In the news this morning, FedEx misses earnings estimates while Williams-Sonoma beats, Freddie Mac is suing banks over LIBOR manipulation, the Office of the Comptroller of the Currency lowered its opinion of JP Morgan's management, American Realty Capital is offering to buy another REIT, Carnival announced delays in getting two ships back in service and True Religion will look for a new leader.
Shipper FedEx (FDX) reported earning $1.13 per share, or $1.23 per share for its most-recent quarter on revenue of $11.0 billion. Analysts had expected $1.38 per share on sales of $10.85 billion. The company said it would accelerate its efforts to cut costs as customer move away from its air express business toward cheaper shipping options. Looking forward, the company said it expects to earn $1.90 to $2.10 per share, compared to estimates for $2.07 per share.
Government-sponsored enterprise Freddie Mac is suing more than a dozen big banks, claiming they manipulates global interest rate benchmarks which lead to substantial losses. The suit names Bank of America (BAC), JP Morgan (JPM), Credit Suisse (CS), UBS (UBS) among other banks. It also names the British Bankers Association, the group that oversees the setting of the London Interbank Offered Rate, or LIBOR.
Banking giant JP Morgan (JPM) received a downgrade on a confidential government scorecard due to concerns about the company's management. The Office of the Comptroller of the Currency lowered the bank's management rating by one notch in July. The move came on the heels of the company's “London Whale” trading losses. The new rating, A 3 on a five-point scale, signifies that oversight at the company “needs Improvement.”
American Realty Capital Properties
Real-estate Investment Trust American Realty Capital Properties (ARCP) has offered to buy fellow REIT Cole Credit Property Trust III for $5.74 billion in cash and stock. The company will pay at least $12 per share for the for 478 million outstanding shares of Cole Credit. Cole shareholders could choose cash or 0.80 shares of American Realty for each Cole share they own. American Realty said it would reconsider its offer if Cole Credit goes through with plans to buy its advisor, Cole Holdings Corp.
Expensive jeans maker True Religion (TRLG) said Wednesday that founder and CEO Jeff Lubell will step down. The company said about two weeks ago that it would not renew Lubell's contract. President Lynne Koplin has been named interim CEO.
Cruise-line Carnival (CCL) said Tuesday that the Carnival Triumph, which suffered an engine fire in February that resulted in 4,200 people being stranded on the ship for five days, will be out of service longer than expected. The ship is now expected to return to service on June 3, meaning 10 additional cruises will be canceled. The company will give affected cruisers a full refund plus reimbursement for non-refindable transportation costs and a 25 percent discount on a future cruise. The company also said that the Carnival Sunshine will return to service on May 5, meaning the cancellation of two European cruises as that ship gets a scheduled makeover. The company is working to improve its backup systems, expand the scope of services that run on emergency power and improve its ships' fire prevention, detection and suppression systems.
Home-goods retailer Williams-Sonoma (WSM) reported earnings of $1.34 per share for the quarter ended Feb. 3. Revenue was $1.41 billion. Wall Street expected $1.29 per share on $1.4 billion in sales. The company also announced plans to raise its quarterly dividend to 41 cents per share from 31 cents.