Wall Street Brief: Starbucks INNOVATIVE Deal, Home Depot GUIDANCE
Chesapeake Energy (NYSE:CHK) is conducting advanced talks with Global Infrastructure to sell its 45.2 percent limited partnership interest in Chesapeake Midstream (NYSE:CHKM) and other pipeline assets for over $4 billion. The deal comes from Chesapeake’s strategy to sell assets as it deals with a cash-flow shortfall. Alembic analyst James Sullivan thinks this may hit $22 billion by the end of 2013.
On Tuesday, a U.S. federal judge ruled that Barclays (NYSE:BCS) is entitled to recover around $1.5 billion in disputed assets from Lehman’s bankruptcy. This represents a partially reversed decision from February 2011.
Coinstar (NASDAQ:CSTR) has a deal with Starbucks (NASDAQ:SBUX) to introduce thousands of Rubi coffee kiosks that include Seattle’s Best Coffee drinks in grocery stores, drugstores and mass merchants. From the agreement, it will add another distribution channel for Seattle’s Best Coffee. Coinstar is expected to begin the roll out in the summer.
Ancestry.com (NASDAQ:ACOM) jumped 24 percent in premarket trading after a Bloomberg story reported that it is mulling a sale and has asked for help from infamous technology banker Frank Quattrone to find buyers. A source is confident that private equity firms will be interested in Ancestry even though its valuation has dropped to historically low levels from worries on slowing subscriber growth.
Home Depot (NYSE:HD) affirmed its 2012 sales and earnings per share guidance and set new targets for fiscal year 2015 with an operating margin of 12 percent and return on invested capital at 24 percent. On Wednesday, the company will host an investor conference beginning at 9:00 AM ET.
A.M Buzzers: Facebook’s Drop and Pop, Tempur-Pedic Tumbles 46%
Shares of Facebook (NASDAQ:FB) hit a new all-time low of $25.52 this morning then popped 4.3% in 25 minutes morning trading. JMP Securities initiated coverage on the social-media company with a Market Outperform rating.
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Chesapeake Energy Corp. (NYSE:CHK) shares jumped 6.65 percent in early trading. The natural gas giant is reportedly in talks to sell pipelines for $4 billion to Global Infrastructure Partners. Chesapeake is also in talks to sell its complete stake in Chesapeake Midstream Partners LP for $10 billion.
FuelCell Energy Inc. (NASDAQ:FCEL) shares dropped more than 17 percent this morning. The company reported a second-quarter loss of $8.3 million. Revenue also declined 15.4 percent to $24.2 million from a year earlier. “Cost reduction efforts and streamlining certain aspects of our business over the past year allowed us to break-even at the gross profit level this quarter despite lower revenue year-over-year, with a gross margin improvement of $2.3 million on an adjusted basis,” said Chip Bottone, President and CEO, FuelCell Energy, Inc.
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Home builders received a lift this morning. Shares of PulteGroup Inc. (NYSE:PHM) gained 6.99 percent, while Lennar Corp. (NYSE:LEN) increased 3.05 percent. Credit Suisse raised its rating on Pulte from Neutral to Outperform.
Tempur-Pedic International Inc. (NYSE:TPX) shares crashed over 46 percent in Wednesday’s morning action. The premium mattress manufacturer cut full-year guidance and reduced its revenue projections for the quarter. The company expects second-quarter revenue to decline 3 to 5 percent, compared to a year earlier. Earnings for the full year is expected to come in at $2.70 per share, more than 30 percent below guidance issued earlier this year. Mattress Firm Holding Corp. (NASDAQ:MFRM) shares also declined 20 percent after reporting disappointing revenue late Tuesday.
Investor Insight: The WAR on Junk Food Stocks Heats Up.
Hovnanian Enterprises ROCKETS 16%, Ulta SPIKES 9.5% on This Good News
Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) CEO Chuck Rubin credits increased online sales and new products as the source of increased revenue. After it beat estimates for Q1 earnings, the company’s stocks are trading higher on strong volume. Shares of Ulta Salon, Cosmetics & Fragrance, Inc. are trading 9.5% higher today.
Earnings Report: ULTA Earnings: Double-Digit Profit and Revenue Growth.
Hovnanian Enterprises, Inc. (NYSE:HOV): In April 2012, the company sold more homes than it has since spring 2006, excluding September 2007’s special promotion. According to Hovnanian CEO Ara Hovnanian, the company has made wide-based improvements over geography, price points, and buyer profiles. Shares of Hovnanian Enterprises, Inc. are trading 16.4% higher today.
Tempur-Pedic Takes a Dirt Nap Down 48%, Lee Enterprises JUMPS 19%
Lee Enterprises, Incorporated (NYSE:LEE): Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) has revealed a new staking in the 166M share firm. Shares of Lee Enterprises, Incorporated are trading 19.3% higher today.
Tempur-Pedic International Inc. (NYSE:TPX): Following the announcement of a sharply reduced annual EPS guidance earlier, Tempur-Pedic falls. The company states that Q2’s North American sales did not reach expectations. Now the mattress makers believes its sales will fall 8% compared with the same period the year before. Shares of Tempur-Pedic International Inc. are trading 48% lower today.
BofA POPS 6% and 4 Hot Stocks Rocking Now
Bank of America (NYSE:BAC): According to the analysis by Financial Times of trends at 13 large international banks, banks have been paying more staff costs relative to profit but cut the portion of income paid out in dividends since the financial crisis.
Apple Inc. (NASDAQ:AAPL): Reuters reports, Apple plans to open flagship stores in Chengdu and Shenzhen, China, while the company contests a Chinese company over the iPad’s trademark. Currently, Apple has five stores in China, three in Shanghai and two in Beijing.
Facebook, Inc. (NASDAQ:FB): The Wall Street Journal reports that today, Nasdaq OMX (NASDAQ:NDAQ) will explain the manner in which it will compensate financial firms for losses over $100M as a result of the technical issues that effected Facebook’s trading debut. Though brokers and market-makers are underwhelmed, the exchange has currently allocated $13.7M and could offer a dicount on trading fees.
AT&T, Inc. (NYSE:T): Jefferies believes that the iTV is in labs at AT&T (NYSE:T) and Verizon (NYSE:VZ), most likely using U-Verse and FiOS TV. Jefferies maintains its Buy rating on shares of Apple with an $800 price target.
Nokia Corporation (NYSE:NOK): According to Reuters, Nokia (NYSE:NOK) has revealed its first three basic phone models equipped with large touch screens as an attempt to meet consumer demand. Though the Asha 306 and Asha 311 models will not be available until next quarter, the Asha 305 will be available this month for $78.52, not including subsidies and taxes.
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