Five Things to Watch: AIG Road Show and More
A pair of TARP pariahs meet shareholders, a pair of big-cap companies report tough quarters and a pair of would-be wed wireless names face scrutiny. Here's what we're watching...
AIG Hits the Road: Late Tuesday, the AIG board met to nail down plans for its "re-IPO" road show. Assuming it gets the green light, two teams of executives will begin making the sell to investors on the same day that the troubled insurer holds its annual meeting in downtown Manhattan. Following the company's lackluster earnings last week, AIG shareholders won't be too happy with one of the worst S&P performers in recent months. The stock is down about 40 percent year to date. Even so, the break even price of $28.70 is within the realm of possibility as the Treasury Department prepares to unload some of its 92 percent stake in AIG.
Banking on Housing: Not to be forgotten in the drumbeat towards AIG's offering, another major TARP recipient Bank of America also meets its shareholders Wednesday. While there's a full agenda of shareholder proposals on the docket, the primary worry orbiting the bank is its continued reliance on a rebounding housing market. Still licking its wounds from the inherited Countrywide portfolio, the Charlotte-based bank holds $408 billion of mortgages and home-equity lines. Add in the lack a real estate recovery and indications of a double-dip, and the formula isn't too great for BofA.
Cisco Twists and Shouts: Nobody's expecting a big quarter out of Cisco when the company delivers Wednesday afternoon earnings. It's been a tough run for the tech giant. CEO John Chambers has tried to shake things up, shutting down Flip and more recently reorganizing the company's corporate structure. Even so, Cisco shares have been headed south over the past six months and Chambers himself has been the target of a fair bit of scrutiny. Consensus forecasts call for earnings of 37 cents per share.
Toyota's Troubles: Speaking of troubled companies, Japanese automaker Toyota reports earnings overnight Wednesday in a quarter that was defined by the Japanese earthquake. By the early part of this year, shares in the company had recovered to levels not seen since the spate of recalls which plagued its 2010. Of course, the effects of the natural disaster rocked shares in the auto company. Good news Tuesday however, as Nikkei reported that Toyota's production will return to normal levels 2-3 months earlier than expected.
Calling Foul on AT&T: The big names in wireless are set to mix it up on Capitol Hill Wednesday in a Senate Judiciary Committee hearing focused on the proposed merger between AT&T and T-Mobile USA. If you want more reason to pay attention than the amazing hearing title — "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?" — you should be watching for vocal dissent from Sprint Nextel CEO Dan Hesse, who's already been outspoken in his opposition to the deal.