Good morning, here’s your morning research roundup from the Street:
- U.S. Media: First full week of ratings completed by Nielsen, showing wins by CBS in total viewers and Fox in the 18-49 audience. As expected, the return of Two and a Half Men beat all competitors – though it will likely come down from its 10.7 rating and 25 market share in its debut. The X Factor did well, with a 4.4 rating and 12 share, but not as well as many in the industry originally hoped.
- Chubb Corp (NYSE: CB): The company lowered guidance on higher than anticipated costs from Hurricane Irene. Chubb expects a $400 to $475 million hit, up from $300 million originally.
- Marriott International (NYSE: MAR): Expecting revenue per available room to grow 6%, but less than originally expected 7% for the third quarter. Weakness at the chains Group segment, as well as disappointing results in D.C., are weighing on North America. International is also forecast to be mixed, though that only represents 20% of Marriott’s rooms.
- Visa Inc. (NYSE: V): Growing confident in high single-digit to low double-digit revenue growth and mid-to-high teens earnings growth for 2012 following a management meeting. Company sees stronger spending by corporate and affluent card holders.
- U.S. Cable: Though a number of cable providers have said they would be willing to move to an a la carte model, none seem poised to act on their words. Comcast has been experimenting with a model, but it does not substantially lower costs to end consumers as they must be Triple Play subscribers.
- General Motors (NYSE: GM): Conference call revealed results from UAW deal, including news that the company can still break even if sales fall to 10.5 million a year.
- Lexmark International (NYSE: LXK): Analysts see larger headwinds for the company in the fourth quarter, even as it is expected to meet third quarter expectations. Citi is lowering earnings for 2012 to $4.39 a share from $4.66
- U.S. Financials: Joining Morgan Stanley and Barclays expecting a miss, Deutsche is reducing third quarter estimates for Goldman Sachs (to a loss of $0.25 from a gain of $0.50), Morgan Stanley (to $0.30 from $0.40) and overall 2012 estimates by 15% since the start of September. Analysts see overall investment banking revenue to be down 40% for the industry for the third quarter.
- Tesco (LON: TSCO): Analysts see coming results to be in line with expectations of earnings per share growth of 11% and for newly installed CEO Philip Clarke to start making the company more aggressive.
- Price Target Changes: Increases, none. Decreases: Acme Packet ($45 new v. $57 old), Advanced Micro Devices ($5 new v. $5.50 old), Juniper Networks ($22 new v. $27 old), Netgear ($31 v. $36).
- Aetna (NYSE: AET): Expecting conservative guidance, even though the company will likely out deliver. Goldman has the highest EPS estimate on the Street, at $5.00 for 2011, v. consensus of $4.77 and $5.45 for 2012, v. consensus of $4.86.
- Chesapeake Energy (NYSE: CHK): Initial results from drilling in shale appear to be more positive than expected. Drilling costs are higher than expected at $7 million per well, but higher pump rates and momentum as it gains scale will benefit the firm.
- Google (NASDAQ: GOOG): Recent acquisition of Motorola Mobility will likely not have an impact on Oracle infringement lawsuit. However, it looks to bode well for Microsoft, which has recently signed HTC and Samsung to Windows Phone 7 on fears of Android/Motorola pair. Expected to boost Microsoft by $444 million in 2012.
- Lear Corp. (NYSE: LEA): Management sees a slight down tick in business in Europe in 2012, but that the next four to six weeks of orders still looks good. Emerging markets are holding up well and the order backlog for 2012 stands at $900 million.
- Information Technology: Survey of U.S. IT shows that spending is likely to increase during 2012, which will benefit Accenture, Dell, EMC, Lenovo, Microsoft, Oracle, Samsung, and VMware. Public sector continues to lag, where CIOs expect to see a 6% decline in spending.
- Middle Market Banking: Fourth quarter M&A activity is further slowing for mid-market banks, mainly on higher funding costs and declining quality of deals. A lack of buyers for mezzanine debt is hurting the CLO market.
- Pension Obligations: UBS calculated obligations for all S&P 500 companies with defined pension plans, and found many massively underfunded, including Ford, Sears Holdings and Goodyear.
- Tablet Release Schedule: RIM Playbook 2 to release in fourth quarter of 2011, HTC Jetstream retailing at $700 in September 2011, Sony Tablet S retailing for €479/579 in September 2011.
- KB Home (NYSE: KBH): Declining costs and better quality lots will likely improve KB’s results going into 2012, but future growth remains constrained. In the third quarter, unit orders increased 40% year-on-year, a good sign that KB may be able to weather the housing crisis.
Other surveys out this week also point to improvements in the market. The National League of Cities sees the number of layoffs and capital reduction plans declining. Click here to see what they’re cutting.
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