Ultimate Market Recap: iPhone 5 Rumors, Shutterfly Out of Focus
Wall Street Brief: Instagram Slams Shutterfly, Sony’s Big Loss
On Monday, Facebook (FB) announced that it is purchasing Instagram for $1 billion in cash and stock. The news came via Mark Zuckerberg’s Facebook page. Here’s the incredible news Instagram Series B Investors Doubled Money in 1 Business Day >>
Upon hearing the news, Shutterfly (NASDAQ:SFLY) fell 4.3 %, then an additional 3.5% in after hours trading on the potential for the Facebook-Instagram marriage to pose a big threat to Facebook’s fortunes as opposed to a single Instagram.
In March, China saw a surprising trade surplus of $5.35 billion vs. an anticipated $3.15 billion deficit. Imports rose 5.3% vs. +9% expectations while exports jumped a surprising +8.9%.
Sony’s (NYSE:SNE) annual loss came in more than double from initial projections. It will now reach YEN 520 billion ($6.4 billion), up from February’s YEN 220 billion loss forecast; this comes from a YEN 300 billion fourth quarter charge on taxes. This bad news isn’t anything new; the loss is the fourth consecutive annual one for Sony as it battles a strong yen and tough competition.
After trashing Amylin’s (NASDAQ:AMLN) board last week for passing over a Bristol-Myers Squibb (NYSE:BMY) takeover offer, investor Carl Icahn stuck to his threat and plans to sue the drugmaker for not extending its deadline for the nomination of board members. But one suit doesn’t appear to be enough, according to The Wall Street Journal. He said on Monday he’ll file another suit if Amylin fails to respond to his demand by Wednesday for copies of its books and records.
6 Early Movers: Supervalu Jumps 15%, Apple Climbs Higher and Dell Teams Up With Lockheed Martin
Supervalu Inc. (NYSE:SVU) shares surged more than 15 percent in early trading. The company reported a fourth-quarter loss, but expects to earn $1.27-$1.42 for the full year.
Shares of Apple Inc. (NASDAQ:AAPL) edged higher before the opening bell to climb above $640. The move comes a day after BTIG’s Walter Piecyk cut his ratings for Apple from Buy to Neutral, citing changing dynamics in the wireless industry.
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Dell Inc. (NASDAQ:DELL) shares jumped almost 2 percent in pre-market trading. The company announced it is teaming up with Lockheed Martin (NYSE:LMT) in order to pursue a large U.S. government IT contract, worth $7.5 billion. Dell would provide computer and support services. Morgan Stanley (NYSE:MS) also upgraded Dell shares from Underweight to Equal Weight.
H&R Block Inc. (NYSE:HRB) shares increased .80 percent in early morning trading. Compass Point upgraded shares to Buy and raised its price target to $20. Currently, shares are trading just under $17.
Shares of American International Group Inc. (NYSE:AIG) gained 2 percent before the opening bell. The company received an upgrade from Market Perform to Outperform by Wells Fargo (NYSE:WFC). The bank also raised its price target on shares from $27-$30 to $40-$45.
Investor Insight: Facebook to Acquire Instagram for $1 Billion
Apple Inc, BofA, IBM, Groupon Attract Traders in Tuesday Market Action
Bank of America Corporation (NYSE:BAC): The Consumer Financial Protection Bureau is set to announce today that it will consider several new rules designed to increase transparency and accountability among mortgage servicers, The Washington Post reported yesterday. Under the rules, mortgage servicers would have to, among other things, provide options for delinquent borrowers to avoid foreclosure and improve staff accessibility to consumers, the newspaper explained. Shares of Bank of America Corporation are trading 0.84% higher today.
Apple Inc. (NASDAQ:AAPL): Rumors are swirling that Apple’s (NASDAQ:AAPL) rumored iPhone 5 could have more memory, a bigger screen, new chassis and a modified Apple chip, CNet reports. Also, Apple Inc. hit a $600 billion market cap today. Shares of Apple Inc are trading 0.59% higher today.
IBM (NYSE:IBM): The Governments of Canada and Ontario, with IBM and a consortium of seven universities led by the University of Toronto and Western University announced they are collaborating to establish a new Ontario-based $210M dollar research and development initiative that will create 145 new highly skilled jobs in Ontario and a new economic cornerstone for the country. IBM will invest up to $175M through December 2014 in the project, forming the “IBM Canada Research and Development Centre” to serve as a foundation for the research initiative. The Government of Ontario is investing $15M towards the creation of this Centre.
Groupon (NASDAQ:GRPN): Gaopeng, Groupon (NASDAQ:GRPN) and Tencent’s group buy joint venture, is rumored to be in merger talks with Chinese group buy site FTuan, according to Marbridge Consulting, citing a report in the Chinese language Beijing Morning Post.
Active Stocks April 10th: X-Rite, AOL, Viropharma, SUPERVALU, Sony
X-Rite, Incorporated (NASDAQ:XRIT): X-Rite, Incorporated announced that it has signed a definitive merger agreement with Danaher (NYSE:DHR) under which Danaher will acquire the company for $5.55 per share in cash, or a total of approximately $625M including the assumption of debt, net of cash. The transaction was unanimously approved by the X-Rite Board of Directors. The cash tender offer of $5.55 per share is expected to commence within 5 business days. This offer represents a premium of 39% over X-Rite’s closing share price of $4.00 on April 9, 2012, the last trading day prior to the announcement. Upon completion of the transaction, X-Rite, headquartered in Grand Rapids, Michigan, will operate as a stand-alone company within Danaher’s Product Identification group which is a part of their Industrial Technology Segment. The transaction is subject to regulatory approval and customary closing conditions. It is expected to close during Q2. Shares of X-Rite, Incorporated are trading 38.5% higher today.
AOL, Inc. (NYSE:AOL): Starboard Value, with current holder of approximately 5.3% of the outstanding shares of AOL (NYSE:AOL), announced that it has delivered a letter to the AOL Board to communicate its views on yesterday’s announcement involving the sale of more than 800 of the company’s patents and their related patent applications to Microsoft Corporation. Starboard also announced that it expects to promptly file preliminary proxy materials with the SEC for the election of directors to the AOL Board at the upcoming 2012 Annual Meeting. In the letter, Starboard said, “We were pleased to read yesterday’s announcement that AOL has entered into a definitive agreement to sell more than 800 of its patents and their related patent applications to Microsoft Corporation…We commend management and the Board for taking this meaningful first step in unlocking value for AOL shareholders. However, the announced sale of the patents does little to address our serious concerns with the Company’s poor operating performance and substantial losses in the Display business.” Shares of AOL, Inc. are trading 2.12% lower today.
Viropharma Inc (NASDAQ:VPHM): ViroPharma announced the FDA denied the citizen petition filed by ViroPharma on March 17, 2006 related to the FDA’s proposed in vitro method for determining bioequivalence of abbreviated new drug applications referencing Vancocin Capsules. In the FDA’s response to the citizen petition, the agency denied ViroPharma’s citizen petition and also informed the company that a final guidance for vancomycin bioequivalence consistent with the FDA’s citizen petition response is forthcoming. The FDA also informed ViroPharma in the same correspondence that the recent supplemental new drug application for Vancocin approved December 14, 2011 would not qualify for three additional years of exclusivity based on the agency’s assertion that in order for an sNDA for an old antibiotic such as Vancocin to be eligible for a grant of exclusivity, it must be a significant new use or indication. FDA also indicated that it is approving three ANDA’s for generic vancomycin capsules. Shares of Viropharma Inc are trading 20.31% lower today.
SUPERVALU INC. (NYSE:SVU): Sees FY13 revenue $35B-$35.5B, consensus $35.28B. Sees FY13 identical store sales growth, excluding fuel, negative 1% to negative 2%. Sees FY13 sales the independent business segment up modestly. Sees FY13 CapEx $675M; the Company expects to complete approximately 100 store remodels and increase Save-A-Lot’s store count by approximately 50 stores, including licensed locations. Shares of SUPERVALU INC. are trading 8.27% higher today.
Sony Corporation (NYSE:SNE): Sony has revised its consolidated results forecast for the FY ended March 31 from that announced on February 2. Sony expects to record an aggregate additional charge of approximately Y300B in tax expense in Q4, primarily due to the establishment of valuation allowances against certain deferred tax assets, predominantly in the U.S.This additional tax expense is a non-cash charge and does not have any impact on Sony’s consolidated operating income or cash flow. Due to the recording of this additional tax expense, net loss attributable to Sony’s stockholders is expected to be significantly greater than the February forecast. As of April 10, no revisions have been made to consolidated sales, operating income and net income before taxes in the forecast announced on February 2. Shares of Sony Corporation are trading 7.91% lower today.
Stocks Active on Wall Street: Alcoa, Molina Healthcare, Adept Tech April 10th
Alcoa Inc. (NYSE:AA): Analysts are looking for EPS of (4c) on revenue of $5.77B. The consensus range is (12c)-7c for EPS, and $5.6B-$5.95B for revenue, according to First Call. Alcoa posted mixed results in Q4, missing EPS but beating revenue estimates. Management said its growth projection was ahead of the 6.5% rate required to meet the company’s forecast of a doubling in global aluminum demand between 2010-2020. Despite the positive sentiment, they said some headwinds remained, especially in the Eurozone. On April 4, RBC Capital reduced its Q1 EPS estimate for Alcoa to below consensus, expecting increased energy costs and currency movements to weigh on the company’s results. The firm maintained an $11 target and Underperform rating on the stock. The shares have traded sideways since Q4 results were released, moving in a narrow range. Mixed Q4 earnings, higher commodity costs, and uncertainty in Europe have contributed to the stagnation. Shares of Alcoa Inc. are trading 1.35% lower today.
Molina Healthcare, Inc. (NYSE:MOH): Molina Healthcare disclosed on Friday that the Ohio Department of Jobs and Family Services, or ODJFS, notified Molina Healthcare of Ohio that it had not been selected to participate under the recently issued Ohio Medicaid Managed Care Plan Request for Applications, or RFA. As a result, Molina Healthcare said its existing contract with the state will expire without renewal on December 31, 2012. Molina added that it is evaluating the scoring of the RFA and whether to pursue its rights of appeal. The company is affirmed it’s previously issued guidance for FY12 earnings of $1.75 per diluted share, versus the consensus estimate of $1.77. Shares of Molina Healthcare, Inc. are trading 3.74% lower today.
Adept Technology, Inc. (NASDAQ:ADEP): Adept Technology announced that Bremer Werk für Montagesysteme GmbH will be utilizing Adept 6-axis Nrobot arms in a production line destined for a major German automotive supplier. The $1M order is expected to be fulfilled and recognized as revenue in the next quarter. The company selected Adept and BWM GmbH as its automation partners to provide advanced robotic systems to be integrated into their production process in order to gain productivity and ensure product quality. Shares of Adept Technology, Inc. are trading 4.3% higher today.
6 Late Radar Stocks: Alcoa Surprises to the Upside, While Best Buy Jumps
Shares of Alcoa Inc. (NYSE:AA) surged more than 5 percent in late trading. The alumina giant reported better-than-expected first-quarter earnings. The company reported adjusted net income of 10 cents per share. By that measure, the company beat the mean analyst estimate of a loss of 5 cents per share. It also beat the average revenue estimate of $5.77 billion.
Best Buy Co. (NYSE:BBY) shares jumped 1.3 percent after the closing bell. The WSJ reports that CEO Brian Dunn resigned on Tuesday due to ‘personal conduct’ issues. “Certain issues were brought to the board’s attention regarding Mr. Dunn’s personal conduct, unrelated to the company’s operations or financial controls, and an audit committee investigation was initiated,” the company said in a statement. “Prior to the completion of the investigation, Mr. Dunn chose to resign.”
Don’t Miss: Let’s Face It: Amazon Ate Best Buy’s Lunch
Hewlett-Packard Co. (NYSE:HPQ) shares edged .47 percent higher in extended trading. The company was the only blue-chip to close higher on Tuesday. Hewlett-Packard announced a new tool that will allow companies to access computing power over the internet as an alternative to buying expensive servers. The move takes direct aim at Amazon.com Inc. (NASDAQ:AMZN) in the cloud computing sector.
Despite closing 1.22 percent lower on Tuesday, shares of Apple Inc. (NASDAQ:AAPL) edged .45 percent higher in late trading. The tech giant reached a new high of $644 on Tuesday and also reached a market cap of $600 billion for the first time. It is only the second company to ever break the $600 billion market cap level after Microsoft (NASDAQ:MSFT) did so in December 1999.
Investor Insight: What’s the Future of Microsoft’s Stock?