Reuters reports that shares of Fannie Mae (FNM) and Freddie Mac (FRE) are plunging on concern the companies need to raise more capital amid larger-than-expected losses. Lehman believes that a pending accounting change could also force FNM and FRE to boost capital by an additional $46 billion and $29 billion, respectively.
Yahoo (YHOO): In response to Carl Icahn's latest open letter to YHOO shareholders, YHOO says it "continues to stand ready to enter into negotiations with Microsoft Corp. for an acquisition of Yahoo!." YHOO also noted that Microsoft's (MSFT)Ballmer and Carl Icahn have "teamed up in an apparent effort to force" YHOO into selling to MSFT its Search business at a price to be determined in a future "negotiation" between Mr. Icahn's directors and MSFT's management. YHOO strongly believes this would not lead to outcome that would be in the best interests of its stockholders. S&P reiterates buy on Yahoo shares.
Verisign (VRSN) says CEO William Roper resigned from the company and board of directors effective June 30, 2008. It expects second quarter revenue will meet or exceed current consensus estimates. S&P upgrades to hold from sell, on valuation. Earlier, S&P reiterated sell on concerns about CEO leaving.
Marshall & Ilsley (MI) expects to take second quarter loan and lease loss provisions of up to $900 million (or $2.22 per share), due to continuing deterioration in housing market. Now sees second quarter net loss of $1.50-$1.60 per share. Expects to return to profitability in the third quarter, but also sees elevated charge-offs and loan loss provisions for the rest of 2008 in comparison to those incurred by MI prior to the current housing downturn. S&P downgrades to sell from hold. Ladenburg cuts estimates, target, keeps neutral.
UBS AG (UBS) says second quarter results are likely to be at or slightly below break-even, reflecting positive contributions from Global Wealth Management & Business Banking and Global Asset Management, offset by a loss in the Investment Bank. Says further market deterioration led to writedowns and losses on previously disclosed Investment Bank risk positions, in particular credit valuation adjustments on monoline insurance exposures. In connection with the losses to date, second quarter results include tax credit of about CHF 3B.
InBev (INBVF.PK) announces that it will file later today a preliminary consent solicitation statement with SEC seeking to remove each member of the board of directors of Anheuser-Busch Companies (BUD) and provide BUD shareholders an opportunity to have a direct voice in the proposed combination with InBev.
Cash America International (CSH) raises $0.51-$0.54 second quarter EPS guidance to $0.62-$0.64. It says its pawn lending business contributed to higher-than-expected results as revenue from pawn loans, increased gross profit dollars on the sale of merchandise exceeded expectations.
Smurfit-Stone Container (SSCC) rises after Credit Suisse raises U.S. paper and forest products sector to overweight from underweight. Upgrades SSCC and Temple-Inland (TIN) to outperform from neutral.
Lehman downgrades Disney (DIS) and CBS (CBS) to underweight from equal-weight, downgrades Time Warner (TWX) and News Corp.