Reports surfaced Thursday that Borders (BGP) started negotiating with banks for financing to help keep the bookstore chain liquid during bankruptcy proceedings. Later in the evening, GE Capital made a $550 million financing commitment to the embattled company.
This financing should allow Borders the financial flexibility and level of liquidity to advance its restructuring plan. The plan includes closing stores, cutting costs, expanding its rewards program, and increasing non-book offerings -- all with the goal of improving cash flow and profits. Borders did note that it will explore alternative possibilities, such as restructuring its debt under court supervision.
Early Friday morning, Bank of America (BAC) reported a fourth-quarter loss of 16 cents per share ($1.2 billion). This includes the company's previously announced goodwill impairment charge of $2 billion that was related to its home loans and insurance business. Taking this charge out of the equation, BAC earned 4 cents per share. It could be an interesting morning for BAC, as experts predicted earnings of 18 cents per share.
Shares of BAC were down more than 2% as we await the opening bell. This drop should push the stock low enough to mount a serious challenge to the support of both BAC's 20-month moving average and the $14 level.
After the closing bell sounded Wednesday, Seagate Technology (STX) reported its second-quarter results. The tech firm announced that it logged non-GAAP earnings of 33 cents per share ($159 million). The firm's earnings of 33 cents per share matched the consensus estimate, as did the firm's quarterly revenue of $2.72 billion.
STX also reported its performance during the six-month period that ended on Dec. 31, 2010. During this time, the firm's GAAP basis revenue was $5.4 billion, gross margin was 19.9%, net income totaled $299 million, and diluted earnings hit 61 cents per share.
It appears that Wendy's/Arby's (WEN) is about to have a roast beef sale. The company announced this morning that it is considering selling the struggling Arby's chain in order to focus more on the Wendy's hamburger chain.
Both sides of the company's eateries, Wendy's and Arby's, have seen sales slump, but Arby's has had the most problems thanks mainly to sandwiches that can cost more than five bucks. With such a price tag , those sandwiches weren't selling wel in the current economic atmosphere.
During the quarter, Wells Fargo reported net income of 61 cents per share ($3.2 billion), matching the consensus estimate. A year earlier, the company earned 8 cents per share ($394 million) thanks to a large preferred dividend paid to the government (this payment was not necessary this year). The bank's CEO John Stumpf stated that the bank's business segments "contributed to earnings as the economy started to gain strength."
The popular smartphone will cost $199 for the 16GB version and $99 for the 32GB version. These are the same price points for the device on the AT&T (T) network. One difference between the carrier's versions is that the Verizon version will also work as a wi-fi hotspot (with credit to the Engadget blog's live coverage of the event). This mobile hotspot will be able to support up to five different devices.
The supermarket operator reported a third-quarter loss of 95 cents per share ($202 million) compared to a profit of 51 cents per share ($109 million) a year ago. The recent third quarter includes write-downs of $1.19 per share ($252 million) and was impacted by weaker sales and margins. The firm's quarterly revenue dropped 5.9% to $8.67 billion, which is a sour follow up to the 9.5% drop from a year ago.
Tuesday morning, Sears Holding (SHLD) released a bit of good and a bit of bad news. Let's start with the bad news.
The retailer announced that its same-store sales dropped 1.7% during December. The company's eponymous Sears stores saw December same-store sales fall 6%, more than offsetting Kmart's 2% growth. The firm blamed the sales drop at Sears on a major decline in sales of consumer electronics, along with appliances and tools.
Earlier today, shares of oil behemoth BP plc (BP) slid lower thanks to the shutdown of the Trans-Alaska Pipeline System. The shutdown took place on Saturday, as a leak was discovered at the 800-mile network that transports oil across Alaska. BP owns a 47% stake in the pipeline system. Overseas, BP shares finished the day more than 1% lower and are currently mere percentage points lower in American trade.
BP has seen its fair share of problems lately, what with the whole Gulf of Mexico oil spill. In fact, the Oil Spill Commission blamed BP for having "a role in all of the mistakes made at the Macondo well." The pipeline's operator stated that the leak was discovered at 8:15 AM (local time) on Saturday and that the pipeline was shut at 8:50 AM. By 6 AM on Sunday, 90% of the oil had been recovered within the building.
Monday morning, the publisher of iconic adult magazine Playboy (PLA) announced that it will take the company private, thanks to a "sweetened offer" from the magazine's founder Hugh Hefner. The offer of $6.15 per share represents an 18% premium from the stock's Friday close. The total offer values the company at $207 million. Back in July, Hefner's Icon Acquisition Holdings LP offered $5.50 per share.
Playboy has had other offers, including an offer of $210 million from rival Penthouse magazine. That said, Hefner is Playboy's largest shareholder with roughly 70% of the company's voting shares and 28% of the company's nonvoting stock. Hefner noted that the "agreement will give us the resources and the flexibility to return Playboy to its unique position and to further expand our business around the world."
First things first, not all retailers have reported their results -- a majority of heavy hitters will report today. Nevertheless, the results are being described as "slow and steady" rather than the expected blowout holiday shopping season. For example, Costco (COST) reported sales that increased 6%. This is positive data, unfortunately expectations called for an increase of 6.2%. Target (TGT) saw sales increase 0.9%, well short of the expected 4%. Of course sales were better at Macy's (M), right? I mean they are adding jobs and all. Wrong, sales did increase (3.9%) but missed expectations (4.5%).
The company sells tobacco lozenges that dissolve in the mouth and the company says that it has lower levels of cancer-causing chemicals than any other tobacco product currently on the market. Star Scientific says that the "modified-risk" label that the FDA is developing should be on the new lozenge (Stonewall Moist) because the product contains 90% to 99% less tobacco-specific carcinogens than other smokeless tobacco products.
"Macy's, Inc. is building one of the largest, most efficient and resourceful e-commerce organizations in American retailing as part of our comprehensive omnichannel strategy," President and CEO Terry Lundgren said, according to The Enquirer. "Having the right talent in the right place is vital as we seek to sustain and accelerate our sales growth online, as well as in the stores."
The Labor Department reported Thursday that jobless benefits dropped 34,000 to a seasonally adjusted 388,000 in the past week. Economists expected a smaller drop to 413,000 claims. Not only was the drop larger than expected, but it was also the lowest level since July 2008.
The four-week average of new claims, which helps smooth out data, fell by 12,500 to 414,000 -- also the lowest level since July 2008. In the week ending December 18, the number of people continuing to receive state unemployment benefits increased 57,000 to 4.13 million. The four-week average of these same claims dropped 37,50 to 4.12 million, the lowest level since November 2008.