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By admin | July 1, 2008
# Warner signs on to Nokia Music. Nokia (NOK), in its continued effort to challenge Apple's (AAPL) iTunes and iPod, added Warner Music (WMG) to its music service. Warner joins Universal and Sony BMG (SNE). "It's the first global initiative to fundamentally align the interests of music companies with telecommunications companies," Warner CEO Edgar Bronfman Jr. said, calling Nokia's music service "a significant step forward in the evolution of digital music."
# GE Real Estate (GE) bought $1B of European property loans from Credit Suisse (CS) on the cheap.
# Fortune warns. Fortune Brands (FO) lowered its Q2 and full-year EPS guidance due in part to ""weakening consumer sentiment in the U.S., the ongoing correction in the U.S. housing market, and a large and unexpected Australian tax increase on ready-to-drink spirits products." It sees Q2 EPS dropping "at a high-teens-to-mid-20s percentage rate" from last year's $1.51 (vs. a previous drop of "high-single-digit-to-mid-teens"). For the full-year, it sees EPS lower by "high-single-digit-to-high-teens percentage rate" compared to last year's $5.06. Shares fell 3.8% AH.
# CIT exits home lending, makes $1.8B cash. CIT Group (CIT) agreed to sell its Home Lending business, consisting of $9.3B in assets and servicing operations, to Lone Star Funds - for $1.5B in cash and the assumption of $4.4B of outstanding debt. CIT also agreed to sell its $470M manufactured housing portfolio to Vanderbilt Mortgage and Finance for $300M.
# Thinner profits seen at Dollar Thrifty. Car rental company Dollar Thrifty (DTG) warned it will not achieve its previous 2008 EPS guidance of $1.00-1.50. "Our second quarter was below our expectations... In addition, the balance of the year looks less robust than we had forecasted, given overall economic trends," CEO Gray Paxton said.
# Yahoo lobbies shareholders. Yahoo (YHOO) sent a letter to its shareholders. Yahoo said it doubts Microsoft (MSFT) "was ever committed to a whole company acquisition"; that its Google (GOOG) tie-up puts it on the fast track to creating value, more so that would have Microsoft's proposal; and that Carl Icahn's plan is ill-defined and could put the company in jeopardy.
# Chunky share repurchase boosts Campbell. Campbell Soup (CPB) gained 4% Monday after its board approved a $1.2B share buyback, and said it sees 2008 EPS at the high-end of previous forecasts.
# Chip sales climbed a surprising 12.3% from a year ago in May, and gained 2.5% over April - excluding memory chips. Total sales were up 5.3% from last year and 2.8% sequentially. May is an historically strong month for semiconductor sales. Emerging markets are becoming increasingly important to the industry, SIA president George Scalise says. U.S. PC unit sales now account for just 21% of the global total, down from a recent 31%. U.S. cell phone sales are just 13% of global sales, down from 21%.
# Thinning ABS. U.S. asset-backed securities issued during the first half of 2008 were worth just $124B, down from $652B sold a year ago. It's little wonder banks' earnings have plunged.
# Flood fallout less than expected. The USDA said farmers will harvest 9% fewer acres of corn than last year due in part to heavy Midwest flooding. The less-pessimistic-than-expected outlook sent corn futures limit down.
# The Chicago PMI (Purchasing Managers Index) was 49.6%, just below the 50% expansion/contraction breakeven line - and well ahead of the 48% consensus.
# The Dallas Fed said manufacturing activity weakened in June. General business activity sentiment remains pessimistic; manufacturing expectations remain positive.
# Manufacturer pessimism in Japan. The Bank of Japan's Tankan index of manufacturer sentiment slid to 5 points in June from 11 in March, its third quarterly decline - a four-year low in confidence among Japan's largest manufacturers; consensus was for an even-worse 3. Profits are expected to drop 7% in the year, vs. a rise of 0.3% predicted 3 months ago.
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