Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
Costco's results undershoot as profit falls. Costco's (NASDAQ:COST) FQ2 earnings missed expectations, hurt by a poor holiday season and by currency fluctuations at the company's international operations. Net profit dropped to $463M from $547M a year earlier, EPS was $1.05 and revenue increased 5.8% to $26.31B. Costco operates 649 warehouses and plans to open another 14 by the end of FY 2014. Shares were -0.2% premarket.

Bouygues bids €10.5B for 49% of SFR. French company Bouygues (OTCPK:BOUYY) has offered €10.5B ($14.42B) to acquire a 49% controlling stake in Vivendi's (OTCPK:VIVHY, OTCPK:VIVEF) SFR mobile unit. That compares with a reported bid of €11B for SFR from Amsterdam-listed Altice. Bouygues would merge its telecom subsidiary with SFR and list the combined entity as soon as possible. However, such a deal would probably face a tough regulatory review because it would combine the second and third largest cellular providers in France.

Crimea parliament votes to join Russia; referendum date set. In a twist that's perhaps not really a surprise, Crimea's parliament has voted unanimously for the province to become a part of Russia. The people of Crimea will have their say in a referendum on March 16. EU leaders, meeting in Brussels today, are expected to again warn Russia over its actions in the region but aren't seen following up their words with any substantial action just yet. A yes vote in the referendum could put the West in a bit of a democratic bind.

Top Stock News
Judge rebuffs Apple request to ban Samsung devices. Judge Lucy Koh has turned down a request from Apple (NASDAQ:AAPL) to ban certain Samsung (OTC:SSNLF) mobile products in the U.S. because of patent infringements. However, Koh did complete a $929.8M damages award to Apple stemming from the companies' IP dispute.

BP finds way to bypass U.S. crude export ban. BP (NYSE:BP) has forged a deal to purchase at least 80% of the capacity of a 100,000 barrel-a-day mini-refinery that Kinder Morgan Energy Partners (NYSE:KMP) plans to open in July. The facility will refine the oil just enough that BP will be able to export it from the U.S., which forbids the sale of crude overseas. The issue of crude exports has received renewed prominence amid the crisis in Ukraine and Russia's leverage because of its role as a major energy supplier.

Chesapeake, Encana charged in Michigan over collusion. Michigan has indicted Chesapeake Energy (NYSE:CHK) and Encana (NYSE:ECA) with conspiring to keep down oil and gas lease prices in the state. If found guilty, the companies could face penalties of up to $1M, while individuals could receive prison sentences as well as fines. The charges follow an investigation that was sparked by a Reuters article about how then Chesapeake CEO Aubrey McClendon and other senior executives at the company and at Encana held discussions in 2010 about not "bidding each other up."

VimpelCom swings to loss after massive Ukraine writedown. VimpelCom (VIP) swung to a Q4 net loss of $2.7B from a profit of $195M a year earlier and badly missed consensus for a profit of $437M. Earnings were hurt by the Russian mobile carrier taking $2.9B in non-cash impairments, including just over $2B for its Ukraine operations. Revenue dropped 7% to $5.6B vs analyst forecasts of $5.7B, while EBITDA slipped 3% to $2.4B, as expected.

Top Economic & Other News
China: Where 7.5% can be 7.2% or 7.3%. China's Finance Minister Lou Jiwei has indicated that the country's 2014 GDP growth goal of 7.5% is not a cast iron target, saying that 7.2% or 7.3% would also "count." What's more important is employment, Lou said - the government aims to create 11M jobs this year. "This flexibility allows them to flag an encouraging number to the business community but at the same time to feel free not to react with stimulus and more debt if it's missed a bit," says Credit Agricole economist Dariusz Kowalczyk.

Ukraine developments prompt calls for more U.S. gas exports. While BP (BP) looks to skirt round the ban on crude exports, the crisis in Ukraine has sparked renewed calls among Republicans and energy state Democrats for an easing of restrictions on foreign sales of natural gas. Russia supplies Europe with 30% of its gas, so there are those who are wary of imposing major sanctions on the country. Increasing U.S. gas exports could reduce that reliance and give the West a freer hand in dealing with Russia, particularly in the long term.

Beige Book: It's the weather. The effects of the severe winter snow are evident throughout the economy, says the Fed Beige Book, but nevertheless, the expansion continues. Eight districts reported improved levels of activity, although New York and Philadelphia experienced slight declines because of the weather. Retail sales weakened in most districts, again due to the weather, which somehow skipped Cleveland, where strong gains were reported.

Top Ideas: Movers and Great Calls
1) On January 13, Steven Reiman called out Orbit Garant Drilling (OTC:OBGRF), noting that the company was selling at a 20% discount to its working capital despite a strong balance sheet and the ability to weather dire conditions in the mining sector. Shares are +57.7% since. Read article »
2) Money Investor recommended navigation-device maker Garmin (NASDAQ:GRMN) in June, arguing that the conventional wisdom projecting the company's demise was contradicted by cash flow, margin and dividend growth. The stock is +56% to date. Read article »

Top Ideas To Watch
1) Michael Filloon says new technologies and increasing demand for fracking sand could drive prices higher in the second half of the year, creating strong upside for producer U.S. Silica (NYSE:SLCA). Read article »
2) Below-expected earnings and guidance at Chico's FAS (NYSE:CHS) are a short-term hiccup, not an end to the company's growth story, writes Shaun Currie, CFA. Read article »

Top Ideas are the best long and short ideas on Seeking Alpha. SA PRO subscribers receive early access to these Top Ideas, which often move markets. For more information about SA PRO and becoming a subscriber, click here.

Today's Markets:
In Asia, Japan +1.6% to 15135. Hong Kong +0.6% to 22703. China +0.3% to 2060. India +1.1% to 21514.
In Europe, at midday, London +0.1%. Paris +0.6%. Frankfurt +0.2%.
Futures at 6:20: Dow +0.2%. S&P +0.2%. Nasdaq +0.1%. Crude -0.1% to $101.34. Gold -0.4% to $1335.20.
Ten-year Treasury Yield flat at 2.71%.

Today's economic calendar:
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Productivity and Costs
9:45 Bloomberg Consumer Comfort Index
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: BKCC, CECE, CIEN, CNQ, COST, CST, FLY, FUR, FXCM, JOY, KR, NAVB, NEON, PF, PLCE, PRFT, RGEN, SFE, SNSS, SPLS, WRES


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