Top 10 News Items 1/10-1/14: Earnings Season Jump-Started with Strong Reports from Alcoa, Intel, JPMorgan; Verzion Getting the iPhone; Big Deal in Utilites Sector
Here is a recap of the top new items from this week on Wall Street:
1. The latest earnings season was officially kicked-off this week as Alcoa (NYSE: AA) reported slightly better than expected Q4 results on Monday of this week. The stock was sold-off modestly following the quarterly figures. Intel (Nasdaq: INTC) and JPMorgan (NYSE: JPM) also posted solid quarterly figures; Intel shares closed Friday's session down 1% as traders took profits, while JPM shares rose about 1% to close this week's session.
2. After months and months of rumors, Verizon (NYSE: VZ) officially announced that it will now carry the Apple (Nasdaq: AAPL) iPhone as of early-February. Retailers are suggesting a retail price of $199.99 for the 16GB model and $299.99 for the 32GB model with a new two year customer agreement. Trading in shares of Verzion was mixed this week as analysts considering that the company may need to subsidize the iPhone, essentially tacking on an estimated $3-$5 billion in costs.
3. Duke Energy (NYSE: DUK) and Progress Energy (NYSE: PGN) announced a massive deal in the Utilities sector this week, valued at around $13.7 billion in stock and creating the largest power company in the US. Under the terms of the agreement, shareholders of Progress Energy will receive 2.6125 shares of Duke common stock in exchange for each share of Progress common stock.
4. Elsewhere on the M&A front, DuPont (NYSE: DD) agreed to a $5.8 billion purchase of Denmark's enzyme and specialty food ingredients company Danisco. The transaction will establish DuPont as a clear leader in industrial biotechnology with science-intensive innovations that address global challenges in food production and reduced fossil fuel consumption.
5. Playboy (NYSE: PLA) shares rallied more than 17% on Monday amid news that owner Hugh Hefner will take the company private at $6.15/share.
6. Shares of ITT Corp. (NYSE: ITT) surged more than 16% on Wednesday as the company disclosed plans to separate into three publicly-traded companies. ITT will execute tax-free spinoffs to shareholders of its water-related businesses and its Defense & Information Solutions segment. Following completion of the transaction, ITT will continue to trade on the New York Stock Exchange as an industrial company that supplies highly engineered solutions in the aerospace, transportation, energy and industrial markets.
7. Marathon Oil (NYSE: MRO) announced that the company will spin-off its downstream business this week, sending shares rallying as much as 13% on Thursday, however the stock closed the trading session up just 6%. The refining branch will be listed on the NYSE under the symbol "MPC" and will be named Marathon Petroleum Corp.
8. Shares of Coinstar (Nasdaq: CSTR) blew-up this week amid extremely concerning preliminary Q4 results. The operator of Redbox (as well as the Coinstar boxes), cut both Q4 and FY11 guidance: quarterly sales are now expected to be about $391 million, with EPS from continuing operations of 65-69c. For FY11, sales will be in the range of $1.7-$1.85 billion with EPS from cont. ops of $2.60-$3.10.
9. Shares of AIG (NYSE: AIG) had a rough week of trading, down about 12%, despite news that the US Treasury completed its recapitalization, including repaying a $21 billion credit facility with the Federal Reserve Bank of New York and exchanging government preferred shares for common shares. As a result of the conversion, the Treasury Department will own approximately 92 percent of AIG's common shares. They will be given 1,655,037,962 AIG common shares.
10. Economic data this week: initial jobless claims came in at 445,000, slightly worse than the 410,000 economist were looking for, however continuing claims fell below the 4 million mark for the first time in years. Both PPI and CPI were higher-than-expected, and consumer sentiment disappointed.
1. The latest earnings season was officially kicked-off this week as Alcoa (NYSE: AA) reported slightly better than expected Q4 results on Monday of this week. The stock was sold-off modestly following the quarterly figures. Intel (Nasdaq: INTC) and JPMorgan (NYSE: JPM) also posted solid quarterly figures; Intel shares closed Friday's session down 1% as traders took profits, while JPM shares rose about 1% to close this week's session.
2. After months and months of rumors, Verizon (NYSE: VZ) officially announced that it will now carry the Apple (Nasdaq: AAPL) iPhone as of early-February. Retailers are suggesting a retail price of $199.99 for the 16GB model and $299.99 for the 32GB model with a new two year customer agreement. Trading in shares of Verzion was mixed this week as analysts considering that the company may need to subsidize the iPhone, essentially tacking on an estimated $3-$5 billion in costs.
3. Duke Energy (NYSE: DUK) and Progress Energy (NYSE: PGN) announced a massive deal in the Utilities sector this week, valued at around $13.7 billion in stock and creating the largest power company in the US. Under the terms of the agreement, shareholders of Progress Energy will receive 2.6125 shares of Duke common stock in exchange for each share of Progress common stock.
4. Elsewhere on the M&A front, DuPont (NYSE: DD) agreed to a $5.8 billion purchase of Denmark's enzyme and specialty food ingredients company Danisco. The transaction will establish DuPont as a clear leader in industrial biotechnology with science-intensive innovations that address global challenges in food production and reduced fossil fuel consumption.
5. Playboy (NYSE: PLA) shares rallied more than 17% on Monday amid news that owner Hugh Hefner will take the company private at $6.15/share.
6. Shares of ITT Corp. (NYSE: ITT) surged more than 16% on Wednesday as the company disclosed plans to separate into three publicly-traded companies. ITT will execute tax-free spinoffs to shareholders of its water-related businesses and its Defense & Information Solutions segment. Following completion of the transaction, ITT will continue to trade on the New York Stock Exchange as an industrial company that supplies highly engineered solutions in the aerospace, transportation, energy and industrial markets.
7. Marathon Oil (NYSE: MRO) announced that the company will spin-off its downstream business this week, sending shares rallying as much as 13% on Thursday, however the stock closed the trading session up just 6%. The refining branch will be listed on the NYSE under the symbol "MPC" and will be named Marathon Petroleum Corp.
8. Shares of Coinstar (Nasdaq: CSTR) blew-up this week amid extremely concerning preliminary Q4 results. The operator of Redbox (as well as the Coinstar boxes), cut both Q4 and FY11 guidance: quarterly sales are now expected to be about $391 million, with EPS from continuing operations of 65-69c. For FY11, sales will be in the range of $1.7-$1.85 billion with EPS from cont. ops of $2.60-$3.10.
9. Shares of AIG (NYSE: AIG) had a rough week of trading, down about 12%, despite news that the US Treasury completed its recapitalization, including repaying a $21 billion credit facility with the Federal Reserve Bank of New York and exchanging government preferred shares for common shares. As a result of the conversion, the Treasury Department will own approximately 92 percent of AIG's common shares. They will be given 1,655,037,962 AIG common shares.
10. Economic data this week: initial jobless claims came in at 445,000, slightly worse than the 410,000 economist were looking for, however continuing claims fell below the 4 million mark for the first time in years. Both PPI and CPI were higher-than-expected, and consumer sentiment disappointed.
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