Netflix soars after blowing past estimates. Netflix (NFLX) shares soared 23.5% premarket after the company's EPS and subscriber growth beat street expectations, helping lay to rest some of the worries that have engulfed the company in the past. Netflix swung to a net profit of $2.7M from a loss of $4.6M and EPS came in at $0.31, while revenue jumped 17% to $1.02B and was in line with forecasts. The number of net domestic streaming subscribers rose 2.03M to 29.2M.
China April PMI disappoints. Chinese flash HSBC PMI dropped to 50.5 in April from 51.6 in March, missing expectations by a full point. "New export orders contracted after a temporary rebound in March, suggesting external demand for China's exporters remains weak," says HSBC. "Weaker overall demand has also started to weigh on employment in the manufacturing sector." The disappointing reading comes not long after Q1 GDP growth slowed to 7.7%, and it helped send Asian stocks lower.
Contraction in German factory activity deepens. Flash German manufacturing PMI unexpectedly fell to 47.9 in April from 49 in March, while the services print dropped to 49.2 vs 50.9. "The latest figures suggest any rebound in GDP" in Q1 "could be rather short-lived," says Markit. Still, French PMI data improved while eurozone-wide readings were mixed, with the overall picture still grim.
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Analysts wary ahead of Apple's earnings. Apple's (AAPL) FQ2 earnings are due out after the bell, with analysts expecting that EPS fell to $10.07 from $12.30 but that revenue grew 4.7% to $42.59B. Some analysts think that the Street's estimates are too high and reckon the stock could take further punishment following the report, although others think there's potential for a turnaround.
Wal-Mart to link pay to compliance targets. Wal-Mart (WMT) plans to link the compensation of certain executives to whether the retailer successfully meets its compliance objectives. As part of an overhaul in the wake of bribery allegations in Mexico, senior managers will start providing quarterly reports to an audit committee on how they are adhering to a corporate compliance program.
SABMiller CEO steps down after surgery for brain tumor. SABMiller (SBMRF.PK) COO Alan Clark has become CEO of the beverages group and is replacing Graham Mackay after the latter was diagnosed with a brain tumor and underwent surgery yesterday. Clark was due to take over in July, with Mackay set to become Chairman. His role is now "under review pending the outcome of his treatment." Shares were +2.9% at midday in London.
ARM shares climb following profit surge. ARM Holdings' (ARMH) Q1 adjusted pretax profit jumped 44% to £89.4M and beat consensus, while revenue climbed 28% to £170.3M and also topped expectations. Royalty revenues again grew faster than the wider semiconductor industry, boosted by increased market shares in key markets such as digital TVs and microcontrollers, with smartphone and tablet growth also helping. ARM "made an encouraging start to 2013" and it projects FY revenues in line with market expectations, which are £675.8M. Shares were +6.6% premarket.
Apple wins latest round in the global IP wars. The International Trade Commission has ruled that Apple (AAPL) did not breach a Motorola (GOOG) patent for a sensor to prevent a user's head from activating the touch screen on an iPhone. The patent was the last one left in a case that originally involved six. Two were terminated and three were found not to have been violated. Had Apple lost the case, the ITC could have banned the import of iPhone 4 devices into the U.S.
Top Economic & Other News
San Bernardino votes to pay Calpers but not bondholders. San Bernardino's council has passed a budget that will allow the bankrupt Californian city to restart $1.2M in biweekly employer contributions to Calpers while continuing to renege on its commitments to its other creditors, including bondholders. Along with Stockton, San Bernardino represents a test case over who should get paid first when a municipality goes bankrupt - the public employees or the bondholders.
Senate clears way for vote on Internet sales tax. The Senate yesterday voted 74-20 to limit debate on legislation that would force retailers to collect taxes for online sales, opening the way for a final vote on the measure, which could take place this week. The White House officially backed the bill for the first time, although its prospects in the House are uncertain even if it passes the Senate.