Wall Street Breakfast: Must-Know News

• On again. Microsoft (MSFT) is back at the table with Yahoo (YHOO). It won't say exactly what the non-acquisitional "transaction" it proposes is, but that it "reserves the right to reconsider" a full-blown bid. Media reports speculate the current proposal relates to contextual search ads, and is an attempt to derail a proposed Yahoo/Google (GOOG) JV. Yahoo issued its own statement, saying it will consider all options, including any Microsoft proposal. Yahoo gained 3% in Germany. Separately, Microsoft said it will discuss a "major new" search engine initiative on May 21, and will make changes to its "fragmented and confusing" online branding.
• Take three. Electronic Arts (ERTS) is likely to re-extend its $2B offer to acquire Take-Two Interactive (TTWO) after failing to muster majority support for its bid.
• Duking it out over caterer. Manitowoc (MTW) trumped Illinois Tool Works' (ITW) offer to acquire UK catering equipment company Enodis, posting a 5% higher $2.11B bid. The deal is far more consequential for the $5B Manitowoc than for the $27B ITW. JPMorgan (JPM) is advising Manitowoc; UBS (UBS) is advising ITW.
• SAP says U.S. "tough but not worsening." SAP (SAP) CEO Henning Kagermann says a U.S. downturn has not spread to Asia and Europe, and noted the U.S. markets are "tough, but not worsening." SAP also said a recent deal with Daimler (DAI) will boost its userbase at the company by 35,000 to 100,000. Barron's was very bullish on Oracle (ORCL) this weekend; less so on SAP.
• Before you even knew it came. The U.S. economy will exit recession by the end of Q2, the NABE says. Growth for H2 will be 2.1%, and most economists think businesses and customers will find it increasingly easy to borrow money. "We are most of the way through the downturn, or the worst of it," BofA's Lynn Reaser says. They think the Fed will keep interest rates steady at 2%.
• Trichet: End of credit crunch not in sight. ECB president Jean Claude Trichet says we have yet to see the end of the credit crisis, calling current market conditions an "ongoing and very significant market correction." Deutsche Bank (DB) CEO Josef Ackermann was more upbeat: "I think that we are getting closer to the end of the financial crisis," he said. "It is not fully over yet, but the signs from the United States are encouraging."
• Facebook makes light of Microsoft rumor. "You can tell, from our history and what we've done, that we really wanted to keep the company independent, by focusing on building and focusing on the long-term," Facebook CEO Mark Zuckerberg says, responding to recent rumors of Microsoft (MSFT) buyout.
• News Corp.'s financial ad net. .Fox Networks (NWS) is unveiling an international online ad network that will target financial websites -- including its own WSJ, Barron's and MarketWatch -- called Worthnet.Fox.

Earnings: Monday Before Open

• Campbell Soup (CPB): FQ3 EPS of $0.43 just misses consensus of $0.44. Revenue of $1.88B in-line. Sees 2008 EPS increase of 5-7% from 2007 EPS of $1.95.
• EnerSys (ENS): Sees Q4 EPS of $0.42, better than consensus of $0.34. Sees revenue of $582M vs. consensus of $564M. Sees 2008 EPS of $1.42, better than consensus of $1.36.
• Lowe's (LOW): Q1 EPS of $0.41 beats consensus of $0.40. Revenue of $12.01B vs. consensus of $12.36B. Sees Q2 EPS of $0.54-$0.59 vs. consensus of $0.56, and revenue up 1%, and SSS down 6-8%. Sees 2008 EPS of $1.45-$1.55, short of consensus of $1.54, and revenue up 1% and SSS down 6-7%. Says 2008 will be a "challenging year on many fronts."
• Pacific Ethanol (PEIX): Q1 EPS of -$0.90 misses consensus of -$0.09. Revenue of $161.5M vs. consensus of $155M.

Today's Markets

• Asia: Nikkei +0.35% to 14,270. Hang Seng +0.48% to 25,742. Shanghai -0.54% to 3,605. BSE Sensex was closed.
• In Europe at midday: FTSE +1.05% to 6,317. CAC +0.28% to 5,092. DAX +0.42% to 7,186.
• U.S. futures are down slightly at 7:15 AM. Dow -0.05% to 12,975. S&P -0.04% to 1,425.25. Nasdaq flat at 2.035.50.
• Gold is up 1.46% to $913. Oil is up 0.89% to $127.43.

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Comments

[InquiringMind]

"Expensive oil is killing oil companies" is not exactly what that article said -- the figures of 26% and 30.2% are for the decline in profit for non-energy companies in the S&P 500, not for oil companies other than XOM, CVX, and COP. Yes, the oil sector is exhibiting declining margins per barrel but it also had the highest total increase in profit of any sector in the index. I appreciate your summaries of other news sources but you got this story totally wrong.

[SA EditorEli Hoffmann]

Inquiring mind, you're absolutely right. Dropped the ball on that one. Thanks for your feedback.