TheChek News Flow

In reaction to disappointing earnings/guidance: XONE -14.2% (also downgraded to Hold from Buy at Canaccord Genuity; tgt lowered to $55 from $75), COOL -13.9%, HTWR -8.1%, FAST -2.5%, MGA -1.4%.

3D printing names lower following XONE guidance: VJET -9.3%, DDD -3%, SSYS -1.1%, ONVO -0.9%.

Select metals/mining stocks trading lower: HMY -2.2%, GOLD -2%, GG -1.1% (Osisko responds to unsolicited proposal from Goldcorp; will continue to review the Offer and will communicate with its shareholders as appropriate), GDX -0.9%, BHP -0.7%, GLD -0.3%.

Other news: QIWI -12% (still checking), WPCS -7.2% (WPCS Intl between December 31- January 13 co received conversion notices to issue an aggregate of 1,250,702 shares), JKS -6.2% (announces concurrent offering of 2.75 mln ADSs and $100 mln convertible senior notes), UBNT -4% (still checking), CORR -3.9% (announced that it intends to offer, subject to market and other conditions, 6,500,000 shares of its common stock in an underwritten public offering), NUS -3.3% (attributed to cautious China Daily story), IRE -2.9% (still checking), THOR -2.2% (following HTWR guidance), HLF -2.2% (down with NUS following cautious China Daily story), ARIA -1.8% (still checking), DEO -1.4% (still checking), WDAY -1.2% (prices 6 mln share follow-on offering at $89.00 per share), BA -1.2% (Japan Air has grounded 787 following battery issue, according to reports ), ABX -0.6% (Large shareholder calls for Director Anthony Munk to step down, according to reports ), NFLX -0.6% (WSJ story cautious on NFLX following net neutrality ruling).

Analyst comments: CRUS -4% (downgraded to Underperform from Sector Perform at Pacific Crest), UN -1.9% (downgraded to Underweight from Neutral at JPMorgan), STCK -1.5% ( downgraded to Neutral from Buy at Goldman), WSO -1.3% (downgraded to Sell from Neutral at Goldman), E -1.1% (downgraded to Reduce from Neutral at Nomura ), TAM -0.7% (downgraded to Neutral from Buy at Goldman), SJR -0.7% (downgraded to Neutral from Buy at BofA/Merrill)

In reaction to strong earnings/guidance: DTLK +31.6%, ENPH +5.5%, GMED +3%, GM +2.9% (also declares 30 cents per share quarterly common stock dividend; names Chuck Stevens Chief Financial Officer; forecasts modest global industry growth in 2014 driven by the United States, China and Europe), BAC +2.6%, MDRX +0.8%(guides 3-yr CAGR non-GAAP revs to grow 5-8%; adj. EDITBA to grow 18-22% range - investor presentation), LLTC +0.8%.

Financial related names showing strength: C +1.4%, MS +1.3% (assumed with a Mkt Perform at Keefe Bruyette; tgt $34), RBS +1.3%, DB +1.3%, HBAN +1.3%, ING +1.1%, GS +0.6%.

Solar names are higher on light volume: HSOL +6.9% (signs strategic partnership MOU with Shanghai HuiTianRan Investment Holding Group to Develop downstream opportunities in China including 700 MW Module supply or EPC contracts), RSOL +4%, SOL +3%, CSIQ +1.6%, SPWR +0.8%

Other news: CHTP +161.7% (confirms FDA Advisory Panel recommends approval of NORTHERA (droxidopa) for the treatment of symptomatic Noh), GST +25% (light volume; still checking for catalyst), DRWI +14.1% (DragonWave and Xi'an Potevio Communications Establish Strategic Sales Agreement for Chinese Mobile Market ), CLNE +9.7% (Clean Energy Opens First LNG Station in Florida and Signs New Multi-year Fueling Agreements), AMRN +6.3% (still checking), PLUG +5.8% (continued strength), NGLS +4.9% (increases quarterly dividend ~2% to $0.7475 from $0.7325 per share), ARO +4.8% (reports indicate exploring options), RMTI +4.8% (still checking), SQNM +4.7% (unit entered into agreement to offer access to its MaterniT21 PLUS laboratory-developed test to Mayo Medical Laboratories), QTM +4.7% (continued strength following guidance/upgrade), VICL +3.1% (higher intraday as CEO, Chief Accounting Officer, and two VPs discloses acquisition of stock, pursuant to a restricted stock grant), CTRL +2% (after 38%+ move higher following Google/Nest news), ERIC +2% (still checking), ELON +1.9% (after 28%+ move higher following Google/Nest news), FRO +1.8% (still checking), TSLA +1.6% (following 15% move higher on guidance; CEO was on CNBC after the close), AAPL +1% (WSJ profiles interview with Apple CEO Tim Cook who said China Mobile (CHL) deal will increase smartphone sales in China).

Analyst comments: FTNT +2% (upgraded to Outperform from Neutral at Wedbush), INTC +1.5% (upgraded to Outperform from Mkt Perform at BMO Capital Mkts), TWTR +1.2% (initiated with a Neutral at Nomura; tgt $60), BIDU +0.9% ( following positive Credit Agricole comments; says top internet pick for 2014 and is cheapest China internet stock), FB +0.5% (initiated with a Buy at Nomura), EC +0.2% (initiated with a Outperform at Raymond James), XLNX +0.1% (upgraded to Overweight from Equal Weight at Barclays)

Reports Q4 (Dec) earnings of $0.29 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.26; revenues rose 14.9% year/year to $21.7 bln vs the $21.17 bln consensus. Revenue, net of interest expense, on an FTE basis rose $2.8 billion from the fourth quarter of 2012 to $21.7 billion. Excluding the impact of debit valuation adjustments (DVA) and fair value option (FVO) adjustments, revenue was $22.3 billion in the fourth quarter of 2013, compared to $19.6 billion in the fourth quarter of 2012.

• Net interest income on a GAAP basis was $10.8 billion and $10.3 billion for the three months ended December 31, 2013 and 2012. Net interest income, on an FTE basis, rose 4 percent from the year-ago quarter to $11.0 billion. The improvement was driven by reductions in long-term debt balances and yields, favorable market-related adjustments from lower premium amortization, lower rates paid on deposits, and higher commercial loan balances. These factors were partially offset by lower consumer loan balances and lower asset yields.
• Net interest margin was 2.56 percent in the fourth quarter of 2013, compared to 2.35 percent in the fourth quarter of 2012.
• Noninterest income increased 28 percent from the year-ago quarter, to $10.7 billion, driven by lower representations and warranties provision and year-over-year improvement in both investment banking fees and investment and brokerage income.
• Noninterest expense was $17.3 billion, compared to $18.4 billion in the year-ago quarter, driven primarily by reduced expenses in Legacy Assets and Servicing (LAS) and lower personnel expense. This was partially offset by higher litigation expense reflecting continued evaluation of legacy exposures largely related to residential mortgage-backed securities (RMBS) litigation.
• • Litigation expense rose to $2.3 billion in the fourth quarter of 2013 from $1.1 billion in the third quarter of 2013 and $916 million in the fourth quarter of 2012. In addition, the year-ago quarter included a $1.1 billion expense related to the Independent Foreclosure Review (IFR) acceleration agreement.

Consumer and Business Banking reported net income of $2.0 billion, up $521 million, or 36 percent, from the year-ago quarter, driven by lower provision for credit losses, lower noninterest expense and higher revenue. Revenue of $7.5 billion increased $96 million from the year-ago quarter, driven by higher net interest income.

Consumer Real Estate Services reported a net loss of $1.1 billion for the fourth quarter of 2013, compared to a net loss of $3.7 billion for the same period in 2012. The year-ago quarter included the settlements with the Federal National Mortgage Association (Fannie Mae) to resolve outstanding and potential repurchase and certain other claims and $1.1 billion of expense related to the IFR acceleration agreement. Revenue increased $1.2 billion from the fourth quarter of 2012 to $1.7 billion due to a $2.9 billion reduction in representations and warranties provision, partially offset by a $1.1 billion decline in servicing revenue reflecting lower Mortgage Servicing Rights (MSR) net-of-hedge performance and a smaller servicing portfolio, as well as a decline in core production revenue.

• CRES first-mortgage originations declined 46 percent in the fourth quarter of 2013 compared to the same period in 2012, reflecting a corresponding decline in the overall market demand for mortgages.
  

Global Wealth and Investment Management reported strong results across many measures in the fourth quarter of 2013 with record net income, record asset management fees and strong client flows. Net income rose 35 percent from the fourth quarter of 2012 to a record $777 million, reflecting strong revenue performance and low credit costs. Revenue increased 7 percent from the year-ago quarter to $4.5 billion, driven by higher noninterest income related to long-term AUM flows and higher market levels. The provision for credit losses decreased $86 million from the year-ago quarter to $26 million due to improvement in the home loans portfolio. Noninterest expense of $3.3 billion increased 2 percent, driven by higher volume-related expenses, partially offset by lower support and other personnel costs.

• Global Banking reported net income of $1.3 billion in the fourth quarter of 2013, down $125 million from the year-ago quarter, as an increase in revenue was more than offset by higher provision for credit losses as the company built reserves associated with loan growth. Net charge-offs declined to $7 million in the fourth quarter of 2013 from $132 million in the fourth quarter of 2012.Revenue of $4.3 billion was up 9 percent from the year-ago quarter, reflecting higher net interest income, driven by loan growth and higher Investment Banking fees.
• • Global Corporate Banking revenue increased to $1.6 billion in the fourth quarter, up $125 million from the year-ago quarter, and Global Commercial Banking revenue increased $117 million to $1.8 billion.
  • Global Banking investment banking fees, excluding self-led deals, increased $101 million from the year-ago quarter.
  • Global Markets reported net income of $215 million in the fourth quarter of 2013, compared to $181 million in the year-ago quarter. Global Markets revenue increased $604 million, or 20 percent, from the year-ago quarter to $3.6 billion.
  • Fixed Income, Currency and Commodities sales and trading revenue, excluding DVAG, was $2.1 billion in the fourth quarter of 2013, an increase of $292 million, or 16 percent, from the year-ago quarter, as stronger results in credit and mortgage products more than offset weakness in rates and commodities. Equities sales and trading revenue, excluding DVAG, was $904 million, an increase of $191 million, or 27 percent, from the year-ago quarter due to gains in market share, higher market volumes, and increased client financing balances. Noninterest expense increased to $3.3 billion from $2.6 billion in the year-ago quarter, primarily driven by expense associated with RMBS litigation.

The Tier 1 common capital ratio, including the Market Risk Final Rule, was 11.19 percent at December 31, 2013, up from 11.08 percent at September 30, 2013. As of December 31, 2013, the company's Tier 1 common capital ratio on a Basel 3 fully phased-in basis under the Advanced approach is estimated at 9.96 percent, up from 9.94 percent at September 30, 2013 and 9.25 percent at December 31, 2012.

• Based on the proposed increases to the U.S. supplementary leverage ratio minimum requirements, the company expects that as of December 31, 2013, the supplementary leverage ratio for Bank of America Corporation would be above the proposed required 5 percent minimum and the supplementary leverage ratios for the company's two primary bank subsidiaries, Bank of America, National Association and FIA Card Services, National Association, would be above the proposed 6 percent minimum.
• Tangible book value per share of common stock was $13.79 at December 31, 2013 compared to $13.36 at December 31, 2012. Book value per share was $20.71 at December 31, 2013 compared to $20.24 at December 31, 2012.