>>> Alexion Pharma beats by $0.11, beats on revs; raises guidance for FY14, abov

Alexion Pharma beats by $0.11, beats on revs; raises guidance for FY14, above consensus

Reports Q3 (Sep) earnings of $1.27 per share, $0.11 better than the Capital IQ Consensus Estimate of $1.16; revenues rose 38.6% year/year to $555.1 mln vs the $544.25 mln consensus. Revenue performance for the quarter reflected steady additions of new patients with paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS) commencing Soliris treatment.
  • Co raises guidance for FY14, sees EPS of $5.15-5.20 vs. $5.02 Capital IQ Consensus Estimate, up from $4.95-5.05 prior guidance;
    • Sees FY14 revs of $2.220-2.225 bln vs. $2.2 bln Capital IQ Consensus Estimate, up from $2.18-2.20 bln prior guidance.

>>> Eli Lilly misses by $0.01, reports revs in-line; reaffirms FY14 EPS guidance

Eli Lilly misses by $0.01, reports revs in-line; reaffirms FY14 EPS guidance, lowers high end of FY14 revs guidance

Reports Q3 (Sep) earnings of $0.66 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus Estimate of $0.67; revenues fell 15.5% year/year to $4.88 bln vs the $4.84 bln consensus.
  • The revenue decline was comprised of 16 percent due to lower volume; the impact of changes in price and foreign exchange rates on worldwide revenue was negligible. The 16 percent decrease in worldwide volume was primarily driven by the loss of U.S. patent exclusivity for Cymbalta, and to a lesser extent Evista, partially offset by volume gains for most other products. Total revenue in the U.S. decreased 33 percent to $2.218 billion, driven primarily by lower demand for Cymbalta and Evista following their patent expirations. Total revenue outside the U.S. increased 8 percent to $2.658 billion, driven by higher volume.
Co issues guidance for FY14, reaffirms EPS of $2.72-2.80, excluding non-recurring items, vs. $2.76 Capital IQ Consensus; lowers FY14 revs to $19.4-19.8 bln from $19.4-20.0 bln vs. $19.88 bln Capital IQ Consensus.
  • Patent expirations have led to a rapid and severe decline in U.S. Cymbalta and U.S. Evista sales. These revenue declines are expected to be partially offset by growth from a portfolio of other products including Humalog, Humulin, Trajenta®, Cialis, Forteo and Alimta, as well as the animal health business and new product launches. In addition, strong revenue growth is expected in China, while a weaker Japanese yen will dampen revenue growth in Japan.
  • The co now anticipates gross margin as a percent of revenue will be ~74.5 percent in 2014 driven by recent strengthening of the U.S. Dollar versus the Euro. Gross margin in 2014 is now also expected to benefit from a decision to delay until 2015 the shutdown at one of the company's bulk insulin plants to implement production changes. T

FT Lex : Tesco: bargain hunters beware

Tesco: bargain hunters beware

Even after halving, the shares do not look cheap

So how bad are things at Tesco? Take your pick of Thursday’s awful figures. The table on page 11 of the first-half results, showing that like for like sales have been falling everywhere for the past 18 months, would be one place to start. The pre-tax profit of £112m on sales of £34bn would be another. The £527m of one-off items, only part of which are related to the accounting problems, are a third. The whole ugly story is summarised in the share price: it has halved versus a year ago. This is no start-up, remember. Tesco is a supposedly defensive food retailer.

At 174p, the shares are pricing in continued awfulness. Over the past five years, Tesco shares have traded at an average price to forward earnings of 11, according to S&P Capital IQ. Apply that to the current share price, and implied earnings per share are 15.8p. Last year the company made underlying EPS of 32p. With 7.7p reported for the first half of this year and like for like sales still falling, there is no reason to think that the 15.8p is unreasonably low. The shares, then, are not cheap, whatever the price chart might suggest.

Making that price look like a good entry point will require some heroic action on the part of newly arrived chief executive Dave Lewis. Rivals can sense weakness and are ready to take advantage – Aldi, Lidl, Asda, Morrison and Sainsbury were all advertising heavily on Thursday. The last thing Mr Lewis needed was to spend the first seven weeks of his tenure clearing up the accounting mess.
The broad outline of what he needs to do is clear. First he needs to overhaul pricing and product ranges. With the UK trading margin already having more than halved to 2.34 per cent, that will be painful. Which leads to point two – cut costs. That applies to both operating costs and capital spending (so no more new hypermarkets). And he will also have to repair the balance sheet. New equity would help, as would the sale of some of the more peripheral UK and overseas businesses. That will all take time. No need to rush in yet.

>>> Autoliv misses by $0.17, misses on revs; lowers organic sales growth guidanc

Autoliv misses by $0.17, misses on revs; lowers organic sales growth guidance 50 bps to ~5.5%; reaffirms operating margin (93.40)
Reports Q3 (Sep) earnings of $1.25 per share, $0.17 worse than the Capital IQ Consensus Estimate of $1.42; revenues rose 4.2% year/year to $2.21 bln vs the $2.25 bln consensus.
  • Quarterly organic sales grew by close to 5%. The adjusted operating margin was 8.5%.
    • The expectation at the beginning of the quarter was for an organic sales growth of "around 6%" and an adjusted operating margin of "around 8.5%".
    • The lower than expected organic sales growth was primarily due to unfavorable vehicle mix in China, but also due to lower overall production in the Chinese market. We had record operating cash flow for a third quarter of $212 million.
  • For the fourth quarter of 2014 we expect organic sales to increase by around 2%, and an adjusted operating margin of around 9.5%. The expectation for the full year is now for organic sales growth of around 5.5%, and an adjusted operating margin of around 9%.

>>> Lazard beats by $0.03, beats on revs

Lazard beats by $0.03, beats on revs (48.71)
Reports Q3 (Sep) earnings of $0.67 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.64; revenues rose 19.2% year/year to $583 mln vs the $561.15 mln consensus.
  • Third-quarter Financial Advisory operating revenue of $291 million, up 24% from third-quarter 2013;
  • Third-quarter M&A and Other Advisory operating revenue of $241 million, up 37% from third-quarter 2013;
  • Record third-quarter Asset Management operating revenue of $288 million, up 16% from third-quarter 2013;
    • Assets under management of $198 billion as of September 30, 2014, up 12% from September 30, 2013, and down 3% from June 30, 2014.
    • Net inflows of $2.6 billion for third-quarter 2014

>>>Diamond Offshore beats by $0.17, reports revs in-line

Diamond Offshore beats by $0.17, reports revs in-line

Reports Q3 (Sep) earnings of $0.96 per share, excluding non-recurring items (see below), $0.17 better than the Capital IQ Consensus Estimate of $0.79; revenues rose 4.5% year/year to $737.68 mln vs the $739.76 mln consensus.
  • Co reported third quarter 2014 net income of $53 million, or $0.38 per share, compared to net income of $95 million, or $0.68 per share, in the third quarter of 2013. The Company today announced plans to retire and scrap six of its mid-water semisubmersible rigs, resulting in a non-cash impairment charge in the third quarter of $109 million before tax, or $0.84 per share after tax.
  • Results for the quarter include favorable settlements of tax audits in Brazil and Malaysia and expiration of the statute of limitations in various jurisdictions for which tax expense had previously been recognized. As a result of these items, tax expense was reduced by $0.23 per share, and a related decrease in interest expense benefited results by $0.03 per share.

(ZH) The "China-And-Japan-PMI-Beat-So-Things-Must-Be-OK" Meme In 2 Simple Charts

The "China-And-Japan-PMI-Beat-So-Things-Must-Be-OK" Meme In 2 Simple Charts
The reactions in USDJPY, Nikkei 225, S&P futures, Gold, Treasury futures, and oil (in a word - none!) tells you all you need to know about the market's total loss of faith in the soft-survey-based PMI data from around the world (and in particular China and Japan). Despite dramatic weakness in a slew of hard-date economic indicators for both nations, the PMIs rose and beat. Japan's to 7-month highs (so much for moar QQE?) but New orders and Output tumbled. China rose and beat but all key components dropped. As the two charts below suggest... things in PMI data production-land need some better "adjustments" if they are to keep the dream alive...
Just two simple charts...Soft-Survey-based PMI vs hard-data-based Industrial Production
China nailed it!
By some accounts, these data are better indicators than the hard numbers that come out of the government. After all, they are released very early, they are raw unfiltered data (other than seasonal adjustment), they are never revised and they are simple to interpret. We disagree. In our view, they are useful as a rough and ready early read on the economy. However, once the corresponding official data are released, we put very little weight on these surveys.
...
It is important to understand how crude these surveys are. Each month, a few hundred purchasing managers are asked if a variety of activity variables are up, down, or the same relative to the prior month. Their responses are then converted into diffusion indexes: the sum of the number managers reporting activity is “increasing” and half of those reporting “the same.” Note that there is some guesswork involved: the survey is taken before the month is over and some of the questions cover areas of the firm that are difficult for a purchasing manager to get a timely read on. For example, a purchasing manager may not have a very precise idea of what is happening to hiring in a large, diverse firm. Moreover, since they don’t gather specific numbers for each series, they may have to make a rough guess, particularly if the trend is slightly up or down.
Fans of the two indexes point out that they are relatively stable, easy to interpret and never revised. However, in our view, the simplicity of the data is a drawback, not an advantage. It means no attempt is made to correct misreporting or to include late respondents. Moreover, the sample they use is not representative of the overall economy. They represent a broad cross-section of industries, but they oversample big firms and they make no attempt to adjust for the birth and death of firms.
* * *
Of course - what really matters is the narrative is alive... (from HSBC/Markit)
"The HSBC China Manufacturing PMI improved to 50.4 in the flash reading for October, up from 50.2 in the final reading for September. Domestic as well as external demand showed some signs of slowing although both remained in expansion territory. Disinflationary pressures intensified, as both the input and output price indices declined further. Meanwhile both employment and inventory indices improved. While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand. This warrants further policy easing and we expect more easing measures on both the monetary as well as fiscal fronts in the months ahead."

(Pimco) Ready, Steady, Stress! Capital Structure Investing in a Changing Eurozon

Ready, Steady, Stress! Capital Structure Investing in a Changing Eurozone Banking Landscap
  • We have a high conviction that over half of the 130 banks under review – including all large systemic national champions – will pass the ECB’s stress test.
  • Nervousness about the asset quality review and stress test has not played a major role in the recent selloff of risk asset classes, rather it was driven by broader risk-off sentiment.
  • Subordination premia remain historically high and valuations across the capital structure are heavily dislocated, offering exciting relative value and capital structure arbitrage opportunities.

(ManagerMagazin) Tchibo Holding Maxingvest is recruiting (Google Translate)

Tchibo Holding Maxingvest is recruiting

The Maxingvest Holding is planning a staff restructuring. A new manager should reinforce the holding company of coffee and grocery retailer Tchibo and Beiersdorf Nivea manufacturer in leadership.

Hamburg - corporate circles confirmed the manager magazin (release date: October 24) that the Hamburger Maxingvest look around for a new manager. This is to assist the owner and Managing Director Michael Herz (71) more in future.

The aim of the proposed personnel action is to create a broader human resource base for the future of Maxingvest. Both the Executive Board, consisting of the heart and the Chief Financial Officer Thomas Wood Greve (57), and the Supervisory Board are medium in front of a generational change.

Changes are also on the board of Dax Group Beiersdorf. Co-owner Michael Herz achieved in the coming year, the age limit of 72 years. Therefore, he should resign in 2016 on the advisory board.

The two Maxingvest investments Beiersdorf and Tchibo developed last quite different. During the Nivea maker 2013 sales and profits increased significantly, Tchibo has led to losses. In the first half of 2014, the weakness of the coffee roaster continued.

Some executives have left recently, including the sales manager Dirk Engehausen (49) Tchibo. For him Maxingvest currently looking for a successor. This search has currently a top priority, it says from the Tchibo environment.