KPN Say Offer Wasn’t of Sufficient Value Board to Recommend
America Movil “has not improved or shown any willingness to improve” its intended offer, KPN says in e-mail. KPN boards weren’t able to obtain acceptable proposal on “the content, firmness, duration and enforceability” of America Movil’s commitments to KPN’s stakeholders
LVMH Needs to Mix and Match The French Fashion House Depends Heavily on Its Louis Vuitton Brand, Which May Cause Problems for Investors Unless It Can Find Another Star
These days, investors in LVMH Moët Hennessy Louis Vuitton could do with a little variety. Shares of the French fashion house fell 4.3% Wednesday after the company issued disappointing third-quarter revenue. The culprit: a mere 3% rise in currency-adjusted sales from the key fashion and leather-goods division, which makes almost all of its profit from the Louis Vuitton brand. While LVMH has some other red-hot brands such as Celine, they were unable to make up for a soft performance from Louis Vuitton, which accounts for about half of operating profit overall. Unfortunately, heavy reliance on Louis Vuitton could be an issue for some time to come. In China, for instance, the luxury market has become considerably more challenging in recent years. In the past, luxury consumers mainly shopped for a few brands such as Louis Vuitton, Gucci and Hermès. These days, malls in major cities are loaded with options for increasingly sophisticated shoppers, says Frank Yao of SmithStreetSolutions, a consultancy. Another problem: LVMH has been slow to win online sales, which have surged at rival luxury labels such as Burberry. It is understandable that LVMH wants to have close control over the in-store luxury-shopping experience. But the Internet will increase the knowledge of wealthy shoppers quickly and probably encourage them to expand beyond their old favorites. What can Louis Vuitton do in response? Its current strategy seems to be protecting itself from competitors by becoming even more exclusive. In recent quarters, the company has begun focusing more on ultraexpensive soft leather to reduce its reliance on canvas bags emblazoned with the "LV" logo. Such a shift makes sense—in the long run. But those canvas bags probably help Louis Vuitton maintain very high margins that it would have to sacrifice. Indeed, Thomas Chauvet of Citigroup estimates the brand has an operating margin of 42%, well above the industry average. Ultimately, the real solution is for LVMH to actually make its conglomerate model work by nurturing the various brands it has acquired into big moneymakers. But for every star like Celine, there has been at least one dud like Donna Karan. And given the premium valuation multiples put on proven successes Salvatore Ferragamo and Tod's, finding new targets at a good price would be tough. Until LVMH can master the art of diversification, investors should browse elsewhere.
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BFW 10/16 20:00 *AMERICAN EXPRESS 3Q EPS $1.25, EST. $1.22 BN 10/16 20:00 *AMERICAN EXPRESS 3Q EPS $1.25, EST. $1.22
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American Express 3Q EPS $1.25, Est. $1.22 2013-10-16 20:01:26.236 GMT
By Brad Skillman Oct. 16 (Bloomberg) -- AXP 3Q rev. net of interest expense $8.3b vs est. $8.21b
Link to Company News:{AXP US <Equity> CN <GO>}
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To contact the editor responsible for this story: Brad Skillman at +1-212-617-2763 or bskillman1@bloomberg.net
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IBM 3Q Oper. EPS Beats Est., Rev. Misses; Shrs Fall 2013-10-16 20:05:34.106 GMT
By Joanna Ossinger Oct. 16 (Bloomberg) -- IBM 3Q oper EPS $3.99, est. $3.96; 3Q rev. $23.72b, est. $24.74b. * Hardware rev. down ~17% * PREVIEW IBM 3Q: Expected to Maintain 2013 View, Barclays Says {NSN MURXXZ6TTDS6 <go>} * Earlier, IBM Reports Post-Mkt; L-T Uptrend Broken, Forms Rounding-Top {NSN MUS0SY6S972B <go>} * Conf. call 4:30pm * IBM down 2.6% post-mkt Link to statement: {NSN MUS2EOMEQTXC <go>}
Link to Company News:{IBM US <Equity> CN <GO>}
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To contact the editor responsible for this story: Joanna Ossinger at +1-212-617-7789 or jossinger@bloomberg.net
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BUS 10/16 20:15 eBay Inc. Reports Strong Third Quarter 2013 Results BN 10/16 20:16 *EBAY SEES 4Q REV. $4.5B-$4.6B, EST. $4.64B :EBAY US BN 10/16 20:16 *EBAY SEES 4Q ADJ. EPS 79C-81C, EST. 83C; SHARES DOWN 4% BN 10/16 20:16 *EBAY SAYS 4Q OUTLOOK ASSUMES BRAINTREE DEALS CLOSES LATE 4Q BN 10/16 20:16 *EBAY: PAYPAL 3Q REV. $1.6B :EBAY US BN 10/16 20:15 *EBAY SEES 4Q ADJ EPS $0.79 - $0.81, EST. 83C :EBAY US BN 10/16 20:15 *EBAY SEES 4Q ADJ EPS $0.79 - $0.81 :EBAY US BN 10/16 20:15 *EBAY: MOBILE ENABLED COMMERCE VOLUME UP 75% :EBAY US BN 10/16 20:15 *EBAY 3Q NET REV. $3.89B, EST. $3.90B BN 10/16 20:15 *EBAY SEES 4Q REV. $4.5B-$4.6B :EBAY US BN 10/16 20:15 *EBAY 3Q ADJ. EPS 64C, EST. 63C BN 10/16 20:15 *EBAY 3Q NET $689M :EBAY US BN 10/16 20:15 *EBAY SEES 4Q EPS 67C TO 69C :EBAY US BN 10/16 20:15 *EBAY SEES 4Q NET REVENUE $4,500 - $4,600M :EBAY US BN 10/16 20:15 *EBAY SEES 4Q NON-GAAP EPS 79C TO 81C :EBAY US BN 10/16 20:15 *EBAY 3Q MARKETPLACES NET REVENUE $2.03B :EBAY US BN 10/16 20:15 *EBAY PAYPAL 3Q TOTAL PAYMENT VOLUME $43.8B :EBAY US BN 10/16 20:15 *EBAY 3Q NON-GAAP EPS 64C :EBAY US BN 10/16 20:15 *EBAY 3Q EPS 53C :EBAY US BN 10/16 20:15 *EBAY 3Q SALES UP 14% :EBAY US BN 10/16 20:15 *EBAY 3Q REVENUE $3.9B :EBAY US
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Ebay Sees 4Q Adj. EPS 79c-81c, Est. 83c; Shrs Down 4% 2013-10-16 20:16:27.708 GMT
By Brad Skillman Oct. 16 (Bloomberg) -- Ebay 3Q adj. EPS 64c vs est. 63c
Link to Statement:{NSN MUS2X0MEQTXE <GO>} Link to Company News:{EBAY US <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: Brad Skillman at +1-212-617-2763 or bskillman1@bloomberg.net
Closing Market Summary: Stocks Rally as Congress Finds Common Ground
The S&P 500 settled higher by 1.4% with participants rushing into equities as Washington lawmakers appeared to be on the verge of striking a deal that would fund the government through January 15 while extending the debt ceiling until February 7, and maintaining the sequester. Stocks registered opening gains after it was reported that Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell resumed working on a deal after the House of Representatives failed to vote on its own measure last evening. Equities caught a second wind in reaction to reports indicating House Speaker Boehner would bring the Senate plan for a vote on the House floor. Although the session ended before Congress had a chance to vote, the Senate plan is expected to be approved by both chambers. All ten sectors posted gains with financials (+2.2%) ending in the lead. The sector received support from Bank of America (BAC 14.56, +0.32) and PNC Financial (PNC 73.87, +1.36) after both banks reported bottom-line beats. Thanks to today's gain, the financial sector extended its October advance to 3.9%. Outside of financials, only health care and energy hold month-to-date gains larger than 3.0%. The health care sector rose 2.0% today, and received support from shares of Abbott Labs (ABT 35.90, +2.19) after the drug maker beat on earnings. Meanwhile, energy gained 1.4% as crude oil advanced 0.9% to $102.16 per barrel. Elsewhere, consumer staples (+1.4%) also contributed to the rally as PepsiCo (PEP 82.27, +1.67) ended higher by 2.1% following its earnings beat on in-line revenue. Although all sectors posted solid gains, industrials (+0.7%) trailed behind the remaining nine groups as defense contractors weighed. The PHLX Defense Index underperformed for the second day in a row, adding 0.1%. Transports, however, kept pace with the S&P as the Dow Jones Transportation Average advanced 1.4%. With the reduced threat of imminent default, the CBOE Volatility Index (VIX 14.84, -3.82) lost 20.9%, tumbling to its lowest level since late September. Treasuries ended on their highs with the 10-yr yield down six basis points at 2.67%. Trading volume was just above average as 753 million shares traded hands on the floor of the New York Stock Exchange. On the economic front, the weekly MBA Mortgage Index ticked up 0.3% to follow last week's increase of 1.3%. Separately, the October NAHB Housing Market Index fell to 55 from 58. Today's report was below the reading of 57 expected by the consensus.
Also of note, the Federal Reserve released its Beige Book, which did not contain many surprises. The report said economic growth during the period between September and early October continued at a "modest to moderate pace" while employment continued to grow modestly. The report also touched on the budget deadlock, saying the situation contributed to an increase in uncertainty. Tomorrow, weekly initial claims will be reported at 8:30 ET while September industrial production and capacity utilization will both be released at 9:15 ET. The day's data will be topped off with the 10:00 ET release of the October Philadelphia Fed survey. On the earnings front, Goldman Sachs (GS 162.25, +4.62), UnitedHealth (UNH 75.19, +1.32), and Verizon (VZ 47.25, +0.93) will report their quarterly results before the opening bell.
Today's advance extended the S&P's year-to-date gain to 20.7%. The benchmark index ended the session less than nine points below its all-time high of 1729.86. With regard to other indices, DJIA +17.3% YTD, Nasdaq +27.2% YTD, and Russell 2000 +28.6% YTD.
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BFW 10/16 16:22 *AMERICA MOVIL WITHDRAWS OFFER FOR KPN
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*AMERICA MOVIL WITHDRAWS OFFER FOR KPN 2013-10-16 16:22:28.475 GMT
--LAUREN BERRY
-0- Oct/16/2013 16:22 GMT
House aide indicates that Republicans have not yet made a decision on whether to accept and vote on the Senate plan
House to reportedly consider voting on Senate debt ceiling/funding bill before the Senate votes - Politico.com - Politico notes that if the House passes the bill first and sends it to the upper chamber, it would eliminate some burdensome procedural hurdles in the Senate and require just one procedural roll call with a 60-vote threshold needed to advance the bill toward final passage in the Senate.
Warren Buffet to CNBC: creditworthiness is like virginity, you can maintain it for a long time, but tough to restore once you've lost it