Wall Street Breakfast: Must-Know News

• Freddie mulls $10B share sale. Sources say Freddie Mac (FRE) may try to raise as much as $10B through a share sale - a move that would likely help it avoid a government bailout. Shares surged more than 29% on Wednesday after the SEC put limits in place on shorting its shares; they added another 22% Thursday - all of which means a share sale could actually be worth something, even though prices are still 76% lower YTD. The main buyers would likely be existing shareholders.
• Teva buys Barr. Teva (TEVA) is acquiring Barr Pharma (BRL) for $66.50/share ($7.46B) in cash and stock - a 42% premium to its Wednesday close. Teva also assumes $1.5B in debt. Teva says Barr's product offerings are 'highly complementary' to its own.
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• Zentiva resists Sanofi. Czech drug maker Zentiva rejected a $2.7B offer from French sanofi-aventis (SNY), which already owns 25% of the firm. Zentiva says the offer fails to reflect the value of its future prospects.
• BP buys U.S. stake from Chesapeake. BP (BP) is betting $1.75B on a natural gas field in Oklahoma, buying out Chesapeake Energy (CHK) stake. For years oil majors have essentially ignored U.S.-based assets in favor of offshore and overseas ventures. They appear to be returning to the States amid declining production and shrinking reserves. Separately, TNK-BP chief Robert Dudley was given a 10-day visa by Russian authorities. Presumedly he will use the time to try and reduce friction between BP and the JV's Russian stakeholders.
• Republic likes Allied's bid better than WMI's. Republic Services (RSG) concludes Waste Management's (WMI) July 14 bid is not superior to the merger it's currently working on with Allied Waste (AW) - and it therefore has no intent of entering negotiations with WMI.
• SIV auction bodes ill for SIV investors. A $7B auction of Cheyene's SIV portfolio drew bids of just $0.44 on the dollar - giving investors a gloomy guide to the amount of cash they can expect to recover from structured investment vehicles - which were at the very heart of the credit crunch.
• And you thought driving was expensive. Utilities analysts estimate it will cost families 30-50% more to heat their homes with natural gas this winter, while families who use heating oil could face increases of 50-100%. One official says it could cost families $1,600-1,700 a month to cover heating oil, electricity and gasoline costs this winter. Natural gas storage levels remain 2% below their five-year average, despite increase drilling, partially due to a fall in imports and Eurasia buyers outbid their U.S. counterparts.
• Oil prices pinch Sinopec. Sinopec (SNP) warns it sees profits falling by 50% from a year ago, despite pumping 2.4% more oil and refining 6.7% more crude, as high oil prices squeeze its margins.
• C'mon guys - vote for us! Yahoo (YHOO) sent another letter to its shareholders Thursday. Yahoo says the Icahn-Microsoft (MSFT) 'odd couple' will destroy shareholder value. It tells investors to be wary of confuse "a modestly improved offer with a good offer."
• June Housing Starts of 1.07M were way ahead of the 0.96M consensus. New permits of 1.09M also exceeded expectations of 0.96M.
• Initial Claims of 366K were less than the 380K consensus. The four-week moving average falls by 4.5K to 381K. Despite the stronger-than-expected housing starts, single-family starts - the key number - hit their lowest level since 1991. Most of the 9.1% gain was due to a change in NYC building codes, net of which starts would have dropped 4%.
• Philly Fed Business Outlook -16.3 vs. -15 consensus, up from -17.1 last month. Manufacturing has now been negative for eight consecutive months.

Earnings: Thursday After Close

• Advanced Micro Devices (AMD): Q2 EPS of -$0.60 misses by $0.08. Revenue of $1.35B vs. $1.45B. Shares -7.4%. [PR]
• BancorpSouth (BXS): Q2 EPS of $0.06 misses by $0.01. Shares +9.3%. [PR]
• Brightpoint (CELL): Sees Q2 revenue of $1.2B vs. $1.25B. Shares -3.5%. [PR]
• Brown & Brown (BRO): Q2 EPS of $0.33 beats by $0.01. Revenue of $242M (-2%) vs. $248M. "The good news is we think 2009 should be better." Shares +0.5%. [PR]
• Callaway Golf (ELY): Sees Q2 EPS of $0.56-0.58 vs. $0.62 consensus, and revenue of $366M vs. $375M. Strong international sales are helping offset weak U.S. growth. [PR]
• Capital One (COF): Q2 EPS of $1.24 misses by $0.07. Revenue of $3.35B (-4.6%) vs. $4.37B. Shares -4.5%. [PR]
• Citizens Republic Bancorp (CRBC): Q2 EPS of -$2.53 misses by $0.22. "We expect to return to profitability for the third and fourth quarters of 2008, assuming our provision for loan losses stabilizes as we expect." [PR]
• Evergreen Solar (ESLR): Q2 EPS of -$0.08 beats by $0.02. Revenue of $22.8M vs. $22.1M. Sees Q3 EPS of -$0.10 vs. -$0.08. Shares -12.7%. [PR]
• Gilead Sciences (GILD): Q2 EPS of $0.49 beats by $0.01. Revenue of $1.28B (+21.9%) in-line. Shares -4%. [PR]
• Google (GOOG): Q2 EPS of $4.63 misses by $0.11. Revenue of $3.9B (+43.2%) in-line. Paid clicks up 19% Y/Y vs. 20% in Q1. Shares -8% to $491. [PR]
• IBM (IBM): Q2 EPS of $1.98 beats by $0.16. Revenue of $26.8B vs. $25.92B. Shares -0.3%. [PR]
• Informatica (INFA): Q2 EPS of $0.17 beats by $0.01. Revenue of $113.8M vs. $109.9M. [PR]
• Leggett & Platt (LEG): Q2 EPS of $0.25 misses by $0.02. Revenue of $1.06B (-0.7%) in-line. Sees full-year EPS of $1-1.30 vs. $1.09 consensus. [PR]
• Merrill Lynch (MER): Q2 EPS of -$4.95 misses by $3.04. Net losses on CDOs of $3.5B and hedging losses of $2.9B. Estimated book value per share falls to $21.43 from $25.93 in Q1. Shares -6.8%. [PR]
• Microsoft (MSFT): Q2 EPS of $0.46 misses by $0.01. Revenue of $15.84B vs. $15.65B. Shares -5.85%. [PR]
• People's United Financial (PBCT): Q2 EPS of $0.13 misses by $0.01. "We take great comfort in our fortress balance sheet." [PR]
• PMC-Sierra (PMCS): Q2 EPS of $0.13 beats by $0.01. Revenue of $140M (+33.5%) vs. $137M. SHares -1.9%. [PR]
• Skyworks Solutions (SWKS): FQ3 EPS of $0.18 beats by $0.01. Revenue of $215M (+22.9%) vs. $211M. Shares +4.15%. [PR]
• Stryker (SYK): Q2 EPS of $0.73 in-line. Revenue of $1.71B (+17%) in-line. Sees full-year EPS of $2.88 in-line. Shares -2.1%. [PR]
• Tempur-Pedic (TPX): Q2 EPS of $0.27 beats by $0.04. Revenue of $239M vs. $232M. Shares +4.9%. [PR]
• Watts Water Technologies (WTS): Sees Q2 EPS of $0.52-0.54 vs. $0.41 consensus, and revenue of $389M (+11%) vs. $344M. Shares +8.8%. [PR]
• Werner (WERN): Q2 EPS of $0.25 beats by $0.05. Revenue of $578M vs. $548M. Shares +4%. [PR]
• Zions Bancorp (ZION): Q2 EPS of $0.65 misses by $0.09. Shares -4.6%. [PR]

Earnings: Friday Before Open

• Citigroup (C): Q2 EPS of -$0.49 beats by $0.17. Revenue of $18.65B (-29.2%) vs. $17.55B. $7.2B writedown in securities and banking, and a $4.5B increase in credit costs. Shares -2.1%. [PR]
• Flagstar Bancorp (FBC): Q2 EPS of $0.22 beats by $0.24. Revenue of $162M vs. $125M. [PR]
• Great Atlantic & Pacific Tea Company (GAP): FQ1 EPS of -$0.48 misses by $0.07. Revenue of $2.92B (+74.1%) in-line. [PR]
• Honeywell (HON): Q2 EPS of $0.96 beats by $0.02. Revenue of $9.67B vs. $9.22B. Sees full-year EPS of $3.75-3.85, up from $3.70-3.80 vs. $3.79 consensus, and revenue of $37.6-38.2B vs. $37.2B. [PR]
• Manpower (MAN): Q2 EPS of $1.52 beats by $0.02. Revenue of $5.9B (+17.3%) in-line. Sees Q3 EPS of $1.45-1.49, short of $1.58 consensus. [PR]
• Mattel (MAT): Q2 EPS of $0.03 beats by $0.01. Revenue of $1.11B (+11%) vs. $1.04B. [PR]
• Schlumberger (SLB): Q2 EPS of $1.16 beats by $0.04. Revenue of $6.75B (+19.6%) vs. $6.48B. [PR]
• Wipro (WIT): FQ1 EPS of $0.13 misses by $0.01. Revenue of $1.39B (+34.7%) in-line. [PR]

Today's Markets

• Asia markets were mainly higher Friday: Nikkei -0.65% to 12,804. Hang Seng +0.64% to 21,874. Shanghai +3.49% to 2,778. BSE +3.99% to 13,635.
• In Europe, markets look strong at midday. London +1.08%. Paris +0.71%. Frankfurt +1.58%.
• Futures are inching up in pre-market trading. Dow +0.31%. S&P +0.4%. Nasdaq +0.03%. Crude +1.14% to $130.75. Gold -1.3% to $957.70.

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Comments

[empiricst1]

Great material

[RightinSanFrancisco]

The earnings briefs are interesting. It would save us all a scratch pad if you ended each such listing with a summary (day and quarter to date) of beat / match / miss. Thanks, though, for this most interesting listing.