WSJ : 21st Century Fox Offered to Buy Time Warner

21st Century Fox Offered to Buy Time Warner
Time Warner Rejected the Deal, Which Valued the Company at $85 a Share


21st Century Fox Inc. made an offer in early June to buy Time Warner Inc. TWX +18.04% at $85 a share.

Time Warner rejected the offer curtly, after Chief Executive Jeff Bewkes took the proposal to the board. Since then, Time Warner has been unwilling to engage with Fox, FOXA -0.98% according to people familiar with the situation.

Fox has suggested that synergies of a combination could be worth more than a billion dollars, but it wanted to have discussions to fully ascertain value of those savings and Time Warner hasn't been willing to talk, one of the people said.

Fox proposed selling off CNN, the one Time Warner asset it felt regulators would balk at being combined with Fox, which already owns Fox News channel, a CNN competitor. Otherwise, Fox was proposing buying all of Time Warner.

The New York Times NYT -1.53% previously reported news of the offer and rejection.

(GS) Tailwinds put Security in the spotlight; Buy PANW (CL), FEYE; initiate on P

Tailwinds put Security in the spotlight; Buy PANW (CL), FEYE; initiate on PFPT (Buy), FTNT

* Why we are Bullish on Security stocks
We assume coverage of Security Software with an
Attractive coverage view, given several tailwinds
that we believe put Security in the spotlight.
These include: (1) an evolving cyber threat
landscape producing larger and more costly data
breaches; as a result of this (and a potential
firewall refresh), enterprises are reviewing, and in
many cases, increasing Security spend to avoid
significant financial/reputational damage in the
event of a breach, (2) a number of factors that are
supportive of increased M&A and capital
allocation for our stocks looking forward.

* Breaches, refreshes support shift to next-gen
We view recent high-profile data breaches (e.g.,
TGT) and an expected firewall refresh as positive
catalysts for our stocks, with a preference for
next-gen/APT-centric providers. Our proprietary
IT surveys support our bullish call, highlighting:
(1) Security spending is accelerating at its highest
rates since 2010, (2) a firewall refresh appears
more likely within the next 12 months, and (3)
new budget is being created to fight APTs, with a
high preference for solutions from new vendors.

* Breaches, refreshes support shift to next-gen
We view recent high-profile data breaches (e.g.,
TGT) and an expected firewall refresh as positive
catalysts for our stocks, with a preference for
next-gen/APT-centric providers. Our proprietary
IT surveys support our bullish call, highlighting:
(1) Security spending is accelerating at its highest
rates since 2010, (2) a firewall refresh appears
more likely within the next 12 months, and (3)
new budget is being created to fight APTs, with a
high preference for solutions from new vendors.

* Stock views: Buy PANW (CL), PFPT, FEYE
Palo Alto Networks (PANW, CL-Buy) is our top
pick, offering disruptive long-term growth and
accelerating profitability that should exceed street
forecasts. We also initiate coverage of Proofpoint
(PFPT) at Buy, given our above-consensus view on
near-term growth/FCF trends, and potential upside via
M&A. We upgrade FireEye (FEYE) to Buy, as
proprietary survey data indicates increased budget
(with new vendors) to counter APTs, a more positive
view on FCF, and potential M&A tailwinds over the
long-term. We also initiate coverage of Fortinet
(FTNT) with a Neutral rating.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: ZIPR +118.5%, ICAD +5.2%, INTC +5%, FEYE +4.9%, GPRO +3.5%, AMD +2.9%, TXT +2.9%, CY +2.8%, AAPL +2.4%, ARNA +2.4%, PT +2.4%, PANW +2.4%, SIRI +2.1%, IBM +2.1%, SIRI +2.1%, PLUG +1.9%, MT +1.7%, TOT +1.7%, STM +1.6%, RIO +1.5%, GOLD +1.5%, CRI +1.3%, CRI +1.3%, ING +1.3%, ABX +1.2%, TRLA +1%, JCI +0.9%, BLK +0.6%

Gapping down: ININ -22%, ITI -13.3%, BIOA -12.2%, BBRY -4.8%, MTG -3.6%, YHOO -3.3%, ARCC -2.9%, IBKR -2.8%, AIR -1.5%, PNFP -1.4%, ASML -1.3%, KORS -1.1%, SHPG -1.1%, IPXL -0.9%, POT -0.9%, CSX -0.5%

>>> Intel Color on quarter

--> INTC (+5%) is extending its breakout (after the co raised guidance in June) to a 10 year high in the premarket

Intel: Color on Quarter
  • Topeka Capital Markets raises their INTC tgt to $38 from $34 after INTC reported 2Q14 rev upside and guided better than consensus, reflecting continued enterprise PC recovery as well strong data center demand. Gross margin strength reflects lower startup costs and better than expected units. We believe further opportunity remains for INTC into 2H14 as the enterprise refresh cycle persists, data center benefits from new products, and smartphones/tablets begin to ramp. They are also encouraged by increased full-year revenue guidance and plans for aggressive share buybacks.
  • RBC Capital Mkts raises their INTC tgt to $34 from $31. Strong quarter and outlook (Q3 & FY14) as our FY15 FCF/sh estimate increases 12% to $2.25. View mgt decision to focus on greater capital return structure as prudent, optimizing BS. Rev upside is being driven by core PCCG and DCG segments, however view shares as fully priced considering deleveraging post-Q3 on recognition of start-up charges and uncertainty around future spending controls.
  • Stifel raises their INTC tgt to $36 from $31. Intel delivered June revenues and earnings slightly above its positive pre-announcement. Looking out to the Sept quarter, demand is expected to return to a seasonal up 4% q/q growth and gross margin is expected to soar to a near four-year high 66% as the co continues to wring out costs from its 22nm manufacturing process. The INTC bears may point to the ~$1bn quarterly operating loss in the Mobile and Communications Group but they agree with mgmt that Intel's viability in broadening its markets and outgrowing its peers may depend on having full-featured cellular modems integrated into its processors.
  • Oppenheimer notes INTC reported solid 2Q sales/EPS of $13.8B/$0.55, in line with estimates and June 12's positively pre-announced results. The third quarter was guided up 4% Q/Q to $14.4B, ahead of consensus and in line with historical seasonality. WinXP/Enterprise refresh and DCG are driving strength while MCG drags. Gross margin of 64.5% was impressive, is expected up another 150bps in 3Q. Mgmt's effort to return cash to shareholders ($2.1B in share buybacks in 2Q, $4B expected in 3Q, and new $20B authorization) are also encouraging. PC momentum looks sustainable near-term; they remain on the sidelines as INTC's pay-to-play strategy in mobile will likely continue presenting a trade-off between top-line growth and bottom-line dollars for the foreseeable.
  • Needham notes that Intel reported 2Q14 results slightly above revised guidance issued in June. PCCG and DCG revenues both exceeded estimates and GM benefited from lower 14nm start-up costs, higher unit volumes and lower unit costs. 3Q14 revenue and GM guidance was stronger than expected due to continued strength in PCCG and DCG. However, 2014 guidance implies flat revenue and a decline in GM in 4Q14. In 2H15, they expect higher start-up costs to impact GM. They remain cautious about PCCG strength in 2015 as they expect the Windows XP refresh cycle will draw to a close, and they believe GM is likely peaking in the near term.
  • Cowen raising tgt from $27.50 to $33 on better guide and shift of basis C15. Record GM in the face of massive mobile losses spring-load P&L for what should be at least ~$0.15-0.20 EPS accretion in '15 even in a base case as mobile losses bottom & inflect. That said, semis have now moved past mid-cycle and they remain bearish on consumer PC, esp if AAPL pivots tablet/NB paradigm again in '15 w/a new pdct.
  • FBR Capital raises their INTC tgt to $35 from $33; underneath the surface, the quarter raised some long-term question marks. Firstly, year-end guidance implies flat 4Q14 revenue growth and 62% GMs (down 400 bps QOQ). Secondly, mgmt essentially admitted to an additional quarter (or more) pushout for Broadwell (which we view as the main driver of 2Q14's 66% GMs). Despite mgmt claiming Broadwell's push would not affect Skylake's launch, mgmt guided the part for a "2015" launch. They view Intel's manufacturing lead as a key competitive advantage. If this were to erode, it may cause us to change their opinion (Samsung may have 14nm FinFET late next year). That said, the mobile segment's $1.1B loss (on just $50M in revenue) challenges comprehension, which ironically, they view as a positive. A restructuring of the segment could drive $0.65 in annual EPS upside, a move that could drive up to $9 in stock value, a positive.
  • Intel upgraded to Buy from Neutral at UBS; tgt raised to $37.50 from $30
  • Intel upgraded to Buy from Neutral at B. Riley & Co.; tgt raised to $40 from $33.50
  • Jefferies raised tgt to $45

>>> Bank of America beats by $0.12, beats on revs --> -1.08% pre market

Bank of America beats by $0.12, beats on revs

Reports Q2 (Jun) earnings of $0.19 per share, $0.12 better than the Capital IQ Consensus Estimate of $0.07; revenues fell 4.3% year/year to $21.96 bln vs the $21.67 bln consensus. BAC reported net income of $2.3 billion compared to net income of $4.0 billion in prior year period.
  • Net interest income declined 5% y/y to $10.2 billion. The decline was driven by lower yields on debt securities due to a $528 million change in market-related premium amortization expense. Net interest margin was 2.26% in Q2 compared to 2.28% in prior year.
  • Noninterest income was down 4% y/y, driven primarily by declines in mortgage banking income and equity investment income. The provision for credit losses declined 66 percent from the second quarter of 2013 to $411 million, driven by improved credit quality.
  • The effective tax rate of 18.0% for Q2 driven by the impact of recurring tax preference benefits on the lower level of pretax income. The effective tax rate for prior year of 27.0% was primarily driven by recurring tax preference benefits and an increase in tax benefits from the 2012 non-U.S. restructurings.
AIG Settlement
  • On July 15, 2014, BAC executed a definitive settlement agreement with AIG to resolve all outstanding residential mortgage-backed securities (RMBS) litigation between the parties. Under the terms of the settlement, AIG will file notices of dismissal in its securities lawsuits against BAC and its affiliates pending in California and New York federal courts. Also, AIG has agreed to withdraw its objection to the Bank of New York Mellon private-label securities settlement. The AIG settlement amount of $650 million was covered by litigation reserves as of June 30, 2014. Bank of America has now resolved approximately 95 percent of the unpaid principal balance of all RMBS as to which RMBS securities litigation has been filed or threatened for all Bank of America-related entities.
Consumer & Business Banking
  • Average deposit balances increased $21.3 billion, or 4% y/y to $543.6 billion. The increase was primarily driven by growth in liquid products in the current low-rate environment.
  • Return on average allocated capital was 24.3%, compared to 18.6% in 2Q13.
  • CBB reported net income of $1.8 billion, up $397 million, or 2% y/y, reflecting lower provision for credit losses and continued progress on the company's strategy of deepening relationships and reducing costs by optimizing the delivery network. Revenue was relatively stable y/y as higher service charge income was offset by lower net interest income and slightly lower card income.
Consumer Real Estate Services
  • Consumer Real Estate Services reported a net loss of $2.8 billion for Q2, compared to a net loss of $930 million from prior year, driven largely by a $3.6 billion increase in litigation expense. Revenue declined $725 million from 2Q13 to $1.4 billion, driven primarily by lower core production revenue due to fewer loan originations as well as lower servicing income, primarily due to a smaller servicing portfolio.
  • CRES first-mortgage originations declined 59% y/y compared to the same period in 2013, reflecting a decline in overall market demand for refinance mortgages. Core production revenue decreased $542 million y/y to $318 million due primarily to lower volume and a reduction in revenues from sales of loans that had returned to performing status. Noninterest expense increased $2.5 billion from the year-ago quarter to $5.9 billion, due to a $3.6 billion increase in litigation expense, partially offset by lower LAS default-related staffing and other default-related servicing expenses, and lower Home Loans expenses as refinance demand slowed.
Global Wealth & Investment Management
  • Unit reported net income of $724 million, compared to $759 million in 2Q13. Revenue increased 2% y/y to a record $4.6 billion, driven by higher noninterest income related to improved market valuation and long-term AUM flows.
  • Return on average allocated capital was 24.3 percent in the second quarter of 2014, down from 30.6 percent in the year-ago quarter, as relatively stable earnings were more than offset by increased capital allocations.
Global Banking
  • Unit reported net income of $1.4 billion in Q2, compared to $1.3 billion in prior year as a decline in the provision for credit losses was partially offset by higher noninterest expense. Revenue of $4.2 billion was relatively stable compared to the second quarter of 2013.
  • Global Corporate Banking revenue increased to $1.6 billion in Q2, up $29 million y/y, and Global Commercial Banking revenue decreased $59 million to $1.7 billion. Included in these results are Business Lending revenue of $1.8 billion, down $80 million from the year-ago quarter, and Global Transaction Services revenue of $1.5 billion, up $50 million from the year-ago period.
  • Global Banking investment banking fees, excluding self-led deals, increased $33 million y/y. Return on average allocated capital was 17.5% in Q2, down from 22.6% in the year-ago quarter, as modest earnings improvement was more than offset by increased capital allocations..
  • Fixed Income, Currency and Commodities (FICC) sales and trading revenue, excluding net DVA, increased 5% y/y to $2.4 billion. Return on average allocated capital was 13.0% in Q2, compared to 12.9% in 2Q13, reflecting increased net income which was largely offset by an increase in allocated capital compared to the year-ago quarter. Global Markets reported net income of $1.1 billion in Q2, up 14% y/y. Revenue increased $389 million, or 9% y/y to $4.6 billion, reflecting higher equity investment gains and increased investment banking fees.
    • Total sales and trading revenue was comparable to the year-ago quarter at $3.5 billion. Excluding net DVA, sales and trading revenue was $3.4 billion in both periods. FICC sales and trading revenue, excluding net DVA, was $2.4 billion in the second quarter of 2014, an increase of $117 million, or 5 percent, from the year-ago quarter, reflecting improved performance in mortgage and municipal products, partially offset by declines in foreign exchange and commodities.
    • Equities sales and trading revenue, excluding net DVA, was $1.0 billion, a decrease of $162 million, or 14 percent, from the year-ago quarter as low volatility depressed secondary market volumes and reduced client activity. Noninterest expense was $2.9 billion compared to $2.8 billion in the year-ago quarter.
Capital
  • The common equity tier 1 capital ratio was 12.0% at June 30, 2014, up from 11.8% at March 31, 2014.
  • The estimated common equity tier 1 capital ratio was 9.5%, up from 9.0% at March 31, 2014.
  • BAC's estimated supplementary leverage ratios were above the 5%; both of the company's primary bank subsidiaries were above the 6%
  • Tangible book value per share was $14.24 at June 30, 2014, compared to $13.81 at March 31, 2014 and $13.32 at June 30, 2013.
  • Book value per share was $21.16 at June 30, 2014, compared to $20.75 at March 31, 2014 and $20.18 at June 30, 2013.

BGR - Apple may have just overcome the 5.5-inch iPhone’s biggest stumbling block

Earlier this year, a report from the Taiwanese publication Business Times revealed that the 5.5-inch iPhone 6 phablet might be delayed into 2015 on account of supply chain issues regarding the size of the battery in the new phone. The iPhone 6 is reportedly going to be even thinner than previous models, necessitating a thinner battery than suppliers were prepared to provide in mass quantities.

It’s been nearly three months, and now United Daily News is reporting that the supply bottleneck has been solved after Apple teamed up with a new supplier which can meet the huge demand. According to G for Games, Dynapack, one of Apple’s primary suppliers for the iPhone 5 battery, was unable to find a way to produce the batteries for the thinner devices and has subsequently “fallen off the radar.”

Shortly after Dynapack vanished, Apple found a new battery supplier: Simplo. Simplo has apparently already solved the design crisis that could have resulted in a delayed release for the iPhone 6 phablet, although the second supplier, Desai, is reportedly still looking for a fix.

Corroborating this recent report with previous stories, G for Games has determined that a third supplier, Sunwoda, is currently on schedule along with Simplo, which would mean that 2 of the 3 battery suppliers are operating at full speed.

In other words, the rumored problems with the rumored iPhone are now rumored to be solved.

(BFW) Actelion 2Q Could Provide Positive Surprise, UBS Says

Actelion 2Q Could Provide Positive Surprise, UBS Says
2014-07-16 11:12:49.62 GMT


By Allison Connolly
     July 16 (Bloomberg) -- Co. could beat consensus ests. on 2Q
rev., Ebit, EPS as Tracleer ests. are too low, UBS (buy, PT
CHF120) says in note.
  * UBS says Tracleer-to-Opsumit switch implied by consensus
    could prove overly optimistic
    * Sees 2% beat on rev., 19% beat on EPS amd 12% beat on
      core Ebit
  * Co. reports 2Q results on July 22
  * NOTE: June 16, Buy Actelion, Selexipag Data May Transform
    Co., BofAML Says

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Allison Connolly in London at +44-20-3525-7043 or
aconnolly4@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net

>>> CNBC Cramer - Mad Money

>>> CNBC Cramer

Stocks with favorable mention: AAPL, AMZN, BMY, CSCO, EPD, GS, JPM, LNCO, MRK, PRGO, RAD, TRV, TTWO

Stocks with unfavorable mention: AKAM, ALU, CB, GE, JNJ, LCI, NFLX, VVUS, WFC, WIN

BGR : The iPhone 6′s reported sapphire display already has Corning nervous

--> GLW +4.9% on light volume pre market


For a long time, Corning’s proprietary Gorilla Glass has been the go-to material that manufacturers use for smartphone displays thanks to its remarkable durability and toughness. However, with Apple reportedly using a sapphire display for its upcoming iPhone 6, Corning is at risk for potentially losing some significant business, particularly if Samsung again decides to be a “fast follower” and switch to sapphire for its future flagship smartphones.

With this in mind, we found it interesting that Corning has launched a preemptive strike against the iPhone 6′s reported sapphire display, even though we don’t know for absolute certain yet whether it will have such a display or not. In a new video posted on its website, Corning does a pressure test comparing a sapphire display to a Gorilla Glass display and shows that Gorilla Glass can withstand more than twice as much force as a sapphire display without breaking.

While the video is certainly interesting, it’s also a bit surprising to see Corning react this early to a product that may not even end up featuring a sapphire display. We should also point out that the video depicts a generic sapphire display and that we don’t know what, if any, special tricks Apple and its manufacturing partners might use to make the iPhone 6′s possible sapphire display more durable than the one shown in the video.

Be sure to check out the full video below.