Top 10 News Items for 02/19 - 02/22: FOMC Hints at Shorter QE; Office Retiler Mega-Merger; Wal-mart's Strong Quarter

February 22, 2013 4:22 PM EST
1. On Wednesday, shares saw a little afternoon pressure following the release of minutes from the latest FOMC meeting. In part, report said that several FOMC members said the Fed should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved. For the

2. After some speculation, Office Depot (NYSE: ODP) and OfficeMax (NYSE: OMX) entered an agreement for Office Depot to acquire OfficeMax. OfficeMax stockholders will receive 2.69 Office Depot common shares for each share of OfficeMax common stock and the two will combine into a company with annual sales of about $18 billion. For more, click here.

3. Wal-mart Stores (NYSE: WMT) set the pace for retailers this week, reporting EPS of $1.67 and revs of $127.1 billion, versus consensus estimates calling for EPS of $1.57 and revs of $128.8 billion. Total sales -- including fuel -- were up across the board with Wal-mart U.S. sales up 2.6 percent, International up 6.9 percent (6.0 percent on constant currency basis), and Sam's Club up 3.4 percent. For more on the results, click here.

4. On Thursday morning, LINN Energy, LLC (Nasdaq: LINE), LinnCo, LLC (Nasdaq: LNCO), and Berry Petroleum Company (NYSE: BRY) announced the signing of a definitive merger agreement pursuant to which LINN and LinnCo will acquire all of Berry's outstanding shares for total consideration of $4.3 billion. Under the terms of the agreement, which was unanimously approved by the boards of directors of LINN Energy, LinnCo and Berry, LinnCo has agreed to issue 1.25 common shares for each common share of Berry outstanding prior to the merger. Click here for more color.

5. Amid slowing PC sales, Hewlett-Packard (NYSE: HPQ) managed to produce stronger-than-expected results in Q113. EPS of 82 cents and revs of $28.4 billion compare with consensus views calling for EPS of 71 cents and revs of $27.77 billion. H-P did note that the PC segment was slowing more than expected, but it is working to diversify away from the segment. For analyst commentary on the quarter, click here.

6. Following the announcement the CEO Aubrey McClendon would be leaving last week, Chesapeake (NYSE: CHK) said it Audit Committee completed an internal review this week. Among the transactions reviewed were the 2008-2012 financing arrangements between EIG Global Energy Partners and affiliates of Mr. McClendon regarding financing of his participation in the FWPP, as well as the preferred stock investments by EIG in CHK Utica, L.L.C. and CHK Cleveland-Tonkawa, L.L.C. The review of the financing arrangements did not reveal any improper benefit to Mr. McClendon or increased cost to the company as a result of the overlap in the financial relationships. For more on the conclusions, click here.

7. Housing starts fell 8.5 percent in January as some builders may be holding back a little as demand works to catch up with current construction. According to the U.S. Census, privately-owned housing starts came in at 890,000 last month, from a revised 973,000 in December and expectations for 914,000 units. For more on the numbers, click here.

8. Private equity KKR (NYSE: KKR) was said to have made a $75 per share bid for Gardner Denver (NYSE: GDI). The bid comes following news that two bidders walked away from a potential deal due to Gardner being slow to provide due diligence. Gardner tapped Goldman last October to explore options. The amount values Gardner at about $3.6 billion.

9. In what was somewhat of an under-the-radar announcement this week, Capital One Financial (NYSE: COF) said it reached an agreement to sell the portfolio of Best Buy (NYSE: BBY) private label and co-branded credit card accounts, with current loan balances of approximately $7 billion, to Citi (NYSE: C). In addition, Capital One and Best Buy have agreed to end their contractual credit card relationship early. Could be a telling sign for the rest of the industry.

10. Thursday morning, Coca-Cola (NYSE: KO) declared a quarterly dividend of $0.28 per share, or $1.12 annualized. This is a 9.8% increase from the prior dividend of $0.255. The dividend will be payable on April 1, 2013, to stockholders of record on March 15, 2013, with an ex-dividend date of March 13, 2013. The annual yield on the dividend is 3 percent.

Coke said the increase reflects the Board's confidence in the Company's long-term cash flow. The Coca-Cola Company returned $9.1 billion to shareowners in 2012, through $4.6 billion in dividends and $4.5 billion in share repurchases, bringing to $24.9 billion the amount returned to shareowners through dividends and share repurchases since Jan. 1, 2010.

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Citi, Federal Open Market Committee, Dividend, Top 10 News Items for the Week, Aubrey McClendon, Earnings, Housing Starts

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