Ultimate Market Recap: Unlucky Penney, Walgreen Gets the “Boots”

Wall St. Brief: Oracle REVEALS Earnings, Microsoft UNVEILS Tablet

Walgreen (NYSE:WAG) has agreed to acquire a 45 stake in Alliance Boots for $6.7 billion with an option to buy the remainder of the company. Walgreen also reported that its fiscal quarter three earnings per share was $0.62, which missed estimates by $0.01; revenue was in line with its 3.4 percent decline to $17.8 billion. The company plans to raise its dividend by 22.2 percent to $0.275 per share–a 37th consecutive year for dividend increases.

On Monday, Oracle (NASDAQ:ORCL) released its fiscal quarter four results three days early with good news to share. Its net income increased eight percent to $3.45 billion while its $0.82 earnings per share beat estimates by $0.04; revenue increased one percent to $11 billion. Oracle also announced its new $10 billion stock buyback plan, while rumors swirled that its North American sales chief Keith Block will exit the company.

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Microsoft (NASDAQ:MSFT) unveiled plans for its Microsoft Surface Windows 8 tablet. The device is 9.3mm thick, with a weight of 1.5 lbs; it includes a 10.6″ display and Microsoft Office. The company also created a cover that can also be used as a keyboard with a touchpad, enabling Surface to move into PC mode.

Coca-Cola (NYSE:KO) CEO Muhtar Kent said the company will begin whittling away its $13 billion cash stockpile. Look for capital expenditures to lead the to-do list. Other expenditures could include strategic bolt-on acquisitions and higher dividend payouts with share buybacks.

Autodesk Inc (NASDAQ:ADSK) will extend its share buyback program by up to 30 million. This comes in addition to its 12 million shares that will stay under the previously authorized share repurchase programs, announced the company. Overall, the plan will include a total share repurchase valued at $1.41 billion based on Monday’s closing price of $33.64.

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Body Central LACKING Visibility and 4 More Analyst Calls to Watch

Body Central Corp (NASDAQ:BODY): Oppenheimer downgraded Body Central to Perform from Outperform due to a lack of visibility following Body Central’s lowering of guidance for the second time in two months. The company’s stock was also downgraded from Outperform to Neutral by RW Baird, thanks to lowered guidance and limited visibility. The price target was lowered to $9 from $25. Shares are trading higher by 4.26% today.

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InterDigital, Inc. (NASDAQ:IDCC) reported on Monday it will sell to Intel Corp around 1,700 wireless technology patents for $375M. Its shares were boosted 27 percent. Today, shares are trading 2.89% lower.

Western Gas Partners, LP‘s (NYSE:WES) 5M share Spot Secondary priced at $43.88. Barclays, Citigroup, Deutsche Bank, Morgan Stanley and RBC Capital served as joint book running managers. Shares are trading 4.45% lower today.

Network Engines, Inc. (NASDAQ:NEI): Privately-owned Unicom Systems will acquire Network Engines for $63.2M, or $1.45/share, in cash. This price is an 85% premium on Monday’s close. Network Engines shares were damaged earlier in 2012 following its announcement that main customer EMC is moving away from its products. Shares are halted, and trading 81.74% higher today.

Piedmont Natural Gas Company Inc. (NYSE:PNY): Hilliard Lyons is sticking to Neutral ratings for Piedmont, whose shares are trading 0.28% higher today.

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Noon Buzz: Microsoft’s Surface Tablet, J.C. Penney Plummets 10%

Microsoft Corp. (NASDAQ:MSFT) shares gained 3.5 percent in today’s trading. Late Monday, the company unveiled its own tablet PC called Surface. It comes with a 10.6-inch screen, compared to the Apple Inc. (NASDAQ:AAPL) iPad’s 9.7-inch screen. One of the most notable features from Microsoft’s tablet is the built-in kickstand and magnetic cover. On the inside cover, users will also find a full keyboard with pressure-sensitive keys. “The Surface is a PC, the Surface is a tablet and the Surface is something new that we think people will really love,” claimed Steve Ballmer, chief executive officer.

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FedEx Corp. (NYSE:FDX) shares climbed 3.38 percent in noon trading. The company announced that income for the fourth-quarter fell to $550 million ($1.73 per share), compared to $558 million ($1.75 per share) a year earlier. “FedEx delivered strong earnings results for fiscal 2012 due to the outstanding performance by FedEx Ground, our new value proposition at FedEx Freight and improved yields across all transportation segments,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “In fiscal 2013, we will continue our focus on improving our operating efficiencies and our financial performance across all of our businesses, while simultaneously enhancing our service capabilities. We remain absolutely committed to higher earnings, margins, cash flows and returns.”

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J.C. Penney Co. (NYSE:JCP) shares plunged 10 percent in afternoon trading. The department store operator unexpectedly announced that President Michael Francis is leaving, effective Monday. No reason was given and Francis had only been with JCP since October, near the time when former Apple executive Ron Johnson also joined the company. Both had previously worked together at Target Corp. (NYSE:TGT).

Shares of Walgreen Co. (NYSE:WAG) fell 6 percent by noon trading. The largest drugstore chain in the United States agreed to pay $6.7 billion for a 45 percent stake in Alliance Boots. The company also reported that fiscal third-quarter earnings decreased 11 percent, due to falling sales from the loss of Express Scripts Holding Co.’s (NASDAQ:ESRX) members.

Oracle Corp. (NASDAQ:ORCL) shares jumped 2.8 percent as of this afternoon. The company said late Monday that it earned 82 cents per share for the fiscal fourth-quarter, excluding one-time items. Analysts were expecting earnings per share of about 78 cents. The results were announced three days earlier than expected. “Our record-breaking fourth quarter featured several all-time highs for Oracle: new software license sales of $4 billion, total software revenue of $8 billion, total revenue of $11 billion, and EPS of 82 cents,” said Oracle President and CFO, Safra Catz. “For the fiscal year, we also set all-time highs for operating margins of 46 percent, and operating cash flow of $13.7 billion.”

Investor Insight: Are J.C. Penney Investors Anxious for the Apple Turnaround Touch?

Facebook RALLIES to Improve Ad Sales and 3 More Hot Stocks

Bank of America (NYSE:BAC): Julius Baer confirms that it is in discussions with Bank of America regarding the purchase of Merrill Lynch’s non-U.S. wealth management ops. The Swiss firm states,  “Given the early stage of these discussions, the outcome is entirely open.” Any deals, which could total nearly $2B, would be an additoin to the trend of big banks shedding capital as a means to build capital. Shares of Bank of America are trading 4.19% higher today.

Facebook, Inc. (NASDAQ:FB): According to Susquenhanna, Facebook recently launched a number of new products, made acquisitions, and improvements to technology which will allow it to push its user base into opportunities for expansion. The firm thinks the company is attempting to automated premium ad purchases, improve pricing, as well as launch Facebook Exchange to assist advertisers provide real-time targeting of users. Shares hold a Positive rating and a price target of $48. Shares of Facebook, Inc. are trading 0.03% lower today.

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AT&T, Inc. (NYSE:T): Following a conversation with investors, Citigroup sees that investors expect that DISH may possibly sell to  DirecTV (NASDAQ:DTV) or AT&T (NYSE:T), but the firm does not believe there is enough competition within the video market for this to be possible. The firm beleives the Department of Justice might block a deal between DISH and DirecTV, and the Department of Justice and FCC might block any deal between DISH and AT&T. Citi believes the chance for DISH’s takeover is not likely, but the firm sees a 25% chance of (NYSE:S) and T-Mobile USA entering into a merger or network sharing deal keeping Citi a buyer of Sprint shares. Shares of AT&T, Inc. are trading 0.65% lower today.

Nokia Corporation (NYSE:NOK): Avian has upgraded Nokia from Neutral to Positive based on valuation. Shares of Nokia Corporation are trading 0.6% higher today.

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Walgreens Acquires Alliance Boots and 4 More HOT STOCKS to Watch

Walgreen Company (NYSE:WAG) has increased its dividend by 22.2% to $0.0275 per share for its 37th consecutive year of dividend hikes. The company has also been investing $6.7B in cash-and-stock for its 45% equity ownership stake in Alliance Boots. Shares of Walgreen Company are trading 5.85% lower today.

FedEx Corporation (NYSE:FDX) has set its guidance for the new fiscal year, which started June 1, anticipating  U.S. GDP growth of 2.2% and 2.6% growth for the world GDP. The high targets come as a surprise to Brian Sozzi of NBG, and he cites downside risk. FDX is down 2.4% premarket. Shares of FedEx Corporation are trading 2.36% higher today.

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Oracle Corporation (NASDAQ:ORCL) is ahead of schedule in providing its FQ4 report and FQ1 guidance, as it includes a $10B stock repurchase. Canaccord gives the stock a Hold rating stating that it believes the quarter is  “a favorable read-through” for software companies. Goldman gives Oracle a Buy rating and cites that both software license and hardware sales exceeded expectations. Shares of Oracle Corporation are trading 3.24% higher today.

Jefferies Group, Inc. (NYSE:JEF): At the end of Q2, Jefferies has reported book value per share at $16.23 based on the 20M shares outstanding. Adjusted book value per common share is at $15.35 based on 226M shares outstanding, which includes restricted stock units. As of May 31, estimates for all assets totaled $35.7B. The company also reports 2.2M shares bough back during Q2 at around $15.77 per share, and nearly 12.6M shares are still authorized for repurchase. Shares of Jefferies Group, Inc. are trading 3.36% higher today.

Network Equipment Technologies, Inc. (NASDAQ:NWK) is to be acquired by  Sonus Networks (NASDAQ:SONS) in a deal totaling $42M and meant to expand its real-time communication product offering. This values NWK at $1.35 per share, which is a 14% premium to its closing price on Monday. Shares of Network Equipment Technologies, Inc. are trading 12.72% higher today.

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