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Spotlight Stocks: Citigroup, Merrill, Delta, IBM

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Tuesday's top stories and stocks with potential to move...

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Stocks to watch for Tuesday, January 15, 2008:

  • Citigroup (C) reported a 4Q loss of $9.83 bln, or $1.99 a share, compared to a profit of $5.13 bln, or $1.03 a share a year ago. Citi also announced it will write down an additional $17.4 bln. Revenue fell 70% to $7.22 billion from $23.83 billion. The results also include a $5.41 billion increase in credit costs, or $3.85 billion for loan-loss reserves and $1.56 billion in credit losses.
  • Merrill Lynch (MER) announced a $6.6 bln capital injection as it issues high-yield preferred stock to three investors including Korea Investment Corporation, Kuwait Investment Authority and a unit of Japan's Mizuho Financial Group Inc. for $52.40 a share. The company will pay a 9% dividend.
  • Delta Airlines (DAL) has begun talks with United Airlines of UAL Corp. (UAUA) and Northwest Airlines (NWA) for a possible merger. A combination of Delta with either company would form the largest U.S. airline. The company hopes to have a deal as early as mid-February.
  • IBM (IBM) preannounced stronger-than expected 4Q sales. The company said that when it officially reports today, it will show earnings of $2.80 a share, up 24% from a year ago and significantly ahead of analyst expectations of $2.60 a share. IBM said it will report quarterly revenue of $28.9 billion, up 10% from a year earlier and about $1 billion above analysts' estimates.
  • Genentech (DNA) reported 4Q profit of 69 cents a share. Operating revenue rose to $2.97 billion from $2.71 billion. Analysts polled by Thomson Financial had been expecting Genentech to earn 67 cents a share on $2.97 billion in revenue.
  • Legg Mason (LM) sold 2.5% nonvoting convertible senior notes to an Kohlberg Kravis Roberts & Co affiliate for $1.25 bln due in 2015, reported the Wall Street Journal. The company said it expects fiscal third-quarter per-share earnings of $1.04 to $1.09, including a charge of 16 cents related to a reduction in the market value of asset-backed commercial paper held by the company's money-market funds.


Market Recap

  • Asian trading closed with the Hang Seng -2.38%, Nikkei -0.98%, Sensex -2.30%, Taiwan +3.13% and Shanghai -0.98%.
  • A quick glance towards Europe finds the CAC -0.59%, DAX -0.42%, FTSE 1.01%, ATX -0.69%, Swiss Mkt. -1.28% and Stockholm -1.49%.
  • In the commodity space, crude oil is trading lower -0.12 to 94.08 while gold is up +3.3 to 906.9 this morning.
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