Morgan Stanley: Wednesday's Headlines

Morgan Stanley, Wells Fargo, AT&T, Boeing and McDonald's reported earnings early Wednesday.
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NEW YORK (

TheStreet

) -- Here are the top stock market headlines for the morning of Wednesday, April 21, 2010.

Wednesday's Earnings Roundup

  • Morgan Stanley (MS) - Get Report swung to a first-quarter adjusted profit of $1.03 a share, compared with a year-ago loss of 41 cents a share. Including discontinued operations, the bank earned 99 cents a share in the recent quarter. The Thomson Reuters average estimate called for a profit of 57 cents a share. Revenue totaled $9.1 billion, well ahead of the consensus target of $7.94 billion. Sales and trading revenue totaled $4.1 billion, almost tripling year-ago results.
  • >> Who Owns Morgan Stanley?: Renaissance Technologies
  • Wells Fargo (WFC) - Get Report reported a first-quarter profit of 45 cents a share, above the Thomson Reuters average estimate of 42 cents a share. Revenue climbed 2% to $21.4 billion, slightly below the consensus target of $21.7 billion. Wells Fargo said credit has "turned the corner," noting that net charge-offs fell $83 million quarter-over-quarter to $5.3 billion. However, nonperforming assets rose on a year-over-year and sequential basis to $31.5 billion, although the bank noted the rate of growth in nonperforming assets continued to decline.
  • >> Who Owns Wells Fargo?: John Paulson
  • AT&T (T) - Get Report posted a first-quarter adjusted profit of 59 cents a share, which excludes a $1 billion charge relating to health care expenses. That topped the 55-cent-a-share average estimate. Revenue was nearly unchanged from a year ago at $30.6 billion, although that was below the $30.72 billion consensus. AT&T said it added 1.9 million new wireless subscribers in the quarter.
  • >> Who Owns AT&T?: George Soros
  • Boeing (BA) - Get Report reported a first-quarter profit of 70 cents a share, which included a 20-cent-a-share charge related to health care legislation. Analysts surveyed by Thomson Reuters had forecasted a profit of 64 cents a share. Revenue fell 8% to $15.2 billion, in line with estimates. Looking ahead, Boeing guided to full-year 2010 earnings per share of $3.50 to $3.80 a share, including charges for health care legislation, with revenue between $64 billion and $66 billion. Analysts are expected a full-year profit of $3.84 a share on revenue of $65 million.
  • United Technologies said it had first-quarter earnings of 93 cents a share, 3 cents better than the Thomson Reuters average estimate. Revenue slipped 1% from a year ago $12.1 billion, slightly below the consensus target of $12.26 billion. Looking ahead, United Tech raised the lower end of its full-year earnings guidance range, now forecasting a profit of $4.50 to $4.65 a share, inline with the analyst target of $4.63 a share.
  • McDonald's (MCD) - Get Report posted first-quarter earnings of $1 a share, which included a 5 cent per share currency benefit. Results were ahead of the Thomson Reuters average target of 96 cents a share. Sales were up 10% from a year ago to $5.61 billion, also ahead of expectations. "Our momentum continues with April's global comparable sales trending at least as strong as first quarter sales," CEO Jim Skinner said in a statement.
  • Apple (AAPL) - Get Report handily beat estimates after reporting a first-quarter profit late Tuesday of $3.33 a share, up from the $1.79 profit in the year-ago quarter and well above the analysts' estimates of $2.45. Revenue jumped to $13.5 billion, above the $12.02 billion consensus, on the back strong iPhone sales. Apple was typically conservative with its second-quarter earnings guidance range, which was below the average analyst target.
  • Yahoo! (YHOO) posted adjusted earnings of 15 cents a share in the first-quarter, above the Thomson Reuters average estimate of 9 cents a share. Excluding traffic acquisition costs, net revenue came in at $1.13 billion, which was slightly below the consensus target of $1.17 billion. Looking ahead to the second quarter, Yahoo offered revenue guidance in a range of $1.6 billion to $1.68 billion, excluding traffic acquisition costs, compared to the $1.2 billion analysts are forecasting.

Wednesday's Early Headlines

  • IMF Proposes Tax on Bank Balance Sheets -- The International Monetary Fund has proposed two new taxes on banks as a "fair and substantial" contribution by the financial sector, according to a report issued ahead of the next G20 meeting. The first would be a Financial Stability Contribution, or FSC, which would initially be a flat rate levied against banks but refined over time to reflect institutions' riskiness and contributions to systemic risk, the IMF said. The FSC would target a bank's balance sheet, specifically on the liabilities of each bank. The second proposed tax would be a Financial Activities Tax, or FAT, levied on the sum of the profits of financial institutions that were above normal levels, the IMF said. "These are important proposals and we welcome them," said UK Chancellor Alistair Darling said, according to The Financial Times.
  • United, Continental Deal Talks Heat Up: Report -- UAL (UAUA) , the parent of United Airlines, and Continental Airlines (CAL) - Get Report are in the early stages of exchanging financial information that could lead to a deal to combine and create the world's biggest airline, people briefed on the talks told The Associated Press. One person told the AP that bankers for United and Continental are discussing how to value the companies in a stock-for-stock swap.
  • Airlines Lost $1.7 Billion from Volcano: IATA -- The International Air Transport Association said Wednesday that the airline industry has lost more than $1.7 billion because of the disruptions to air travel across Europe from the volcano in Iceland. For the three days of April 17-19, when disruptions were greatest because of excessive volcanic ash in the sky, airlines lost revenue of $400 million a day, the industry group said.
  • Visa to Acquire CyberSource for $2 Billion -- Visa (V) - Get Report is buying online securities provider CyberSource (CYBS) for $26 a share, or a total of about $2 billion, representing a 34% premium to the stock's closing price Tuesday. Visa expects the transaction to be about 4 to 5 cents dilutive to its fiscal fourth-quarter per-share earnings on a reported basis and slightly dilutive to its fiscal full-year 2011 earnings per share.
  • GM Pays Back Government Loans from U.S., Canada -- General Motors has repaid the $8.1 billion in loans it got from the U.S. and Canadian governments, The Associated Press reports. GM received a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments last year as it entered into bankruptcy protection. The $8.1 billion repayment reflects $6.7 billion in U.S. aid considered as a loan, as well as $1.4 billion in loans to the Canadian governments.
  • Mortgage Applications Rise, Rates Drop -- The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage loan application volume, increased by a seasonally adjusted 13.6% last week. Refinancing applications jumped 15.8% compared with the prior week, the survey showed, while purchase activity was up 10.1%. The average 30-year fixed-rate mortgage rate slid to 5.04% last week from 5.17% the previous week, the MBA said.

-- Written by Robert Holmes in Boston

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