Bank of America (BAC) posts $0.15, vs. $0.82 a year ago, third quarter EPS, driven by significant increase in provision expense, as credit costs continued to rise, partially offset by advances in various income categories largely as a result of Countrywide Financial acquisition and LaSalle Bank. Revenue net of interest expense rose 21% to $19.9 billion. It reduces quarterly dividend by 50% to $0.32. Commences public offering of about $10B of common stock. The two capital raise initiatives target an 8% Tier 1 capital ratio. S&P downgrades to hold from buy.
Royal Bank of Scotland Group PLC (RBS) - S&P MarketScope Europe reports that a report by the BBC suggests the UK's three largest banks, RBS, Lloyds TSB (LYG) and Barclays (BCS), estimate they need GBP 15 billion each, with GBP 7.5 billion paid up front and a further GBP 7.5 billion guarantee by the Treasury. Yesterday, S&P Ratings Services lowered long- and short-term counterparty credit ratings for RBS to 'A+/A-1' from 'AA-/A-1+'. Also cut its long-term counterparty credit ratings on main rated subsidiaries to 'AA-' from 'AA'.
Morgan Stanley (MS) shares pare losses on report that deal with Mitsubishi (MTU), whereby MTU will invest $9 billion in MS for 21% interest in firm, is on track to close this weekend.
Advanced Micro Devices (AMD) and Advanced Technology Investment Co. (ATIC) of Abu Dhabi create semiconductor manufacturing company to address the growing demand for independent, leading-edge foundry production capabilities. The new company will be temporarily be called "The Foundry Co." Mubadala Development Co. will increase its current investment in AMD to 19.3% on fully diluted basis. AMD will contribute to The Foundry Co. its manufacturing facilities, related assets, intellectual property rights. ATIC will invest $2.1 billion to purchase its stake in The Foundry Co.
SAP AG (SAP) shares continue to be under pressure following yesterday's announcement that SAP expects U.S. GAAP software and software-related service revenues to rise 13%-14% in third quarter; said market developments of the past several weeks have been dramatic and worrying to many businesses and these concerns triggered a very sudden and unexpected drop in business activity at the end of third quarter.
Auto stocks fall amid reports that General Motors (GM) is planning on halting output at its Opel Plant in Poland for nearly 3 weeks due to declining orders from Western Europe.
Safeway (SWY) gains 1.39 to 23.16 after the company posts $0.46, vs. $0.44 a year ago, third quarter EPS on 2.8% same-store sales rise including fuel, 0.5% rise excluding fuel, 3.9% total sales rise. Confirms guidance for $2.25-$2.35 2008 EPS. S&P reiterates buy.
Casino stocks fall after Deutsche Bank cuts price targets on Ameristar Casinos (ASCA), Bally Technologies (BYI), International Game Technology (IGT), WMS Industries ( 2 3 Next Page