- AOL goes solo. Time Warner (NYSE:TWX) filed with the SEC to officially turn AOL into a stand-alone, publicly traded company called AOL Inc. According to the filing, Time Warner repurchased Google's (NASDAQ:GOOG) 5% stake in AOL for $283M earlier this month, valuing AOL at less than $5.66B vs. the $20B implied valuation the business carried in 2005.
- Speculators drove oil price spike. The Commodity Futures Trading Commission will release a report next month suggesting speculators played a major role in causing oil prices to spike, reversing an earlier finding by the CFTC that attributed oil price swings primarily to supply and demand. One of the CFTC commissioners said the original analysis was based on 'deeply flawed data.' The agency, which is shifting away from its former hands-off approach, is expected to institute rules limiting the investments of large institutions in commodities.
- AIG keeps asset sale proceeds. AIG (NYSE:AIG) used $2.4B from recent asset sales to improve the capital position of its property-casualty unit rather than using the funds to pay down some of its government debt. AIG's need to use some of the sale proceeds to bolster its own businesses will undoubtedly raise questions about the insurer's ability to repay its government bailout.
- U.S. pledges to rein in deficit. At the beginning of a strategic round of talks with China, Geithner pledged to ensure a 'sustainable' U.S. budget deficit by 2013 as Chinese officials expressed concern over the security of their U.S. financial holdings. There were few signs of tensions over the value of the yuan. Both countries agreed not to prematurely withdraw economic stimulus measures.
- SEC updates short-selling rules. The SEC will no longer require institutional investors to report their short-sale positions on a weekly and confidential basis, part of an effort to curb abuse by making more information about short positions available to the public. The weekly reporting was instituted in October as an emergency measure and will expire August 1. A temporary ban on naked short selling was made permanent.
- Amgen, Glaxo reach drug agreement. Amgen (NASDAQ:AMGN) and GlaxoSmithKline (NYSE:GSK) reached an agreement to jointly market denosumab, an osteoperosis treatment that could see annual sales of $2B within a decade if approved by regulators. Glaxo will pay $120M for near-term milestones to share profits in Europe and to sell the drug in countries where Amgen doesn't have any exposure. Amgen will market the drug in the U.S. and Canada, and retain the rights to sell it for cancer in Europe once it's approved.
- Third time's the charm for Delphi. Delphi looks set to emerge from nearly four years of bankruptcy protection with its third attempt at an exit plan. Delphi's board approved an offer to split the company between former parent General Motors and lenders, replacing an agreement announced two months ago between GM and Platinum Equity. Under the new deal terms, lenders will forgive $3.4B in debt in exchange for most of the supplier's assets, and the lenders will pay cash to keep Delphi operating. GM will pay a little over $3B for four North American factories and Delphi's steering business.
- BoA to shutter branches. Bank of America (NYSE:BAC) is planning to slash the company's 6,100-branch network by 10%, reversing two decades of coast-to-coast expansion. Bank officials reportedly attribute the closings to changes in customer preferences, citing the shift away from traditional branches in favor of online and mobile banking. A timeline for the closures wasn't specified.
- Reining in derivatives. Lawmakers are considering steps to curb speculation in the $39T credit default swaps [CDS] market, which could include preventing investors from speculating on a borrower's credit quality. Among the options under consideration to curb speculation are a ban on naked CDS and a requirement that derivative dealers and investment advisers managing more than $100M report their short interests in CDS contracts to the appropriate regulator.
- Magna improves bid. Magna International (NYSE:MGA) reportedly improved its bid for General Motors' Opel unit, offering to inject €350M upfront vs. an earlier offer of €100M. The improved offer comes after the German government criticized all three bidders for the amount of their own capital they were willing to inject into Opel.
- CVC brews up AB InBev bid. According to media reports, private equity group CVC Capital Partners is prepared to pay up to €1.5B ($2.1B) for the Central and Eastern European assets of Anheuser-Busch InBev. AB InBev was accepting bids until yesterday, by which point CVC and TPG Capital were still in the running but KKR had dropped out.
- New homes sales (.pdf). New home sales came in at 384K in June, up 11% from May, vs. consensus of 350K. Sales were down 21.3% vs. the previous year. The median home price of $206,200 was down from May's $221,600. Inventory of 281K homes represents an 8.8 month supply, down from 10.2 months in May.
Earnings: Tuesday Before Open
- AMB Property (NYSE:AMB): Q2 EPS of $0.37 beats by $0.01. Revenue of $147M (-27%) vs. $144M.
- BE Aerospace (BEAV): Q2 EPS of $0.39 beats by $0.05. Revenue of $475M (-9%) vs. $488M. (PR)
- BP (NYSE:BP): Q2 EPS of $1.01 beats by $0.09. Revenue of $54.8B (-50%) vs. $64B. Shares -1.2% premarket (6:50 ET). (BP press release (.pdf))
- Celanese (NYSE:CE): Q2 EPS of $0.53 beats by $0.07. Revenue of $1.2B (-33%) vs. $1.3B. (PR)
- Check Point Software (NASDAQ:CHKP): Q2 EPS of $0.48 beats by $0.02. Revenue of $224M (+12%) vs. $220M. (PR)
- Coach (COH): FQ4 EPS of $0.43 in-line. Revenue of $778M (-0.5%) vs. $780M. (PR)
- Coventry Health Care (CVH): Q2 EPS of $0.50 beats by $0.10. Revenue of $3.5B (+19%) in-line. (PR)
- Diamondrock Hospitality Company (NYSE:DRH): Q2 EPS of $0.24 beats by $0.03. Revenue of $144M (-21%) vs. $145M. (PR)
- EarthLink (NASDAQ:ELNK): Q2 EPS of $0.29 beats by $0.03. Revenue of $186M (-24%) in-line. (PR)
- Energizer (NYSE:ENR): Q2 EPS of $1.12 beats by $0.09. Revenue of $997.5M (-6.5%) vs. $1B. (PR)
- FPL Group (FPL-OLD): Q2 EPS of $0.99 beats by $0.01. Revenue of $3.8B (+6%) vs. $3.9B. (PR)
- Interpublic Group of Companies (NYSE:IPG): Q2 EPS of $0.04 misses by $0.06. Revenue of $1.5B (-20%) vs. $1.6B. (PR)
- Jacobs Engineering Group (NYSE:JEC): FQ3 EPS of $0.76 beats by $0.01. Revenue of $2.7B (-7%) vs. $2.8B. (PR)
- McGraw-Hill Companies (MHP): Q2 EPS of $0.58 beats by $0.03. Revenue of $1.46B (-12%) vs. $1.54B. (PR)
- National Oilwell Varco (NYSE:NOV): Q2 EPS of $0.90 beats by $0.03. Revenue of $3B (-9.5%) vs. $3.1B. Shares -2.7% premarket (8:10 ET). (PR)
- Office Depot (NYSE:ODP): Q2 EPS of -$0.22 misses by $0.10. Revenue of $2.8B (-22%) vs. $2.9B. (PR)
- PACCAR (NASDAQ:PCAR): Q2 EPS of $0.07 vs. consensus of $0.04 (may not be comparable). Revenue of $1.6B (-58%) vs. $1.7B. Shares +0.9% premarket (8:30 ET). (PR)
- Patriot Coal Corporation (PCX): Q2 EPS of $0.39 vs. consensus of -$0.47 (may not be comparable). Revenue of $507M (+49.3%) vs. $518M. (PR)
- PepsiAmericas(PAS): Q2 EPS of $0.74 beats by $0.06. Revenue of $1.3B (-6%) in-line. (PR)
- Rockwell Automation (NYSE:ROK): FQ3 EPS of $0.23 beats by $0.03. Revenue of $1B (-31.5%) in-line. (PR)
- Smith International (SII): Q2 EPS of $0.15 misses by $0.06. Revenue of $1.9B (-22%) vs. $2B. (PR)
- SUPERVALU (NYSE:SVU): Q2 EPS of $0.55 beats by $0.02. Revenue of $12.7B (-5%) vs. $12.8B. (PR)
- Teva Pharmaceutical Industries (NYSE:TEVA): Q2 EPS of $0.83 beats by $0.03. Revenue of $3.4B (+20%) vs. $3.5B. (PR)
- Textron (NYSE:TXT): Q2 EPS of $0.08 beats by $0.11. Revenue of $2.6B (-29%) in-line. Lowers guidance for FY '09, sees EPS of $0.33-0.63 vs. prior $0.45-0.75, sees FY '09 revenue of ~$10.6B vs. prior $11B. (PR)
- United States Steel Corporation (NYSE:X): Q2 EPS of -$3.28 beats by $0.17. Revenue of $2.1B (-68.5%) vs. $2.4B. Shares -3.7% premarket (8:30 ET). (PR)
- Valero Energy (NYSE:VLO): Q2 EPS of -$0.48 beats by $0.02. Revenue of $17.9B vs. $16.3B. Shares -2% premarket (8:15 ET). (PR)
- Viacom (VIA.B): Q2 EPS of $0.49 beats by $0.01. Revenue of $3.3B (-14.5%) vs. $3.5B. (PR)
- Vishay Intertechnology (NYSE:VSH): Q2 EPS of -$0.10 misses by $0.02. Revenue of $460M (-41%) vs. $459M. Issues upside guidance for Q3, sees revenue of $480-520M vs. $477M consensus. (PR)
- Waddell & Reed Financial (NYSE:WDR): Q2 EPS of $0.28 beats by $0.03. Revenue of $200M (-21%) vs. $195M. (PR)
- Waters (NYSE:WAT): Q2 EPS of $0.78 misses by $0.01. Revenue of $363M (-9%) vs. $366M. (PR)
Earnings: Monday After Close
- ACE Limited (NYSE:ACE): Q2 EPS of $2.09 beats by $0.15. Net premiums written of $3.4B (-5%). (PR)
- Amgen (AMGN): Q2 EPS of $1.29 beats by $0.13. Revenue of $3.7B (-1%) vs. $3.6B. Raises full-year EPS guidance to $4.80-4.95 vs. $4.57. (PR)
- CF Industries (NYSE:CF): Q2 EPS of $4.33 beats by $1.72. Revenue of $991M (-15%) vs. $764M. (PR)
- Crane Company (NYSE:CR): Q2 EPS of $0.47 misses by $0.02. Revenue of $545M (-21%) vs. $588M. (PR)
- Desarrolladora Homex (NYSE:HXM): Q2 EPS of $0.91 beats by $0.24. Revenue of $359M (+8%) vs. $329M. (PR)
- Fidelity National Financial (NYSE:FNF): Q2 EPS of $0.40 beats by $0.01. Revenue of $1.6B (+34%) in-line. (PR)
- Health Management Associates (NYSE:HMA): Q2 EPS of $0.13 beats by $0.03. Revenue of $1.2B (+5%) vs. $1.1B. (PR)
- Hexcel (NYSE:HXL): Q2 EPS of $0.18 misses by $0.01. Revenue of $277M (-23%) vs. $302M. (PR)
- Manitowoc (NYSE:MTW): Q2 EPS of $0.19 beats by $0.06. Revenue of $1B (-13%) vs. $1.1B. (PR)
- Masco (NYSE:MAS): Q2 EPS of $0.15 beats by $0.16. Revenue of $2B (-23%) in-line. Sees full-year revenue down 18-22%. (PR)
- Meritage (NYSE:MTH): Q2 EPS of -$2.37 misses by $1.65. Revenue of $220M (-41%) vs. $211M. (PR)
- Olin (NYSE:OLN): Q2 EPS of $0.36 beats by $0.03. Revenue of $383M (-11%) vs. $382M. (PR)
- Owens & Minor (NYSE:OMI): Q2 EPS of $0.57 misses by $0.06. Revenue of $2B (+12%) in-line. (PR)
- Plum Creek Timber (NYSE:PCL): Q2 EPS of $0.19 beats by $0.17. Revenue of $272M (-28%) vs. $227M. Sees Q3 EPS of $0.05-0.10 vs. $0.14. (PR)
- Rent-A-Center (NASDAQ:RCII): Q2 EPS of $0.61 beats by $0.08. Revenue of $680M (-5%) vs. $684M. (PR)
- SL Green Realty (NYSE:SLG): Q2 FFO of $1.20 misses by $0.01. Revenue of $253M (-13%) vs. $216M. (PR)
- Torchmark (NYSE:TMK): Q2 EPS of $1.53 beats by $0.03. Net operating income of $126M (-3%); NOI/share $1.53 (+6%). (PR)
- Transatlantic (NYSE:TRH): Q2 EPS of $1.68 beats by $0.07. Net premiums written of $1B (+2%) in-line. (PR)
- W.R. Berkley (NYSE:WRB): Q2 EPS of $0.59 in-line. Revenue of $1.16B (-4%) in-line. (PR)
Asian markets closed mixed. European markets and U.S. futures get off to a tepid start.
- In Asia, Nikkei -0.01% to 10,087. Hang Seng +1.8% to 20,625. Shanghai +0.1% to 3,438. BSE -0.3% to 15,332.
- In Europe at midday, London -0.2%. Paris flat. Frankfurt -0.1%.
- Futures: Dow -0.3%. S&P -0.4%. Nasdaq -0.3%. Crude -0.04% to $68.35. Gold +0.1% to $954.50.
Tuesday's Economic Calendar
7:45 ICSC Retail Store Sales
9:00 S&P/Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 Fed's Yellen speaks on the economic outlook
10:00 State Street Investor Confidence Index
10:00 Richmond Fed's Manufacturing Index
5:00 PM ABC Consumer Confidence Index
7:00 PM Geithner speaks at the National Committee on U.S.-China Relations Dinner
- Notable earnings before Tuesday's open: AMB, BEAV, BP, CE, CHKP, COH, CVH, DRH, ECL, ELNK, ENR, FPL-OLD, IPG, JEC, MHP, NOV, ODP, PCAR, PCX, ROK, SII, SVU, TEVA, TXT, VIA.B, VLO, VSH, WAT, WDR, X
- Notable earnings after Tuesday's close: BDN, CBI, EQ, FIS, FTI, HTZ, IDTI, LIFE, MCK, MEE, NLC, NSC, PMTC, OTCPK:PSYS, SBAC, SPN, STM, STR, TE, THQI, TSS, WDC, XL
Seeking Alpha editor Eli Hoffmann contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.