Wall St. Brief: JPMorgan’s Earnings Trick, RIM Slashes and Burns
JPMorgan (NYSE:JPM) unloaded $25 billion of profitable securities to increase its second quarter earnings after the huge losses from its Chief Investment Office. CEO Jamie Dimon said earlier in the month that the bank sold corporate bonds and other securities, seeing $1 billion in profits that will help counterbalance the $2 billion-plus in losses. From this, JPMorgan won’t have to report as large of an earnings hit for its second quarter, according to Reuters.
From its restructuring, Research In Motion (NASDAQ:RIMM) will have corporate-wide layoffs that could affect at least 2,000 employees, reported The Globe & Mail reports. With its 16,500 employees, down from its height of 20,000, the company will announce its plans around June 1 but it has already been conducting some layoffs. The cuts could hit 6,000, according to Reuters.
Panasonic (NYSE:PC) is also mulling layoffs and considering a restructuring of its operations. The Tokyo marketplace took the news well and shares jumped 3.9 percent. In the last fiscal year, the company cut 36,000 jobs.
In April, Citigroup (NYSE:C) got rid of its panel responsible for overseeing the disposal of toxic and unwanted assets confirmed a corporate spokesman. At the time, around $200 billion of these assets were still in Citi Holdings, a decline from $600 billion when the unit had been created after the bank almost collapsed in 2008.
Federal investigators are reviewing if BP (NYSE:BP) representatives lied to Congress when they gave oil estimates of leaking after the Deepwater Horizon disaster and whether or not engineers attempted to withhold data, reported Reuters. The investigations could lead to more criminal charges.
Sirius XM and 4 Stocks Sizzling Higher After Memorial Day
Sirius XM (NASDAQ:SIRI): More than 1,200 Ford L (NYSE:F) and Lincoln dealerships nationwide will supply buyers of pre-owned vehicles that include a factory-installed satellite radio with a three-month SiriusXM subscription.
Toyota Motor Corporation (NYSE:TM), along with Nissan (NSANY) and Honda (NYSE:HMC) (together making up the three major auto manufacturers in Japan), announced raises in April domestic production and sales. This calls attention to recoveries on the part of all three following last year’s earthquake and tsunami negatively affected supply chains and reduced demand, according to the Wall Street Journal. Toyota shares are trading 0.65% higher today.
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Chesapeake Energy (NYSE:CHK): Stifel Nicolaus believes Chesapeake valuation is set to increase thanks to the company lowering its costs and conducting more asset sales following the announcement of Carl Icahn’s 7.6% stake in the company. Stifel holds to a Buy rating.
Intel Corp. (NASDAQ:INTC)’s Atom D525 Pineview processor is facing serious supply shortages, reports Digitimes, with numerous IPC players forecasting shipment drops in May and June that could potentially affect Q3 performance.
Hewlett-Packard (NYSE:HPQ)’s patent lawsuit with Brazilian Multilaser Industrial Ltda regarding HP’s integrated printhead inkjet cartridges has been amicably settled. In the agreement, Multilaser admits HP’s patents are viable and were infringed upon. Multilaser also will halt selling the cartridges in question in its home country and others where HP has corresponding patent rights, and will pay back some of the litigation expenses to HP.
IsoRay Rockets 16% Higher with These Super Hot Stocks
LeCROY Corporation (NASDAQ:LCRY) will be purchased by defense equipment maker Teledyne (NYSE:TDY) for $240.5M, at $14.30 per share; this offer is a premium of more then 56% on LeCroy’s Friday close. According to Teledyne, “LeCroy will broaden our portfolio of analytical instrumentation businesses.” LeCroy shares are trading 55.8% higher today.
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Interline Brands Inc (NYSE:IBI) is entering into a definitive agreement to be taken over by affiliates of GS Capital Partners LP and P2 Capital Partners for $25.50/share in cash. This amount demonstrates a premium of around 42% relative to Interline’s May 25 closing stock price (the final trading day prior to the transaction announcement) and a 31% premium relative to the firm’s trailing 30-day average closing stock price. Interline shares are trading 39.86% higher today.
Sanderson Farms, Inc. (NASDAQ:SAFM): Elevated average sales prices of chicken along with heightened production drove site and company sales up for Sanderson Farms, although profits still are negatively impacted by relatively high feed prices, and prediction that grain costs will stay high and volatile. Company FQ2 EPS of $1.02 beats by $0.19, and revenue of $595M (+24% Y/Y) beats by $4M. Sanderson Farms shares are trading 2.23% lower today.
BancTrust Financial Group, Inc. (NASDAQ:BTFG): Signing of a definitive agreement has been reported by Trustmark and BancTrust Financial Group, in which the former will absorb the latter. BancTrust has 49 Alabama and northern Florida offices, with $1.8B in deposits and $1.3B in loans as of March 31. On a price on $24.99 per share of Trustmark common stock, the deal is valued at around $55.4M, or $3.08 per share of BancTrust common stock. Shares of BancTrust are trading 56.84% higher today.
IsoRay’s (AMEX:ISR) Cesium-131 brachytherapy treatment for localized prostate cancer is being featured by the Discovery Channel, as Discovery Channel Chief Medical Expert John Whyte spoke with UPMC urologist Dr. Ronald Benoit regarding the benefits of using Cesium-131 rather than traditional isotopes. IsoRay shares are trading higher by 16.67% today.
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Bank of America (NYSE:BAC): Merrill Lynch will launch exact auth override, a strengthening of its leading card solution, ePayables. This service will be accessible to clients beginning in mid-July will round off the suite of payment possibilities for clients using ePayables. Shares of Bank of America are trading 1.68% higher today.
Apple Inc. (NASDAQ:AAPL): Given upcoming next-gen iPhone production in Q2 or Q3, it is rumored that if yield rates aren’t elevated enough for the production of the in-cell panels employed by the smartphone and made by LG Display (NYSE:LPL) and Sharp (SHCAY), supply of LTPS (low-temperature poly-silicon) available to other smartphone companies may be restricted. This is being reported in Digitimes based on word from Taiwanese upstream suppliers. Apples shares are trading 1.05% higher today.
Facebook, Inc. (NASDAQ:FB) may hand over more than $1B for Opera Software due to competition from Google (NASDAQ:GOOG) and others, Reuters reports based on analyst comments. Facebook shares are trading down more than 7% today.
Pandora’s (NYSE:P) shares are falling in early trading following Samsung’s announcement that its Music Hub smartphone app. Music Hub will boast 15M song tracks; the service is available on some Samsung devices and in 32 European and North American countries. Pandora shares are trading 5.77% lower.
Nokia Corporation (NYSE:NOK): According to Digitimes on word from industry sources, Chinese smartphone vendors are starting to manufacture ultra-thin models to contend with major industry players. Nokia shares are trading 3.37% higher today.
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Facebook Falters to $28s, Chesapeake and Monster Stay Green
Shares of Facebook (NASDAQ:FB) declined over 9 percent to continued new lows today. Reports indicate that Mark Zuckerberg is preparing to build a smartphone by hiring several former Apple Inc. (NASDAQ:AAPL) engineers. Facebook options also become available for trading today. Shares traded at $29.06, marking a new low for shares.
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Chesapeake Energy Corp. (NYSE:CHK) shares jumped more than 7 percent in morning trading, but have since settled down to just up a little over 1 percent. In a filing with the Securities and Exchange Commission, Carl Icahn disclosed owning roughly 7 percent of the natural gas giant.
Vertex Pharmaceuticals Inc. (NASDAQ:VRTX) shares plunged 13 percent in trading. The company released corrected data that showed its cystic fibrosis treatments did not improve lung function on as many patients as previously thought. “The corrected data appear weaker than the original data,” ISI Group analyst Mark Schoenebaum explained.
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Lecroy Corp. (NASDAQ:LCRY) shares surged almost 55 percent in early trading. Teledyne Technologies Inc. (NYSE:TDY) announced it would purchase LeCroy for $240.5 million in cash. The total value of the deal is estimated to be almost $300 million, including stock options, stock appreciation rights and debt.
Shares of Monster Beverage Corp. (NASDAQ:MNST) were up 1 percent in afternoon morning. The energy drink company received an upgrade from SunTrust to Buy from Neutral. The firm cited Monster’s strong first-quarter results and improving margins. SunTrust also increased their price target on shares to $90.
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Market Recap: 1% RALLY Leaves Facebook Behind, Chesapeake Gains Big
Markets closed up on Wall Street today: Dow +1.01%, S&P +1.11%, Nasdaq +1.18%, Oil -0.02%, Gold -0.80%.
On the commodities front, Oil (NYSE:USO) declined to $90.79 a barrel. Precious metals also declined, with Gold (NYSE:GLD) falling to $1,558 an ounce while Silver (NYSE:SLV) fell 0.53% to settle at $27.84.
Here’s your Cheat Sheet to today’s top stock stories:
Facebook’s (NASDAQ:FB) stock is in trouble. This company was supposed to be the biggest IPO of the current market cycle, but it’s quickly becoming the fastest way to lose money — not to mention a complete embarrassment for Facebook execs and Wall Street.
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If you’re a retail investor who bought shares at the IPO, you’ve got only one question now: how low can Facebook go? For the day, Facebook closed down 9.62 percent to $28.84.
Caterpillar Inc. (NYSE:CAT) rose 2.5 percent, leading all 10 S&P 500 sectors higher. The company’s stock, as well as its peers including Alcoa (NYSE:AA), saw a rise thanks to news that is China increasing its spending after receiving approval for a new $11 billion steel mill at the Zhanjiang port in Guangdong.
Another top gainer in the S&P 500 index was Chesapeake Energy Corp. (NYSE:CHK). On Friday, Carl Icahn revealed a 7.6% stake in the company and said he’d like four of its board members to be replaced. He said in a letter, according to MarketWatch, that “We believe that Chesapeake has collected some of the best oil and gas assets in the world. However, we believe that the low stock price today does not reflect the value of those assets; rather the stock price suffers because of the enormous risk associated with an ever changing business strategy, enormous capital funding gap, poor governance, and unchecked risk taking.” Chesapeake is reviewing the letter and has said it agrees that its stock is undervalued.
Peabody Energy Corp.’s (NYSE:BTU) stock was upgraded by Goldman (NYSE:GS) to a “Buy” from a “Neutral.” It said the coal-producing company had a good outlook as the demand from China improves and its shares look attractive with the current valuations.
Late Radar: RIM Shares Plunge, BofA and Alcoa Pump Dow Up
Research in Motion (NASDAQ:RIMM) shares plunged more than 11 percent after the closing bell. The BlackBerry maker announced it hired JPMorgan (NYSE:JPM) and RBC Capital Markets to review the company’s business and financial performance. RIM has seen its market share dwindle over the years as Apple Inc.’s (NASDAQ:AAPL) iPhone has gained popularity.
After closing 9.62 percent lower during regular trading. Facebook (NASDAQ:FB) shares continued to edge lower in late trading. The social-media giant is reportedly expanding its efforts on creating a smartphone. Nick Bilton from the New York Times writes, “One engineer who formerly worked at Apple and worked on the iPhone said he had met with Mark Zuckerberg, Facebook’s chief executive, who then peppered him with questions about the inner workings of smartphones. It did not sound like idle intellectual curiosity, the engineer said; Mr. Zuckerberg asked about intricate details, including the types of chips used.” Also, Facebook options are now available for trading. Thus, providing investors with a cheaper way to play Facebook shares.
Bank of America Corp. (NYSE:BAC) shares closed 4 percent higher on Tuesday and continued to climb higher in extended trading. The JPMorgan multi-billion dollar loss fall-out has investors running towards banks with less publicized problems.
Despite trading near 52-week lows, shares of Alcoa Inc. (NYSE:AA) popped 3 percent during regular trading. Shares of the aluminum company were one of the best performers in the Dow Jones Industrial Average on Tuesday as value investors explored the industrial sector.
Lululemon Athletica Inc. (NASDAQ:LULU) shared edged slightly lower in late trading, despite Wedbush Securities initiating coverage on the athletic apparel maker with an Outperform rating. The firm also placed a price target of $90 on shares.
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