Gapping up
In reaction to strong earnings/guidance: DSCI +16.5%, BLK +4.6%, PNC +2.7%, KMP +1.8%, BBT +0.2%, GS +0.4%, PLXS +0.1% (ticking higher).
M&A news: CEC +11.8% (agrees to be acquired by an affiliate of Apollo Global Management (APO) for $54.00 per share in cash ), JNJ +1.6% (Johnson & Johnson receives binding offer from The Carlyle Group (CG) to acquire its Ortho-Clinical Diagnostics business for $4.15 bln), TWC +1% ( Charter and Comcast are in renewed discussions concerning joint bid for TWC).
Select metals/mining stocks trading higher: RIO+3.4% (reports record quarterly and annual iron ore production, shipments and rail volumes), BBL +3.3%, VALE +2.2%, BHP +2.1% (upgraded to Buy from Neutral at Citigroup ), MT +1.2%.
Select shipping related names showing strength: GNK +4.9%, FREE +4.8%, NAT +3.7%, FRO +2.1%, DRYS +1%.
Solar names are trading higher: CSIQ +4.8%, FSLR +4.6%, SCTY +4.7% (initiated with a Buy at Deutsche Bank), RSOL +3.7%, SOL +3%, SPWR +2.9% (initiated with an Overweight at JPMorgan), JASO +2.9%, JKS +2% ( prices upsized offering of 3.75 mln ADSs, each representing four ordinary shares of the co, at $35.25 per ADS), YGE +2%, TSL +1.4%,
Other news: ZOOM +54.7% (entered a non-binding LoI with Tinho Union Holding), SRPT +14.1% (announces Eteplirsen demonstrates continued stability on Walking Test through 120 weeks in Phase IIb study in Duchenne Muscular Dystrophy), TXTR +8.6% ( SAC Capital Advisors discloses 5.0% passive stake in 13G filing), AMCC +5.5% (following mention on Fast Money last night regarding options activity ), ILMN +4.9% (Illumina and Amgen enter agreement to develop oncology companion diagnostic test), PLUG +4.2% (seeing continued strength; will host conference call to discuss Jan business update today at 10am ET; continues to expect first quarter 2014 booking to exceed the past quarter), PSTI +3% (may be attributed to positive blog mention), KNDI +2.7% (continued strength), MRK +0.5% (attributed to FDA panel vote in favor of Vorapaxar approval), TRBAA +0.4% (modestly rebounding from Aereo concern weakness; also Aereo ruling far from definitive - Oppenheimer).
Analyst comments: ELX +4.7% (upgraded to Buy from Neutral at BofA/Merrill), HPQ +4% (upgraded to Buy from Neutral at BofA/Merrill), VMW +1.9% (upgraded to Buy from Neutral at Citigroup), FEYE +1.6% (initiated with an Outperform at William Blair), NUVA +1.5% (upgraded to Neutral from Sell at Goldman), MU +1% (Micron upgraded to Outperform from Market Perform at JMPSecurities)
M&A news: CEC +11.8% (agrees to be acquired by an affiliate of Apollo Global Management (APO) for $54.00 per share in cash ), JNJ +1.6% (Johnson & Johnson receives binding offer from The Carlyle Group (CG) to acquire its Ortho-Clinical Diagnostics business for $4.15 bln), TWC +1% ( Charter and Comcast are in renewed discussions concerning joint bid for TWC).
Select metals/mining stocks trading higher: RIO+3.4% (reports record quarterly and annual iron ore production, shipments and rail volumes), BBL +3.3%, VALE +2.2%, BHP +2.1% (upgraded to Buy from Neutral at Citigroup ), MT +1.2%.
Select shipping related names showing strength: GNK +4.9%, FREE +4.8%, NAT +3.7%, FRO +2.1%, DRYS +1%.
Solar names are trading higher: CSIQ +4.8%, FSLR +4.6%, SCTY +4.7% (initiated with a Buy at Deutsche Bank), RSOL +3.7%, SOL +3%, SPWR +2.9% (initiated with an Overweight at JPMorgan), JASO +2.9%, JKS +2% ( prices upsized offering of 3.75 mln ADSs, each representing four ordinary shares of the co, at $35.25 per ADS), YGE +2%, TSL +1.4%,
Other news: ZOOM +54.7% (entered a non-binding LoI with Tinho Union Holding), SRPT +14.1% (announces Eteplirsen demonstrates continued stability on Walking Test through 120 weeks in Phase IIb study in Duchenne Muscular Dystrophy), TXTR +8.6% ( SAC Capital Advisors discloses 5.0% passive stake in 13G filing), AMCC +5.5% (following mention on Fast Money last night regarding options activity ), ILMN +4.9% (Illumina and Amgen enter agreement to develop oncology companion diagnostic test), PLUG +4.2% (seeing continued strength; will host conference call to discuss Jan business update today at 10am ET; continues to expect first quarter 2014 booking to exceed the past quarter), PSTI +3% (may be attributed to positive blog mention), KNDI +2.7% (continued strength), MRK +0.5% (attributed to FDA panel vote in favor of Vorapaxar approval), TRBAA +0.4% (modestly rebounding from Aereo concern weakness; also Aereo ruling far from definitive - Oppenheimer).
Analyst comments: ELX +4.7% (upgraded to Buy from Neutral at BofA/Merrill), HPQ +4% (upgraded to Buy from Neutral at BofA/Merrill), VMW +1.9% (upgraded to Buy from Neutral at Citigroup), FEYE +1.6% (initiated with an Outperform at William Blair), NUVA +1.5% (upgraded to Neutral from Sell at Goldman), MU +1% (Micron upgraded to Outperform from Market Perform at JMPSecurities)
The personal computer is dead. Long live the PC.
While tablets and mobile devices are irrevocably altering the computing landscape, PCs aren't yet extinct. In fact, customers snapped up more than 300 million of them last year. And that is money in the bank for Intel Corp.
Granted, there is less money to be made than in years past. Yet Intel's investors are rejoicing that the bad news around PCs hasn't been worsening. And when the company reports fourth-quarter results Thursday, it will have the luxury of having gotten some bad news out of the way at its Nov. 21 analyst meeting.
Back then, it projected revenue, gross margin and operating income would be flat for 2014. But flat is better than down. And Intel said it was going to take a more pragmatic approach to its outlook, a move welcomed by investors.
More on Intel
Intel Arizona Plant to Remain Idle
Intel's Anthropologist Considers Wearables
Following the meeting, three analysts upgraded the stock. The shares are up 13% since Intel reported results in October and the stock's price/earnings multiple based on estimated profit for the next 12 months has risen to 14.1. That is about 9% above its five-year average, according to FactSet.
Why the optimism? Intel has pointed to signs of "stabilization" in PCs, which still accounts for nearly two-thirds of revenue. IDC says global PC shipments dropped 5.6% in the fourth quarter—the smallest decline in six quarters.
As for the fourth quarter, analysts expect Intel to post revenue of $13.7 billion, up 1.5% from a year ago, while earnings per share are seen at 52 cents versus 48 cents in the prior-year quarter.
Still, pragmatism only gets you so far. PCs are passé and an expansion of Intel's data-center business is too small to fully offset their decline. So Intel's stock is effectively a wager the company can realize ambitious plans for the mobile market.
Quadrupling the number of tablets shipped with Intel processors this year is a big goal, while efforts in wearable devices are still further out. The trick will be in holding down overall capital spending to keep margins from falling, even while investing in new areas.
Intel has been rewarded for being more reasonable, but it still has to show that investors will eventually find something new inside.
Goldman Sachs beats by $0.42, beats on revs
Reports Q4 (Dec) earnings of $4.60 per share, $0.42 better than the Capital IQ Consensus Estimate of $4.18; revenues fell 4.9% year/year to $8.78 bln vs the $7.73 bln consensus.
Investment Banking
Investment Banking
- Fourth Quarter Net revenues in Investment Banking were $1.72 billion, 22% higher y/y and 47% higher q/q.
- Net revenues in Financial Advisory were $585 million, 15% higher y/y.
- Net revenues in Underwriting were $1.13 billion, 26% higher y/y, due to strong net revenues in equity underwriting.
- Net revenues in equity underwriting were more than double the amount in 4Q12, reflecting an increase in client activity, particularly in initial public offerings.
- Net revenues in debt underwriting were lower y/y, primarily reflecting lower net revenues from investment-grade activity
- Fourth Quarter Net revenues in Institutional Client Services were $3.41 billion, 22% lower y/y and 19% higher q/q.
- Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.72 billion, 15% lower y/y, reflecting significantly lower net revenues in mortgages and, to a lesser extent, interest rate products, currencies and commodities. Net revenues in credit products, which include a gain on the sale of the firm's European insurance business, were higher compared with the fourth quarter of 2012.
- During the fourth quarter of 2013, Fixed Income, Currency and Commodities Client Execution operated in an environment characterized by tighter credit spreads and improved market-making conditions in certain businesses, compared with the third quarter of 2013. However, economic uncertainty persisted and levels of activity generally remained low.
- Net revenues in Equities were $1.68 billion, 27% lower y/y, due to the sale of the firm's Americas reinsurance business in 2013 and the sale of the firm's hedge fund administration business in 2012. Net revenues in equities client execution were significantly higher compared with the same prior year period, including significantly higher net revenues in cash products, partially offset by lower net revenues in derivatives. Commissions and fees were slightly higher compared with the fourth quarter of 2012.
- Securities services net revenues were significantly lower compared with the fourth quarter of 2012, due to a gain of $494 million on the sale of the firm's hedge fund administration business in 2012.
- Fourth Quarter Net revenues in Investing & Lending were $2.06 billion, 4% higher y/y and 40% higher q/q. Results for the fourth quarter of 2013 included net gains of $1.40 billion from investments in equities, primarily reflecting company-specific events, including initial public offerings, and net gains in public equities.
- Investment Management-
- Fourth Quarter Net revenues in Investment Management were $1.60 billion, 5% higher y/y and 31% higher q/q. The increase in net revenues compared with the fourth quarter of 2012 reflected higher management and other fees, primarily due to higher average assets under supervision.
- Compensation and benefits expenses were $12.61 billion for 2013, 3% lower than 2012. The ratio of compensation and benefits to net revenues for 2013 was 36.9% compared with 37.9% for 2012.
- Non-compensation expenses were $3.04 billion for the fourth quarter of 2013, 3% higher y/y and 40% higher q/q. The increase compared with the fourth quarter of 2012 included an increase in other expenses, due to higher net provisions for litigation and regulatory proceedings, partially offset by lower operating expenses related to consolidated investments.
- Including the impact of the warrant exercise, book value per common share increased approximately 5% to $152.48 and tangible book value per common share increased approximately 7% to $143.11 compared with the end of 2012, while both decreased approximately 1% compared with the end of the third quarter of 2013.
- Under the regulatory capital requirements applicable to bank holding companies in 2013, the firm's Tier 1 capital ratio was 16.7% and the firm's Tier 1 common ratio was 14.6% as of December 31, 2013, up from 16.3% and 14.2%, respectively, as of September 30, 2013.
Johnson & Johnson Inc Announces Binding Offer From The Carlyle Group To Acquire Ortho-Clinical Diagnostics for $4.15B (as speculated in the press)
- The acceptance period for the offer will end on March 31, 2014, unless extended, and during that time Johnson & Johnson will consult with relevant works councils and trade unions. If the offer is accepted by Johnson & Johnson, the proposed transaction would be expected to close toward the middle of the year, pending fulfillment of certain conditions, including, but not limited to, the receipt of applicable anti-trust clearances and other customary closing requirements.
- The Company will further discuss the contemplated transaction during its scheduled quarterly earnings meeting on January 21, 2014
- The Company will further discuss the contemplated transaction during its scheduled quarterly earnings meeting on January 21, 2014
Troika finds Greece 2014 fiscal plan is inconclusive - press
- Will not decide on Greece in Jan meeting
- 2014 fiscal gap seen at €1.5B, 2015 seen at €3.0B
- Troika return date to Greece still undecided
- 2014 fiscal gap seen at €1.5B, 2015 seen at €3.0B
- Troika return date to Greece still undecided
Best Buy domestic holiday comps -0.9%; lowers Q4 profit guidance (raises Q4 non-GAAP operating income headwind guidance)
Domestic revenue of $9.75 billion declined 1.5% versus last year. The decline was primarily driven by a comparable store sales decline of 0.9% (Q4 comp consensus is +1%). Comparable store sales were negatively impacted by our continuing rationalization of non-core businesses. Excluding this impact, the company estimates Domestic comparable store sales would have declined ~ 0.7%.
Domestic online revenue was $1.32 billion and comparable online sales increased 23.5% due to: (1) intense executional focus; (2) a higher average order value; (3) increased traffic; and (4) improved inventory availability supported by our ship-from-store and online distribution center expansion initiatives. From a merchandising perspective, growth in computing, appliances and gaming was more than offset by declines in other categories, including digital imaging, movies and MP3 players.
International revenue of $1.70 billion declined 8.0% versus last year. The decline was primarily driven by: (1) the negative impact of foreign currency exchange rate fluctuations; and (2) the loss of revenue from 35 large format stores closures in Canada and China. These declines were partially offset by a slight increase in comparable store sales in China and Canada.
In defense of our market share, and from a financial perspective, we made a significantly greater-than-expected year-over-year investment in pricing in the holiday period as Hubert previously discussed, and are projecting to continue to invest through the end of the quarter. In addition to this earnings impact for the fourth quarter, our Q3 FY14 earnings release quantified an additional impact that was estimated in the range of negative 60 to 70 basis points as a percentage of revenue versus last year's fourth quarter (Q4 FY13) non-GAAP operating income rate of 5.7%. This range was comprised of the following: (1) the negative impact of pricing investments; (2) the negative impact of our $150 to $200 million in FY14 incremental Renew Blue SG&A investments; (3) the temporary negative impact of our mobile warranty costs; and (4) the negative impact of the economics of our new credit card agreement; all substantially offset by the positive impact of our $505 million in annualized Renew Blue cost savings. Now as a result of all of these impacts, partially offset by substantially better-than-expected "non-Renew Blue" cost reductions, we expect our fourth quarter non-GAAP operating income rate to be 175 to 185 basis points lower than last year's (Q4 FY13) 5.7% non-GAAP operating income rate, excluding the impact of such items as restructuring charges and asset impairments."
"When we entered the holiday season, we said that price competitiveness was table stakes and an intensely promotional holiday season is what unfolded... our holiday revenues were negatively impacted by a number of factors, including: (1) the aggressive promotional activity in the retail industry during the holiday period, which we believe did not result in higher industry demand and had a deflationary impact on our revenue; (2) supply constraints for key products; (3) significant store traffic declines between "Power Week" and Christmas; and (4) a disappointing mobile phone market."
Domestic online revenue was $1.32 billion and comparable online sales increased 23.5% due to: (1) intense executional focus; (2) a higher average order value; (3) increased traffic; and (4) improved inventory availability supported by our ship-from-store and online distribution center expansion initiatives. From a merchandising perspective, growth in computing, appliances and gaming was more than offset by declines in other categories, including digital imaging, movies and MP3 players.
International revenue of $1.70 billion declined 8.0% versus last year. The decline was primarily driven by: (1) the negative impact of foreign currency exchange rate fluctuations; and (2) the loss of revenue from 35 large format stores closures in Canada and China. These declines were partially offset by a slight increase in comparable store sales in China and Canada.
In defense of our market share, and from a financial perspective, we made a significantly greater-than-expected year-over-year investment in pricing in the holiday period as Hubert previously discussed, and are projecting to continue to invest through the end of the quarter. In addition to this earnings impact for the fourth quarter, our Q3 FY14 earnings release quantified an additional impact that was estimated in the range of negative 60 to 70 basis points as a percentage of revenue versus last year's fourth quarter (Q4 FY13) non-GAAP operating income rate of 5.7%. This range was comprised of the following: (1) the negative impact of pricing investments; (2) the negative impact of our $150 to $200 million in FY14 incremental Renew Blue SG&A investments; (3) the temporary negative impact of our mobile warranty costs; and (4) the negative impact of the economics of our new credit card agreement; all substantially offset by the positive impact of our $505 million in annualized Renew Blue cost savings. Now as a result of all of these impacts, partially offset by substantially better-than-expected "non-Renew Blue" cost reductions, we expect our fourth quarter non-GAAP operating income rate to be 175 to 185 basis points lower than last year's (Q4 FY13) 5.7% non-GAAP operating income rate, excluding the impact of such items as restructuring charges and asset impairments."
"When we entered the holiday season, we said that price competitiveness was table stakes and an intensely promotional holiday season is what unfolded... our holiday revenues were negatively impacted by a number of factors, including: (1) the aggressive promotional activity in the retail industry during the holiday period, which we believe did not result in higher industry demand and had a deflationary impact on our revenue; (2) supply constraints for key products; (3) significant store traffic declines between "Power Week" and Christmas; and (4) a disappointing mobile phone market."
Early premarket gappers
Gapping up: ZOOM +54.7%, SRPT +14.1%, AMCC +5.5%, CSIQ +4.8%, FSLR +4.6%, PLUG +4.2%, UNH +4.2%, BLK +3.9%, RSOL +3.7%, KNDI +2.7%, IGTE +2.7%, SPWR +2.6%, VALE +2.2%, BHP +2.1%, JKS +2%, YGE +2%, ARO +1.7%, KMP +1.5%, ILMN +1.4%, TSL +1.4%, MU +1.2%, BBT +0.8%, C +0.6%, TWC +0.6%, HBAN +0.6%, MRK +0.5%, MRVL +0.5%
Gapping down: NUS -13.7%, AMRN -10.4%, MNOV -6.3%, CSX -3.2%, GLOG -2.7%, ARMH -2.7%, RBS -2.4%, TTM -2.2%, ORC -1.8%, JCP -1.6%, KMI -1.4%, RESI -1.3%, CORR -0.7%, CBL -0.6%, EPB -0.6%, AA -0.5%, NSC -0.5%, BA -0.4%
Gapping down: NUS -13.7%, AMRN -10.4%, MNOV -6.3%, CSX -3.2%, GLOG -2.7%, ARMH -2.7%, RBS -2.4%, TTM -2.2%, ORC -1.8%, JCP -1.6%, KMI -1.4%, RESI -1.3%, CORR -0.7%, CBL -0.6%, EPB -0.6%, AA -0.5%, NSC -0.5%, BA -0.4%
Google TRanslation :{http://bit.ly/1ddauSX}
Le Monde : {http://bit.ly/1arcSlJ}
Jean-Paul Agon, CEO of L'Oréal: "I will play the game Pact of responsibility"
LE MONDE | 16/01/2014 at 11:44 |
Interview by Nicole Vulser and Vincent Giret
Jean-Paul Agon, CEO of The Gold eal, is one of the first patrons of the CAC 40 to respond , very favorable to the proposed pact liability companies , Tuesday, Jan. 14, by François Hollande . The President of the world's leading cosmetics also claims that, in the thorny issue of the late pre-emption rights that bind the two major shareholders of L'Oréal - the family Bettencourt (30.3%) and Nestle (29.5 %) - until April, the decision is in the hands of the group Swiss . If the opportunity arises, L'Oréal will, he promises, the means to buy all or part of the shares of Nestlé.
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What do you think of the pact that François Hollande offers companies?
This is really a step in the right direction, which is what France needs.
Was there an emergency?
Yes. Well seen: all industrial production figures, trust, investment, market share, everything was in line with the decline for several years. I'm talking in general, not for L'Oréal. There is need for a strong recovery. The substance and spirit of the measures announced Tuesday in the right direction.
A do we lost eighteen months?
The important thing is that it happens. But the mobilization of all political, industrial, labor, civil society for an economy that creates value, it's been that it was necessary. The most positive is this awareness of a need for energy for the country and its economy.
I do not think this a bit outdated version, with one hand employers and other unions of gifts made to one or the other ... The world today is a global company and France maps extraordinary play . The fact remobilising everyone, all energies to believe that again it is mobilizing to reinvest and grow globally, it's a great dynamic.
The end of family social contributions by 2017 is it a good decision?
Yes. Symbolically it reflects an awareness and proof of economic realism. And I am committed: these cost savings that will come , we will fully the reinvest in the service of the company and its employees.
To create a dynamic boost creative energy, you need a trigger. It is this discourse of trust, partnership, not an opposition speech to business, as there was in the past. The lowering or elimination of family contributions will also trigger this process. I find it quite normal that the state checks if there in return for the investment and the jobs . But it does not take any more than it turns into "machi n," as General de Gaulle, with bureaucratic thirty-six commissions ... Job creation should not be in control bodies! But the process is good, I am very happy for the country.
Were you surprised?
No, I think that at some point the politicians responsible and informed eventually understand reality. It is a principle of reality. I would call it a good pact reality. To be frank, ideology no longer has a place in the economic world. We must be realistic and pragmatic.
François Hollande spoke of a risk of dropping out of France. Have you measured?
Yes, every day we see companies in difficulty, which focused on the French market alone, may péricliter and are suppressed by production costs or expenses too high. When a man policy manager is faced with this reality, he understands that the only way out is through the top.
Thirty billion is enough?
It's a start. Movement that can trigger is greater than the money invested. It is a vibrant, state of mind, a sign that can reverse the logic. We were in constant uncertainty in terms of tax policy and production costs ... Entrepreneurs, small, medium or large, were not really encouraged to undertake , to take risks in such a negative context. A From the moment you change the context, you change the whole situation. Then it has to follow in the acts, and that it is not broken by contradictory actions fortnightly. Confidence, it is not won easily, but it is lost very quickly.
You play the game?
Yes, I play the game and companies want to play the game It's for L'Oréal, the interest of the company, employees and their families.
With the current tax policy, you said having difficulty recruiting foreign managers in France and your expatriates did not want to return to work in France. What is it?
Fiscal policy in France was punitive. Indeed, with the law of the 75% tax on high salaries and all the hype that had been around, senior executives of the group had more desire to make their career in the world rather than return to France. If we reverse the process of confrontation rather negative - anti-contractors and unfavorable to people who make money - there may be an economic recovery which itself will lower their taxes and will therefore more favorable.
While other countries in Europe out of the crisis faster than France, François Hollande was he driven to such an economic turnaround?
There is a necessary skill. It is not a question of being cornered but to be faced with a reality and choose a way to go out . This is a great advance for France to be pragmatic and realistic, as became virtually every country of the world. The French government is in the process of learning , for the first time since the post-war, which is simple works better than what is complicated.
THE REDEMPTION OF SHARES IN NESTLÉ L'OREAL "OPERATION IS GOOD"
What are your results for 2013 and forecasts for 2014?
2013 was a good year. We managed to grow all our businesses and in all regions of the world. In 2014, we expect to grow and a half times faster than the global market.
What can he go in April with late preemption Reciprocal linking the main shareholders of L'Oréal and Nestlé, the Bettencourt family?
This deadline has been known for ten years since the agreements were re-signed in 2004. No one is caught off guard. There are endless possibilities. It is not we who hand. The options are in the hands of the Board of Directors of Nestlé. Its president has publicly stated that the Board of Nestlé should decide on the future of its stake in L'Oreal, which is normal. It is their job. Getting ready for all possible options.
Including the redemption of all or part of the L'Oréal shares held by Nestlé?
If the opportunity arises, we have huge financial resources allow.
What would interest shareholder of L'Oréal?
It would be a good deal: there would be a "accretion". These actions could be canceled, and the value of each share of L'Oréal would thus be increased.
Nestlé has recently sold its stake in Givaudan. Should we see a sign?
They must ask .
Discussions with Nestlé did they begin?
This is secret defense . If there are decisions will be taken at best, in the interest of everyone.
A little "business fiction." That the group will be in ten years?
The cosmetics market will probably doubled. The number of consumers of beauty products will also probably doubled since the middle class will be from 1.5 to 3billion people. The new billion consumers that we intend to conquer will, 80% of new major emerging countries. L'Oréal will be more universal, with the creation of a large The Asian Oréal L'Oréal great South America and a large L'Oréal Africa / Middle East.