S&P: Sovereign Risk Remains A Concern For European Corporates; Guides 2014 Eurozone GDP +0.9%
- Sees UK & Switzerland expanding at a faster rate in 2014
2013 GDP forecasts: - Italy -1.8% - Spain -1.5% - UK +1.5% - Switzerland +1.7% - Germany +0.5% - France 0.0% - Eurozone -0.7%
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Icahn Asked Apple to Start Immediate Tender Offer: CNBC 2013-10-24 13:07:22.176 GMT
By Beth Mellor Oct. 24 (Bloomberg) -- Icahn asked AAPL to make tender offer at current share price of $525, CNBC said, citing person familiar. * Icahn now owns 4.7m shrs of Apple, CNBC says * NOTE: Yday, Icahn said he would disclose letter to Tim Cook today: {NSN MV4YZB6TTDTF <GO>} * NOTE: Oct. 1, Icahn said he talked about $150b buyback with Cook: {NSN MTZUXW6JTSFU <GO>}
Link to Company News:{AAPL US <Equity> CN <GO>}
For Related News and Information: First Word scrolling panel: {FIRST<GO>} First Word newswire: {NH BFW<GO>}
To contact the reporter on this story: Beth Mellor in New York at +1-212-617-3078 or bmellor@bloomberg.net
To contact the editor responsible for this story: Courtney Dentch at +1-212-617-8732 or cdentch1@bloomberg.net
Gapping down
In reaction to disappointing earnings/guidance: FIO -15.3%, SYMC -13.1%, ANGI -12.3%, TQNT -11%, AKAM -9.8%, KFN -7.1%, VAR -7%, WRLD -6.3%, (light volume), FORM -6%, ALV -5.7%, ORLY -5.4%, EGHT -5.2%, TKR -5.2%, (light volume), XRX -4.5%, DOW -3.5%, TER -3.3%, ETFC -3.1%, DNKN -3%, SKX -3%, (light volume), CS -3%, SIRI -3%, ESI -2.8%, (light volume), LSI -2.7%, GNC -2.2%, CVA -2.1% (light volume), DO -1.9%, (light volume), UA -1.6%, POT -1.3%, TRIP -1.3%, MLNX -1.1%, CMO -0.9% (light volume), IP -0.5%, (light volume).
Other news: NVDQ -6% (announces public offering of common shares; size not disclosed), ZIOP -5.7% (prices public offering of 14.3 mln shares of its common stock at $3.50 per share), RIGL -5.6% (Rigel Pharma provides pipeline update; R333 did not meet the primary endpoint in a recently completed Phase 2 clinical study; co has decided not to pursue this indication further with R333), SWKS -1.8% (following TQNT results), NOK -1.8% and DEO -1.1% (still checking), ZINC -1% (announces public offering 5 mln shares of common stock).
Analyst comments: USB -0.6% (U.S. Bancorp downgraded to Hold from Buy at Deutsche Bank).
Gapping up
In reaction to strong earnings/guidance: BABY +17.5% (light volume), MMSI +12.4%, FTNT +9.7%, STMP +8.3%, EQIX +7.9%, FOE +6.8%, TEX +6.4%, CAKE +6.3%, AEM +5.6%, (light volume), CTXS +5.2%, SHPG +5.2%, MCK +4.9% (also McKesson agrees to purchase Celesio in transaction valued at $8.3bln), CSGP +4.7% (light volume), TSCO +4.5%, YNDX +4.2%, F +3.9%, KKR +3.7%, ALXN +3.7%, HOT +3.6%, LUV +3.6%, BSX +3.3%, KMT +3.2%, RDWR +3%, (light volume), RRD +2.8%, PACR +2.5%, FFIV +2.2%, LRCX +2.1%, PHM +1.9%, RTN +1.3% (light volume), WLL +1.2%, MO +1.2%, MO +0.9%, CELG +0.6%, WPPGY +0.3%, NOW +0.1%, (light volume).
M&A news: HOME +9.3% (Cascade Bancorp and Federal Bancorp (HOME) merge in transaction valued at $265.7 mln).
Select metals/mining stocks trading higher: SVM +2.1%, GOLD +2%, GDX +1.7%, ABX +1.6%, SLW +1.6%, AU +1.5%, BHP +1.4%, BBL +1.4%, MT +1.3%, SLV +0.7%, GLD +0.5%, .
Select oil/gas related names showing strength: RDS.A +6.1%, SD +2.2%, BP +1.2%, STO +1.1%.
Other news: AMRS +8.1% (Amyris to enter partnership to supply renewable jet fuel to GOL Airlines), LVS +5.1% (FT details news that Japan may be close to ending casino ban), YGE +2.8% (to supply 59 MW of PV modules for China Three Gorges New Energy), NBG +2.7% (still checking), SWY +2.6% (continued strength on PE speculation), GM +2.4% (up on F results), ARIA +1.6% (Camber Capital disclosed 5.4% passive stake in 13G filing), NUAN +1.2% ( Successfully Concludes CooTek Patent Infringement Case), VOYA +1.1% (prices 33 mln shares of common stock offered by ING Group at $29.50 per share), MPEL +1% (FT details news that Japan may be close to ending casino ban), BSX +0.9% (announces restructuring program for 2014), SBUX +0.7% (Starbucks plans to open 'Tea Bar' in NYC, according to reports ), VMW +0.6% (following CTXS/FFIVresults), RVBD +0.6% (following CTXS/FFIVresults), QTWW +0.5% (Seamans Capital disclosed 5.9% passive stake in 13G filing), HLF +0.4% and NFLX +0.3% ( Icahn says if he did not have such a large position in NFLX that he would have held on to his position; reiterates HLF is undervalued ), PCLN +0.2% (on TRIP results).
Analyst comments: AEM +5.6% (upgraded to Outperform from Mkt Perform at BMO Capital Mkts,upgraded to Buy from Hold at Desjardins ), LCC +2.8% (upgraded to Buy from Hold at Deutsche Bank), RBA +1.6% (upgraded to Outperform from Underperform at BMO Capital Mkts), ARCP +0.8% (upgraded to Outperform from Market Perform at BMO Capital), CHK +0.6% (Chesapeake upgraded to Buy from Neutral at Citigroup)
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BFW 10/24 10:01 *POTASHCORP SEES YR EPS $2.00-$2.20, SAW $2.45-$2.70, EST. $2.29 BN 10/24 10:00 *POTASHCORP SEES YR EPS $2.00-$2.20, SAW $2.45-$2.70, EST. $2.29 BN 10/24 10:00 *POTASHCORP 3Q EPS 41C, EST. 41C BN 10/24 10:00 *POTASHCORP SEES YR EPS $2.00-$2.20 :POT CN BN 10/24 10:00 *POTASHCORP 3Q EARNINGS OF $0.41-SHR BN 10/24 10:00 *POTASHCORP REPORTS 3Q EARNINGS OF $0.41-SHR
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PotashCorp Reports Third-Quarter Earnings of $0.41 per Share 2013-10-24 10:00:15.538 GMT
PotashCorp Reports Third-Quarter Earnings of $0.41 per Share
PR Newswire
SASKATOON, Oct. 24, 2013
Symbol: POT Listed: TSX, NYSE
Key Highlights
* Third-quarter earnings of $0.41 per share^1; nine-month total reaches $1.77 per share * Weaker prices for all nutrients; market uncertainty leads to lower potash sales volumes * Nine-month cash flow from operating activities second-highest in company history * Full-year estimate revised to $2.00-$2.20 per share
SASKATOON, Oct. 24, 2013 /PRNewswire/ - Potash Corporation of Saskatchewan Inc. (PotashCorp) today reported third-quarter earnings of $0.41 per share ($356 million), down from $0.74 per share ($645 million) earned in the same period last year as a result of weaker prices for all three nutrients and lower potash sales volumes. With the benefit of stronger performance in the first half of the year, our nine-month earnings reached $1.77 per share ($1.6 billion), down 6 percent from the $1.89 per share ($1.7 billion) in last year's comparative period.
Gross margin contributions from all three nutrients were negatively affected by a challenging fertilizer market. Our gross margin totals of $484 million during the third quarter and $2.3 billion for the first nine months trailed our performance in the comparative periods of 2012, when we generated $927 million and $2.8 billion, respectively.
Earnings before finance costs, income taxes and depreciation and amortization^2 (EBITDA) of $654 million for the third quarter and $2.7 billion for the first nine months were below the comparable previous-year totals. While cash flow from operating activities of $616 million in the period fell short of the $759 million realized in last year's third quarter, the nine-month total of $2.6 billion was the second highest in our history.
Our offshore investments in Arab Potash Company (APC) in Jordan, Sociedad Quimica y Minera de Chile S.A. (SQM) in Chile and Israel Chemical Ltd. (ICL) in Israel contributed $85 million to earnings for the quarter. The nine-month contribution from our offshore potash investments, including a dividend from Sinofert Holdings Limited (Sinofert) in China, reached $251 million. Both totals trailed those of the previous year. The market value of our investments in these publicly traded companies equated to approximately $6 billion, or $7 per PotashCorp share, as of market close on October 23, 2013.
"The most recent quarter can best be characterized as a predictable response to an unpredicted event," said PotashCorp President and Chief Executive Officer Bill Doyle. "As we have seen in the past, fertilizer customers faced with uncertainty act with extreme caution. This was the case during the third quarter, particularly in offshore potash markets, where significant purchases were delayed as Russian producer pronouncements left buyers waiting in anticipation of weaker prices. While this volatility does not change the long-term underlying fundamentals of fertilizer demand, it did significantly slow market activity and our ability to deliver the results we expected."
Market Conditions The need for proper crop nutrition fueled strong demand for potash through the first half of 2013, but an announced change in strategy by Uralkali in late July created considerable market uncertainty and stalled global demand. Key offshore markets - particularly large contract buyers in China and India - delayed purchases or were reluctant to accept major tonnage against existing contracts. Although Brazil continued to be a region of relative strength, with buyers procuring tonnes in preparation for their upcoming planting season, offshore shipments from North American producers fell to one of the lowest third-quarter totals in recent history. In North America, a pause in purchasing early in the quarter and a late crop resulted in shipments below the record achieved in 2012, a period when demand was pulled forward because an early harvest enabled strong fall applications. In both the offshore and North American markets, pricing weakened as the quarter progressed.
In nitrogen, US demand for ammonia, urea and nitrogen solutions was relatively flat compared to last year and production from low-cost domestic producers increased, reducing the need for higher-cost offshore imports. While this situation benefited domestic producers, the combination of typical seasonal slowness and increased availability of new supply from offshore exporting regions softened key global reference prices through the quarter.
Global phosphate markets were subdued during the quarter, as strong Latin American demand was offset by the continued absence of significant engagement from India and a delayed start to the US fall application season. Solid phosphate fertilizer shipments from US producers were slightly below those of both the third quarter and the first nine months of 2012. This environment put downward pressure on prices for most phosphate products.
Potash The slowdown in global markets resulted in our third-quarter potash gross margin declining to $228 million from the $554 million generated during the comparative period of 2012. This quarter's result brought our nine-month total to $1.3 billion, compared to $1.7 billion in the same period last year.
With many buyers delaying purchases, our third-quarter sales volumes declined. In North America, sales volumes of 0.7 million tonnes were in line with historical levels but trailed the record 1 million tonnes sold in the third quarter of 2012. In offshore markets, the 0.8 million tonnes moved during the quarter fell short of the 1.1 million tonnes sold in the same period last year as a result of reduced sales to Canpotex^3 and fewer tonnes shipped from our New Brunswick facility. The majority of Canpotex shipments were directed to Other Asia (39 percent) and Latin America (34 percent) and, to a lesser extent, India (9 percent) and China (8 percent). Despite a weak demand environment during the quarter, our total sales volumes for the first nine months of 2013 reached 6.3 million tonnes, a 7 percent increase over the same period last year.
Buyer caution and competitive pressures in all key markets weakened the pricing environment and our average realized price of $307 per tonne for the third quarter was down from $429 per tonne during the same period last year.
Our third-quarter production of 1.2 million tonnes was down 27 percent from the same quarter of 2012. While both periods included normal maintenance downtime, this year's total was also affected by additional downtime at Cory (four weeks) and reduced operating rates at Lanigan and Rocanville. Lower production levels had a negative impact on our per-tonne cost of goods sold for the quarter, but this impact was offset by the absence of higher-cost tonnes from Esterhazy.
Nitrogen The positive impact of higher sales volumes was more than offset by lower prices for all major nitrogen product categories and brought nitrogen gross margin for the quarter to $178 million, below the $251 million earned in last year's third quarter. For the first nine months, we generated gross margin of $725 million, compared to a record $772 million in the same period in 2012. With favorable natural gas costs and higher production levels, our US operations generated the majority of gross margin for the quarter ($116 million), while our facility in Trinidad contributed the remainder ($62 million).
Despite maintenance-related downtime in Trinidad, our third-quarter sales volumes increased to 1.4 million tonnes - well above the 1.1 million tonnes sold in the same period last year. The key driver of this increase was the restart of ammonia capacity at Geismar, which also helped raise our nine-month total to a record 4.3 million tonnes.
Our average realized nitrogen price of $327 per tonne for the third quarter fell below the $458 per tonne realized in the same period last year, as prices declined in all major product categories. Ammonia prices pulled back from the historically high levels of third-quarter 2012, while urea moved lower primarily due to increased supply pressures from key exporting countries. Our remaining nitrogen products - focused largely on more stable industrial markets - declined marginally compared to last year.
Including the impact of our hedge position, the total average natural gas cost included in production for the third quarter was $4.96 per MMBtu - 27 percent below the same period last year. This, along with the favorable impact of lower-cost production from Geismar, resulted in improved cost of goods sold for the quarter relative to the same period of 2012.
Phosphate Phosphate gross margin of $78 million trailed the $122 million earned in the third quarter last year, primarily as a result of weaker prices. Feed and industrial products, which tend to deliver more stable margins, contributed $47 million for the quarter and demonstrated the value of our diversified phosphate product offerings, while fertilizer products generated $28 million. For the first nine months of 2013, our phosphate gross margin totaled $260 million, which compared to $370 million earned in the same period last year.
Phosphate sales volumes of 0.9 million tonnes for the third quarter and 2.7 million tonnes for the first nine months were comparable to 2012 levels.
Our average realized phosphate price for the quarter was $467 per tonne, down from $537 per tonne realized in the same period last year. This change was largely due to a 20 percent decline in prices for fertilizer products from third-quarter 2012; the decline in feed and industrial realizations was 4 percent.
Per-tonne cost of goods sold for the quarter trended lower compared to the same period last year as a result of reduced input costs for sulfur and ammonia.
Financial Provincial mining and other taxes totaled $10 million, compared to $62 million in the third quarter last year, primarily due to adjustments in our annual forecast and the resulting impact on potash production tax accruals. With lower earnings during the quarter, our income tax expense declined to $116 million from $249 million in the comparative period of 2012.
Capital-related cash expenditures totaled $360 million in the quarter, down significantly from previous period spending levels, as we near completion of our major potash expansion program.
Through our announced share repurchase program (by way of a normal course issuers bid), we repurchased 6.3 million common shares during the third quarter at an average cost of $30.95 per share.
Market Outlook Markets for all three nutrients faced challenges during the third quarter as near-term uncertainty overshadowed the long-term fundamentals that drive food and fertilizer demand. The impact was evident in equity market valuations across the sector and in the actions of fertilizer buyers around the world.
This was most pronounced in the potash market. However, as the quarter progressed, growers and distributors in Brazil and North America began to focus on the agronomic needs of their soils and the supportive economic motivators of high-yield agriculture. In other markets, the procurement of new supply continues to be limited or deferred - not necessarily due to lack of immediate need, but in anticipation of lower prices. Although this evolving situation led us to reduce our global potash demand estimates for 2013 and our pricing expectations, we believe the deferral will contribute to a more positive demand environment in the coming year.
In North America, potash buyers are beginning to take the necessary steps to place product in advance of the fall application season. In recent weeks, they have been moving more aggressively in drawing against summer-fill tonnage commitments and are purchasing additional product requirements. In regions where the harvest is complete, fertilizer application activity is reportedly strong, although an especially late crop across much of the US will likely shorten the fall application window and could push demand from the final quarter of the year into the first half of 2014.
With Latin America well into its key planting season, favorable crop economics and the agronomic need to replenish nutrients in its soils continue to support strong demand for all fertilizer products. Most of the immediate requirements are now in place for their planting season and we anticipate buyers will take a more measured approach through the balance of the year. Despite this potential slowdown, Brazilian demand for fertilizer, including potash, is on track to reach record levels for the year.
In China, potash inventories are expected to satisfy fall application requirements but are likely to be drawn down through the second half of the year. We anticipate Canpotex will have sales to this market in the fourth quarter, which is reflected in the upper end of our sales volume guidance range. Challenging growing conditions in key agricultural regions are expected to put pressure on the supply of domestic grain and oilseeds and create a greater need for crop imports. We expect China's desire to improve yields to keep pace with food requirements will increase future potash demand.
Challenges remain in India. Although potash contracts with major suppliers run through to March 2014, weak domestic demand caused by reduced government subsidies and currency volatility - as well as the desire to hold out for lower contract prices - could result in shipments and pricing falling short of our previous expectations.
Following limited potash movements during the third quarter, we anticipate buyers in Other Asian countries will engage more actively through the final quarter of 2013. With many customers entering their major tender season, supportive grower economics and limited inventories are expected to result in increased fourth-quarter shipments. Competition remains strong in this region.
Financial Outlook In this environment, we have revised our 2013 potash gross margin forecast range to $1.5-$1.7 billion on expected shipment levels between 8 million and 8.4 million tonnes. We anticipate our operating levels will remain below those of the first half of the year as we manage our inventory and position ourselves for a Canpotex allocation run at Allan early in 2014. We expect our per-tonne operating costs in the fourth quarter to improve relative to those of third-quarter 2013 as well as the comparable period last year.
In nitrogen, we remain on track to surpass previous-year annual sales volumes. While prices for most nitrogen products appear to have found support during the third quarter, they have weakened from our previous expectations and led us to reduce our gross margin estimate for the full year.
In phosphate, weak Indian demand is expected to pressure solid fertilizer realizations through the balance of the year, although a strong North American fall application season could provide some near-term support. The decline of costs for purchased inputs - specifically sulfur and ammonia - and the continued stability provided by our feed, industrial and specialty liquid fertilizer products are expected to keep our margins relatively close to previous expectations.
In this environment, we now forecast full-year 2013 combined gross margin for nitrogen and phosphate of $1.2 -$1.3 billion.
All other previously disclosed annual guidance assumptions for 2013 remain in place, with the exception of contributions from equity investments and dividend income, which are now anticipated to approximate $300 million.
Based on these factors and guidance items above, PotashCorp now forecasts full-year 2013 net income at $2.00-$2.20 per share.
Conclusion "Throughout our history, PotashCorp has demonstrated the ability to outperform, during good times and in the face of adversity," said Doyle. "Our large, low-cost operations and distribution systems in each nutrient provide flexibility and competitive advantages during difficult market conditions. As we have in the past, we manage our assets to minimize the impact of short-term market volatility and position ourselves to respond as demand grows. By focusing on our competitive advantages in potash and our unique positions in nitrogen and phosphate, we will continue to maximize long-term value for our stakeholders."
Notes
1. All references to per-share amounts pertain to diluted net income per share. 2. See reconciliation and description of non-IFRS measures in the attached section titled "Selected Non-IFRS Financial Measures and Reconciliations." 3. Canpotex Limited (Canpotex), the offshore marketing company for Saskatchewan potash producers.
* Essilor - Q3 revs light,cuts fy revenue growth forfecast by c.6% -3% * ABB - Q3 net/sales better,solid performance,indicators mixed +2% * Cr Suisse - Q3 net miss,pbt in line,creates non-core asset division -1% * Aixtron - Q3 revs light,ebit better,to sell 10.2m shs/10% share cap -10% * Gemalto - Q3 revs lighr,reaffirms forecast,sees yr double dig expan -2% * Kontron - Q3 revs miss,narrows 2013 sales guidance -2% * Klepierre - Q3 revs in line,reaffirms fcst,France/Nordics offset Iberia unch * Software A - Q3 sales light,ebit beat,net in line,confirms 2013 forecast -2% * Safran - Q3 revs better,confirms fy adj rev and ebitd outlook +2% * SEB - Q3 loss prov's/NII/net commission income better,ROE 13.4% +5% * Dassault - spins-off Inceptra,sees Q4 revs €555-575m vs cons $578m -1% * Telenet - 9m revs/ebitda in line,repeats 2013 rev growth/ebitda target +1% * Nystar - reduces fy zinc guidance,challenging trad envir't persisted -5% * Ipsos - Q3 revs light,sees Q4 growth faster than Q3 +1% * Logitech - Q3 net income better,reits 2014 revenue forecast +2% * Air Liquid - Q3 sales miss,significant currency impacts,guid unchanged -2%
US MArket Closed Lower leaded by the Nasdaq, China news on Bank Write-offs in Q3, pushed people to think that China will tighten monetary policy due to excessive inflation..Shibor jumped overnight by 31 pts to 4,09 after 73 yesterday...Icahn news of cutting stake in NFLX, pushed some retailers investors to be more cautious on few names that looked overvalued...(LNKD, TSLA,...)...Semi continue to be weak after Brocade numbers...VIX @ 13,42 (+0,7%)...Brazil-1,81%...China PMI at 7th Month Highs @ 50,9...China money market continued to tighten...Nikkey +0,40%...Canon kick off Jap.earning season after close...
Eur$ 1,3815 European Markets indicated 70bps higher
Keep an eye on : CompAnies reporting after the close today : Areva, Axa, Icade, Kering, Renault, Saint-Gobain Thales and Vinci
- ABBN VX : ABB 3Q Net Rises 10%, Beats Est.; Faces Near-Term Uncertainty - AI FP : Air Liquide Misses 3Q Rev. Est., Repeats 2013 Profit Growth Goal - AIXA GY : Aixtron 3Q Rev. €46.2m vs Est.€51.4m, to Sell 10.2m Shrs in ABB. - ASOS LN : Asos management sells 2.3% stake; shrs said to be priced at 5000p - BBRY US : John Sculley (ex AAPL CEO) said to be exploring bid for BlackBerry - BMPS IM : Monte Paschi Talking to Fortress on NPL Sale: Corriere - Canon (7751) : *CANON CUTS FY NET INCOME FORECAST TO 240B YEN FROM 260B YEN - CLS1 GY : McKesson Offers EU23 a Share to Acquire Celesio - CSGN VX : Credit Suisse 3Q Net CHF454m Vs Est. CHF724.1m,New Units to Wind Down Non Essential Assets - DAI GY : Daimler 3Q Ebit Beats Est.; Sees FY Profit Below Consensus - DANSKE DC : Maersk CEO Reiterates Aim to Keep Danske Stake, Berlingske Says - DECB BB : Deceuninck 3Q Revenue EU146.4 Mln vs. Consensus Est. EU141.9 Mln - DNB NO : DNB Net Rises More Than Estimated, Sees Stable Opex Level - DSY FP : Dassault Systemes Cuts 2013 Non-IFRS Rev., EPS Outlook, Spins off Inceptra unit (sales & Service Sub in North America) - DTE GY : Deutsche Telekom Says EU Hurts Competitiveness: Handelsblatt - EI FP : Essilor Cuts Full-Year Revenue Target as 3Q Sales Stagnate - ERICB SS : Ericsson 3Q Gross Margin, Sales Miss Estimates,Sees Eur.Improvement - F IM : RTR : Exclusive: Fiat likely to miss Brazil sales targets - FNAc FP ; FNAC 3Q Rev. EU844m, Down 5.9% Y/y - GLJ GY : Grenkeleasing 9M Cons. Net Profit Rises 16%; Reiterates Target - GTO NA : Gemalto 3Q Rev. EU596m vs Est. EU639m; 2013 Forecasts Reaffirmed - HOIL LN : Heritage Oil Expands Exploration Portfolio in Papua New Guinea - IPS FP : Ipsos Sees 4Q Comparable Sales Growth Faster Than 3Q - KESBV FH : Kesko 3Q Profit Beats Ests.; Keeps Full-Year Outlook - KRN GY : Krones 3Q Sales Rise 7.8%; Sees Higher Rev, Profitability in '14 - LI FP : Klepierre 3Q Revenue Rises on Increased Rental Income - LOGN VX : Logitech 2Q Net Income $14.4m vs Est. $9.8m - MOB BB : BlueCrest cut net short position in Mobistar to <0.5% disclosure treshold by 22/10 - NSG NO : Norske Skog 3Q Ebitda Declines; Sees Stable Prices From 3Q to 4Q - OKDBV FH : Oriola-KD 3Q Sales, Profit Miss Analyst Ests.; Sees FY Growth - RI FP : Pernod 1Q Organic Sales Growth Misses Ests. - ROG VX : Roche CEO Doesn’t Rule Out Move Into Rare Diseases - SAB SM : Sabadell 9m Net EU186.1 Mln; Analyst Est. EU197.3 Mln - SAND SS : Sandvik 3Q Net Income SEK1.63b vs Est. SEK1.53b - SAF FP : Safran 3Q Rev. Up 9.7% Y/y, Led by Propulsion; Confirms FY Goal - SEBA SS : SEB 3Q Net Income SEK3.75b vs Est. SEK3.39b - SEV FP : Suez Env. 9-Mo. Ebitda Beats, Sales Miss; Europe Improved in 3Q, CFO Says 2014 Waste Volumes Could `Stabilize' - SGRO LN : Segro Says 2013 Forecasts Unchanged After Progress in 3Q - SOW GY : Software AG 3Q Rev. Misses, Ebit Beats; Confirms 2013 Targets - TNET BB : Telenet 3Q Adj. Ebitda Beats Ests.; Sales, Net Ads Miss Ests. - UNA NA : Unilever 3Q Underlying Sales Growth 3.2%, Estimate 3.3%, BlackRock's Stake in Unilever Falls to 2.99%, AFM Filing Shows - WPP LN : WPP 3Q Sales Matches Estimates; Reiterates Full Year Forecast
Up
*BNP, RAISED TO BUY VS NEUTRAL AT BOFAML *BRITVIC RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN *COMDIRECT RAISED TO BUY VS HOLD AT KEPLER *ENIRO RAISED TO BUY VS HOLD AT SEB *HANDELSBANKEN RAISED TO HOLD VS SELL AT SEB *HOME RETAIL RAISED TO NEUTRAL VS SELL AT CITI *OKEY RAISED TO BUY VS NEUTRAL AT BOFAML *PREMIER OIL RAISED TO HOLD VS SELL AT LIBERUM *RAUTARUUKKI RAISED TO NEUTRAL VS UNDERPERFORM AT BOFAML *SOCGEN RAISED TO BUY VS NEUTRAL AT BOFAML
Down
EUROPEAN CREDIT PIPELINE: IG and HY Calendar Update *BECHTLE CUT TO ’HOLD’ AT COMMERZBANK *CAPGEMINI CUT TO NEUTRAL VS BUY AT UBS *DELEK GROUP CUT TO NEUTRAL VS BUY AT UBS *HEIDELBERGCEMENT CUT TO UNDERPERFORM AT CREDIT SUISSE *QSC CUT TO HOLD VS BUY AT BERENBERG *STEINHOFF CUT TO HOLD FROM BUY AT BNP PARIBAS *VOESTALPINE CUT TO HOLD VS BUY AT JEFFERIES *VOLVO CUT TO NEUTRAL VS OUTPERFORM AT ROBERT BAIRD
PT change
*BIC PT Raised to EU101 vs EU96 at Raymond James *DUFRY PT RAISED TO CHF160 VS CHF138 AT UBS, REITERATES BUY *INTESA PT RAISED TO EU2.1 VS EU1.7 AT UBS; KEPT AT BUY *LUXOTTICA PT CUT TO EU40 VS EU41 AT JPMORGAN; KEPT AT NEUTRAL *STMICRO PT CUT TO EU5.6 VS EU6.8 AT UBS; KEPT AT NEUTRAL *STMICRO PT CUT TO EU5.81 VS EU6.74 AT JEFFERIES; KEPT AT HOLD *STMICRO PT CUT 7% TO EU5.5 AT BARCLAYS; KEPT AT EQUALWEIGHT *STMICRO PT CUT TO EU6 VS EU6.2 AT CITI; KEPT AT NEUTRAL
Initiation
*GN STORE NORD RATED NEW BUY AT UBS, PT DKR150
Country Sector Stock Call
* Italy Banks Profitability Turnaround More Likely in 2014: UBS
McKesson says offer price of EU23 per share represents 39% premium over 3-mo VWAP prior to market speculation that began on Oct. 8. • Says total transaction valued at EU6.1b, to fund a portion with cash, has put a bridge financing facility in place to fund the balance • Expects tender offers to commence during McKesson’s fiscal 3Q 2014, ending Dec. 31 and conclude in McKesson’s fiscal 4Q 2014, but no earlier than Jan. 17 • Expects to complete required steps to obtain operational control of Celesio during McKesson’s fiscal 2015 • Expects to realize annual synergies between $275m-$325m, sees deal being $1.00-$1.20 accretive to adj. EPS in the first 12-mos following successful completion of tender offers • Says after transaction McKesson and Celesio expect to maintain their own brands and continue to support customers through existing channels • Conf. call 8:30am ET/2.30pm CET: +1 719-234-7317 • NOTE: McKesson Offers EU23 a Share to Acquire Celesio • Related: • Oct. 23: Mckesson said planning to pay about EU22-Shr for Celesio stake • Oct. 8: Celesio, McKesson in advanced talks, DJ says • McKesson, Celesio strategic alliance more likely, DZ Bank says • Sept. 11: Celesio attractive asset for strategic, PE buyers: Market Secs • NOTES: • Celesio Short Interest: Has 2.5% of shares outstanding, 6.35 days to cover: Markit (as of Oct. 21) • Celesio Convertibles: • 2014: conversion price EU22.49, fixed coupon 3.75% • 2018: conversion price EU22.48, fixed coupon 2.5% • Top Celesio Shareholders: Bloomberg data • Haniel 50.01%, Blackrock 4.7%, Franklin Resources 2.65%, Capital Group 2.63%, Norges Bank 1.48%
Asian Market Update: China HSBC flash PMI hits 7-month highs; China money rates remain elevated as PBoC again refrains from liquidity injection
***Observations/Insights*** - China HSBC flash manufacturing PMI hit 7-month highs of 50.9; new orders component hit 6-month highs and output index a 7-month high; HSBC chief economist cited broad-based modest improvements in China economy, with growth recovery becoming more entrenched heading into Q4 and anticipating continued upward momentum in the coming months. - China money markets continued to tighten as 1-week Shibor rose for 6th consecutive session to a 3-month high and 1-yr swap rate hitting a 6-week high; PBoC once again passed on injecting liquidity into the system - for the week, China central bank drained CNY58B, 6th week out of the last 8 in terms of liquidity outflows in China. - Australia draft of legislation intended to repeal the mining (MRRT) tax - one of the coalition govt's campaign pledges - was said to add A$13B to the budget; Separately, RBA Dep Gov Lowe forecasted further decline in mining investment relative to GDP while welcoming the weaker AUD. - In New Zealand terms of trade marked its 3rd consecutive month of deficit in September, albeit a much smaller one than expected; Exports outpaced expectations by over 10% while imports missed slightly. - In regional earnings, Canon kicks off the Japan reporting period with much of the focus on compact camera sales outlook after a cut in the past two quarters. Out of South Korea, LG, Posco, and Hyundai Motors are on tap to report quarterly results.
***Economic Data*** - (CN) CHINA OCT HSBC/MARKIT FLASH MANUFACTURING PMI: 50.9 V 50.4E (7-month high) - (JP) Japan investors bought ¥1.4T in foreign bonds last week (2nd straight week of net purchases) vs bought net ¥380.7B in prior week; Foreign Investors bought ¥297.8B in Japan stocks v bought net ¥143.6B in prior week - (NZ) NEW ZEALAND SEPT TRADE BALANCE (NZ$): -199M V -680ME (3rd month of deficit); Exports: 3.83B v 3.46Be; Imports: 4.03B v 4.13Be - (KR) SOUTH KOREA Q3 FOREIGN DIRECT INVESTMENT (FDI) Y/Y: -32.9 V -3.3% PRIOR - (VN) Vietnam Oct Consumer Price Index (CPI) M/M: 0.5% v 1.1% prior; Y/Y: 5.9% v 6.5%e (lowest since Aug 2012)
***Fixed Income/Commodities/Currencies*** - (CN) PBoC won't conduct open market operations (OMO) in today's session for 3rd consecutive day; Drains net CNY58B this week v drained CNY44.5B last week - (CN) China 1-yr swap rate rises 7bps to 4.12% (highest since Sept 13th); 7-day repo rate opened at 5%, up about 95bps vs prior close - (CN) China Statistics Bureau: China pork price -0.4% in mid Oct - SLV: iShares Silver Trust ETF daily holdings rise to 10,442 (first rise since Sept 24th) tonnes from 10,367 tonnes
- USD/CNY: (CN) China yuan opens trade at 6.0830 vs 6.0835 prior (record high for 2nd straight day) - AUD and NZD traded off their overnight lows despite further tension in China money markets, hitting session highs against after the release of China HSBC flash manufacturing PMI above $0.9660 and $0.8440 respectively. NZD/USD saw an added modest boost after the release of New Zealand trade data. - USD/JPY rangebound in ¥97.20-50 area ahead of tomorrow's closely monitored inflation data from Japan. - Precious metals up slightly; Dec gold up $5 around 1,336 and silver up nearly 1% above $22.70/oz.
***Speakers/Political/In the Papers*** - (CN) China State Information Center chief economist Fan Jianping: sees Q4 GDP approx 7.6% vs 7.8% in Q3; FY13 GDP remains around 7.6-7.7% - financial press - (CN) China Center for International Economic Exchanges (CCIEE)'s Zheng Xinli: China could miss goal of doubling per capita income by 2020 v 2010 - (CN) Beijing issues new policy for self-occupied homes; To increase home supply substantially by year end - press
- (JP) BOJ Gov Kuroda: BOJ to continue to carefully monitor US monetary policy - addressing parliament - (JP) Japan PM Abe: Plans to use additional tax revenue, not new debt, to finance stimulus spending - (JP) Japan Business Federation (Keidanren) expresses support for 'Abenomics'; first assessment in over four years - Kyodo News
- (AU) Australia RBA Dep Gov Lowe: Mining investment may decline 3% relative to GDP; Weaker AUD since April is welcome development; Decline in mining investment should be manageable. - (AU) Australia Treasurer Hockey: Reaffirms RBA's 2-3% inflation target. - (AU) Australia govt announces draft to repeal Mining Tax (MRRT) on July 1st 2014; will add approx A$13B to budget bottom line.
- (ID) Moody's: Indonesia's outlook is stable, with external pressures manageable.
***Equities*** Market Snapshot (as of 03:30 GMT): - Nikkei225 -0.4%, S&P/ASX +0.3%, Kospi flat, Shanghai Composite -0.4%, Hang Seng -0.9%, Dec S&P500 +0.2% at 1,746, Dec gold +0.1% at $1,335, Nov crude oil +0.7% at $97.49/brl
US earnings: - SYMC: Reports Q2 $0.50 adj v $0.44e, R$1.64B v $1.68Be; -12.4% afterhours - FIO: Reports Q1 -$0.07 v -$0.11e, R$86.3M v $85.2Me; -10.7% afterhours - AKAM: Reports Q3 $0.50 v $0.46e, R$396M v $388Me; approves $750M buyback program (8.1% of market cap); Guides Q4 $0.49-0.53 v $0.51e, R$412-430M v $425Me - conf call; -6.8% afterhours - LSI: Reports Q3 $0.17 v $0.16e, R$607M v $612Me; -4.0% afterhours - ETFC: Reports Q3 $0.16 v $0.16e, R$416.8M v $422Me; Enters into agreement to sell its market making G1 Execution Services to affiliate of Susquehanna International Group for $75M; -3.8% afterhours - T: Reports Q3 $0.66 v $0.65e, R$32.2B v $32.2Be; -0.1% afterhours - V: Increases quarterly dividend by 21% to $0.40/shr from $0.33/shr; +0.3% afterhours - LRCX: Reports Q1 $0.81 v $0.71e, R$1.02B v $1.01Be; +1.7% afterhours - FFIV: Reports Q4 $1.26 v $1.19e, R$395.3M v $385Me; +2.3% afterhours - TEX: Reports Q3 $0.62 (ex items) v $0.59e, R$1.81B v $1.94Be - filing; +2.7% afterhours - CTXS: Reports Q3 $0.70 v $0.69e, R$713M v $715Me; +4.6% afterhours - TSCO: Reports Q3 $0.46 v $0.41e, R$1.21B v $1.19Be; +5.9% afterhours - EQIX: Reports Q3 $0.72 v $0.57e, R$540.5M v $542Me; +7.0% afterhours
Notable Asia movers by sector: - Consumer discretionary: LG Household & Health Care Ltd 051900.KR +4.9% (Q3 results); China Star Entertainment Ltd 326.HK +6.2% (to sell hotel in Macau); Pacific Brands PBG.AU -3.7% (provides operating updates); Suzhou Gold Mantis Construction Decoration Co Ltd 002081.CN -2.3% (speculation of business ties with political official) - Industrials: Hitachi Ltd 6501.JP +7.6% (H1 guidance); Zoomlion Heavy Industry Science and Technology Co Ltd 000157.CN -2.7% 1157.HK -2.4% (speculation on accounting fraud); JGC Corp 1963.JP +1.1% (positive chairman comments); Mazda 7261.JP +1.4% (press reports on op profit outlook) - Materials: Newcrest Mining NCM.AU -1.2% (Continue to believe gold outlook positive), Medusa Mining Ltd MML.AU -7.4% (provides operating updates); Xinjiang Tianye Co Ltd 600075.CN -2.3% (Q3 results); Toll Holdings TOL.AU +3.5% (provides operating updates) - Financials: China Merchants Property Dev Co Ltd 000024.CN -0.1% (Q3 results); WesFarmers Limited WES.AU -0.3% (Q1 results) - Energy: Yang Quan Coal Industry Group Co Ltd 600348.CN -1.6% (Q3 results); APA Group APA.AU +1.4% (provides FY guidance); Taiyuan Coal Gasification Co Ltd 000968.CN -2.0% (Q3 results); Shanxi Xishan Coal & Electricity Power Co Ltd 000983.CN -1.5% (Q3 results); S-Oil Corp 010950.KR -2.6% (Q3 results); Eve Energy Co Ltd 300014.CN +6.1% (Q3 results); Henan Dayou Energy Co Ltd 600403.CN -6.2% (under investigation) - Healthcare: Imugene IMU.AU +20.0% (announces acquisition)