$300 Million Troubles for Thornburg; Brazil's Tele Norte Dials Up 49% Profit, China Economy to Slow; EOG Boosts Outlook; Cost Conscious Consumers Shun Premium Cocktails; Apple Ripens On Increased Demand; Freddie Mac Losses Mount; eBay Settles Suit
- Shares of Thornburg Mortgage Inc. (TMA) tumbled 15% to close at $9.76 yesterday (Thursday) after a regulatory filing with the Securities and Exchange Commission revealed the firm had to pay out $300 million in cash for margin calls due to mortgage-backed securities that had declined 10% to 15%. “In the event that we cannot meet future margin calls from our available cash position, we might need to selectively sell assets in order to raise cash," Thornburg said in a statement, MarketWatch reported. "To date, no such sales have been required to meet margin calls."
- Brazil's biggest phone carrier, Tele Norte Leste Participacoes SA (TNE), reported a 49% profit increase in the fourth quarter, bolstering prospects of it taking over rival Brasil Telecom Participacoes SA (BRP). Acquisitions aside, the company plans to invest $2.39 billion this year to upgrade and expand land and wireless networks, Bloomberg reported.
- China's State Information Center said the country's economic growth would slow to 10.5% in the first quarter because of slowing overseas sales and damages from recent snowstorms. Meanwhile, inflation will balloon to 6.9%. China's economy grew 11.4% in 2007, Bloomberg reported.
- Shares of Houston-based oil and gas producer EOG Resources Inc. (EOG) soared 18% to close at $124.73 yesterday (Thursday) after the independent energy firm increased its production forecast for 2009 to 13% and for 2010 to 15% from a previous forecast of 10% for both years. EOG also announced new discoveries of crude oil that should boost reserves, Reuters reported.
- Alcoholic beverage makers have seen a decline in on-premises sales, MarketWatch reported, as more patrons choose to save money and drink at home. "On-premise growth had already dropped to almost zero in 2007, while off-premise grew by 2-plus percentage points," said David Ozgo, chief economist of the Distilled Spirits Council, an industry trade group. "Two years ago, on-premise was growing by 5 or 6 points." But industry giants such as Diageo PLC (DEO) and Fortune Brands, Inc. (FO) are protected, as off-premise sales already make up 75% of their book of business.
- Shares of Apple Inc. climbed 5.7% yesterday (Thursday) to close at $129.91. The gains came one day after Apple affirmed its iPhone sales goal for this year and promised to release details on how outside programmers can create software for the device, Reuters reported. "Apple's industry-leading product cycles should help it overcome softer seasonality and sets the stock up for a strong second half," said Goldman Sachs analyst David Bailey who met with Apple Chief Operating Officer Tim Cook on Wednesday.
- Freddie Mac (FRE) said yesterday (Thursday) that its loss widened to $2.5 billion in the fourth quarter of 2007 as mortgage defaults mounted and falling interest rates hurt certain investments. It was announced Wednesday that Freddie and its larger government-sponsored sibling, Fannie Mae (FNM), would be allowed to expand their roles in the turbulent mortgage market.
- eBay Inc. (EBAY) and MercExchange LLC have settled a long-running patent lawsuit, Reuters reported yesterday (Thursday). According to the terms of the settlement, eBay will buy three patents from MercExchange needed to run its Web search, online auctions and fixed price sales, for an undisclosed sum. The legal fight, which began in 2001, resulted in a Supreme Court ruling in 2006 that weakened courts' power to issue injunctions to bar firms from using infringing technology.