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$BBY Posts a Quarterly Loss

Best Buy Co. (BBY), the world’s largest consumer-electronics retailer, posted an $81 million first-quarter net loss as the company lowers prices to compete with online rivals.

The loss of 24 cents a share in the quarter ended May 4 compares with net income of $158 million, or 46 cents, a year earlier, the Richfield, Minnesota-based company said today in a statement….”

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$CPB Beats Expectations and Raises Guidance

“Stronger-than-expected fiscal third-quarter growth helps Campbell Soup CPB -0.46% boost its EPS view and project other metrics being at the high end of prior forecasts.

Leading the way is a nearly 5% volume increase amid higher promotional spending helping US condensed, ready-to-serve and broth sales post double-digit sales gains.

That as the early part of 2013 was much-more conducive weather-wise to soup eating that a year earlier, which saw record late-winter/early-spring warmth in America.

But the company also saw roughly 5% volume growth in its global baking-and-snacks business and 4% gains in international simple meals and beverages….”

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$JCP Disappoints on Earnings

“Struggling department-store retailer JC Penney on Thursday reported operating margins plunged in the first quarter on weak sales and heavy clearance deals, as its new chief executive promised more promotions and a return to basics to win back shoppers.

Penney, struggling with mass customer defections after a failed strategic shift by former Chief Executive Ron Johnson, said gross margins came in at 30.8 percent, nearly 7 percentage points lower than a year earlier. Total sales and same-store sales both posted double-digit declines, in line with the company’s warning last week…..”

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$CSCO Beats Estimates for a 9th Consecutive Quarter on Revs and a 6th on Profits

“Cisco Systems (CSCO) reported third-quarter 2013 earnings of 48 cents a share, beating the Zacks Consensus Estimate of 45 cents on higher revenues and lower-than-expected operating expenses. The adjusted earnings per share exclude one-time items but include stock-based compensation expense.


Revenues increased 5.2% year over year and 0.8% sequentially to $12.2 billion. Products (78.2% of total revenue) were up 5.5% year over year to $9.6 billion. Services (21.8% of total revenue) jumped 8.0% year over year to $2.7 billion.

Revenues decreased year over year across most of the geographies except Americas. The Americas region increased 10.2% year over year, while Asia-Pacific, Japan and China collectively known as APJC decreased 0.2% from the year-ago quarter. Europe, the Middle East and Africa (:EMEA) also declined 0.9% on a year-over-year basis due to continued macroeconomic challenges in Europe.

Product Revenues by Category

Switching (29.5% of total revenue), Collaboration (8.3% of total revenue), Security (2.7% of total revenue), and Other Products revenues declined 2.0%,1.0%, 4.0% and 41.0% year over year, respectively. NGN Routing, which accounted for 17.5% of total revenue, was flat year over year.

However, this decline was fully offset by strong performances from Service Provider Video (10.6% of total revenue), Data Center (4.2% of total revenue), Wireless (4.3% to total revenue) and Service (21.8% of total revenue) segments, which increased 30.0%, 77.0%, 27.0%, 7.0%, respectively.


Cisco’s total product orders in the quarter were up 4% year over year. The Americas region saw the strongest growth at 7%, APJC orders increased 1% while EMEA and Russia declined 6% from the year-ago quarter (consistent with broad market trends).

In the APJC region, Japan again witnessed strong growth, while China continues to see challenges related to the business environment.

Gross Margin…”

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$WMT Q2 Forecast Trails Estimates

Wal-Mart Stores Inc. (WMT), the world’s largest retailer, forecast second-quarter profit that was less than analysts estimated as its shoppers struggle amid the slow U.S. economy and higher taxes.

Earnings per share will be $1.22 to $1.27, the Bentonville, Arkansas-based company said today in a statement. Analysts projected $1.29, the average of 24 estimates compiled by Bloomberg. Sales in the fiscal first quarter ended April 30 trailed analysts’ estimates while profit matched projections.

Chief Executive Officer Mike Duke has cut prices on groceries and other necessities as the chain’s lower-income shoppers deal with elevated unemployment and higher Social Security taxes. First-quarter sales at U.S. Wal-Mart stores open at least 12 months fell 1.4 percent, the first drop after six straight gains. Analysts estimated a 0.1 percent decline.

“They’re pressured by the economy, unemployment, the increase in payroll taxes, the delay in tax returns,” Bernard Sosnick, an analyst at Gilford Securities based in New York, said today in an interview. “All these negatives coalesced in the first quarter.”

Sosnick recommends buying the shares and said improvement in the economy and lower gas prices should help Wal-Mart later in the year.

The shares fell 2.9 percent to $77.53 at 7:54 a.m. in New York. Wal-Mart had gained 17 percent this year through yesterday, compared with a 16 percent gain for the Standard & Poor’s 500 Index.

Profit Gains…”

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$DE Beats Expectations, Guides Lower for the Year

“MOLINE, Ill. (AP) — Deere & Co. said on Wednesday that bad weather and weak economies will hinder sales growth this year.

The company reported better-than-expected second-quarter earnings and maintained its full-year profit prediction, but the outlook lowered Deere’s stock price in premarket trading.

Deere makes farm and construction equipment, and said sales of that gear would rise 5 percent during the current fiscal year, which is now half over. It had previously predicted growth of 6 percent.

The reduced sales expectation came after a long, cold winter in North America delayed the planting of this year’s seeds. It also slowed construction work and reduced demand for turf-care equipment, the company said.

CEO Samuel R. Allen also said Deere’s “near-term forecast is being tempered by lingering economic concerns in many parts of the world, which are restraining business confidence and growth.”

Deere’s second-quarter net income rose 3 percent to $1.08 billion, or $2.76 per share. That was up from $1.06 billion, or $2.61 per share, during the same period last year.

That topped analysts’ average estimates for earnings of $2.71 per share.

Revenue from equipment sales rose 9 percent to $10.27 billion from $9.41 billion a year earlier. Analysts had expected equipment revenue of $9.82 billion. Including financial services, Deere revenue rose 9 percent to $10.91 billion.

Deere raised prices 3 percent and shipped more gear during the quarter….”

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$M Posts Huge Profit Rise on Solid Sales


“NEW YORK (AP) — Macy’s Inc. is reporting a 20 percent increase in first-quarter profit as the department store chain saw solid sales despite cool temperatures that dampened shoppers’ appetite for spring clothes.

The company, which also operates the upscale chain Bloomingdale’s, is also raising its dividend to 25 cents from the current 20 cents. It also announced an additional $1.5 billion in stock buybacks.

Macy’s, based in Cincinnati, says it earned $217 million, or 55 cents per share in the quarter ended May 4. That compares with $181 million, or 43 cents per share, a year ago.

Revenue rose 4 percent to $6.38 billion.

Analysts expected earnings of 53 cents per share on revenue of $6.4 billion.

Macy’s shares rose 46 cents to $47.85 in premarket trading.”

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$PCLN Reports Monster Earnings, Guidance Disappoints

Priceline.com Inc. (PCLN), the largest U.S. online-travel agent by market value, forecast second-quarter profit that missed analysts’ estimates as international expansion exposes the company to economic swings in Europe.

Profit, excluding some items, will be $8.87 to $9.45 a share in the current period, the Norwalk, Connecticut-based company said in a statement yesterday. Analysts were projecting a profit of $9.59, according to data compiled by Bloomberg….”

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$JPM Joins $BAC in a Perfect Trading Record for the Q, $GS Trails

JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) had perfect trading records in the first quarter, making money every day of the period as Morgan Stanley posted losses in eight sessions and Goldman Sachs Group Inc. in two.

One daily gain at JPMorgan exceeded $200 million as the biggest U.S. bank by assets recovered from last year’s London Whale derivatives loss, the New York-based company said yesterday in a regulatory filing. Bank of America, the second-largest lender, generated more than $25 million of revenue on 97 percent of trading days, compared with 76 percent at Morgan Stanley, the firms said in separate filings. Goldman Sachs, which generated about half its revenue from trading last quarter, said its team made more than $100 million on 17 days…..”

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$FNM Posts Monster Profits, Company Sends Some Money Back to the Treasury

“WASHINGTON (Reuters) – Fannie Mae , the nation’s biggest mortgage finance company, said on Thursday it will pay $59.4 billion in dividends to the U.S. Treasury after a record profit in the first quarter that reflecting a multibillion dollar gain from reversing an earlier writedown of tax benefits.

The government-controlled company reported pretax income of $8.1 billion for the quarter and booked an additional gain of $50.6 billion on the tax assets, resulting in net income of $58.7 billion. That compared to a $2.7 billion profit in the same three months a year earlier.

Since its return to profitability, Fannie Mae has been considering when to start counting potential tax credits as part of its net worth….”

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$SNE Posts Profits From One Time Gains, Company Guides Below Estimates

Sony Corp. (6758) forecast annual profit that missed analyst estimates as Chief Executive Officer Kazuo Hirai tries to win back customers from Samsung Electronics Co. with new Xperia smartphones and Bravia TVs.

Net income may rise 16 percent to 50 billion yen ($507 million) in the year started April 1, the Tokyo-based company said in a statement. That compares with the 66.4 billion-yen average of 18 analyst estimates compiled by Bloomberg.

Hirai used job cuts, asset sales, a weaker yen and blockbuster movies to return the company to profit after four years of losses as the electronics business struggles to recapture ground lost to Samsung. The South Korean company’s smartphones outsold Sony’s 7-to-1 last year, and its flat-panel TVs generated more than triple Sony’s revenue.

“Sony is being bullish,” said Takashi Oba, a senior strategist at Okasan Securities Co. “It’s up to whether it can reduce the losses in its electronics business and produce hit products.”

Sony posted a profit in the year ended March after it generated about $2 billion in one-time gains selling stock holdings and properties including its New York headquarters, a chemicals unit and shares in health-care data provider M3 Inc. (2413) Sony’s movie studio also topped the U.S. box-office last year with hits including “Skyfall” and “The Amazing Spider-Man.”

Operating Profit…”

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$HBC Profits Nearly Double as Writedowns Decline

HSBC Holdings Plc (HSBA)Europe’s largest bank, posted a bigger-than-estimated increase in first-quarter profit after provisions for bad loans shrank, stirring speculation the lender may step up its cost-reduction targets.

Pretax profit increased to $8.43 billion from $4.32 billion in the year-earlier period, the London-based bank said in a statement today. That beat the $8.04 billion average estimate of nine analysts surveyed by Bloomberg (HSBA). Bad loan charges declined 51 percent to $1.17 billion, HSBC said.

Stuart Gulliver has eliminated $4 billion of costs since becoming chief executive officer in 2011, beating his initial target. He’s announced 46,000 job cuts and sold or closed 52 businesses to revive earnings. That’s prompted speculation among analysts he may set a tougher expense-reduction goal when when he updates investors on the bank’s strategy on May 15.

“The true underlying revenue picture is flat, so it makes sense that they would look to the cost side again,” said Simon Willis, an analyst at Daniel Stewart Securities Plc (DAN) whose hold rating on the bank is under review….”

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$TSN Reports a 43% Drop in Profits as Consumers Trade Down, Sales Up 2%

“May 6 (Reuters) – Tyson Foods Inc, the largest U.S. meat processor, reported a 43 percent fall in quarterly profit as shoppers and restaurants switched to cheaper chicken from beef to save money.

“Our beef segment suffered margin compression as consumers opted for the relative value of chicken,” Chief Executive Donnie Smith said in a statement on Monday….”

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$LNKD Posts Outstanding Numbers, Stock Crushed for Poor Guidance

“SAN FRANCISCO (AP) — LinkedIn’s rapidly rising stock got demoted late Thursday after the online professional networking service released a forecast calling for its earnings growth to slow later this year as the company hires more workers, invests in data centers and tweaks the way that it shows online ads.

The predicted deceleration overshadowed another stellar performance during the first three months of the year. As has been the case in every reporting period since LinkedIn Corp. went public two years ago, both the company’s first-quarter earnings and revenue topped the analyst estimates that steer Wall Street expectations.

But management’s projections for both the current quarter ending in June and the full year came in below analyst projections, rattling investors who have become accustomed to LinkedIn delivering nothing but pleasant surprises.

The letdown dampened the feverish interest in LinkedIn’s stock, which surpassed $200 for the first time Thursday. After closing at $201.67, LinkedIn’s shares tumbled $20.45, or more than 10 percent, to $181.22 in extended trading.

Even if the sell-off carries through into Friday’s regular trading session, LinkedIn’s stock still will have more than quadrupled from its initial public offering price of $45. As of Thursday’s close, the shares had surged by 76 percent so far this year compared to a 12 percent gain for the Standard & Poor’s 500 index.

LinkedIn has thrived by establishing itself as the go-to place for employers to find talented workers and for people to get job tips and other advice to manage their careers. It doesn’t cost anything for people to set up a professional profile on the site. The Mountain View, Calif., company makes most of its money by charging employers and headhunters for analytical tools and additional access to LinkedIn profiles and the site, such as the ability to send messages to users.

The service now has 225 million members, up from 202 million members at the end of last year.

LinkedIn is now adding more content, giving its audience more reasons to return to its website more frequently and to stay for longer periods. The company hopes that will lead to more advertising to supplement its revenue. As part of that process, LinkedIn plans to place more ads within the stream of the personal updates appearing in the middle of its members’ individual pages rather displaying them on the sides….”

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Weak Power Demand Has $DUK Posting Lower Than Expected Profits

“(Reuters) – Duke Energy Corp , the largest power provider in the United States, reported a lower-than-expected quarterly profit on Friday, citing weak electricity demand and higher costs at two key units.

The company, which uses coal, natural gas and nuclear plants to generate electricity, has had weak power sales since the 2008 recession as the housing market struggles to recover and consumers remain reluctant to increase their spending.

Demand from commercial customers was especially weak in the first quarter, Duke said, but it still expects to earn $4.20 to $4.45 per share this year. The midpoint of that forecast roughly matches analysts’ average estimate of $4.33.

Low rainfall in Brazil boosted generation costs at a key hydroelectric power station, the company said. Duke operates an international power supply business, primarily in South America, but the United States is its largest market…”

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Kellogg Profit Falls, Company Approves $1B Buyback


“BATTLE CREEK, Mich. (AP) — Kellogg’s first-quarter net income slid 11 percent on higher expenses and acquisition costs.

The Battle Creek, Mich., company announced a $1 billion stock repurchase program Thursday, but shares slipped in premarket trading.

Kellogg earned $311 million, or 85 cents per share. That’s down from $351 million, or 98 cents per share, a year earlier.

Excluding the costs related to its acquisition of Pringles, earnings were 99 cents per share. Taking out 3 cents per share for the Venezuelan currency devaluation, earnings were $1.02 per share, which was in line with Wall Street expectations.

Revenue rose 12 percent to $3.86 billion on improved sales, but fell short of analysts expectations, according to a poll by FactSet.

Kellogg Co. maintained its full-year adjusted earnings and revenue forecasts.”

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Teva First-Quarter Profit Slides on Provigil, Generics

Teva Pharmaceutical Industries Ltd. (TEVA)’s first-quarter profit fell 26 percent as a branded drug lost patent protection and opportunities diminished to introduce new generic medicines.

Earnings excluding some costs declined to $960 million, or $1.12 a share, from $1.3 billion, or $1.47, a year earlier, the Petach Tikva, Israel-based company said in a statement today. Profit beat the average estimate of $1.11 a share from 20 analysts surveyed by Bloomberg.

Teva’s branded-drug sales dropped as Provigil, a sleep- disorder medicine it got in the $6.5 billion acquisition of Cephalon Inc. in 2011, lost patent protection last year. Sales of generics were higher in last year’s first quarter as Teva began selling seven new products and benefited from a partnership with Ranbaxy Laboratories Ltd. for copies of Pfizer Inc.’s Lipitor.

Revenue from Copaxone, the branded multiple-sclerosis treatment that is Teva’s best-selling product, increased 17 percent in the quarter to $1.1 billion as Teva boosted the price of the injection. Copaxone faces new competition from Biogen Idec Inc.’s Tecfidera, which grabbed an 8 percent share of the MS pill market in the week ended April 19, according to Bloomberg Industries.

Feedback from doctors suggests some Tecfidera patients are switching from Copaxone, according to Marko Kozul, an analyst with Leerink Swann & Co.

Levin’s Forecast…”

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GM Narrows Quarterly Loss in Europe

General Motors Co. (GM), after losing more than $18 billion in Europe since 1999, narrowed its first- quarter loss in the region, outpacing Ford Motor Co. (F) and helping the automaker beat analysts’ earnings estimates.

GM’s European adjusted loss before interest and taxes was $175 million, compared with $294 million a year earlier, as the region’s economic slump continued to roil sales, according to a statement today from the Detroit-based automaker. Companywide profit excluding one-time items was 67 cents a share, exceeding the 54-cent average of 16 estimates compiled by Bloomberg…”

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Refining Margins Help $PSX to Crush Estimates

“Phillips 66 (NYSE: PSX) reported first-quarter 2013 results before markets opened this morning. The oil refiner posted adjusted diluted earnings per share (EPS) of $2.19. In the same period a year ago, the company reported EPS of $1.20. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.89 and $41.44 billion in revenues. Phillips 66 did not include revenues in its press release…”

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$MRK Hurts DOW Futures as They Miss and Guide Lower

“Merck & Co. (MRK) reported first quarter 2013 earnings of 85 cents per share, well above the Zacks Consensus Estimate of 78 cents. Tax benefits boosted first quarter 2013 earnings by 6 cents. Earnings, however, declined 14.1% from the year-ago period.

Revenues for the quarter fell 9.0% to $10,671 million and missed the Zacks Consensus Estimate of $10,997 million. Revenues were hit by the genericization of Singulair and a few other products and negative currency fluctuation (2%).

Including one-time items, first quarter 2013 earnings declined 7.1% to 52 cents per share.

The Quarter in Details

Merck’s Pharmaceutical segment posted sales of $8.9 billion, down 12%. Negative currency movement impacted Pharmaceutical segment sales by 2%. Products like Remicade, Simponi, Isentress, Zostavax and Gardasil performed well.

However, the strong performance of these products was offset by lower sales of Singulair, Maxalt, and Clarinex.

Singulair sales experienced a severe decline following its US patent expiry in Aug 2012. Sales fell 75% from the year-ago period to $337 million. We note that Singulair lost exclusivity in the EU in Feb 2013 and is experiencing a sharp decline in sales. The drug retains exclusivity in Japan until 2016….”

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