In the news this morning, Knight Capital chooses a partner, FedEx reports weak earnings, UBS will pay $1.5 billion to settle charges that it manipulated the LIBOR, Oracle beats earnings estimates, Greenbrier rejects an offer from Carl Icahn, Health Net releases guidance calling for higher-than-expected earnings but weak revenue, and the Treasury plans to exit its investment in General Motors.
The board of Knight Capital (KCG) decided Tuesday to select a bid from Getco Holdings, rejecting an offer from Virtu Financial. Knight shareholders will have the right to elect to receive either $3.75 per share or one share of common stock in the new business. Getco was part of a group led by Jefferies Group (JEF) that rescued Knight after a software error caused a massive trading loss on Aug. 1.
Shipping giant FedEx (FDX) reported fiscal second-quarter earnings of $1.39 per share on revenue of $11.1 billion. Analysts had forecast EPS of $1.41 per share on revenue of $10.84 billion. The company said Superstorm Sandy cost it 11 cents per share during the quarter. The company kept its forecast for the full fiscal year on hopes that a strong holiday season and cost cutting plan will offset a weak global economy.
Swiss banking giant UBS AG (UBS) admitted Wednesday that its staff committed fraud while rigging the benchmark LIBOR interest rate. The company will pay a fine of $1.5 billion to regulators in the U.S., U.K. and Switzerland. Other lenders and individuals are expected to face charges in connection is manipulation of the LIBOR, which is used to set prices on trillions of dollars worth of securities.
Oracle (ORCL) reported adjusted second-quarter earnings of 64 cents per share, topping analysts' estimates for 61 cents per share. Adjusted revenue was $9.11 billion in the quarter, compared to estimates for $9.02 billion. The company said it expects software sales to grow by between three and 13 percent in the quarter that ends in February. Hardware sales are expected to flat or down about 10 percent from the year-ago quarter.
Greenbrier (GBX) turned down a $488 million offer from Carl Icahn, saying the buyout bid was too low. The company said a regulatory filing made by Icahn, who owns a 9.99% stake in the company, included a conditional offer to purchase the company for $20 per share. The company said in previous discussions with Icahn, potential bids had been between $20 and $22 per share.
Health Net (HNT) said it expects to earn between $2 and $2.10 per share next year on revenue from $10.7 billion to $11.2 billion. Analysts had forecast EPS of $2.03 per share on revenue of $12.06 billion.
General Motors (GM) will spend $5.5 billion to repurchase 200 million shares of its stock from the government. The Treasury plans to sell the rest of its stake in the automaker in the next 12 to 15 months. The company will pay about $27.50 per share, a premium of about $2 to Tuesday's closing price. The government acquired 500 million shares of the company for $49.5 billion as part of its bailout of the company. The deal leaves the company about $21.5 billion short of breaking even on its investment.