Stocks in the news: Sun Microsystems, Coca-Cola, General Mills
International Business Machines (IBM) is in talks to buy Sun Microsystems Inc. (JAVA) according to Wall Street Journal sources. The reported deal is for $6.5 billion, a premium of about 100 percent over Sun's closing price Tuesday of $4.97 a share. The deal could bolster Big Blue's computer server products against rivals such as Hewlett-Packard Co. (HPQ). IBM shares are down 3.2 percent in premarket trade, JAVA's up over 68 percent, HPQ down 1.2 percent.
American International Group's (AIG) CEO Liddy will have to answer to a congressional committee regarding bonuses paid to employees for an overall sum of some $200 million. AIG received a government bailout of $140 billion. Liddy himself is not getting a bonus and has to defend a policy he didn't initiate. AIG shares are up over 4 percent in premarket trade.
Coca-Cola Co.'s (KO) attempts to expand in China have just hit a snag as China has rejected its $2.4 billion bid to buy China Huiyuan Juice Group. The Ministry of Commerce said the deal didn't meet its anti-monopoly laws because it would have given Coca-Cola too much power to squeeze out smaller players, which would eventually result in higher prices for consumers. KO shares are down 1 percent in premarket trade.
General Mills (GIS) says its fiscal third-quarter profit dropped 33 percent to $288.9 million, or 85 cents per share, partly hurt by increased input costs and a stronger dollar. Excluding items, earnings were 79 cents per share, lower than estimates of 88 cents per share according to Thomson Reuters. Sales rose 4 percent to $3.54 billion. The company raised its 2009 earnings outlook below analysts' expectations. GIS shares are down over 6 percent in premarket trade.
General Motors Corp. (GM) CEO Wagoner said Tuesday that if the company were forced into Chapter 11 bankruptcy protection, the automaker would end up being liquidated because a long bankruptcy would scare customers away.
Adobe Systems Inc. (ADBE) said its fiscal first-quarter net income fell some 28 percent. Revenue for the period fell to $786.4 million from $890.5 million. Excluding items, earnings would have been 45 cents a share, beating by a penny analyst estimates, according to Thomson Reuters. Revenue estimates were $784 million.
Darden Restaurants Inc. (DRI) said its fiscal third-quarter profit fell 15 percent to $107.5 million, or 78 cents a share, beating analyst estimates. Revenue declined to just under $1.8 billion from $1.81 billion last year. DRI shares are soaring over 11 percent in premarket trade.
Guess Inc. (GES) reported that fourth-quarter profit fell 13 percent. Sales rose 9 percent, while same-store sales declined 6.5 percent. It also gave outlook lower than expected. GES shares are down about 2.4 percent in premarket trade.
MGM Mirage (MGM) reported a fourth-quarter loss of $1.15 billion, or $4.15 a share, but excluding items, it would have earned 10 cents a share. Sales fell to $1.79 billion from $2.11 billion. Results were below estimates.
Reporting after the close today:
- Oracle (ORCL) is expected to report 32 cents per share according to First Call.
- Nike (NKE) is expected to report 79 cents per share according to First Call.
- Citigroup upgraded Eli Lilly (LLY) from Hold to Buy. LLY shares are up over 2 percent in premarket trade.
- Needham upgraded Intel (INTC) from Hold to Buy.