Pre-Market: Amazon Expects Major Third-Quarter Loss; Durable Goods Rise In June

By Alex Brokaw  JUL 25, 2014 9:01 AM

Plus: BSkyB will acquire Italian and German assets from 21st Century Fox for $8.3 billion.

 


Stock futures pointed toward a lower open on Friday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.09% to 16,982. Futures on the S&P 500 (INDEXSP:.INX) were down 0.15% to 1,977.70. Nasdaq (INDEXNASDAQ:.IXIC) futures moved lower, falling 0.27% to 3,961.  

Stocks

Amazon (NASDAQ:AMZN) expects a major third quarter hit after reporting a loss $126 million in Q2, its largest since 2012. Analysts had predicted the Seattle, Washington-based company would only lose roughly $66 million, compared with a $7 million loss in the same quarter last year. Growth in the online retailer's operating expenses rose 24%, topping a 23% rise in sales. Amazon, which had been consistently profitable for nearly a decade, has remained committed to investing heavily in expanding customer loyalty.

In other earnings news, Royal Bank of Scotland (NYSE:RBS) reported a strong preliminary second quarter results with a net profit of $390 million versus $241 million a year ago. AbbVie (NYSE:ABBV) beat estimates with a Q2 EPS of $0.06 and revenue of $4.93 billion, up 5.1% year-on-year. Ahead of the opening bell, Amazon fell 10.91%. RBS rose 12.16%. AbbVie was up 0.68%.

GlaxoSmithKline (NYSE:GSK) is facing new allegations of corruption, now in Syria, where England's largest pharmaceutical company has been accused of bribery. The bribes were tied to GSK's former consumer healthcare operations in the country, which were shuttered in 2012 amid an escalating civil war. Syria marks the sixth country in which the pharmaceutical giant is facing bribery charges, including China, where GSK has been accused of spending up to $480 million to bribe doctors and officials. Shares of GSK fell 1.76% in pre-market trading.

British Sky Broadcasting Group (OTCMKTS:BSYBY) will pay $8.3 billion for 21st Century Fox (NYSE:FOX) assets in Germany and Italy including Sky Italia and Fox's 57% of Sky Deutschland. The combination will bring in roughly 20 million new customers, and increase the pay-TV providers potential customer base to 97 million. The deal, which was announced alongside stronger than expected earnings, will place BSkyB at the top of the markets in five European countries, including three of the four biggest pay-TV markets.

EU regulators will decide whether to clear a $5.3 billion bid from Oracle (NYSE:ORCL) for point-of-sale hardware and software maker Micros Systems (NASDAQ:MCRS) on August 29. The acquisition, which would be Oracle's largest in five years, would be part of the Redwood City, California-based company's strategy to rapidly expand its cloud computing business. Oracle rose 0.69% ahead of the opening bell.

Economy

The only economic indicator expected today is capital and durable goods. The Commerce Department reported capital goods rose 1.4% after a 1.2% decrease in May, which had previously been reported as a 0.7% gain. Durable goods increased 0.7%. 

Global Markets

Asian stocks continued a week of gains and posted their 10th weekly advance in 11 weeks, mainly on earnings. In Japan, core consumer inflation rose by 3.3% in June, in-line with forecasts and the Bank of Japan's projections. European stocks stumbled off a two-week peak in the week's final trading session. In England, GDP finally registered above pre-crisis levels, coming in in-line with analyst forecasts at 0.8% growth in the second quarter. German business confidence did not meet analyst expectations, falling to its lowest level since October at a reading of 108, compared with 109.7 in June. On this side of the Atlantic, representatives from Argentina have made it clear that the country plans to default next week.
No positions in stocks mentioned.

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