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Macy’s Jumps on Earnings; Hedge Funds Eyeing Fannie & Freddie; Chevron Damages Reduced

Dan Berman
Hot Stock Minute

Macy's (M) is just out with a solid earnings beat for the quarter. The department store chain made 47-cents a share when estimates were for 39-cents. Sales also edged past estimates at $6.28-billion compared to $6.19-billion. Yahoo Finance Senior Columnist Mike Santoli has more in the video above.

There is word this morning of a new plan for Fannie Mae and Freddie Mac. The Financial Times reports that a number of hedge funds and private equity firms are working on a proposal to take over large parts of the housing giants. The plan is being pitched as a way to bring private money back to the mortgage market. It could also conceivably speed-up housing finance reform which has gotten stuck in Congress. The Treasury has controlled both Fannie and Freddie since the financial meltdown.

Ecuador has affirmed a guilty verdict in an environmental case against Chevron (CVX). However, the court cut damages to $9.5-billion, which is half the original amount. The case stemmed from claims against Texaco, which Chevron acquired in 2001. Chevron stock goes into today's trading session up 8% year-to-date.

Meanwhile, Johnson & Johnson (JNJ) will pay more than $4-billion to settle thousands of lawsuits over defective hip implants and Starbucks will pay Mondelez (MDLZ) $2.8-billion for early termination of a grocery store deal with the company when its operations were still under the Kraft (KRFT) umbrella.

How much does it cost to bring home the Bacon? $142.4-billion if you're talking about Francis Bacon. His three panel-painting of a friend-turned-foe Lucian Freud sold at Christie's last night. That price tag was a record amount for artwork sold at auction. The winning bid came over the phone from New York dealer Bill Acquavella who was representing a client.


Cisco Systems (CSCO) reports after the closing bell. The company is expected to post earnings of 51-cents a share up from 48-cents a year ago. That would be on revenues that have tipped past the $12-billion mark. If those figures prove to be accurate, they would mark the company's lowest year-over-year gains in quite some time. The company's biggest challenge right now may be the massive shift to cloud computing. Shares of Cisco Systems are currently up 17% year-to-date.

Potbelly (PBPB) has been up as much as 14% since reporting its earnings after yesterday's close. The company just edged past revenue estimates with 78-million dollars in sales of its sandwiches. Earnings however easily topped expectations at 15-cents a share. The chain reported sales gains of nearly 12% over the last year, and same-store sales increases of 2.5%. It now plans to open about 40 more stores before year's end. Potbelly ended yesterday's regular session down 16% since its market debut about 5-weeks ago.

Another company which went public back in October reports today: Re/Max (RMAX). The real estate company is expected to post earnings of 99-cents a share on about $39-million in revenues. Shares of Re/Max are down about 8% since the stock began trading. JPMorgan has a $30 price target on the stock. Bank of America has a $33 target.

Trucking company YRC Worldwide (YRCW) has been down as much as 28% in early trading. The company posted losses of $4.45 a share, nearly ten times the predicted losses of 46-cents a share. That was despite revenues which were basically in line with expectations. Prior to this drop, shares were up 44% year-to-date. The company is blaming driver shortages and higher expenses for the earnings miss.