It has been a difficult turnaround for Deutsche Bank. The big German financial firm said on Thursday that it lost 2.2 billion euros ($3 billion) in the fourth quarter, as it was hit by legal costs and expenses related to its restructuring. “The results underline the task ahead for Jürgen Fitschen and Anshu Jain, the co-chief executives who took over the bank less than seven months ago and have declared their intention to deal more severely with the legacy of the financial crisis,†Jack Ewing writes in DealBook.
The firm said “significant†charges related to legal proceedings contributed to the loss, without giving specifics. The bank, which avoided a bailout in the financial crisis, has been hit with numerous lawsuits and official investigations, incuding a tax-evasion inquiry that led to a raid on the company’s headquarters last month. In addition, Deutsche Bank’s leaders have pledged to reduce the firm’s risky activities, a process that can involve booking losses.
But such strategic efforts are starting to show signs of working. The firm said revenue in the fourth quarter rose 14 percent, to 7.9 billion euros.
“This is the most comprehensive reconfiguration of Deutsche Bank in recent times,†Mr. Fitschen and Mr. Jain said in a statement. They warned that “deliberate but sometimes uncomfortable change†lay ahead, adding that “this journey will take years not months.â€
FACEBOOK’S MIXED REVIEWS  | Facebook’s earnings gave investors reasons for optimism and some cause for concern. The company said revenue rose by 40 percent, to $1.59 billion, in the fourth quarter, beating analysts’ expectations, after an aggressive push to ramp up advertising. But expenses also rose rapidly as the company hired engineers and built data centers. Facebook reported net income of $64 million, or 3 cents a share.
Facebook’s shares, which have been on a roller-coaster ride over the company’s eight months on the public market, fell more than 3 percent in after-hours trading as the results were released. “It’s important to start planting seeds,†Mark Zuckerberg, the chief executive, said, cautioning that profit might not grow as fast as investors would like.
“The most closely watched part of the earnings report was how much money the company brought in from its mobile users,†Somini Sengupta writes in The New York Times. “Facebook said advertising on the mobile newsfeed accounted for 23 percent of its advertising revnue, up from 14 percent in the third quarter but slightly lower than some analysts had forecast.†Over the long term, Facebook’s biggest challenge “remains how to profit from the enormous piles of personal data of its one billion users without alienating them or inviting the wrath of government regulators in the United States and abroad.â€
“The quarter was a little like a cold shower after you’ve been out all night â€" it’s something that makes you sober up very quickly,†said Jordan Rohan, an analyst at Stifel Nicolaus.
PROMINENT PROSECUTOR IS EXPECTED TO JOIN PRIVATE SECTOR  | A government lawyer who secured a conviction of Raj Rajaratnam on insider trading charges and led the successful prosecution of Rajat K. Gupta is leaving the United States attorney’s office in Manhattan. The lawyer, Reed Brodsky, is joining Gibson Dunn & Crutcher as a partner in the white-collar crimin! al defens! e practice, the law firm is expected to announce on Thursday, according to DealBook’s Peter Lattman.
Mr. Brodsky is the latest government lawyer to head to the private sector. Lanny A. Breuer, the head of the Justice Department’s criminal division, said he was stepping down on Wednesday. The two prosecutors who tried Mr. Rajaratnam with Mr. Brodsky, Jonathan R. Streeter and Andrew Z. Michaelson, have already moved on to corporate law firms. “Reed is a star in federal prosecutorial circles,†said Randy M. Mastro, co-head of Gibson Dunn’s litigation practice.
Mr. Brodsky was known as a workhorse around the office, Mr. Lattman writes. “But Mr. Brodsky was also a show horse. Fresh faced and animated, Mr. Brodsky endeared himself to juries with an impassioned, eloquent presentation. He could also be tenacious and combative in the courtroom, frequently butting eads with his adversaries.â€
ON THE AGENDA  | The Blackstone Group, Nasdaq OMX, MasterCard, Royal Dutch Shell and United Parcel Service report earnings on Thursday morning. Russell Wasendorf, the founder of the Peregrine Financial Group, is to be sentenced at 10 a.m. on charges of mail fraud, embezzlement and lying to regulators. The Commodity Futures Trading Commission holds a public round table starting at 9:30 a.m. to discuss the “futurization†of the swaps market. Steve Wynn of Wynn Resorts is on Bloomberg TV at 3 p.m. Shawn Matthews, chief executive of Cantor Fitzgerald, is on CNBC at 4 p.m.
BLACKBERRY’S COMEBACK ATTEMPT  | As it i! ntroduced a new product line on Wednesday, the maker of the BlackBerry also changed its name from Research in Motion to simply BlackBerry, underscoring its bet on that brand. “But because the new name is now tied to the company’s hopes of restoring its main product’s status as a symbol of executive cool, the change carries some risk,†Ian Austen writes in The New York Times. The company’s ticker symbol on Nasdaq is also changing to BBRY from RIMM. For context, DealBook put together an abridged history of corporate rebranding.
“BlackBerry 10 arrives long after Apple’s iPhone and phones using Google’s Android operating system have come to dominate the smartphone market, so its success is anything but assured,†Mr. Austen writes. According to an industy research group, “BlackBerry now holds just 4.6 percent of that market, about one-tenth of its peak market share. Analysts are concerned about how long it will take for the phones to go on sale in the United States.†Still, the products have gotten some favorable reviews.
Those on Wall Street may miss one feature in particular. BrickBreaker, a simple game whose devotees have included Richard S. Fuld, formerly chief executive of Lehman Brothers, won’t be installed on the new devices, DealBook’s Susanne Craig reports. The company said it wanted to encourage third-party developers to make versions of the classic game, which is still played by Richard B. Handler, the chief executive of the Jefferies Group.
Hostess Confirms Lead Bidder for Twinkies  | Hostess Brands confirmed late on Wednesday that it had picked the team of Apollo Global Management and C. Dean Metropoulos & Company, the owner of Pabst Blue Ribbon, as the stalking horse bidder for its Twinkies and Dolly Madison brands. DealBook Â'
Thai Magnate Wins Control of Fraser & Neave  |Â
BLOOMBERG NEWS
Diageo May Bck Off From Deal-Making  | Reuters reports: “Diageo, the world’s biggest spirits group, signaled a more reticent acquisition strategy following a recent buying spree, saying it wants to develop its own tequila brand after ending talks to buy a stake in Jose Cuervo.†REUTERS
Endo Health Said to Have Discussed Possible Sale  | Reuters reports: “Endo Health Solutions Inc. has held talks in recent weeks with drug makers potentially interested in buying the maker of pain relief medication, people familiar with the matter said on Wednesday.†REUTE! RS
Time Warner Said to Weigh Sale of New York Headquarters  |Â
REUTERS
Nomura Earnings Rise 13%, but Miss Analysts’ Estimates  | Net income at Japan’s biggest brokerage rose to 20.1 billion yen ($221 million) for the last three months of 2012, as Nomura moved to win back investor confidence after an insider trading scandal last year. Real Estate Losses Weigh On Santander  | Banco Santander’s fourth-quarter net income rose to $544 million, but the Spanish bank continued to set aside billions of euros to cover losses in its domestic property market. DealBook Â'
Goldman Reduces Exposure to Interest Rates  | Fortune writes: “Goldman Sachs is growing more nervous about the bond bubble. In the last year, the investment bank has dramatically cut the amount of money it could lose on any given day if interest rates were to rise, which would cause bond prices to fall. The bank has also upped its own borrowing in order to lock in low interest rates.†FORTUNE
2 Morgan Stanley Executives Said to Be Leaving  | Bloomberg News reports: “Peter Bacon, Morgan Stanley’s head of capital markets in Europe, and Gene Martin, co-head of the leveraged and acquisition finance group, are leaving the bank, according to people briefed on the matter.†BLOOMBERG NEWS
Overseas, Citigroup Takes a Hard Look at Consumer Banking  | Citigroup “is looking to pull out of cosumer banking in more countries in an effort to lower costs and boost profits, according to two people familiar with the matter,†Reuters reports. REUTERS
The Rich Math Behind the Handler Handout  | One of Wall Street’s relative minnows is getting a whale-size paycheck, Antony Currie of Reuters Breakingviews writes. DealBook Â'
K.K.R. and Apax Said to Plan Bid for Vivendi Unit  | Bloomberg News reports: “Private equity firms including K.K.R. and Apax Partners L.L.P. are teaming up to bid against DirectTV to acquire Vivendi’s GVT phone unit in Brazil, people with knowledge of the matter said.†BLOOMBERG NEWS
In Dell Buyout, Founder Must Tread Carefully  | Quartz writes: “Buyout scenarios involving company management are rife with possible land mines. Corporate governance rules suggest that an executive, who is already a company insider, should not be shown favoritism or given other unfair advantages.†QUARTZ
Big Investor Supports Elliott Push for Shake-Up at Hess  | Relational Investors, the activist investment firm run by Ralph V. Whitworth, says that “Elliott’s suggestions for unlocking value are similar to our recommendations.†DealBook Â'
For Elliott Management, Argentina Continues to Pose Challenges  | Elliott Management had a gain of 3.3 percent in its flagship fund in the fourth quarter, as most of its holdings, with the exception of Argentine debt, made money, Absolute Return reports. ABSOLUTE RETURN
Zoetis, Unit of Pfizer, Aims to Raise $2.2 Billion in I.P.O. Â |Â Zoetis, which is expected to price shares on Thursday evening, is aiming for what would be the largest I.P.O. in the United States since the debut of Facebook. BLOOMBERG NEWS
Quintiles Said to Choose Banks for I.P.O.  | Reuters reports: “Quintiles Transnational Corp., the largest provider of testing services to drug makers, has chosen Morgan Stanley, Barclays and JPMorgan Chase as joint bookrunner for a planned initial public offering, people familiar with the matter said on Wednesday.†REUTERS
On SecondMarket, Current Employees Sell More Stock  | SecondMarket, the platform that lets people buy and sell private company shares, said 66 percent of all sellers of stock last year were current employees of those companies, an increase from 11 percent the year before, TechCrunch reports. “It used to be that former employees made up most of the sellers.†TECHCRUNCH
Renewable Energy Industries Push for New Financing Options  | With government approval, investment structures more commonly used by the oil, gas and real estate industries could make wind and solar companies more appealing to investors. DealBook Â'
Chrysler Reports Big Increase in 2012 Earnings  | The New York Times reports: “Chrysler said that its net income soared to $1.67 billion last year â€" about nine times as much as the $183 million it earned in 2011. The exponential increase nderscored the company’s comeback from its government bailout and bankruptcy in 2009, when it was taken over by Fiat.†NEW YORK TIMES
Treasury Sells Some TARP Holdings at a Loss  |Â
WALL STREET JOURNAL
Applications to Law Schools Fall  | The New York Times reports: “Law school applications are headed for a 30-year low, reflecting increased concern over soaring tuition, crushing student debt and diminishing prospects of lucrative employment upon graduation.†NEW YORK TIMES
Living Dangerously Without Ring-Fencing  | Germany will make its banks split off proprietary trading. But European depositors will still be exposed to major trading losses, George Hay and Dominic Elliott of Reuters Breakingviews write. DealBook Â'
A Warning to Wall St. About Misleading Clients  | The charges against Jesse Litvak, a former securities trader at Jefferies & Company, serve as a warning to Wall Street that misleading customers â€" including sophisticated ones â€" can result in criminal action, even for a broker who does not owe a fiduciary duty to clients, Peter J. Henning writes in the White Collar Watch colun. DealBook Â'
Jackson Proposes Creation of a New Lender  | At a three-day conference, the Rev. Jesse Jackson discussed a proposal to use pension money to make loans in low-income communities. DealBook Â'
