Thursday's Earnings Releases
- JPMorgan Handily Beats Wall Street's Forecasts. - JPMorgan Chase (JPM) reported second-quarter top- and bottom-line results that easily beat the Thomson Reuters average estimate. JPMorgan reported a profit of 28 cents a share, down from 53 cents in the year-ago period, but far better than the 4 cents a share predicted by analysts. The bank said quarterly revenue of $27.7 billion was its best ever for a quarter, easily surpassing the Thomson Reuters average target of $25.89 billion.
- Nokia Q2 Operating Profit Falls 71%. - Handset maker Nokia (NOK) reported second-quarter operating profit fell to 427 million euros ($600.8 million) from 1.47 billion euros a year earlier. Sales fell almost 25% to 9.9 billion euros in the second quarter. Excluding certain items, operating profit for the handset maker declined 62% to 775 million euros. Nokia said it expects its third-quarter share of the mobile devices market to be flat sequentially, and its 2009 market share to be flat vs. 2008, an update to its earlier target that it would increase market share this year.
- Biogen Misses Profit Expectations, But Tysabri Sales Tops Consensus. - Biogen Idec (BIIB) posted adjusted second-quarter earnings of 75 cents a share, below the 83 cents a share consensus estimate of analysts surveyed by Thomson Reuters. Revenue in the quarter rose 10% to $1.1 billion from a year ago, slightly ahead of analysts' forecasts of $1.07 billion. Worldwide sales of the multiple sclerosis drug Tysabri totaled $254 million in the second quarter, exceeding the$242 million Wall Street expected.
- Harley Earnings Drop 91%, Plans More Job Cuts. - Harley-Davidson (HOG) said second-quarter earnings fell to $19.8 million, or 8 cents a share, from earnings of $222.8 million, or 95 cents a share, posted a year earlier. Revenue came to $1.15 billion in the second quarter, compared with $1.57 billion in the year-ago quarter. Analysts estimated the company would earn 24 cents a share in the second quarter on $1.18 billion in revenue, according to Thomson Reuters. The company also lowered its 2009 shipment expectations, and said it plans to slash another 700 hourly production jobs and 300 nonproduction jobs.
Thusday's Early Headlines
- CIT Group Bankruptcy Expected Friday. - CIT Group (CIT) is likely to file for bankruptcy Friday, according to CNBC. CIT late Wednesday said that "there is no appreciable likelihood" of new government support over the near-term, raising the specter of bankruptcy for the commercial lender. CIT and federal regulators had been talking over the past several days about possibly securing a temporary government loan from the Treasury Department and Federal Reserve to allow the lender breathing room to strengthen its balance sheet.
- Paulson to Testify on BofA-Merrill . - Former Treasury Secretary Henry Paulson will Thursday tell the House Committee on Oversight and Government Reform that he did threaten to remove Bank of America's (BAC) management if it walked away from the Merrill Lynch deal, according to prepared remarks. In his testimony, Paulson deems his threat to replace the bank's leaders as "appropriate" because their invocation of a Material Adverse Change, or MAC, clause would have shown "a colossal lack of judgment."
- BofA Operating Under MOU: Report. - In other Bank of America news, the bank is operating under a memorandum of understanding that requires it to overhaul its board and address perceived problems with risk and liquidity management, The Wall Street Journal reports, citing people familiar with the situation. The MOU gives banks a chance to work out their problems without the glare of outside attention, the report notes. Firms that don't address deficiencies can be given harsher penalties that include a publicly announced cease-and-desist order.
- Citigroup Close to Secret Deal with Regulators. - Meanwhile, Citigroup (C) is also reportedly close to a secret agreement with regulators that will increase scrutiny of the US bank and force it to fix financial, managerial and governance issues. The Financial Times reported Thursday that a proposed agreement between Citi and the Federal Deposit Insurance Corp. requires, among other things, that Citi strengthens its board and governance, improves asset quality, better manages expenses and provides more information to regulators on its capital and liquidity, these people added.
Thursday's Economic News
- Jobless Claims in Focus - The Labor Department will release weekly jobless claims data at 8:30 a.m. EDT. Economists expect the number to fall to about 552,000 claims from 565,000 last week, although revisions will likely come into play.
- Other Economic Data Due - At 9 a.m. EDT, the Treasury Department will issue its monthly international capital report. Later, at 10 a.m. EDT, the Philadelphia Fed will post it's the July reading for its manufacturing index, which should worsen to -5 from -2.2 in June, according to economists polled by Reuters.