Headlines this morning include bad news for JPMorgan and Goldman Sachs, Boeing's new battery plans, weak guidance from Krispy Kreme and Ulta Salon and Cosmetics.
JPMorgan and Goldman Sachs
The Federal Reserve found problems with capital plans submitted by JP Morgan (JPM) and Goldman Sachs (GS). While both banks received passing grades from the central bank's stress tests, questions linger about their ability to adequately estimate losses during a severe economic downturn. JP Morgan said it received approval to repurchase $6 billion in stock and raise its quarterly dividend to 38 cents, but those figures could be reduced after it submits a revised capital plan to the Federal Reserve. Goldman Sachs will also resubmit its capital plan. Fourteen other banks, including Bank of America (BAC) and Citigroup (C) had their capital plans approved, while capital plans submitted by BB&T (BBT) and Ally Financial (GJM) were rejected.
Aircraft maker Boeing (BA) said its 787 Dreamliner could be flying again in weeks with a newly fortified battery that it hopes will reduce the risk of fire. The new battery pack will be incased in a steel box, packed with insulation, heat-resistant material and spacers. The box will also have new drain holes to reduce moisture and vents to send gases produced by overheating directly into the atmosphere. Japanese regulators said they could not say when flights will restart and called the comments from Boeing “inappropriate.”
Doughnut-maker Krispy Kreme (KKD) earned 7 cents per share for its fourth fiscal quarter, or 11 cents per share on an adjusted basis. Revenue was $118.1 million. Wall Street had expected earnings of 12 cents per share on $117 million in revenue. The company forecast full-year earnings of 53 to 57 cetns per share for fiscal 2014, missing estimates for 58 cents.
Ulta Salon, Cosmetics & Frangrance
Beauty-supply store Ulta Salon (ULTA) said it expects to earn between 60 and 63 cents per share on revenue between $568 million and $577 million in the first quarter. Analysts had e3xpected earnings of 72 cents on revenue of $578.9 million.