Amazon flies higher after earnings. Amazon (AMZN) shares surged 9.2% premarket after its Q4 operating profit beat expectations and despite net profit plunging, and EPS and revenues missing consensus. Operating income jumped 56% to $405M as gross margins widened to 24.1% from 20.7%, helped by the growth of 3P, Amazon’s online marketplace for third-party merchants. However, Amazon’s continued prodigious spending ensured that operating profit margins remained tiny, while net profit fell 45% to $97M and EPS was $0.21. Still revenue did grow 27% to $21.27B.
Kinder Morgan to acquire Copano for $3.22B. Kinder Morgan (KMP) has agreed to buy Copano Energy (CPNO) for $3.22B in stock, or $5B including debt, with Kinder’s offer of $40.91 a share representing a 23.5% premium to Copano’s close yesterday. The deal will provide Kinder with natural-gas assets in Texas, Oklahoma and Wyoming, adding 6,900 miles of pipelines to the company’s 46,000 existing miles.
McClendon to retire as Chesapeake CEO. Chesapeake Energy (CHK) CEO Aubrey McClendon will retire as CEO effective April 1. McClendon’s departure follows a turbulent year in which he and the company have been dragged through the mud over various dealings, and in which the firm has been selling assets to fill a funding gap. An inquiry by Chesapeake’s board has thus far found that McClendon has not carried out any improper conduct; a final report will be completed in mid-February.
Top Stock News
Thermo Fisher eyes $10.7B Life Technologies. Thermo Fisher Scientific (TMO), the world’s largest maker of laboratory equipment and scientific instruments, is reportedly considering making an offer to acquire Life Technologies (LIFE), which has been exploring a possible sale and has a market cap of $10.7B. Other companies interested in the biomedical laboratory equipment company include KKR (KKR), Blackstone (BX), Bain and TPG.
Analysts hope for further growth in Facebook’s mobile revenues. Facebook (FB) is due to release its Q4 results after the bell, when it is expected to report EPS of $0.15 as revenue increased to $1.51B from $1.13B last year. Analysts are particularly looking out for growth in Facebook’s mobile revenues, which provided a pleasant surprise in the company’s Q3 disclosure and have helped the shares recover from its post-IPO slump.
Michael Dell seeks majority control in buyout. Michael Dell is reportedly looking to gain majority control of Dell (DELL) by adding $500M-$1B of his own money to his $3.6B, 15.7% stake in the efforts to take the company private. Such a combination would mean that Dell would contribute over half of the $8-9B equity payment in the deal, with more money coming from Silver Lake and possibly Microsoft (MSFT). DELL has so far received no other bids, while it’s also considering paying a special dividend.
JPM’s investment bank bet against CIO. JPMorgan’s (JPM) investment bank reportedly took relatively small but opposite positions to its CIO in the latter’s $6.2B trading fiasco. JPM managers spoke about combining the two positions to help offset the losses prior to the CIO trades becoming public. "London Whale" Bruno Iksil and former boss Javier Martin-Artajo complained internally about the investment bank in the spring of 2012 and accused it of intentionally trying to move the market against the CIO’s positions.
Samsung wins latest round in Apple IP war. Samsung (SSNLF.PK) has gained a victory of sorts in the latest battle in its global IP fight with Apple (AAPL) after Judge Lucy Koh ruled that the Korean company didn’t willfully breach some Apple patents. Koh therefore left last summer’s $1.05B jury verdict intact, although she could have tripled the amount had she found otherwise. Koh also denied Apple and Samsung requests for a new trial.
Top Economic & Other News
GDP forecast to slow sharply. GDP data for Q4 is due out this morning, with economists estimating that growth slowed from 3.1% on year in Q3 to 1.1%, which would be the weakest in almost two years. The softening is attributed to falling inventories and declining exports. The data will come ahead of a FOMC policy announcement later, when the Fed is expected to maintain its asset buying at $85B a month and keep its commitment to hold interest rates close to zero until unemployment drops to 6.5%.
Euro hits 13-month high. The euro has risen above $1.35 for the first time in 13 months and was +0.5% at $1.3556 premarket. The recent spike in the currency has been helped by confidence that the eurozone crisis just may be over, monetary easing in other parts of the world, and the repayment by banks of cheap ECB loans. However, there has been concern about the euro’s rise. "The danger is European policy makers allow a spike (in euro and market rates)…With the Fed and the Bank of Japan still easing, the euro is clearly the path of least resistance."
Spain’s recession deepens. Spanish preliminary Q4 GDP fell a greater-than-expected 0.7% on quarter, signalling that the country’s recession is deepening after the economy shrank 0.3% in Q3. As the impact of more severe austerity took effect, GDP contracted 1.37% for the whole of 2012. In particular, a rise in VAT in September helped further undermine consumer spending. Spanish shares were -0.2% at midday in Europe.
In Asia, Japan +2.3% to 11114. Hong Kong +0.7% to 23822. China +1% to 2382. India flat at 20005.
In Europe, at midday, London flat. Paris -0.1%. Frankfurt -0.1%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq +0.1%. Crude +0.4% to $97.92. Gold +0.2% to $1666.
Today’s economic calendar:
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 GDP Q4
10:30 EIA Petroleum Inventories
1:00 PM Results of $29B, 3-Year Note Auction
2:15 PM FOMC Announcement
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