>>> Telefonica may raise €6.7B bid for GVT unit over fear of a rival bid from Te

Telefonica may raise €6.7B bid for GVT unit over fear of a rival bid from Telecom Italia - press 
- Telefonica SA Board is scheduled to meet today to discuss the play for Vivendi Brazilian operator GVT. 

**Telecom Italia has said it is studying its own offer for GVT in order to merge its Brazilian unit, TIM Participacoes, with GVT. - Telecom Italia's board was meeting Wednesday as well.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: SWHC -11.1%, DAEG -10.9%, YGE -4.8%, CHS -4.7%, SDRL -4.2%, TIVO -2.2%, (announces new $350 mln share repurchase plan), SLH -1.6%, BMRN -1.3%, (adjusted guidance to reflect one-time sale item), DY -1.2%, BF.B -0.8%

M&A news: COV -1.5% (investor has filed lawsuit to block Medtronic (MDT) deal, according to reports)

Other news: TLM -4.1% (seeing reports that co's discussions with Repsol (REPYY) regarding a potential deal for the sale of assets have stalled), RGR -3.5% (following SWHC results), AR -0.8% (co raised its production guidance and 2014 capital budget to $3.7 bln), OWW -0.5% (OWW issues statement regarding American Airlines action; Orbitz for Business is not impacted)

Analyst comments: LEJU -4.4% (downgraded to Neutral from Buy at Goldman), RGR -3.5% (downgraded to Fair Value from Buy at CRT Capital, also in sympathy with SWHC), EJ -2.7% (downgraded to Neutral from Buy at Goldman), FB -0.5% (downgraded to Neutral from Buy at Janney)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: TUBE +32.5%, EXPR +13.9%, ARUN +8%, DCI +5.7%, NMBL +2.9%, TIF +2.7%, HEI +2.3%, REX +1.8%, BWS +1.4%

M&A news: OIBR +1.8% (Engagement of Banco BTG Pactual to act as agent to review alternatives to the acquisition of the shares of TIM)

Other news: ISNS +25.9% (seeing continued strength - another recent security play, ie DGLY, TASR), AEGR +8.2% (announces resolution of warning letter for JUXTAPID (lomitapide) capsules), PKT +6.9% (receives $5 mln in initial orders from Tier 1 European MSO), ALTV +5.4% (following late move higher on Juniper Investment Company amended 13D filing with proposal for an all-cash acquisition of $8/share), RSH +4.7% (continued strength following yesterday's rumors on potential financing), RYAAY +3.6% (launched Ryanair Business Plus), PT +3.5% (still checking), CLUB +3.4% (Farallon Capital files amended 13D; indicates company should be prepared to evaluate potential acquirers' interest and engage financial advisor ), YOKU +3.3% (announces up to $300 mln share repurchase program), HZNP +2.5% (announces the USPTO issuance of an additional notice of allowance with claims covering RAYOS delayed-release tablets), ARO +2.1% (in sympathy with EXPR), MBLY +1.9% (cont strength), GALE +1.7% (still checking), KLIC +1.7% (authorized the repurchase of up to $100 mln of co's common shares), TRNS +1.4% (co increased secured revolving credit facility to $30 mln, up from $20 mln; $15 mln now available for acquisitions, up from previous $10 mln), ALLT +1.2% (in sympathy with PKT (closest peer)), DGLY +1.2% (cont momentum), BRCM +1.2% (Netatmo has selected the Broadcom Wireless Internet Connectivity for Embedded Devices Wi-Fi technology), LGND +1% (partner GSK receives FDA approval for Promacta/Revolade for use in patients with severe aplastic anemia), GSK +1% (receives FDA approval for Promacta/Revolade for use in patients with severe aplastic anemia), STJ +0.9% (resolves FDA Warning Letter for Plano Facility)

Analyst comments: ACLS +9.4% (initiated with a Buy at Stifel), MNKD +3.7% (initiated with a Buy at Jefferies), RCII +2.9% (upgraded to Buy from Hold at Canaccord Genuity), HTH +2.3% (upgraded to Outperform from Mkt Perform at Keefe Bruyette), TTI +1.8% (upgraded to Outperform at Cowen), LVLT +1.3% (upgraded to Outperform from Neutral at Macquarie)

>>> Brown-Forman misses by $0.02, misses on revs; reaffirms FY15 guidance

--> Stock Flat pre market

Brown-Forman misses by $0.02, misses on revs; reaffirms FY15 guidance

Reports Q1 (Jul) earnings of $0.70 per share, $0.02 worse than the Capital IQ Consensus Estimate of $0.72; revenues rose 2.8% year/year to $921 mln vs the $932.15 mln consensus.
  • Underlying net sales increased 3%: Price/mix contributed two points to net sales growth and gross margin expanded 50bps Jack Daniel's trademark grew underlying net sales 5% (+4% reported).
  • Underlying net sales grew 15% (+10% reported) in the emerging markets, a continuation of the strong trends the company has been experiencing in these fast growing markets.
Co reaffirms guidance for FY15, sees EPS of $3.25-3.45 (now including $0.06 FX headwind) vs. $3.36 Capital IQ Consensus Estimate; reaffirms FY15 revs +6-8% to ~$4.18-4.26 bln vs. $4.25 bln Capital IQ Consensus Estimate; operating income +9-11%.
  • The geopolitical environment remains fragile, particularly in Russia, where iconic American brands are experiencing increased scrutiny, including some of Brown-Forman's brands.
  • While first quarter results were negatively impacted by inventory reductions, the company expects stronger reported and underlying results over the balance of the year, driven by more stable inventory levels and expanding global demand for the company's portfolio of brands.

>>> Aruba Networks: Color on Quarter --> +10% pre-mkt

Aruba Networks: Color on Quarter

  • Oppenheimer notes Aruba delivered strong 4Q14 sales upside consistent with their positive checks and an outlook that suggests the momentum is sustainable well into FY15. The margin overhang is also clearing with mgmt. raising Aruba's FY15 operating margin target to 21.0-22.0% and proactively optimizing overall operations with a 4.0% headcount cut and 4.0% headcount relocation to lower cost facilities. They're raising estimates and continue to see room for upside driven by 802.11ac trends. And now that visibility into margin trends is getting clearer, they believe the shares will better reflect the strong top-line performance; Outperform.
  • Mizuho raises their ARUN tgt to $21 from $20; Aruba still appears to be grabbing share and building volume in the 802.11 market. The co is now also taking concrete steps to improve two long-term investor concerns including 1) employee stock comp and 2) high op-ex. The combination should help consensus EPS to rise post report; they move to $1.05 from $1.00 for FY15
  • Stifel raises their ARUN tgt to $26 from $24. As their checks showed, Aruba delivered a solid quarter with improved gross and operating margins. They continue to believe that being first to market with 11ac has helped Aruba consolidate its position in the market. This combined with partnerships with JNPR and HPQ should help the co continue to take market share against CSCO. Second, the SMB market is ripe for penetration and Aruba, with Instant, is in early days of expanding into that market; Buy.
  • Robust Q4 tees up strength into FY15 - Northland; $27 tgt
  • UBS upgraded ARUN to Buy from Neutral; tgt raised to $25 from $21

>>> US Early premarket gappers

Early premarket gappers
Gapping up: TUBE +33.4%, ISNS +16%, RSH +15.1%, ARUN +11.2%, EXPR +7.3%, DCI +7.1%, ISLE +4.8%, PT +3.5%, CLUB +3.4%, TIF +3.4%, ALTV +3.1%, HEI +2.3%, FEYE +2.2%, APP +2%, DB +1.8%, MBLY +1.6%, BF.B +1.5%, TRNS +1.4%, GILD +1%, STJ +0.9%, GOLD +0.9%, VOD +0.9%

Gapping down: SWHC -11.8%, DAEG -10.9%, SDRL -6.1%, RGR -5%, TLM -4.4%, YGE -3.7%, CHS -1.7%, SLH -1.6%, NMBL -1.5%, GALE -1.3%, BMRN -1.3%, DY -1.2%, DY -1.2%, AR -0.8%, OWW -0.5%

>>> Express beats by $0.08, beats on revs; guides Q3 EPS in-line; raises FY15 EP

Express beats by $0.08, beats on revs; guides Q3 EPS in-line; raises FY15 EPS above consensus; reaffirms FY15 comp guidance; Q2 comps -5%

Reports Q2 (Jul) earnings of $0.08 per share, $0.08 better than the Capital IQ Consensus Estimate of ($0.00); revenues fell 1.8% year/year to $481.4 mln vs the $457.65 mln consensus with (including e-commerce sales) comps -5%. Gross margin as a percentage of net sales declined 280 basis points compared to last year's second quarter and represented 28.3% of net sales.
  • Co issues in-line guidance for Q3, sees EPS of $0.13-0.18 vs. $0.16 Capital IQ Consensus Estimate. Co sees Q3 comps of Negative low single digits.
  • Co issues raised guidance for FY15, sees EPS of $0.85-0.95 from $0.74-0.90 vs. $0.81 Capital IQ Consensus Estimate. Co reaffirms FY15 comp guidance of Negative mid single digits.

>>> Michaels Stores beats by $0.06, reports revs in-line; guides 2H15 EPS in-lin

Michaels Stores beats by $0.06, reports revs in-line; guides 2H15 EPS in-line

Reports Q2 (Jul) adj. earnings of $0.15 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus Estimate of $0.09; revenues rose 4.9% year/year to $948 mln vs the $943.05 mln consensus.
  • Comparable store sales increased by 3.2% or 3.6% on a constant currency basis.
  • Gross profit grew 40 basis points to 37.7% of net sales compared to 37.3% of net sales in the second quarter of fiscal 2013. The improvement was driven by occupancy cost leverage, the timing of store remodel costs and lower costs of shrink and damages, partially offset by slightly higher merchandise costs and increased freight and distribution costs.
Co issues guidance for FY15, sees EPS of $1.38-1.42 vs. $1.36 Capital IQ Consensus; sees annual sales +1-2%; sees 2H15 EPS $0.98-1.02 vs. $1.01 consensus

>>> Tiffany & Co beats by $0.11, reports revs in-line; raises FY15 EPS to in-lin

Tiffany & Co beats by $0.11, reports revs in-line; raises FY15 EPS to in-line, reaffirms revs guidance

Reports Q2 (Jul) earnings of $0.96 per share, $0.11 better than the Capital IQ Consensus Estimate of $0.85; revenues rose 7.2% year/year to $992.93 mln vs the $988.94 mln consensus. The Americas comparable store sales were up 8%. Gross margin (gross profit as a percentage of net sales) increased to 59.9% in the second quarter from 57.5% year ago; operating margin (earnings from operations as a percentage of net sales) rose to 21.0% in the second quarter due to the higher gross margin.
  • Co raises FY15 EPS to $4.20-4.30, prior $4.15-4.25, vs. $4.28 Capital IQ Consensus Estimate; reaffirms FY15 revs of +HSD vs. $4.39 bln Capital IQ Consensus Estimate.
  • This full year forecast is based on the following assumptions:
    • Opening 10 Company-operated stores and closing three existing stores: opening four in the Americas, two in Asia-Pacific, two in Japan, and one each in Europe and Russia, while closing one each in the Americas, Asia-Pacific and the U.A.E.
    • Operating margin increasing due to a higher gross margin and SG&A expense growth less than sales growth.
    • Interest and other expenses, net of $65 million; 6% increase in net inventories; Capital expenditures of $270 million, versus $221 million last year, with the increase largely reflecting incremental investments in certain information technology systems.
    • Free cash flow (cash flow from operating activities less capital expenditures) of at least $400 million.

>>> Watch Luxury on TIF better numbers TIF +1.47% pre-market

Tiffany & Co prelim $0.96 vs $0.85 Capital IQ Consensus Estimate; revs $993 mln vs $988.94 mln Capital IQ Consensus Estimate

Tiffany & Co raises FY15 to $4.20-4.30 from $4.15-4.25 vs $4.28 Capital IQ Consensus Estimate; reaffirms sales +HSD

Tiffany & Co plans on adding net 10 co-operated stores during 2014, prior guidance +13 co-operated stores and closing 4 existing stores

Tiffany & Co sees FY15 (fiscal 2014) EPS of $4.20-4.30 vs $4.15-4.25 prior guidance and $4.28 consensus; worldwide net sales of +HSD vs +HSD prior guidance and +8.8% to $4.39 bln consensus
Guidance assumes operating margin increasing due to a higher gross margin and SG&A expense growth less than sales growth.