Wall Street Brief: JPMorgan Beats the Street, Amazon Makes Zip on Kindles
JPMorgan’s (NYSE:JPM) third-quarter earnings exceeded forecasts as earnings per share increased to $1.40 from $1.02; net profit rose to $5.7 billion from $4.3 billion and revenue jumped 6 percent to $25.9 billion. The bank said it saw continued momentum through all of its businesses, with strong commercial, business and mortgage banking lending and positive asset management performance.
Amazon (NASDAQ:AMZN) CEO Jeff Bezos publicly said what Wall Street has suspected: his company doesn’t make any money from Kindles. Bezos said to the BBC, “We sell the hardware at cost. We want to make money when people use our devices, not when they buy them.” In other words, Amazon looks to earn profits though the purchases made by Kindle users such as books, apps, films and other products.
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Softbank (SFTBF.PK) is negotiating with three big Japanese banks about borrowing $23 billion to fund its Sprint (NYSE:S) bid; this includes Mizuho (NYSE:MFG), Sumitomo Mitsui (NYSE:SMFG) and Mitsubishi UFJ (NYSE:MTU) reported Reuters. Rumors are swirling that either MetroPCS (NYSE:PCS) or Clearwire (NASDAQ:CLWR) may be part of a deal. Japanese investors don’t support a deal; Softbank’s shares tanked 17 percent in Tokyo.
AMD (NYSE:AMD) shares fell 8.1 percent in premarket trading after the company slashed its third quarter revenue guidance to -10 percent on the quarter from a previous -4 percent to +2 percent, and cut its gross margin outlook to 31 percent from 44 percent, in part from a $100 million inventory write-down. The company is undergoing weak demand for its product lines with falling PC sales adding to the problem but the large fall also suggests a market share loss to Intel (NASDAQ:INTC) and/or Nvidia (NASDAQ:NVDA).
Oracle (NASDAQ:ORCL) CEO Larry Ellison has expressed interest in acquiring AEG from Anschutz, which has a $10 billion asking price for the sports and entertainment unit, reported Reuters. If the rumors are true, Ellison has a large credit facility to assist him via his 139 million Oracle shares worth $4.3 billion. This represents “collateral to secure personal indebtedness.”
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