $1.91B (-17%) vs. $1.95B. (PR)
• Omnicare (OCR): Q1 EPS of $0.64 beats by $0.03. Revenue of $1.6B (+0.3%) in-line. Shares +3.3% premarket (8:10 ET). (PR)
• Oshkosh Corporation (OSK): FQ2 EPS of -$0.24 misses by $0.04. Revenue of $1.3B (-26.9%) vs. $1.5B. (PR)
• Owens Corning (OC): Q1 EPS of $0.04 beats by $0.08. Revenue of $1.1B (-20.6%) vs. $1.2B. (PR)
• Patterson-UTI Energy (PTEN): Q1 EPS of $0.11 misses by $0.03. Revenue of $296M (-41.3%) vs. $319M. (PR)
• Pennsylvania Real Estate Investment Trust (PEI): Q1 EPS of $0.71 beats by $0.03. Revenue of $73M (-0.8%) vs. $67M. Shares +1.2% premarket (8:10 ET). (PR)
• Pride International (PDE): Q1 EPS of $0.87 beats by $0.01. Revenue of $549M (+1.7%) vs. $555M. (PR)
• Procter & Gamble (PG): FQ3 EPS of $0.84 beats by $0.04. Revenue of $18.4B (-8%) vs. $18.9B. Shares +2.1% premarket (8:00 ET). (PR)
• Rayonier (RYN): Q1 EPS of $0.33 beats by $0.04. Revenue of $274M (-0.3%) vs. $286M. (PR)
• Regal Entertainment Group (RGC): Q1 EPS of $0.14 misses by $0.02. Revenue of $666M (+6.2%) vs. $651M. (PR)
• Sepracor (SEPR): Q1 EPS of $0.85 beats by $0.16. Revenue of $330M (+2.9%) vs. $329M. (PR)
• Spirit AeroSystems (SPR): Q1 EPS of $0.45 beats by $0.05. Revenue of $887M (-14.4%) vs. $859M. (PR)
• Starwood Hotels & Resorts Worldwide (HOT): Q1 EPS of $0.14 beats by $0.10. Revenue of $1.1B (-23.7%) in-line. (PR)
• Taiwan Semiconductor Manufacturing (TSM): Q1 EPS of $0.01 beats by $0.02. Revenue of $1.2B (-57.9%) vs. $1.1B. Shares +4.5% premarket (8:00 ET). (PR)
• The Travelers Companies (TRV): Q1 EPS of $1.34 beats by $0.03. Revenue of $5.7B (-8.0%) vs. $6.1B. (PR)
• Tyco International (TYC): FQ2 EPS of $0.55 beats by $0.14. Revenue of $4.15B (-14.7%) vs. $4.2B. (PR)
• Viacom(B): Q1 EPS of $0.29 beats by $0.03. Revenue of $2.9B (-6.8%) vs. $3.0B. (PR)
• Watson Pharmaceuticals (WPI): Q1 EPS of $0.58 beats by $0.09. Revenue of $667M (+6.5%) vs. $638M. Shares +6.0% premarket (8:05 ET). (PR)
• Xcel Energy (XEL): Q1 EPS of $0.38 beats by $0.01. Revenue of $2.7B (-11%) vs. $3.1B. (PR)

Earnings: Wednesday After Close

• AFLAC (AFL): Q1 EPS of $1.22 beats by $0.06. Revenue of $4.82B (+12%) in-line. Total investments and cash of $61.7B down 1.7% Y/Y. Shares -2% AH. (PR)
• Agnico-Eagle Mines (AEM): Q1 EPS of $0.35 beats by $0.26. Revenue of $111M (-10.5%) vs. $72M. Shares +1.7% AH. (PR)
• Akamai Technologies (AKAM): Q1 EPS of $0.43 beats by $0.03. Revenue of $210M (-1%) in-line. Announces $100M share repurchase. Shares +5.1% AH. (PR)
• Annaly Capital Management (NLY): Q1 EPS of $0.56 beats by $0.01. Shares +1.1% AH. (PR)
• Assurant (AIZ): Q1 EPS of $1.17 misses by $0.26. Revenue of $2.09B (-4.1%) vs. $2.24B. Shares -3.7% AH. (PR)
• Biomed Realty Trust (BMR): Q1 FFO of $0.51 beats by $0.06. Revenue of $94M (+39.4%) vs. $85M. (PR)
• Boston Properties (BXP): Q1 FFO of $1.36 beats by $0.11. Revenue of $377M (+1.6%) vs. $366M. (PR)
• CB Richard Ellis Group (CBG): Q1 EPS of -$0.03 misses by $0.05. Revenue of $890M (-27.7%) vs. $983M. Shares -0.15% AH. (PR)
• Cliffs Natural Resources (CLF): Q1 EPS of -$0.07 beats by $0.07. Revenue of $465M (-6%) vs. $528M. Shares -2.5%. (PR)
• Citrix Systems (CTXS): Q1 EPS of $0.32 beats by $0.01. Revenue of $369M (-2.1%) vs. $359M. Announces up to $300M share buyback. Shares +5.1% AH. PR)
• Covance (CVD): Q1 EPS of $0.63 beats by $0.02. Revenue of $441M vs. $429M. Sees full-year EPS of $2.50-2.70 vs. consensus of $2.88. Shares flat AH. (PR)
• Crown Castle International (CCI): Q1 EPS of $0.02 beats by $0.08. Revenue of $403M (+8.7%) vs. $392M. Shares +7% AH. (PR)
• Duke Realty (DRE): Q1 FFO of $0.50 in-line. Revenue of $238M (+5%) vs. $219M. Sees full-year FFO of $1.85-2.15 vs. $1.81. Shares flat AH. (PR)
• Equity Residential (EQR): Q1 FFO of $0.57 beats by $0.02. Revenue of $515M (+2.5%) vs. $523M. Shares flat AH. (PR)
• Express Scripts (ESRX): Q1 EPS of $0.86 beats by $0.04. Revenue of $5.42B (-1.2%) in-line. Full-year guidance in-line. Shares +1.3% AH. (PR)
• First Solar (FSLR): Q1 EPS of $1.99 beats by $0.48. Revenue of $418M (+112.4%) vs. $403M. Shares +13.4% premarket. (PR)
• Flextronics International (FLEX): FQ4 EPS of $0.03 misses by $0.01. Sees FQ1 revenue of $5-6B vs. $6.2B consensus. Shares -3.3% AH. (PR)
• Genco Shipping (GNK): Q1 EPS of $1.32 beats by $0.06. Revenue of $96.7M (+5.4%) vs. $96M. Shares +0.5% AH. (PR)
• Green Mountain Coffee Roasters (GMCR): FQ2 EPS of $0.50 beats by $0.14. Revenue of $193M (+60%) vs. $178M. Sees full-year EPS of $1.47-1.53 vs. $1.31. Shares +20.4% AH. (PR)
• Harman International (HAR): FQ3 EPS of -$0.84 misses by $0.40. Revenue of $598M (-42.1%) vs. $668M. Suspends dividend. Shares -4.7% AH. (PR)
• JDS Uniphase (JDSU): FQ3 EPS of -$0.03 in-line. Revenue of $281M vs. $285M. Sees FQ4 revenue of $265-285M vs. consensus of $290M. Shares -12% AH. (PR)
• Kaiser Aluminum (KALU): Q1 EPS of $0.81 vs. consensus of $0.42. Revenue of $266M (-33.4%) vs. $277M. Shares +1.7% AH. (PR)
• LSI Logic (LSI): Q1 EPS of -$0.03 beats by $0.01. Revenue of $482M vs. $469M. Shares -0.2% AH. (PR)
• Northeast Utilities (NU): Q1 EPS of $0.60 beats by $0.05. Revenue of $1.59B (+4.8%) in-line. Shares -4.9% AH. (PR)
• Oceaneering International (OII): Q1 EPS of $0.80 beats by $0.12. Revenue of $435M (-0.2%) vs. $461M. Shares flat AH. (PR)
• O'Reilly Automotive (ORLY): Q1 EPS of $0.47 beats by $0.07. Revenue of $1.16B (+80.1%) in-line. Shares +3% AH. (PR)
• Owens-Illinois (OI): Q1 EPS of $0.55 beats by $0.19. Revenue of $1.52B (-22.5%) vs. $1.66B. Shares +11.3% AH. (PR)
• ProLogis (PLD): Q1 EPS of $0.66 misses by $0.04. Revenue of $455M vs. $245M. Shares -3.5% AH. (PR)
• Realty Income (O): Q1 EPS of $0.45 misses by $0.01. Revenue of $82.9M vs. $81.9M. (PR)
• Ryland Group (RYL): Q1 EPS of -$1.76 misses by $0.74. Revenue of $265M (-36.3%) vs. $235M. Shares -1.8% AH. (PR)
• Skechers (SKX): Q1 EPS of $0.18 beats by $0.27. Revenue of $343M (-10.8%) vs. $333M. "We are continuing to monitor our expenses and inventory levels to ensure maximum profitability in this soft economic environment, which we believe will continue to negatively impact our business." Shares +5.6% AH. (PR)
• Smith & Nephew (SNN): Q1 EPS of $0.13 misses by $0.49. Revenue of $865M (-5%) vs. $902M. Shares +0.45% premarket. (PR)
• Starbucks (SBUX): FQ2 EPS of $0.16 beats by $0.01. Revenue of $2.3B in-line. Shares +1.5% AH. (PR)
• STMicroelectronics (STM): Q1 EPS of -$0.31 beats by $0.02. Revenue of $1.66B (+33%) in-line. (PR)
• Taubman Centers (TCO): Q1 EPS of $0.70 beats by $0.12. Revenue of $158M (+0.2%) vs. $146M. Shares -0.3% AH. (PR)
• Teradyne (TER): Q1 EPS of -$0.38 beats by $0.02. Revenue of $121M (+59.4%) in-line. Shares +3.7% AH. (PR)
• Unum Group (UNM): Q1 EPS of $0.62 beats by $0.02. Revenue of $2.45B vs. $2.57B. Shares -0.1% AH. (PR)
• Visa (V): FQ2 EPS of $0.73 beats by $0.09. Revenue of $1.65B (+13.4%) in-line. Affirms full-year outlook - high-single digits in 21009 and the lower range of 11-15% in 2010. Volume growth of $675B down 1% Y/Y. Shares -0.1% AH. (PR)
• Walter Industries (WLT): Q1 EPS of $1.36 beats by $0.51. Revenue of $290M (+20.7%) vs. $316M. Shares +6.6% AH. (PR)
• Whiting Petroleum (WLL): Q1 EPS of -$0.92 misses by $0.20. Revenue of $164M in-line. (PR)

Today's Markets

Overseas markets posted strong gains Thursday, and futures are sharply higher.

Two months ago, we wrote the article “Colocation and the Financial Industry” to summarize the growing demand for outsourced colocation services, especially from the Electronic Trading Community.

It may now be worth a little follow up, not because the landscape described has really changed, but to update our readers with a few events that have happened in the meantime.

From the Economist, here is a look at the stocks with the highest levels of short interest:

(From the Economist): "WHAT do a coffee company, a financial planner and a shopping-mall operator have in common? All are among the ten listed firms most in the sights of short-sellers, who borrow shares in the hopes of making a profit when their price falls. While there is little doubt that many short-sellers have profited handsomely on the recent misery of financial-services firms, the current list of short-sellers’ darlings—compiled by Data Explorers, a short-selling research firm—suggests that their recent track record has not been as good. As short interest in Nasdaq-listed Green Mountain Coffee Roasters more than doubled over the past three months, with around a third of the firm's shares now on loan, its share price rose by almost 30%. That is not the aroma of freshly-brewed coffee you smell; it’s burnt fingers."

Excerpt from Raymond James strategist Jeffrey Saut's latest essay, published Monday (March 16th):

...I think the answer to that question is “yes” because of the upcoming sequence of events. To be sure, investors should gain much more clarity this week as the TALF (Term Asset-backed Securities Loan Facility) is ramped-up in earnest, which might just lead to a rebound in the velocity of money.

Q4 2008 Earnings Call Transcript

February 26, 2009 1:00 pm ET

• AIG carve up? Sources say AIG (AIG) is in advanced talks with U.S. officials about a radical restructuring plan that would split the troubled insurer into at least three government-controlled divisions. Described by one insider as a 'controlled break-up,' the move could end AIG's 90-year history of independence and serve as a model for carving up other troubled institutions. Under the plan, the government would swap its 80% stake in the insurer for large stakes in three units - AIG’s Asian operations, its international life insurance business and the US personal lines business. In return, officials would relax the terms of AIG's loans or even cancel a large portion of them. AIG would remain as a holding company but could disappear if the government decides to recoup taxpayer money by selling or listing the three divisions separately. The overhaul could be announced Monday.
• Citi deal imminent. Citigroup (C) is very close to an agreement to boost the government's stake in the ailing company to 40%, and an announcement could come as soon as today. Executives have been rushing to identify potential problems from an increased government stake, including local laws in certain countries that would require Citigroup to apply for new charters or, in the case of Mexico, to potentially give up some or all of ownership in Grupo Financiero Banamex, the No. 2 bank in Mexico by assets, if the government takes more than a 10% stake in Citigroup.
• The unstoppable budget deficit. The White House is projecting a $1.75T deficit for the current fiscal year, including a new $250B slush fund in case banks need more money. Officials say Obama has no plans to use the $250B, but wanted to include an 'overly conservative' placeholder just in case. The 134-page budget outlines health, tax and energy priorities, and includes a 10-year $634B reserve fund to help pay for Obama's proposed healthcare reforms and $537B for the U.S. military. The White House will also propose $634B in new taxes on upper-income Americans. The budget is due at 11:00 ET.
• UBS shakes up top job. In the latest shake-up of its top management, UBS (UBS) announced the surprise departure of CEO Marcel Rohner. The position will be filled by Oswald Grubel, the former CEO at rival Credit Suisse (CS). In a statement, UBS said Rohner had told the board last month that he planned to retire as CEO after the conclusion of the "ongoing investment bank repositioning and wealth management restructuring phase," but is now leaving immediately. Rohner's sudden departure comes after UBS agreed to a $780M settlement with the Justice Department and amid an ongoing civil inquiry into tax evasion. Shares +10.0% premarket (7:00 ET).
• Record loss at RBS. Royal Bank of Scotland (RBS) posted a full year loss of £24.1B ($34.3B), the biggest loss in British history. The record loss reflected a £16.2B write down against acquisitions and another £7.9B in operating losses. Reacting to the losses, RBS will put £325B of investments into a state insurance program. In return, the bank will pay a fee of £6.5B over seven years in the form of preference shares. RBS will also shift £540B of toxic assets to a new unit, including derivatives and mortgage-backed securities, and will increase lending by £50B over the next two years while aiming to reduce expenses by £2.5B. Shares +20.2% premarket (7:00 ET).
• Exelon gains ground in NRG bid. Exelon (EXC) said its $6B tender offer for NRG Energy (NRG) won more than 51% of the outstanding shares, giving it strong leverage in its hostile pursuit of NRG. NRG has already rejected Exelon's offer twice, saying the price 'manifestly undervalues' NRG and expressing doubt whether Exelon would be able to finance the transaction. Winning the tender gives Exelon the right to acquire NRG, assuming Exelon shareholders agree to the deal and it receives regulatory approval. However, Exelon has good reason to try for a friendly acquisition since it will make the regulatory approval easier and will allow Exelon access to NRG's books.
• BoA considers private bank sale. Bank of America (BAC) is reportedly looking to sell a private bank it inherited from Merrill Lynch. Merrill bought the bank in question, First Republic Bank, for $1.8B in September 2007. At the time, First Republic had $10B of deposits. Possible buyers include Goldman Sachs (GS) and Morgan Stanley (MS), both of which are trying to expand their deposit-gathering businesses.
• Another fraud bites the dust. The most recent financial fraud to come to light revolves around two money managers who have been accused of misappropriating at least $533M to fund their own lavish lifestyles. The two men, Paul Greenwood and Stephen Walsh, were arrested by the FBI and face criminal charges of conspiracy, securities fraud and wire fraud. They are accused of running a fraudulent investment-advisory scheme since 1996 in which the men raised $668M from institutional clients and pocketed most of the money. Alleged victims include Carnegie Mellon University, the University of Pittsburgh and the Iowa Public Employees Retirement System.
• Home sales fall. Existing Home Sales fell 5.3% to 4.49M/year in January, and are down 8.6% from a year ago. NAR's Lawrence Yun blamed the drop on would-be buyers waiting for more clarity on the nature of a government housing stimulus. Median prices -14.8% from a year ago.

Earnings: Thursday Before Open

• American Tower (AMT): Q4 EPS of $0.21 beats by $0.07. Revenue of $408M (+8%) vs. $407M. (PR)
• Boyd Gaming (BYD): Q4 EPS of $0.13 in-line. Revenue of $422.6M (-11.7%) vs. $423.4M. (PR)
• Cablevision (CVC): Q4 EPS of -$1.11 misses by $1.44. Revenue of $2.05B (+11.4%) vs. $2.06B. (PR)
• Continental Resources (CLR): Q4 EPS of $0.00 misses by $0.19. Revenue of $136M (-14.6%) vs. $160M. (PR)
• Digital Realty Trust (DLR): Q4 EPS of $0.20 beats by $0.06. Revenue of $147M (+3.6%) vs. $144M. (PR)
• Dynegy (DYN): Q4 EPS of -$0.01 beats by $0.01. Revenue of $795M (+9.8%) vs. $769M. (PR)
• El Paso (EP): Q4 EPS of $0.21 in-line. Revenue of $1.3B (+6.4%) vs. $1.2B. (PR)
• EMCOR Group (EME): Q4 EPS of $0.90 beats by $0.16. Revenue of $1.7B (-4.9%) vs. $1.8B. (PR)
• ENSCO International (ESV): Q4 EPS of $2.14 beats by $0.08. Revenue of $622M (+20.2%) vs. $616M. (PR)
• First American (FAF): Q4 EPS of $0.10 beats by $0.03. Revenue of $1.35B (-28%) vs. $1.43B. (PR)
• Frontier Oil (FTO): Q4 EPS of $0.32 misses by $0.09. Revenue of $1.35B (+2.2%) vs. $1.61B. (PR)
• Frontline (FRO): Q4 EPS of $1.03 misses by $0.08. Revenue of $452M (+36.2%) vs. $328M. (PR)
• GM (GM): Q4 EPS of -$9.65 misses by $2.25 (-that's a $9.6B loss). Revenue of $30.8B vs. $35.13B. GM burned through another $6.2B in cash. 2008 sales of 8.35M vehicles, down 11%. (PR)
• Global Industries (GLBL): Q4 EPS of -$0.24 misses by $0.17. Revenue of $250M (-4.8%) vs. $242M. (PR)
• HRPT Properties Trust (HRP): Q4 EPS of $0.05 in-line. Revenue of $218M (+9.7%) vs. $211M. (PR)
• Huntsman (HUN): Q4 EPS of -$0.38 misses by $0.33. Revenue of $2.05B (-18.2%) vs. $2.44B. (PR)
• Iron Mountain (IRM): Q4 EPS of $0.01 misses by $0.16. Revenue of $753M (+3.6%) in-line. (PR)
• King Pharmaceuticals (KG): Q4 EPS of $0.24 beats by $0.01. Revenue of $348M (-34.8%) vs. $345M. (PR)
• Lamar Advertising Company (LAMR): Q4 EPS of -$0.08 misses by $0.01. Revenue of $279M (-8.4%) vs. $285M. (PR)
• Limited Brands (LTD): Q4 EPS of $0.68 beats by $0.04. Revenue of $3.0B (-8.7%) in-line. (PR)
• Linn Energy LLC (LINE): Q4 EPS of $0.00 misses by $0.32. Revenue of $155M (+2.7%) vs. $163M. Shares -2.6% premarket. (PR)
• LKQ (LKQX): Q4 EPS of $0.10 misses by $0.04. Revenue of $470M (+13.4%) vs. $490M. (PR)
• MetroPCS Communications (PCS): Q4 EPS of $0.04 misses by $0.03. Revenue of $724M (+22.4%) vs. $765M. (PR)
• Nasdaq (NDAQ): Q4 EPS of $0.53 beats by $0.02. Revenue of $403M (-3.9%) vs. $414M. (PR)
• NII Holdings (NIHD): Q4 EPS of $0.05 misses by $0.38. Revenue of $989.5M (+5.3%) vs. $1.0B. (PR)
• Omnicare (OCR): Q4 EPS of $0.66 beats by $0.03. Revenue of $1.6B (+2.7%) in-line. (PR)
• RAIT Financial Trust (RAS): Q4 EPS of $0.33 misses by $0.05. Revenue of $57.4M (-1.7%) vs. $54.9M. (PR)
• Rowan Companies (RDC): Q4 EPS of $1.28 beats by $0.19. Revenue of $613M (-1.7%) vs. $615M. (PR)
• Safeway (SWY): Q4 EPS of $0.80 misses by $0.01. Revenue of $13.82B (+3.4%) vs. $14.29B. (beats by $0.26. Revenue of $13.3B (-11.9%) vs. $14.0B. (PR)
• Sonus Networks (SONS): Q4 EPS of -$0.37 misses by $0.35. Revenue of $89.5M (-7.8%) vs. $64.1M. (PR)
• Southern Union Company (SUG): Q4 EPS of $0.47 beats by $0.03. Revenue of $727M (+75.3%) vs. $692M. (PR)
• Warnaco Group (WRC): Q4 EPS of $0.29 beats by $0.14. Revenue of $446M (-4.4%) vs. $451M. (PR)

Earnings: Wednesday After Close

• Aruba Networks (ARUN): FQ2 EPS of $0.02 beats by $0.02. Revenue of $47.7M (+17.5%) vs. $45.5M. Shares +11.6% AH. (PR, earnings call transcript)
• Assured Guaranty (AGO): Q4 EPS of $0.04 beats by $0.03. Revenue of $123.3M (+22.1%) vs. $135.6M. (PR)
• Avis Budget Group (CAR): Q4 EPS of -$1.08 misses by $0.61. Revenue of $1.26B (-9%) in-line. Shares -2% AH. (PR)
• Express Scripts (ESRX): Q4 EPS of $0.83 in-line. Revenue of $5.51B (-0.9%) vs. $5.45B. Shares -1.6% AH. (PR)
• El Paso (EP): Sees 2009 EPS of $0.85-1.05 vs. $1.11 consensus. Shares -2.65% AH. (PR)
• Flowserve (FLS): Q4 EPS of $20.3 beats by $0.14. Revenue of $1.17B (+5.4%) vs. $1.26B. Shares +7.3% AH. (PR)
• Fluor (FLR): Q4 EPS of $1.04 beats by $0.12. Revenue of $6.07B (+28.9%) vs. $5.81B. Sees 2009 EPS of $3.90-4.20 vs. $3.76. Shares +12.3% AH. (PR, earnings call transcript)
• Genco Shipping (GNK): Q4 EPS of $1.55 misses by $0.01. Revenue of $101.6M (+54.6%) vs. $100.2M. Shares +1.5% AH. (PR)
• Goodrich Petroleum (GDP): Q4 EPS of -$0.01 beats by $0.06. Revenue of $44.1M (+35.7%) vs. $49.9M. (PR)
• Medicis Pharmaceutical (MRX): Q4 EPS of $0.42 beats by $0.11. Revenue of $136M (+1.4%) vs. $127M. Sees Q1 EPS of $0.15-0.18 vs. $0.30 and revenue of $125-130M vs. $129.5M. (PR)
• Netease.com (NTES): Q4 EPS of $0.65 beats by $0.21. Revenue of $117.5M (-0.6%) in-line. Shares +5.3% AH. (PR)
• Plains Exploration & Production Company (PXP): Q4 EPS of -$0.31 misses by $0.73. Revenue of $-33.5M vs. $328M. Shares -6.9% AH. (PR)
• Salesforce.com (CRM): Q4 EPS of $0.11 beats by $0.04. Revenue of $290M vs. $285M. Sees full-year EPS of $0.54-0.55 vs. $0.51. "Salesforce.com is proud to be the first billion dollar cloud computing company." Shares +5.3% AH. (PR, earnings call transcript)
• Savient Pharmaceuticals (SVNT): Q4 EPS of -$0.45 misses by $0.12. (PR)
• Service International (SCI): Q4 EPS of $0.09 beats by $0.01. Revenue of $517M vs. $510M. Sees 2009 EPS of $0.26-0.36 vs. $0.38. Shares -0.3% AH. (PR)
• Tenaris (TS): Q4 EPS of $1.01 beats by $0.02. Revenue of $3.23B vs. $3.01B. Shares -5.4% premarket. (PR)
• True Religion Apparel (TRLG): Q4 EPS of $0.53 beats by $0.06. Revenue of $73M (+38.5%) vs. $68.7M. Shares flat AH. (PR)
• USEC (USU): Q4 EPS of $0.16 in-line. Revenue of $432M vs. $440M. Sees 2009 revenue of $2.2-2.25B vs. $2.01B consensus. Shares -0.6% AH. (PR)

Today's Markets

• Asia stocks end Thursday mostly lower, with China pacing losses on a late-day selloff. Nikkei -0.04% to 7,458. Hang Seng -0.85% to 12,895. Shanghai -3.87% to 2,121. BSE +0.59% to 8,955.
• Europe markets have moved off their highs but remain up at midday, with banks leading the way after details of the U.K. asset protection scheme seem to be less onerous than originally feared. London +1.5%. Paris +1.5%. Frankfurt +1.8%.
• U.S. stock futures are higher in a volatile premarket session as traders await a slate of data including Jan. durable-goods, new home sales and weekly jobless claims. Dow +1.05% to 7304. S&P +1.2% at 771. Nasdaq +1%. Crude +1.8% to $43.30. Gold -1.9% at $947.70.

Thursday's Economic Calendar

• 8:30 Durable Goods Orders
  8:30 Jobless Claims
  10:00 New Home Sales
  10:30 EIA Natural Gas Report
  4:30 PM Money Supply
• Notable earnings before Thursday's open: ALO, AMT, BYD, CLR, CVC, DLR, DYN, EME, EP, ESV, FAF, FRO, FTO, GLBL, GM, HRP, HUN, IRM, KG, LAMR, LINE, LKQX, LTD, NDAQ, NIHD, OCR, PCS, RAS, RDC, SHLD, SONS, SUG, SWY, WRC
• Notable earnings after Thursday's close: ADSK, BEE, BID, BVN, CTV, CVA, DELL, FCH, GPS, HANS, HGSI, IO, KSS, LEAP, ME, NOVL, PSA, RSG, SBAC, SD, SGMS, SNH, SWN

Seeking Alpha editor Eli Hoffmann contributed to this post.

Equinix (EQIX) reported 4Q and full year results on February 11.

The headline we've used mirrors what the market has perceived as the main outcome of the call, together with the information that the Company was lowering, because of that, 2009 guidance, by roughly 2% [a $16 million haircut at midpoint, due in part to currency fluctuations (roughly $ 3 million)].

Given the recent collapse of the financial sector, and the concerns about IT spending and capital expenditure in general, it may seem quite odd to look at the financial services industry as an important source of business opportunities for data center Companies, right now.

In spite of the recent distress, especially among Wall Street firms, we believe that a few colo Companies are now competing for the leadership in this specific market, and that it may be very interesting to analyze the different strategies to understand who might emerge as the 800 pound gorilla, ready to capitalize from this position in the next few years.

On December 10, 2008, Equinix (EQIX) held a very interesting webcast:

Operating Today's Data Centers & Key Industry Trends that will Affect Your Business

The discussion was targeting many aspects of the colocation business and Equinix product offer, but the main interest, from an investor point of view, was Dan Golding's speech about the state of the sector, and his forecast for the close future.

At the end of each trading week, Hillbent scans the market for extremely oversold stocks with a proprietary "A" (strongest) or "B" (next strongest) ranking in terms of positive fundamentals, revenue and earnings stability. The generated results is better known as the "Weekly Babies With Bathwater" watchlist.

Past observations have revealed that such candidates may experience reversal corrections to the upside once the market reconfirms that their fundamentals remain solidly intact. (The purpose of this list is not to provide specific recommendations, but instead serve as a starting point for investment ideas as the upcoming trading week unfolds.)

Q3 2008 Earnings Call

November 5, 2008 1:00 pm ET