Movers: Citigroup, Google, Barr Labs, Microsoft, Merrill Lynch
Citigroup (C) posts narrower-than-expected $0.54 second quarter loss per share, vs. $1.24 EPS a year ago, on 29% revenue drop. Says loss primarily due to fixed income write-downs, higher consumer credit costs in North America. But says second quarter results improved substantially versus first quarter due to lower write-downs, good performance in core franchise.
Google (GOOG) posts $3.92, vs. $2.93 a year ago, second quarter GAAP EPS on 39% revenue rise. S&P reiterates hold; believes stock indicated weak as GOOG acknowledges a more challenging economic environment; S&P cuts estimates.
Barr Pharmaceuticals (BRL) agrees to be acquired by Teva Pharmaceutical (TEVA) for a total consideration of $7.46 billion plus assumption of net debt of approximately $1.5 billion. Terms: $39.90 in cash and 0.6272 Teva ADRs.
Microsoft (MSFT) posts $0.46, vs. $0.31 a year ago, fourth quarter EPS on 18% revenue rise. Street was looking for $0.47. It says growth rates for operating income and EPS were impacted by a $1.1 billion charge in the fourth quartger related to the expansion of the company's Xbox 360 warranty coverage. Sees first quarter revenue of $14.7-$14.9 billion and EPS of $0.47-$0.48, and fiscal year 2009 revenue of $67.3-$68.1 billion and $2.12-$2.18 EPS.
Merrill Lynch (MER) posts $4.95 second quarter loss from continuing operations, vs. $2.10 EPS a year ago, on negative $2.1 billion in revenue, which driven by net losses totaling $3.5 billion related to U.S. super senior ABS CDOs and credit valuation adjustments of negative $2.9 billion related to hedges with financial guarantors. Other significant net losses included $1.7 billion in investment portfolio of MER's U.S. banks, $1.3 billion from certain residential mortgage exposures. At second quarter-end, net exposures to U.S. ABS CDOs were $4.5 billion, down from $6.7 billion at first quarter-end. Moody's cuts debt rating to A2. S&P keeps sell.
WSJ reports that Freddie Mac (FRE) is considering raising capital by selling as much as $10 bi lion in new shares to investors. The move, which comes as emergency regulatory actions have triggered a two-day rebound in its stock, would have the potential to avoid a full-blown government rescue for FRE and Fannie Mae (FNM), according to the article.
IBM (IBM) posts $1.98, vs. $1.55 a year ago, second quarter EPS from continuing operations on 13% revenue rise. Street was looking for $1.82. Says it feels "good" about its full-year outlook and its 2010 roadmap for EPS of $10.00-$11.00. S&P maintains strong buy.
Advanced Micro Devices (AMD) posts $0.44 second quarter loss from continuing operations (including $0.16 favorable impact, and other items) vs. $0.96 loss on 3% revenue rise. In the seasonally up third quarter, AMD expects revenue to increase in line with seasonality. Names COO Dirk Meyer as president. S&P maintains hold; widens loss estimate and reduces target price.
Honeywell International (HON) posts $0.96, vs. $0.78, second quarter EPS on 13% sales rise. Raises 2008 EPS estimate to $3.75-$3.85 on $37.6-$38.2 billion sales.
Mattel (MAT) posts $0.03, vs. $0.06, second quarter EPS as higher expenses offset 11% revenue rise.
Schlumberger (SLB) posts $1.16, vs. $1.02, second quarter EPS on 20% revenue rise.
Manpower (MAN) posts $1.34, vs. $1.20, (excluding $0.66 after-tax benefit) second quarter EPS on 17% revenue rise. Sees $1.45-$1.49 third quarter EPS (including $0.17 favorable currency impact).