(BFW) EDF CEO Says Alstom Sale Would Have Consequences for Utility...

 BN 05/15 11:48 *EDF CEO SPEAKS ON ALSTOM FOLLOWING PARIS SHAREHOLDERS' MEETING
 BN 05/15 11:48 *EDF WANTS TO SAFEGUARD ITS OWN INTERESTS ON ALSTOM, CEO SAYS
 BN 05/15 11:47 *EDF CEO SAYS ALSTOM SALE WOULD HAVE CONSEQUENCES FOR UTILITY
EDF CEO Says Alstom Sale Would Have Consequences for Utility
2014-05-15 11:55:46.495 GMT


By Tara Patel
     May 15 (Bloomberg) -- The potential sale of Alstom SA’s
energy assets would have consequences for Electricite de France
SA, the world’s biggest nuclear operator, CEO Henri Proglio told
reporters today following a shareholders’ meeting in Paris.
     “We will find a way to safeguard our own interests,” he
said, noting that Alstom is a “big supplier and long-term
partner” for EDF.
     Asked whether EDF could play a bigger role in the tussle
for Alstom, Proglio said it would be “derisory and not
relevant.”
  * NOTE: Alstom supplies equipment such as steam generators for
    EDF nuclear reactors

Link to Company News:{ALO FP <Equity> CN <GO>}
Link to Company News:{EDF FP <Equity> CN <GO>}
Link to Company News:{GE US <Equity> CN <GO>}
Link to Company News:{SIE GR <Equity> CN <GO>}

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

To contact the editor responsible for this story:
Tara Patel at +33-1-5365-5058 or
tpatel2@bloomberg.net

(Makor) Special Situations - Sky Deutschland: BUY


SpecialSituation-RARe©Trading                          Sky Deutschland (SKYD GR)

BUY

SKYD GR: Eur 6.62; target: Eur 6.90

May 12, 2014

On May 12, BSkyB acknowledged that it is in preliminary discussions with 21st Century Fox to evaluate the potential acquisition of its pay-tv assets in Germany (Sky Deutschland – SKYD) and Italy (unlisted). Fox owns ~57% of SKYD, 39% of BSkyB, and 100% of Sky Italia. BSkyB also noted that under German legislation, it would be required to launch a buyout offer for the SKYD’s minorities and it would expect, subject to German minimum offer price rules, to make this offer without a premium. Under the German minimum price rules, a bid price would be the higher of the last three-month VWAP or the highest price paid by a bidder in the preceding six months to acquire target shares. On this basis, we believe that the floor for a potential SKYD bid has been set around ~€6.7 (last three month VWAP).

Unlike other cable operators in Europe, SKYD is a growth stock, whose revenue and EBITDA are forecast to grow well into 2020s on the back of improving pay-tv penetration (currently below 10%) in the German market. Presently, consensus forecasts a three-year revenue CAGR of 14% and a three-year EBITDA CAGR of ~129%. On a relative basis (PE vs revenue growth), SKYD looks undervalued and we would value it around €7.90 a share. On a DCF basis, we value SKYD at €7.50 a share. Recent precedent transactions in the European cable sector are not comparable given SKYD’s growth profile. However, we note that on EV/Sub basis, SKYD (~€1800/sub) is valued at the high end of the precedent multiple range. If we apply, the EV/Sub paid for Virgin Media by Liberty (highest in our list), we would value SKYD at around ~€8.0 a share.

Overall, we are skeptical that BSkyB will pay a control premium to SKYD minorities, at least immediately. However, should BSkyB decides to consolidate the SKY’s European operations, SKYD minorities could benefit from backend transactions (e.g. domination agreement / outright bid etc.) that are likely to be pitched at higher premiums. We estimate a risk adjusted “efficient” price of ~€6.90 assuming (i) a bid at a price of €7.90 (30% probability), (ii) bid at 3m VWAP of ~€6.7 (40% probability), and (iii) no deal and SKYD trades around ~€6.3 (30% probability).  On this basis, we would buy SKYD.

FULL REPORT ATTACHED

WSJ : IBM's Earnings Target Doesn't Compute

IBM's Earnings Target Doesn't Compute

For IBM, talk isn't exactly cheap.

That much was clear in the reaction to Big Blue's analyst meeting on Wednesday, at which it maintained its target of delivering $20 in operating earnings per share in 2015. Despite that promise, shares of International Business Machines IBM -1.81% slipped, adding to a steady decline since the company reported disappointing first-quarter results last month.

Even more notable is how the stock has lost nearly 6% against a 30% increase in the Nasdaq Composite since IBM's last analyst day in February 2013. The $20-per-share target was promised there as well, but investors have grown more skeptical since.

IBM had a reputation as a reliable generator of earnings-per-share growth despite challenges to expand its enormous revenue base. But that is looking tarnished these days. Earnings fell more than 15% in the first quarter from the year-ago period, with IBM reporting its eighth consecutive quarterly revenue decline year over year.

Today's tech investors are all about revenue growth, and IBM chief Virginia Rometty went on the offensive Wednesday, promising growth "in the right places," which includes hot areas such as big data and the cloud.

But that stopped short of promising revenue growth for the company as a whole, which is a bigger ask for a business of IBM's size. The company said it has made 43 acquisitions since the beginning of 2010, but revenue has expanded by just a little over 4% in that time. To deliver 10% annual revenue growth now would require IBM to find about $10 billion in new sales in a market where its big rivals are hunting for precisely the same thing.

The challenge of doing that explains why IBM maintains its focus on delivering higher earnings growth. But the target of $20 a share for 2015 implies growth of almost 23% over a two-year period, which looks ambitious. And IBM admitted Wednesday that it faces a "tax headwind" of about $1.50 a share against that goal. Moreover, based on the company's current forecast, share buybacks will account for less than half of the expected growth.

So reaching next year's earnings goal is no sure thing. The revenue picture remains unclear and the company must deliver on promises to arrest the losses in its hardware business. At about 10 times forward earnings, the stock's valuation isn't terribly demanding. But given the uncertainty around IBM's growth potential, and the risk that it misses its earnings goal, investors shouldn't see that as a compelling reason to buy.

(BN) CORRECT: Turquoise Hill Considers Sale of SouthGobi Coal Unit...

CORRECT: Turquoise Hill Considers Sale of SouthGobi Coal Unit
2014-05-15 05:06:27.455 GMT


By Michael Kohn
     May 14 (Bloomberg) -- (Corrects Turquoise Hill’s stake in
SouthGobi in first bullet point, in story published yesterday)
Vancouver-based Turquoise Hill Resources is considering the sale
of its stake in SouthGobi Resources Ltd., Kay Priestly, chief
executive of Turquoise Hill, said during a conference call on
Tuesday.

* Turquoise Hill owns 56% stake of SouthGobi
* SouthGobi’s flagship asset is the Ovoot Tolgoi mine, located
40km north of the Mongolia-China border.
* Oyu Tolgoi remains co’s main focus: Priestly
* SouthGobi CEO Ross Tromans declined to comment on the issue in
a phone interview today.

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

To contact the reporter on this story:
Michael Kohn in Ulaanbaatar at +65-6212-1000 or
mkohn5@bloomberg.net
To contact the editors responsible for this story:
Jason Rogers at +65-6231-3673 or
jrogers73@bloomberg.net

WSJ : Murphy Oil Seeks Sale of Malaysia Oil and Gas Assets

Murphy Oil Seeks Sale of Malaysia Oil and Gas Assets

Midsize U.S. energy firm Murphy Oil Corp. MUR +0.23% has begun an over US$2 billion sale of its Malaysian oil and gas assets, people with knowledge of the deal said.

The deal would make Murphy the latest U.S. oil company to shed overseas assets in an effort to refocus on business back home.

Murphy Oil is seeking to sell as much as 30% of its stake in its Malaysian assets, these people said.

The sale process is at an early stage, the people said, adding that the company is currently seeking bidders. The first round of bids are due in June, one of the people said, adding that the company hopes to wrap up the deal by the end of the year.

Murphy Oil didn't respond to requests for comment.

Many U.S. oil firms are under pressure from investors to shed overseas assets, especially as the shale-gas boom at home has made domestic operations more lucrative.

In February, U.S.- based Anadarko APC +0.64% Petroleum Corp. sold its minority interest in two offshore fields in northeastern China's Bohai Bay to China's Brightoil Petroleum (Holdings) Ltd. 0933.HK +6.11% for US$1.08 billion. New York-based Hess Corp. HES +0.39% agreed to sell its Indonesian business for US$1.3 billion to Indonesia's PT Pertamina and Thailand's PTT Exploration & Production PTTEP.TH -0.32% PCL in December. And Houston-based Newfield Exploration Co. sold its Malaysian business to SapuraKencana Petroleum 5218.KU -0.46% Bhd. for US$898 million in October. Apache Corp. APA -0.17% and Devon Energy Corp. DVN -0.94% have also shed foreign assets.

The potential for developing North America's vast shale-gas fields has caused globally diversified oil-and-gas companies to rethink their overseas strategies. Huge discoveries in Louisiana, Texas, North Dakota and Pennsylvania have made the U.S. an attractive investment target. The Obama administration also cleared the way for broader natural-gas exports recently, when it approved a $10 billion facility at the Gulf Coast.

Murphy entered Malaysia in 1999 and has majority interests in seven separate production-sharing contracts. Oil-and-gas production in Malaysia and off the country's coastline accounts for more than 40% of Murphy Oil's output. So far this year, the company has sanctioned a floating liquefied natural gas project offshore with local partner Petroliam Nasional Bhd., or Petronas, Malaysia's state-controlled energy company. It also started pumping oil and gas from four wells in the Siakap North-Petai fields, the company said earlier this month.

With Murphy now looking closer to home, it will focus on its Eagle Ford Shale operations in southern Texas as well as offshore exploration in the Gulf of Mexico. In March, Murphy Oil was the high bidder on 16 new blocks in the central Gulf of Mexico, where it is actively exploring. And last month, the company started natural gas production from a well at its Dalmatian field in the Gulf. A second oil-pumping well there is expected to come online by the end of June.

Apart from Malaysia, the company also has operations in Vietnam, where it has three assets, including two deep water blocks and one shallow water block. In Indonesia, the company has interest in four gas exploration assets, while in Brunei, Murphy Oil has entered into two production sharing agreements. It has made five discoveries—two oil and three gas.

>>> Wal-Mart misses by $0.05, misses on revs; guides Q2 EPS below consensus

Wal-Mart misses by $0.05, misses on revs; guides Q2 EPS below consensus

Reports Q1 (Apr) earnings of $1.10 per share, $0.05 worse than the Capital IQ Consensus of $1.15; revenues rose 0.8% year/year to $114.17 bln vs the $115.6 bln consensus.
  • U.S. Q1 comparable store sales relatively flat (down 8 bps) vs flat guidance; Sam's Club Q1 comparable store sales of -0.5% vs flat guidance (excluding fuel).
  • Severe weather adversely impacted comp sales by ~20 basis points. Comp sales for the Neighborhood Market format rose ~5 percent.
  • Severe weather in the U.S. businesses negatively impacted EPS by ~ $0.03. Additionally, the company's effective tax rate for the quarter was higher than anticipated.
  • E-commerce sales globally increased ~ 27 percent for the quarter.
Co issues downside guidance for Q2, sees EPS of $1.15-1.25 vs. $1.28 Capital IQ Consensus; sees U.S. Q2 comparable store sales relatively flat and Sam's Club comparable store sales flat.

"Walmart's first quarter net sales increased 0.8 percent over last year. Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected," said Doug McMillon, Wal-Mart Stores, Inc. president and chief executive officer. "Walmart's underlying business is solid, and I'm confident in our long-term strategies. We'll continue to invest in price and enhance our service to improve sales," added McMillon. "We remain focused on growth across the enterprise, especially in small formats like Neighborhood Market in the U.S."

>>> Kohl's misses by $0.02, misses on revs; reaffirms FY15 EPS guidance; Q1 comp

Kohl's misses by $0.02, misses on revs; reaffirms FY15 EPS guidance; Q1 comps -3.2%

  • Reports Q1 (Apr) earnings of $0.60 per share, $0.02 worse than the Capital IQ Consensus Estimate of $0.62; revenues fell 3.1% year/year to $4.07 bln vs the $4.22 bln consensus.
  • Co reaffirms guidance for FY15, sees EPS of $4.05-4.45 vs. $4.33 Capital IQ Consensus Estimate.
  • Co reported Q1 comparable store sales of -3.4% vs -0.2% Street expectations.
  • Kohl's ended the quarter with 1,160 stores in 49 states, compared with 1,155 stores at the same time last year. The Company opened four new store locations, relocated one existing store and permanently closed two stores during the first quarter of 2014.
  • "We did not achieve our first quarter sales goals, but we were encouraged by the improvement in sales as the quarter progressed. Our teams managed our inventory levels appropriately and expenses were controlled throughout the organization during the quarter."

>>> US Early premarket gappers

Early premarket gappers

Gapping up: GTIV +55.7%, VIPS +12.3%, CLVS +8.2%, TSEM +7.7%, CSCO +6.6%, SANW +6.6%, MNTA +4.7%, OPWR +4.1%, AMED +3.6%, AGYS +3.4%, SYMC +2.8%, WILN +2.2%, DNDN +1.9%, CLDX +1.7%, JNPR +1.6%, FFIV +1.5%, JDSU +1.5%, DQ +1.4%, NTES +1.4%, WWE +1.3%, CIEN +1.1%, CA +1.1%, YY +1%, WUBA +1%, UL +0.9%, HFC +0.8%, VMW+0.8%

Gapping down: VOXX -21.5%, SRNE -17.9%, RGSE -14.7%, XONE -13.4%, NBG -13.3%, INCY -8.8%, SIR -5.2%, SIR -4.9%, SEAS -3.5%, DANG -2.9%, JACK -2.8%, DK -1.9%, ALU -1.5%, A -1.5%, DDD -0.9%, PCYC -0.6%, SSYS -0.5%