Alcatel-Lucent CEO to leave as firm posts another loss. Alcatel-Lucent (ALU) CEO Ben Verwaayen is to step down after 4 1/2 years in the job, during which he’s been unable to turn the company around, with the stock price falling 70% during his tenure. The announcement came as Alcatel-Lucent disclosed that it made a Q4 net loss of €1.37B, due to a €1.41B charge "related to the depreciation of goodwill and fixed assets," while revenue slipped 1.3% to €4.1B. Shares surged 7.6% premarket.
Labor cost inflation estimated to be 2.1% higher YOY: National Bank Financial. Find out what happened last time to the price of gold, under similar conditions. — Read more here >>
AMR and US Airways close to landing merger agreement. US Airways (LCC) and AMR (AAMRQ.PK) are reportedly just a few key details away from inking a merger deal, which would be an all-stock transaction whereby AMR’s creditors would receive 72% of the combined entity and US Air shareholders the rest. AMR’s major creditors are on board, making the merger highly likely.
Green Mountain shares slide despite earnings beat. Green Mountain’s FQ1 earnings handily topped Street forecasts as EPS came in at $0.76 and revenue climbed 16% to $1.34B, while net profit rose 3% to $107.6M. Sales of the firm’s Keurig brewers increased 18% to 4.95M. However, shares slid 5.9% premarket, possibly because analysts expected a stronger beat and because Green Mountain provided sales guidance that was below their forecasts, although the company’s EPS outlook was above their predictions.
Top Stock News
Boeing working on temporary design changes to battery. Boeing (BA) is reportedly proposing interim design changes to the lithium-ion batteries used in the 787 in order to minimize the fire risks and allow the Dreamliner to start flying again with passengers. If approved, Boeing hopes to send the new batteries to airlines by the end of the month. Meanwhile, the FAA has authorized one 787 flight with a crew so that they can study possible changes to the plane’s electrical systems.
Sony makes surprise net loss. Sony’s (SNE) FQ3 net loss narrowed to ¥10.8B ($115M) from ¥159B a year earlier, although analysts were expecting the company to swing to a profit of ¥21B. Overall revenue climbed 6.9% to ¥1.95T. TV sales continued to slump even though the yen has weakened sharply, with the home-entertainment division, as well as Sony’s mobile operations, making losses. Notwithstanding, Sony reiterated its FY guidance for net income of ¥20B, which would be its first profitable year in five.
LinkedIn’s revenues seen surging. LinkedIn’s (LNKD) Q4 earnings are due out after the bell, with analysts expecting that EPS climbed to $0.19 from $0.12 a year earlier and revenue 66.6% to $279.5M as the firm’s hiring-services business continued to grow. "We believe the company’s focused and calculated approach to expanding the recruiting and marketing product portfolio is laying a great foundation for highly leverageable growth," says Piper Jaffray’s Gene Munster.
Herbalife keeps fighting pyramid claims. Herbalife (HLF) yesterday disclosed information about how much its distributors earn as part of its attempts to counter persistent accusations that, in the words of Bill Ackman, it’s just a "well-managed pyramid scheme." Just under 90% of distributors received no payments last year, while compensation for those who did ranged from $104 to $724,030, depending on their levels.
Bunge CEO to step down. Bunge (BG) CEO Alberto Weisser will retire on June 1 and will be replaced by Soren Schroder, the head of Bunge North America. Since its 2001 listing, the agribusiness and food company’s shares have gained almost 500%, with the stock +37% on year. Bunge announced Weisser’s departure along with Q4 earnings – EPS from continuing operations fell to $0.57 from $1.80, although revenues rose to $17.04B from $15.69B.
Peugeot workers go on strike at French plant. Production at a Peugeot (PEUGF.PK) plant in France is at a standstill as workers strike and try to intimidate those crossing the picket lines. Amid all the tension with job cuts looming, worker absenteeism has doubled, causing slower manufacturing.
Yahoo forges display ad deal with Google. Yahoo (YHOO) has cut a non-exclusive display ad deal with Google (GOOG) in which targeted AdSense Web ads and AdMob mobile promotions will be shown on Yahoo’s properties. The deal is a major feather in Google’s cap – its display ad ops have been growing quickly but face tough competition from Facebook (FB) and others – and should strengthen its mobile ad leadership. Yahoo search partner Microsoft (MSFT) can’t be pleased.
Top Economic & Other News
Abe might have to settle for less radical BOJ governor. Shinzo Abe’s desire to appoint a Bank of Japan governor who will boldly go where no BOJ governor has gone before is hitting opposition in his own cabinet and among financial bureaucrats, who fear that radical new policies could spark a dangerous rise in bond yields. It may mean that the Japanese PM might have to settle on a compromise candidate, especially as he’ll need opposition support in parliament.
BOE leaves policy unchanged. The Bank of England has again left its monetary policy unchanged, with its benchmark rate staying at 0.5% and its QE program dormant. Next up very soon is the ECB. Meanwhile, future BOE Governor Mark Carney has been testifying before the U.K. parliament. "The bar for (policy) alteration is very high," he said, suggesting that the policy doves’ dream of GDP targeting isn’t such a sure thing.
Ireland’s hopes rise for debt refinancing. A reluctant ECB is close to agreeing a refinancing of Ireland’s debt after the country’s parliament authorized emergency legislation to dissolve the former Anglo Irish and Irish Nationwide banks, now merged into IBRC, and sell their remaining assets of up to €14B to a bad bank. Dublin wants to lengthen the payment schedule of a €31B promissory note that helped support the failed banks.
India cuts outlook again. India’s growth will decelerate this FY to 5% from 6.2% last year, the statistics ministry has said in a forecast that is lower than a recent finance ministry outlook of +5.8%. The slowdown is due to continued weakness in manufacturing and farm output, with the economy being hampered by a lack of reform, wide fiscal and current account deficits, and high inflation.
In Asia, Japan -0.9% to 11357. Hong Kong -0.3% to 23177. China -0.7% to 2419. India -0.3% to 19580.
In Europe, at midday, London -0.3%. Paris +0.1%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +0.3% to $96.90. Gold -0.15% to $1676.30.
Today’s economic calendar:
Chain Store Sales
8:30 Initial Jobless Claims
8:30 Productivity and Costs
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
3:00 PM Consumer Credit
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today’s open: AAP, ALU, BG, CCE, CI, CS, CTSH, EXC, FLIR, FLO, GPK, HLSS, HOT, INGR, KKR, MFC, MPW, MWW, NBL, NNN, NYT, ONNN, OZM, PM, PMT, PTEN, S, SBH, SIAL, SNE, SNI, SPH, SQNS, TDC, TEVA, XYL
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