Stock Market Predictions

Google's Schmidt may sell about 2.4 million shares

Stock Market Predictions

In a filing with the U.S. regulators, the Mountain View, California-based company said Schmidt adopted the Rule 10b5-1 plan last November and could begin selling shares this month.

Schmidt, who stepped down as Google's chief executive last April after a decade of "adult supervision," could bring down his voting power on the company's stock to about 7.3 percent if he sells all the shares under the plan.

As of December 31, he held 9.1 million shares of Google's Class A and Class B common stock - wielding about 9.7 percent voting power.

If Schmidt sells his shares under the plan, his overall stake would fall to 6.7 million class A and B shares - based on Google's outstanding shares as on December 31 - or about 2.1 percent of outstanding capital stock.

Schmidt, who led Google starting in 2001 to bring more management experience to a then-fledgling company, became executive chairman of the Internet giant's board after stepping down.

Google shares closed at $604.64 on Friday on the Nasdaq.

(Reporting by Himank Sharma in Bangalore; Editing by Unnikrishnan Nair)

GE to open technology center in New Orleans

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The center, which will open in mid-2012, will focus on creating new software and processes for the GE Capital business, the company said.

GE chief executive Jeff Immelt said this week wage differences between the United States and other countries were narrowing and it saw an opportunity to bring jobs back to the United States. The company said it plans to hire some 5,000 military veterans over the next five years.

(Reporting By Nick Zieminski in New York; Editing by Gerald E. McCormick)

Heinz, Campbell Soup top Street view; shares up

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"Campbell Soup and Heinz results were not all that great, but were better than expected," said Edward Jones analyst Jack Russo. "Expectations were quite low."

By contrast General Mills Inc (GIS.N), which makes Progresso soup and Cheerios cereal, cut its forecast on Friday and its shares fell more than 3 percent. J.M. Smucker (SJM.N) also cut its forecast this week, as increased costs hurt margins and higher prices hurt demand.

Heinz, which sells Ore-Ida frozen potatoes and other packaged foods in addition to its namesake ketchup, narrowed its full-year earnings outlook.

Campbell Soup, which sells Pepperidge Farm cookies and V8 juice in addition to its namesake soup, stood by its full-year outlook, despite quarterly sales it said were below its expectations.

"Our hypothesis is that continued pressure on the consumer in the current economic environment increased after holiday spending," said Campbell Chief Executive Denise Morrison. "The resulting decrease in personal disposable income has forced consumers to reduce discretionary spending, including food."

Heinz reported adjusted third-quarter earnings of 95 cents per share, topping analysts' average estimate of 85 cents per share, according to Thomson Global Markets I/B/E/S.

Sales were $2.92 billion, topping analysts' estimate of $2.89 billion. Net pricing rose 4.2 percent, while volume rose 0.4 percent.

Heinz said it now expects 2012 earnings of $3.27 to $3.29 per share excluding a benefit of 5 cents per share from foreign currency exchange rates and one-time charges.

Its prior forecast, which also excluded currency fluctuations and charges, was $3.24 to $3.32 per share.

Campbell Soup's quarterly profit was 64 cents per share, topping analysts' average estimate, according to Thomson Global Markets I/B/E/S, by 2 cents per share.

Campbell stood by its 2012 outlook, which calls for earnings of $2.35 to $2.42 per share and net sales to range from flat to up 2 percent.

Campbell's sales fell 1 percent to $2.11 billion, as higher prices could not fully offset the impact of lower volume.

Campbell's U.S. soup business has been lagging for some time

Heinz shares rose 4.4 percent to $54.40 in morning trade on the New York Stock Exchange. Campbell shares rose 2.6 percent to $32.90, while General Mills shares fell 3.6 percent to $38.36.

(Reporting By Martinne Geller in New York, editing by Dave Zimmerman)

Glencore says aluminium boss holds $1 billion stake

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Glencore, which has agreed to take over miner Xstrata (XTA.L) in what is set to be the sector's largest deal, detailed the holdings of senior employees who hold shares below the reporting threshold of 3 percent, but above 1 percent, in a series of regulatory filings.

The head of its aluminium division, Gary Fegel, with 2.2 percent of the company and 154.8 million shares, emerged as one of the most significant holders of the stock. Fegel, who took sole charge of the aluminium division last month, has been with Glencore since January 2001.

Glencore, the world's largest diversified commodities trader, detailed its top investors above 3 percent last year, when it ended almost four decades as a private company with a record market debut. Its largest single shareholder is its chief executive, Ivan Glasenberg, who holds almost 16 percent.

Others with significant holdings disclosed on Thursday include Stuart Cutler, who runs the ferrochrome division after the January shake-up, with 1.1 percent.

Steven Blumgart, a former co-head of Glencore's alumina and aluminium division who last month became the first senior executive since the IPO to announce plans to leave, holds 1.25 percent.

Its newly appointed head of iron ore, Christian Wolfensberger, holds just under 1.3 percent.

(Reporting by Clara Ferreira-Marques; Editing by Tim Dobbyn)

Amazon downgraded by Morgan Stanley; shares fall

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Analysts led by Scott Devitt lowered their rating on Amazon shares to "equal weight" from "overweight." Amazon's shares fell 4.1 percent to $176.97 in morning trading.

(Reporting By Alistair Barr; Editing by Maureen Bavdek)

Moody's may downgrade UBS and Morgan Stanley

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It was reviewing the long-term ratings and standalone credit assessments of a range of banks, Moody's added. Markets were unaffected by the Moody's announcement.

"Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions," the ratings agency said in a statement.

It said among 17 banks and securities firms with global capital markets operations, it might cut the long-term credit rating of UBS, Credit Suisse and Morgan Stanley by as much as three notches following the review. It said the guidance was indicative.

Among the banks that might be downgraded by two notches are Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC Holdings, and Goldman Sachs.

Bank of America and Nomura were included in those that might be downgraded by one notch.

The U.S. rating agency said in a separate statement its action on 114 financial institutions from 16 European nations reflected the impact of the debt crisis and deteriorating creditworthiness of its governments.

It cited more fragile funding conditions, increased regulatory burdens and a tougher economic environment for its review of banks and securities firms with global reach.

Moody's salvo follows rounds of downgrades in European sovereign ratings as the euro zone's struggle to keep its weakest link Greece afloat has been driving up borrowing costs and straining finances of other nations.

Last Monday, Moody's cut the ratings of six European nations including Italy, Spain and Portugal and warned it could strip France, Britain and Austria of their top-level AAA grade.

Standard & Poor's cut France's and Austria's top ratings and downgraded seven other euro zone nations last month. It also cut the euro zone's bailout fund by one notch.

Moody's on Thursday also downgraded the insurance financial strength ratings (IFSR) by one or two notches of several insurance companies, which it said related to their investment and operating exposures to Spain and Italy.

These included Unipol Assicurazioni SpA, Mapfre Global Risks, Assicurazioni Generali SpA and Allianz SpA. It affirmed the IFSR of Allianz SE, AXA SA, Aviva Plc and their subsidiaries, but cut the outlook on the rating to negative from stable.

VICIOUS CIRCLE

Asian shares and the euro were weaker on Thursday on concerns about another delay in cementing a bailout for Greece. Traders said markets didn't not show any specific reaction to the Moody's announcement.

In its review of European financial institutions, Moody's said that once completed, the ratings would "fully reflect the currently foreseen adverse credit drivers."

European banks' bond holdings of struggling euro zone nations Greece, Portugal, Ireland, Spain and Italy have trapped Europe in a vicious circle.

The falling value of the debt puts pressure on banks, which in turn weighs on lending and economic activity, making it tougher to sustain the growth that governments badly need to shore up their finances.

The biggest single group among the 114 institutions under review were headquartered in Italy, followed by Spain, with more than 20 each. Nine were headquartered in Britain, 10 in France and seven in Germany.

Moody's said nine of the 17 banks with global reach are included in the list of 114 financial institutions in Europe.

European Union leaders have been trying to put a financial "firewall" around the nations most afflicted by the euro zone debt crisis.

But jittery market sentiment suffered a fresh setback on Wednesday when several EU sources told Global Markets that the euro zone was considering a delay in parts of a second bailout plan for Greece.

Moody's said that for 99 European financial institutions, the standalone credit assessments have been placed on review for downgrade. For 109 institutions, the long-term debt and deposit ratings have been placed on review for downgrade.

For 66 institutions, the short-term ratings have been placed on review for downgrade.

(Additional reporting by Wayne Cole in Sydney: Writing by Tomasz Janowski and Neil Fullick; Editing by Ramya Venugopal)

GM profit bolstered by pricing, stock up

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The stock rise also reflected investor relief that the results were not worse, given that GM lost $747 million in Europe last year. For the fourth quarter, analysts gave the world's biggest automaker mixed reviews.

Fourth-quarter earnings were roughly flat from a year earlier and missed Wall Street expectations. GM also failed to provide the more detailed forecast for 2012 that some had hoped to hear.

"The results were 'shaken, not stirred,'" Guggenheim Securities analyst Matthew Stover said in a research note. "In other words, they were a little worse than consensus but certainly not as bad as the worst case outcome."

GM Chief Executive Dan Akerson said the U.S. automaker is focused on tackling the problems in Europe and South America, the two markets that dragged on fourth-quarter results. GM lost $562 million in Europe and $225 million in South America. By contrast, it earned $1.5 billion in its home market.

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GM earnings graphic: link.reuters.com/cyn66s

BREAKINGVIEWS-Would President Romney sell Uncle Sam's

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"We clearly have work to do in Europe," GM Chief Financial Officer Dan Ammann told reporters. "We have work to do in the South America business. Frankly, we have work to do all around the company in terms of cost opportunity."

Overall, GM expects 2012 sales to top 2011's $150.3 billion, and it sees a flat global market share.

For 2011, GM's profit jumped 62 percent to $7.6 billion. It was the company's first full year of operations since its initial public offering in the fall of 2010. GM reorganized with the help of a $50 billion U.S. government bailout and a 2009 bankruptcy.

The Obama administration's bailouts of GM and Chrysler Group LLC, which is majority-owned by Italy's Fiat SpA (FIA.MI), are the subject of political debate in the runup to this year's presidential election. Republican candidate Mitt Romney this week urged the U.S. Treasury to sell its nearly one-third stake in GM.

GOOD NEWS, BAD NEWS

Fourth-quarter net income was $472 million, or 28 cents a share, compared with $510 million, or 31 cents a share, in the year-ago quarter.

Excluding one-time items, GM earned 39 cents a share, 2 cents below analysts' average forecast in a poll by Thomson Global Markets I/B/E/S. Earnings before interest and taxes were in line with Wall Street's expectations.

GM's ability to raise prices on its vehicles added $800 million in earnings to the quarter.

Sales rose 3 percent to $38 billion.

"The good news is they've done a nice job getting North America back on track; the bad news is the rest of the world," Edward Jones analyst Matt Collins said.

"In order to get the stock moving again, they really need to address international profitability and the pension," he added.

Even with the 6.5 percent stock rise on Thursday, GM shares trade about 20 percent below their November 2010 IPO level of $33.

For 2012, GM expects to raise vehicle prices and hold costs in line after announcing its U.S. salaried workers would not receive an automatic pay raise.

But GM also said it expected profits to take a hit from the growing trend toward smaller, and lower-margin cars rather than more lucrative trucks like the Chevrolet Silverado. That drag on profit will be smaller in 2012 than it was last year, Ammann said.

One of the key questions for GM investors has been its troubled Opel unit, a business it opted to keep in 2009 when then-CEO Ed Whitacre scotched a planned sale.

In recent months, Vice Chairman Steve Girsky has taken charge of the Opel restructuring, and GM said it would detail further steps soon. The cost for the Opel restructuring was $200 million in the fourth quarter.

JPMorgan analyst Himanshu Patel described GM's European results as "not a train wreck."

For the year, Opel reported a loss of $700 million. GM had originally aimed to break even in Europe but abandoned that target last fall as the European debt crisis deepened.

Ammann said GM was working with union leaders at Opel to cut costs and improve efficiency in Europe within the framework of the current contract that runs through 2014 in Germany.

On Thursday, Opel union leaders urged GM to shift production of Opel vehicles from South Korea to Europe.

GM said its U.S. defined pension plans earned outsized returns of 11.1 percent last year and ended 2011 with a $13.3 billion pension funding shortfall.

The automaker expects returns of 6.2 percent in 2012 due to a shift to investments in bonds.

Ammann also said GM was exploring other actions to further reduce its pension risk, but has no plans to contribute to the plans at this time.

GM announced on Wednesday that it was ending its traditional pension for 19,000 U.S. salaried workers. The automaker and the United Auto Workers union have agreed to negotiate potential changes to the larger pension plan for factory workers.

GM said it would pay profit sharing of up to $7,000 per worker to about 47,500 hourly U.S. employees.

The automaker, which has said it remains focused on preserving a "fortress balance sheet" to carry it through the industry's next bust, ended the year with total automotive liquidity of $37.5 billion, down from $38.8 billion at the end of the third quarter.

GM shares were up 6.5 percent at $26.55 on Thursday afternoon on the New York Stock Exchange.

(Reporting By Ben Klayman and Deepa Seetharaman; Editing by Maureen Bavdek, John Wallace and Matthew Lewis)

Bank of America grants CEO $6 million in restricted stock

Stock Market Predictions

The stock grants are incentive pay doled out as part of the CEO's 2011 compensation package. For 2010, Moynihan received $9.1 million in performance-based stock.

In 2011, Bank of America earned $85 million in net income applicable to common shareholders, as the second largest U.S. bank sold off assets and took mortgage-related losses. It was the bank's first profitable year under Moynihan, who took charge in January 2010.

The bank's shares fell 58 percent last year as investors worried about whether the company had enough capital to absorb mortgage-related losses and meet new international standards. This year, the stock is up 44 percent, as the concerns eased. The shares closed Friday at $8.02, down 0.9 percent.

Moynihan did not receive a cash bonus for 2011 and did not receive an increase in his $950,000 base salary, a person familiar with the situation said on Friday. The stock grants disclosed on Friday equal all of the incentive-based pay he received for 2011, the person said.

The Charlotte, North Carolina-based bank will disclose more information about executive pay in its proxy filing next month.

Moynihan received 532,705 performance-based shares, worth $4.1 million as of Wednesday's grant date. These shares vest only if the bank meets unspecified performance measures.

The shares cannot be paid out until March 1, 2015. If they are not earned by December 31, 2016, they expire.

Similar performance-based shares granted by the bank last year required the company to post a minimum return on assets - net income compared with total assets - of 0.5 percent on a rolling annual basis. In the first year for that grant, the bank did not meet the minimum hurdle.

Moynihan also received 228,302 stock units this week that will vest in 12 monthly portions and be paid out in cash, based on the company's stock price, starting in March. As of Wednesday's grant date, they were worth about $1.8 million. He did not receive this type of stock for 2010.

Seven other Bank of America executives also received various stock grants this week, according to securities filings on Friday. Co-chief operating officer Tom Montag, a former Merrill Lynch executive who runs capital markets and investment banking operations, received the largest performance-based stock grant, worth about $7.1 million. That was down from a $14.3 million grant for 2010.

Net income in Montag's global banking and markets unit fell by more than half to $3 billion in 2011 from $6.3 billion in 2010, as investors and corporations pulled back amid uncertainty over the European debt crisis.

Some senior executives who report to Moynihan received cash bonuses for 2011, the person familiar with the situation said. Performance-based stock grants, however, made up the largest portion of their incentive pay, the person said.

In January, Bank of America said it would issue as much as $1 billion in stock to certain employees in lieu of a portion of their cash bonuses. Unlike restricted stock grants, however, the shares would be immediately tradable. Bonuses were paid out to employees this week.

(Reporting By Rick Rothacker; editing by Andre Grenon)

Brightcove glitters on debut; competition worries

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The company's shares closed at $14.30 on the Nasdaq, 30 percent above the IPO price, valuing the company at $377.2 million. More than 4.3 million Brightcove shares changed hands on the first day.

Investors have lapped up shares of most companies across sectors that debuted earlier this month such as EPAM Systems (EPAM.N), Roundy's Parent (RNDY.N), Caesars Entertainment (CZR.O) and FX Alliance (FX.N).

Started in 2004, Cambridge, Massachusetts-based Brightcove provides cloud-based solutions to clients to help them publish and distribute videos and other digital media.

"Companies that are cloud related are like last year's social media stocks. They (Brightcove) have attractive customer pricing and it is hard for a customer to change because they are committed to the technology," said IPO Desktop analyst Francis Gaskins.

Despite the glitzy start, some analysts remain cautious on the company's long-term prospects.

"Investors are overlooking the fundamentals and even the competitive threats. (They) just buy because the last IPO did well and the market is hot," Josef Schuster, founder of IPOX Schuster, a fund that specializes in investing in newly public companies, said.

Brightcove has incurred a loss each year since it began operating.

It posted a consolidated net loss of $17.3 million for the fiscal year ended December 31, 2011, and expects to continue to incur operating losses on an annual basis through at least the end of 2012, according to a regulatory filing.

Brightcove, which named only Google's (GOOG.O) YouTube as its rival in the filing, also competes with Ooyala, IAC's (IACI.O) Vimeo and Comcast's (CMCSA.O) thePlatform for a share in the fast-growing video cloud sector.

At its opening price on Friday morning, the company is valued at about $382.8 million.

Brightcove's principal stockholders include Accel Partners that holds about 11 percent stake in social media behemoth Facebook Inc, which filed with U.S. regulators to go public earlier this month.

Brightcove's venture capital backers Accel and General Catalyst Partners will each hold 21.4 percent of the company after the offering.

Palo Alto, California-based Accel's affiliates have a stake in daily deals company Groupon Inc (GRPN.O) and have also backed Rovio, the Finnish developer of the Angry Birds smartphone game.

Brightcove's Chief Executive Jeremy Allaire, who co-founded the company, worked as Chief Technology Officer of Macromedia after its merger with Allere Corp. Macromedia was bought by Adobe Systems Inc (ADBE.O) in 2005.

As of December 31, 2011, the company had 3,872 customers in more than 50 countries. They include BBC Worldwide, The New York Times Co, The Financial Times, Bank of America, General Motors and Sears.

(Reporting by Sharanya Hrishikesh and Ashutosh Pandey in Bangalore; Editing by Sriraj Kalluvila, Sreejiraj Eluvangal)

General Mills cuts '12 outlook on weak sales

Stock Market Predictions

The maker of Progresso soups and Cheerios cereal said it expected 2012 earnings of $2.53 to $2.55 per share, down from a prior forecast of $2.59 to $2.61.

The company forecast earnings of 54 cents to 56 cents per share for the third quarter ending on February 26.

The company plans to report third-quarter earnings on March 21.

General Mills shares fell 4.2 percent to $38.10 in premarket trading.

(Reporting By Martinne Geller in New York; Editing by Lisa Von Ahn)