(BFW) Renault’s Ghosn Favors 2 CEOs for Renault, Nissan:Auto News Link

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Renault’s Ghosn Favors 2 CEOs for Renault, Nissan:Auto News Link 2014-01-10 13:33:47.277 GMT

By Dan Hart Jan. 10 (Bloomberg) -- http://bit.ly/JMOpAB

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To contact the editor responsible for this story: Dan Hart at +1-202-624-1870 or dahart@bloomberg.net

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: CERE -19.1%, PSUN -15.5% (also downgraded at Janney), SHLD -12.4%, NRP -11.5%, (declares Q4 dividend of $0.35 per share vs $0.55 in prior quarter; reaffirms FY13 guidance; sees FY14 revs of $305-340 mln vs $362.62 mln estimate), AEGR -10.5%, PRGS -10.3%, CUDA -9.6%, ( downgraded to Neutral from Buy at BofA/Merrill), SCVL-6.7%, AA -6.5%, EOPN -6%, FNP -3.5%(also announced company name change to Kate Spade & Company; Craig Leavitt to succeed William McComb as Chief Executive Officer; George Carrara promoted to President and Chief Operating Officer), NSPH -3.4% (light volume), SNX -3.2%, TGT -2.9% (also was upgraded to Buy from Neutral at Goldman), MTH -2.6% (also announces public offering of 2.2 mln shares of common stock), PSMT -2.4%, SAP -2.3%.

Other news: YRCW -18.6% (continued weakness on Teamsters voting; Teamsters reject extending, modifying current restructuring agreement), BV -15.2% (Bazaarvoice comments of court ruling challenging co;s acquisition of PowerRevenues), WYY -6.8% (files for $25 mln mixed securities shelf offering), SNE -3.2% (still checking), BALT -2.4% (still checking), PWRD -2.4% (still checking),DRYS -2.3% (still checking), JCP -1.4% (following SHLD guidance), BHI -1.2% ( provides operational update for the Q4, repurchases $350 mln in common stock), ALU -1.1% (still checking).

Analyst comments: SPLK -2% ( downgraded to Equal Weight from Overweight at Barclays), LNG -1.7% (downgraded to Neutral from Buy at Citigroup), AMBA -1.5% ( downgraded to Hold from Buy at Deutsche Bank), AMCC -1.5% (downgraded to Neutral from Buy at Sterne Agee), PHM -1.2% (PulteGroup downgraded to Underweight from Neutral at JPMorgan ), SI -1% ( downgraded to Neutral from Buy at BofA/Merrill), JNJ -0.5% (downgraded to Equal Weight from Overweight at Barclays), LLY -0.5% (downgraded to Underweight from Equal Weight at Barclays), BLK -0.2% ( downgraded to Neutral from Buy at Goldman), LVS -0.1% (downgraded to Mkt Perform from Outperform at FBR Capital)

>>> Baker Hughes provides operational update for the Q4, provides Q4 EPS guidanc

Baker Hughes provides operational update for the Q4, provides Q4 EPS guidance below consensus; repurchases $350 mln in common stock 

Co provides the following update for the fourth quarter of 2013:

Q4 guidance
Co issues downside guidance for Q4 (Dec), sees EPS of $0.78-0.80, excluding non-recurring items, vs. $0.83 Capital IQ Consensus Estimate.

Operations update pertaining to guidance
Following the disruption to its business in Iraq during the fourth quarter, Baker Hughes resumed operations by the end of December. Due to the lost revenue related to this event, expenses associated with personnel movements and security measures, and other nonrecurring items, the pretax and after-tax profit impact from the disruption in Iraq during the fourth quarter is ~$80 mln, or $0.18 per share.

In the U.S. and the North Sea, activity declined primarily due to weather delays late in the quarter. As a result, North America and Europe/Africa/Russia Caspian operating profit margins declined sequentially.

As a result of the operational items highlighted above, adjusted earnings per share (a non-GAAP financial measure) are estimated to be between $0.60-0.62 per share for the quarter. The estimated adjusted earnings per share exclude $29 mln in after-tax severance costs, or $0.06 per share, incurred during the quarter. If not for the Iraq disruption, the estimated adjusted earnings would be between $0.78-0.80 per share.

Stock Repurchase Update
During the fourth quarter Baker Hughes repurchased ~6.3 mln shares of common stock, totaling $350 mln.

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: STV +16.2% (ticking higher), ANF +15.9% (also upgraded to Buy from Neutral at Janney), FRAN +13%, ANGO +5.7%, INFY +3.3%, HIIQ +3.3% ( announces preliminary record 2013 premium equivalents driven by strong Q4 sales), GPS +2.2%, AEHR +2.2% (also announces new customer order of more than $1 mln for multiple ABTS Burn-in and Test Systems from a European semiconductor manufacturer), HELE +1.9% (light volume), ZLC +0.6%, (light volume), .

M&A news: SWS +15.5% (Hilltop proposes to acquire SWS Group for $7.00 Per Share in 50% cash and 50% Hilltop common stock ), OMC +2% (Publicis Groupe And Omnicom confirmed yesterday Received Unconditional Clearance From The European Commission), ORAN +1.9% (AT&T and Deutsche Telekom may bid for ORAN; AT&T may offer EUR $15/share, according to reports ).

Select metals/mining stocks trading higher: GOLD +2%, RIO +1.9%, ABX +1.2%, AUY +1%, SLV +0.8%, GDX +0.6%, GLD +0.4%, .

Select oil/gas related names showing strength: STO +2.4% (upgraded to Overweight from Neutral at JP Morgan), RDS.A +1.6% (upgraded to Outperform from Neutral at Exane BNP Paribas ), TOT +0.7%.

Other news: ICPT +28.7% (following after hours NASH and FLINT conference call; was up more than 200 points yesterday; target raised to $872 from $81 at BofA/Merrill), CNAT +14.8% (continued strength), BLDP +14.4% (announces sales agreement with M-Field For Clean Baseload Power Systems), KIN +12.2% (The Baupost Group (Seth Klarman) discloses 17.93% passive stake in 13G filing), IMMU +12% (announces initiation of Phase III clinical trial of Clivatuzumab Tetraxetan in patients with pancreatic cancer), PLUG +11.4% (continued momentum), RIGL +11.1% (earns milestone payment of $5.75 mln from AstraZeneca (AZN) for the continued development of R256 in asthma ), STEM +9.7% (Expands Phase I/II Spinal Cord Injury Trial to North America), GALT +9.7% (has sold 2.39 mln shares of common stock since October 28 at an avg price of $9.99, raising $23.9 mln in net proceeds- Announces Update on Financing Activities and Cash of $32.3 Million), SNTA +9.6% (announces initiation of three multicenter, randomized Phase II/III trials of Ganetespib in acute myeloid leukemia and high risk Myelodysplastic Syndrome), DCTH +9.4% (still checking), IMUC +8.8% (issues shareholder letter providing update on ICT-107 program in newly diagnosed glioblastoma), APO +8.1% (ticking higher, Apollo Global Management Closes Apollo Investment Fund VIII), GALE +7.4% (continued strength), JKS +4.5% (announces agreement to take over assets of Zhejiang Topoint), NBIX +3.1% (announces 12-Week safety results from initial Phase IIB study of VMAT2 Inhibitor NBI-98854; Shows "excellent safety profile"), SQNM +2.3% (announces second national coverage agreement for prenatal diagnostic testing services; downgraded to Neutral from Overweight at Piper Jaffray), MNKD +1% (announces tentative date of FDA advisory committee review of AFREZZA ), YHOO +0.7% (has acquired Aviate for $80 mln, according to reports ), NFLX +0.6% (Netflix app will stream 4K to new TV's right away, according to reports), FB +0.5% (plans to shutdown controversial ad feature this Spring, according to reports; target raised to $65 at Stifel).

Analyst comments: IRWD +4.8% (ticking higher, upgraded to Outperform from Market Perform at BMO Capital), OREX +2.1% (initiated with a Buy at WallachBeth), BBRY +1.6% (upgraded to Sector Perform from Underperform at RBC Capital ), MSFT +1.3% (upgraded to Overweight from Equal Weight at Barclays), CNW +0.5% (upgraded to Outperform from Market Perform at Wells Fargo), M +0.2% (upgraded to Buy from Neutral at Goldman)

>>> Zale announces overall holiday comparable store sales up 2.0 percent at cons

--> No pre-market yet

Zale announces overall holiday comparable store sales up 2.0 percent at constant exchange rates; sees Q2 gross margin of 52.6%

  • Co announced that comparable store sales increased 2.0 percent at constant exchange rates, or 0.7 percent on a U.S. dollar reported basis, for the combined months of November and December 2013.
  • Revenues for the two-month period were $556 million compared to $567 million in the same period last year. The decrease in revenues is primarily due to the net decrease of 91 stores compared to last year and a decline in the Canadian exchange rate, partially offset by the two percent constant currency comparable store sales growth.
  • "During the holiday period, we maintained our focus on increasing exclusive product penetration, driving gross margin improvement and building our core national brands... We executed a solid holiday season despite a challenging retail environment. Our holiday performance gives us confidence we can achieve our financial expectations for the fiscal year."
  • For the quarter ending January 31, 2014, the company expects gross margin to be approximately 52.6%, or 200 basis points higher than the prior year quarter. This improvement is primarily the result of efficiencies gained from our merchandise sourcing program, discipline around promotional activities and a favorable commodity cost environment. Operating margin is expected to be approximately 8.6 percent, or 100 basis points higher than the prior year quarter.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: ICPT +28.7%, ANF +15.9%, CNAT +14.8%, BLDP +14.4%, KIN +12.2%, IMMU +12%, PLUG +11.4%, SNTA +9.6%, IMUC +8.8%, GALE +7.4%, ANGO +5.7%, INFY +3.3%, HIIQ +3.3%, NBIX +3.1%, SQNM +2.3%, GPS +2.2%, AEHR +2.2%, BBRY +2.1%, HELE +1.9%, MNKD +1%

Gapping down: YRCW -18.6%, FIVE -15.7%, SHLD -13.8%, AEGR -13.2%, PSUN -12.5%, CERE -12.1%, NRP -11.5%, PRGS -10.3%, CUDA -9.6%, WYY -6.8%, SCVL -6.7%, AA -6.5%, EOPN -6%, FNP -3.5%, SNE -3.2%, SNX -3.2%, MTH -2.6%, BALT -2.4%, PWRD -2.4%, PSMT -2.4%, RBS -1.7%, JCP -1.4%, ALU -1.1%, SI -1%, HUM -1%

(Exane) Firework Season is over - Long SG,Buy Natixis on weakness...

*No big surprises
French banks’ Q4 results will be followed (and are therefore likely to be eclipsed) by their capital markets days (see Sober ambitions). Divisional targets will be useful but we believe that the most significant targets have already been largely announced: 1) ET1 targets of 9.5% (CA) to 10% (BNPP, SG); 2) pay-out targets of 35% at CA, ‘a little more than 30–40%’ at BNPP (say 35–45%), 35–50% at SG and 50% at Natixis; 3) ROE of 10% at SG, probably 10–11% at BNPP. For CA a level of c. 12% ROTE is the most likely. Our recent visit to French banks suggests that surprises on these key targets are unlikely.

*Q4 is usually on the weak side
We do not believe that French banks’ CIB divisions will have been particularly impressive: client activities are always more subdued in Q4 and lending activities may have slowed due to the weak economy, margin pressure and the festive season. However, market parameters remained strong (spreads tightening, market levels higher and volatility at a favourable level) probably favouring SG vs peers. Costs and provisions are usually seasonally high in Q4 and may also be impacted by restructuring (BNPP, Natixis). Finally the USD weakness (down c. 5% QoQ) is likely to have impacted revenues (BNPP most exposed, but also Natixis due to its structured finance business).

*Stock calls: long SG, buy Natixis on weakness, CA: pause for breath
Likely underwhelming results at Natixis (Outperform) will not alter our conviction that the yield story will play out as we expect, i.e. c. 40% of market cap will be returned to shareholders by end 2017. The Coface IPO could release 60bp of capital in H1 14 and could prove a catalyst. SG (Outperform) should have a decent Q4 in CIB, and also, we believe, no accidents on the cost of risk in France, both sensitive items. These should help to more than offset a potential poor cost of risk in Romania. Following CA’s sharp bounce YTD (+3% relative) we believe that delivery is now needed on capital improvement.

>>> SWS : Hilltop Holdings (24% holder) Proposes To Acquire SWS Group for $7.00/

SWS Group Inc. Hilltop Holdings (24% holder) Proposes To Acquire SWS Group for $7.00/shr
- Hilltop Holdings submitted a written proposal to the SWS Group's board to acquire all of the outstanding shares of SWS that it does not already own for $7.00 per share in 50% cash and 50% Hilltop common stock. In 2011, Hilltop invested $50 million in SWS in the form of a senior unsecured loan. At the time of Hilltops investment, Hilltops Chairman, Gerald J. Ford, joined the Board of Directors of SWS and Hilltops President and Chief Executive Officer, Jeremy B. Ford, became a non-voting observer to the SWS board. In conjunction with Hilltops investment in SWS, SWS issued Hilltop a warrant to purchase 8,695,652 common shares of SWS at an exercise price of $5.75 per share. Hilltop currently beneficially owns 24% of SWS common stock, inclusive of the warrant.