The Dawn Patrol – 23.01.12 – GOOG+, IBM+, TXN-, SAP-, SIE=, NOVN-,


Sorry this dawn patrol is a bit tedious with lots of earnings, but scooter is still down….

European shares to rise on Wednesday on expectations of a solid earnings season and an extension of the U.S. debt limit.


We’ll monitor the Euro Area consumer confidence, the French Business confidence, the BoE minutes, the US MBA mortgage apps and the house price index. No auction today.

Other stuff:

Yes, it’s a an entertaining movie, and Jessica Chastain is great.

The book I recommended yesterday is only getting better…

America’s fiscal policy is not in crisis, by Martin Wolf



Sorry, lots of results, and in some cases details are important.

GOOGLE +4.1% after hours on 4Q’s

IBM +3.3% after hours on 4Q’s

TEXAS INSTRUMENTS -0.7% after hours on 4Q’s

GOOGLE shares rose 5% to $737.80 after the Internet search firm said fourth-quarter adjusted earnings were $10.65 a share, which was above the Thomson Reuters estimate of $10.47 a share. The shares pushed higher though the company’s quarterly revenue minus traffic acquisition costs of $11.34 billion was below the consensus estimate of $12.34 billion. A year ago, revenue minus traffic acquisition costs was $8.13 billion.

IBM shares IBM +0.83% gained 4.2% to trade at $204.25 as Big Blue’s quarterly earnings were bolstered by stronger software sales and margins. Fourth-quarter earnings excluding one-time items were $5.39 a share. Analysts surveyed by FactSet had expected $5.25 a share. Overall revenue slipped to $29.3 billion from $29.48 billion a year earlier, but the result was ahead of Wall Street’s outlook of $29.12 billion in sales. For fiscal year 2013, IBM said it expects earnings of at least $16.70 a share excluding one-time items. Wall Street currently expects $16.63 a share.

Microsoft may contribute to Dell buyout: Microsoft is planning to provide part of the funding for a leveraged buyout of Dell by Silverlake Partners, people with knowledge of the matter said. (Bloomberg)

Siemens fiscal 1Q net income from cont. operations EU1.30b, analyst est. EU1.18b, EU1.31b Y/y.
• CEO Loescher says 2013 will see “no tailwinds from economy”
• Confirms 2013 outlook
• Sees 2013 sales close to 2012 level
• Sees 2013 orders rising moderately
• Sees 2013 net income from cont. ops. at EU4.5b to EU5b
• Book-to-bill ratio at 1.06
• Net income after minorities EU1.20b vs EU1.37b
• Call 8:30am +49-69-222234061, +44-20-31064822 pin 7404972
• AGM 10am

SAP Sees 2013 Non-IFRS Operating Profit Lower Than Analyst Est.
We already saw SAP earning a week ago. The key takeaway is that the guidance is OK on top line, but soft on software and operating income. Cloud and Hana are strong, but will not make up for the rest. Expect some earnings downgrades and some weakness in the shares.

Novartis 4Q EPS Beats Est.; Names Bayer’s Reinhardt Chairman
Novartis’s Daniel Vasella to step down from board, Bayer’s Jorg Reinhardt proposed as new Director, non-executive Chairman, co. says in statement.
• 4Q Core EPS $1.27 vs est. $1.25
• 4Q rev. $14.8b vs est. $14.5b
• Dividend CHF2.30, matches BDVD forecast
• NOTE: Call at 2pm CET on +44 20 3106 4822, pw 9746872

UNILEVER Q4: Strong.

BHP. The company forecasted 10% annual output growth on iron ore, copper, oil, in a trading update overnight. The FT this morning claims the update fuels write-down speculation.


Italian Banks(MS, Tondi) Time to look through?
Easing sovereign stress and improving funding markets have wide implications for the earnings and valuation of Italian banks: lower CoE, better funding costs, abating deposit competition, and over time, less stressed credit conditions. We see value in the larger names given still deep NAV discounts.

Global Banking (JPM, Abouhossein) Wealth Management – only area of structural growth in banking: OW UBS, CSG, Julius Baer and MS
The theme for 2013 within the banking universe is Wealth Management, as we discuss in this over hundred page analysis. We conclude, Wealth Management is the most attractive and undervalued business relative to other business lines such as Retail/Corporate banking, Investment banking and Custody as we see most potential upside to Wealth Management from i) structural growth potential, ii) revenues upside from current low activity levels, and iii) undervaluation by the market of WM NPV cashflows.

Accor Rated New Buy at Cantor Fitzgerald; PT EU33

Alcatel-lucent Raised To Neutral VS Sell at Citi

Andritz Cut To Hold VS Buy at Deutsche Bank

Arcelormittal SA Raised to Neutral at Credit Suisse

BNP Cut Hold VS Buy at Deutsche Bank

BT Raised to Outperform From Market Perform at Bernstein

Exane Reinitiates Iberian Utilities/Renewables, Negative View

France Telecom Cut to Underperform at Bernstein

Henderson Group Cut to Sell at SocGen; PT Raised to 135p

Julius Baer Cut to Hold at Berenberg; PT Raised to CHF39

Julius Baer Raised To Buy VS Hold at Deutsche Bank

KPN Cut to Neutral VS Buy at Citi

Overweight Intertek, Share Drop a Buying Opportunity: JPMorgan

SGS Raised to Buy VS Neutral at Goldman

UniCredit Raised to Overweight at Morgan Stanley

Bernstein Selects Telecom Shares to Own/Not to Own; BT Raised
• Says Deutsche Telekom, Iliad, Telecom Italia, Telenor, BT, TIM Brasil shrs to own; says still attractively valued
• Says KPN, Telefonica, TEF Brasil, France Telecom shrs not to own
• BT raised to outperform from market perform (compelling relative valuation, with prospect of growing FCF and divs); PT raised to 285p from 230p
• France Telecom cut to underperform from market perform (earnings downgrades, negative re-ratings, div. uncertainty set to continue); PT cut to EU7.25 from EU8.4
• Telenor PT raised to NOK140 from NOK130 (valuation rolled over); kept at outperform
• Telefonica PT raised to EU8 from EU7.25 (improved Spanish spreads); kept at underperform


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