Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:50 AM ET
S&P 500: +2.75; 1,539.00
NASDAQ 100: +5.25; 2114.75
Dow: -40; 13,965
NIKKEI 225: -0.28%; 16,785.69 (-46.53)
HANG SENG: +0.29%; 27,142.47 (+77.32)
SHANGHAI SE COMPOSITE: +2.64%; 5,552.30 (+142.90)
BSE SENSEX 30: +0.82%; 17,291.10 (+140.54)
FTSE 100: -0.81%; 6,433.60 (-52.80)
CAC 40: -0.41%; 5,709.86 (-23.51)
XETRA-DAX: -0.10%; 7,846.04 (-7.75)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.28%; $82.65 (-$0.23)
Gold: -0.76%; $745.50 (+$5.60)
Natural Gas: +0.55%; $6.96 (+$0.04)
Silver: +0.73%; $13.745 (+$0.10)
U.S. Breaking Newssee today's Wall Street Breakfast for earlier news
Focus Media Q2 Beats, Raises FY Rev Outlook
Focus Media Holding, China's largest publicly traded advertising company, reported fiscal Q2 net income more than doubled to $37.7 million, or $0.32/share (excluding certain items EPS totaled $0.38), topping analyst estimates of $0.30/share in a Bloomberg survey and $0.35 in a poll by Thomson. Revenues also more than doubled to $113.3M, beating estimates of $103M per Thomson. Focus Media expects Q3 adjusted EPS of $0.41 to $0.43, on sales of $132M - $135M, compared to analysts' average forecast of $0.43 on sales of $116.9M (Thomson). It also boosted its full-year revenue guidance to $440M to $450M, from $390M to $400M previously, on "higher-than-expected growth" in its internet advertising business. (See full earnings call transcript). Analysts had expected revenues of $407M according to Thomson. Shares of Focus Media lost 2.1% to $57.90 in late Thursday trading, extending a 1.5% loss to $59.15 during the normal session.
Sources: Press release, Associated Press I, II, Bloomberg, MarketWatch
Commentary: Focus Media Shares Surge on Completion of Auditor’s Investigation • Focus Media Soars As Audit Committee Finds No Undisclosed Rebate Payments • 11 Advertising Stocks That You Might Be Tempted to Buy
Stocks/ETFs to watch: FMCN
3Com To Be Taken Private - WSJ
Telecom equipment maker 3Com will announce Friday it is being acquired by Bain Capital and Huawei Technologies for more than $2 billion, the Wall Street Journal reported on its website. Unnamed sources say Chinese networking giant Huawei Technologies will take a minority stake in the deal, which values 3Com at over $5 a share. Assuming a final price of $5.50/share, the Journal says the deal represents a 50% premium to 3Com's Thursday close of $3.68 -- a potential signal of returning strength to a sagging LBO market (full story). The companies did not comment on the rumor.
Sources: Wall Street Journal
Commentary: 3Com, Sonus And Tellabs: Possible Nortel Targets • 3Com: Beneficiary of Online Video?
Stocks/ETFs to watch: COMS. Competitors: CSCO, HPQ, NT, ALU
Earnings call transcript: 3Com F1Q08
FCC Commissioner Casts Aspersions on Media Mergers
FCC member Michael Copps said Thursday he isn't convinced the proposed merger of satellite-radio companies Sirius Satellite Radio and rival XM Satellite Radio should be allowed to go through. Copps, one of five voting commission members, said it would be a "steep climb" for him to cast a favorable vote on the deal due to his concerns about U.S. media consolidation, and said he felt the same about Sam Zell's pending privitization of Tribune Co. Speaking of the XM/Sirius tie-up, he said: "The parts of the record that I've looked at so far have not shown me that it serves the public interest... Someone's going to have make a pretty powerful and potent demonstration" that the deal is in the public's best interest. Sirius wants to acquire XM for about $4 billion in stock, thereby linking the only two satellite radio providers in the U.S. The companies argue satellite radio faces competition from traditional AM/FM radio and personal audio players. Copps also said he thought the pending takeover of Dow Jones by News Corp. should be closely examined by the FCC, due to its impact on diversity in local and national media, but noted that FCC chairman Kevin Martin didn't seem to share his views in this regard. "His comments are fairly significant because the commissioners have been quite cautious in their comments about the pending transactions," said Stanford Group analyst Paul Gallant. XM shares fell 2.6% Thursday, Sirius shares were flat, Tribune dropped 0.9%, while Dow Jones and News were essentially unchanged.
Sources: Wall Street Journal, Reuters
Commentary: Notable FCC Comment Stage Filings On the Sirius-XM Merger • 8 Important Points On The Sirius/XM Merger • Rumors of Google Buying Sirius
Stocks/ETFs to watch: XMSR, SIRI, TRB, NWS, DJ
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Rise, Led by BHP, PetroChina on Metals Demand, China Growth Asian stocks advanced after prices of oil and metals gained and researchers at China's central bank raised their forecast for economic growth.
• Yen Gains on Speculation Credit Losses to Spread in U.K., U.S. and Europe The dollar fell to a record low against the euro before economic reports that may add to evidence the U.S. economic slowdown is deepening, suggesting the Federal Reserve may lower interest rates again this year.
• Asian Bond Sales Decline by 75 Percent, Most Since 2001, on Subprime Rout Asian bond sales plunged 75 percent in the third quarter, the biggest fall in six years, as losses sparked by defaults on U.S. subprime mortgage securities prompted investors to shun all but the most creditworthy borrowers.
European Headlines (via Bloomberg.com)
• European Stocks Fall; Tate & Lyle, L'Oreal, Northern Rock Lead Declines European stocks declined, heading for the first quarterly loss in a year, as the dollar's retreat against the euro hurts earnings at exporters.
• Borrowing Costs Soar at End of Quarter as Banks Seek Funding Amid Squeeze The cost of borrowing pounds, dollars, and euros rose as banks sought funding over the quarter- end amid a credit squeeze that shows no signs of abating.
• European Economic Sentiment Drops to 16-Month Low as Inflation Accelerates European confidence in the economic outlook dropped to a 16-month low in September and inflation accelerated above the European Central Bank's ceiling as borrowing costs climbed and oil prices reached a record.