Liberty in talks to buy Britain’s Virgin Media. U.K. cable TV operator Virgin Media (VMED), which has a market cap of £7.59B, has confirmed an FT report that it is in talks with John Malone’s Liberty Global (LBTYA) "concerning a possible transaction," although it didn’t provide many more details. The FT said Liberty Global could make an offer in the coming days; any deal would represent Liberty’s biggest foray into the U.K. Virgin was +13.8% premarket.
DOJ hits S&P with lawsuit over ratings. McGraw Hill (MHP) shares tumbled 14% yesterday on news that the Department of Justice was filing civil charges against the company and its S&P unit over mortgage-bond ratings from 2007. The government is seeking financial penalties in what is the first enforcement action against any of the ratings agencies for their roles in the financial crisis. Moody’s (MCO) shares also suffered yesterday, dropping 10.7%.
Yum profit falls as Chinese consumers say Yuk. Yum Brands’ (YUM) shares swooned 6.2% premarket after the restaurant operator yesterday warned that its 2013 earnings will fall instead of rise, as it predicted previously, due to a massive scandal in China over the safety of chickens used at KFC. Overall Q4 same-store sales in the country fell 6% and Yum reckons they’ll decline 25% in Q1. In the last quarter, EPS of $0.83 topped forecasts, net profit slipped 5.4% to $337M, and revenue edged up to $4.15B.
Top Stock News
Barclays provisions extra £1B for mis-selling products. Barclays (BCS) is provisioning another £1B in its Q4 results to settle claims it mis-sold financial products. The bank is setting aside £600M to cover payment protection insurance following more applications from consumers for compensation, bringing total provisions to £2.6B. Barclays is adding a further £400M to cover interest-rate hedging products for a total allocation of £850M.
BP profits hit by asset sales, oil-spill charges hit. BP’s (BP) Q4 earnings beat expectations, but its replacement cost profit slumped 72% to $2.14B. The fall was due to the company selling assets to pay for its Gulf oil spill liabilities, including divesting its 50% take in TNK-BP even though the deal hasn’t yet been completed, and a $4.1B charge for the spill costs. Earnings per ADS came in at $1.25 while revenues edged up 2.6% to $98.86B. Shares were +1.8% premarket.
Toyota ups FY outlook as Q3 profit rises 23%. The sharply weaker yen helped Toyota’s (TM) FQ3 net profit jump 23.4% to ¥99.9B ($1.08B) and sales rise 9.3% to ¥5.32T, although the profit figure missed forecasts. The company made an operating loss of ¥17.1B in North America after taking $1B in legal charges related to recalls, but sales of the Camry and other key brands were strong. Looking ahead, Toyota raised its FY net profit outlook by over 10% to ¥860B, and revenue guidance by 4.3% to ¥9.6T.
UBS posts $2.1B loss following massive Libor fine. UBS (UBS) swung to a Q4 net loss of 1.89B Swiss francs ($2.08B) from a net profit of 323M francs last year, although the figure wasn’t as bad as expected. Earnings were hurt by a $1.5B penalty for manipulating inter-bank interest rates and the costs of a restructuring plan in which it is shedding thousands of staff at its investment bank. Following the revamp, UBS is offering to repurchase 5B francs in senior debt.
Disney seen showing broad momentum. Disney’s (DIS) FQ1 earnings are due out after the bell, with analysts forecasting that while EPS slipped to $0.76 from $0.80, revenue increased 4% to $11.2B. Expectations are running high that all of Disney’s segments will show momentum. SA author Darren Hart reckons that while headline advertising revenue from ESPN could dominate the report, Disney’s investments in theme parks and resorts may start to drive up revenue in the segment and affect guidance.
Turbocharged engines not so turbocharged. Consumer Reports has blasted cars with turbocharged engines for not living up to expectations. Engineers found in detailed testing that the performance results from turbocharged four-cylinder vehicles underperformed on power and fuel economy. The development is important, with close to 3M vehicles with turbocharged engines slated to be sold from automakers this year at elevated prices, including models from General Motors (GM), Ford (F) and Hyundai.
Top Economic & Other News
Eurozone composite PMI improves as Germany and France diverge. Eurozone composite PMI rose to a 10-month high of 48.6 in January from 47.2 in December, with the services reading increasing to 48.6 from 47.8. While the "eurozone is showing clear signs of healing," says Markit, "growth is heavily skewed towards Germany." The contrast with France’s deepening contraction "is the greatest seen since the survey began in 1998."
BOJ governor offers to leave early. Bank of Japan Governor Masaaki Shirakawa has offered to step down three weeks early on March 19, when the BOJ’s two deputy governors are also due to leave. The yen fell vs the dollar following the news and was -1.2% early morning U.S. time, possibly on expectations that Shirakawa’s proposed early departure could accelerate the bank’s stimulus activities.
In Asia, Japan -1.9% to 11047. Hong Kong -2.3% to 23149. China +0.2% to 2433. India -0.5% to 19660.
In Europe, at midday, London +0.6%. Paris +1.1%. Frankfurt +0.2%.
Futures at 7:00: Dow +0.5%. S&P +0.5%. Nasdaq +0.4%. Crude +0.8% to $96.96. Gold +0.3% to $1681.10.
Today’s economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 ISM Non-Manufacturing Index
Notable earnings before today’s open: ACI, ACM, ADM, ADP, AGCO, AGN, ALLT, ARMH, ATK, BDX, BP, CAH, CHD, CSC, DLPH, DO, EL, EMR, ETN, K, MMP, NGPC, NRGY, NYX, OHI, SE, SEP, SIRI, TE, TM, UBS, UDR, VSH
Notable earnings after today’s close: AFL, BNNY, BV, CBL, CERN, CHRW, CME, CMG, DIS, ENTR, EQR, EXPE, FISV, GLUU, GNW, GTAT, HAIN, HRZN, INFN, JIVE, KFN, KIM, LNC, MWA, MYGN, NLY, NSR, PACB, PNRA, SFLY, SIMG, SU, THOR, TRMB, TTWO, UNM, USNA, ZNGA
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