Morgan Stanley\'s Profit Beats Estimates

MORGAN STANLEY’S PROFIT BEATS ESTIMATES  |  Morgan Stanley reported a fourth-quarter profit of $481 million or 25 cents a share, including charges. Excluding one-time accounting charges, the firm had a profit of 45 cents a share, beating estimates of analysts polled by Thomson Reuters of 27 cents a share. Revenue was $7 billion in the fourth quarter, up 23 percent from the period a year ago, when the firm reported a per-share loss of 15 cents. Morgan Stanley’s chief executive, James P. Gorman, said in a release on Friday that Morgan Stanley had reached a “pivot point” in its turnaround strategy. The conference call is at 10 a.m.

ARMSTRONG’S BACKER SAYS HE WAS UNAWARE OF DOPING  |  Lance Armstrong’s confession that he repeatedly used performance-enhancing drugs has raised questions about Thomas Weisel, the financier who bankrolled Mr. Armstrong through his seven Tour de France victories. But Mr. Weisel, speaking to DealBook’s Susanne Craig in his first public comments on the matter, denied the accusations that he participated in a doping program. “I did not know until very recently that Lance Armstrong had engaged in doping while riding for the team,” he said. “Any allegation that I was aware of or condoned or supported doping by any team rider is false.”

Mr. Weisel, a legend in the! investment banking world, is accused of wrongdoing in a federal whistle-blower suit filed by Floyd Landis, a former teammate of Mr. Armstrong’s, that claims the banker and other team officials “engaged in a systematic program of doping.” In addition, “Mr. Armstrong, in hopes of mitigating his lifetime ban from Olympic sports, might implicate Mr. Weisel and other team owners, according to people briefed on the case,” Ms. Craig reports. But Mr. Weisel said he was cooperating with federal authorities and has testified he did not know about Mr. Armstrong’s activities. Still, Ms. Craig notes, “if he did not know about the team’s win-at-all costs approach, he should have, friends and rivals alike say.”

DELL’S FINANCIAL EMPIRE  |  The firm that manages Michael S. Dell’s $16 billion fortune, MSD Capital, could play a role in a leveraged buyout of Dell, DealBook’s Peter Lattman writes. Started by Mr. Dell 15 years ago, the firm has “quietly built a reputation as one of the smartest investors on Wall Street,” with a portfolio of stocks, companies, real estate and timberland. It is among the more prominent of the so-called family offices, run by Glenn R. Fuhrman, formerly a managing director at Goldman Sachs, and John C. Phelan, who was once a principal at ESL Investments.

MSD has been cast in a spotlight as the private equity firm Silver Lake discusses a buyout of Dell worth more than $20 billion. That such a deal is being contemplated illustrates Dell’s financial missteps over the years, the New York Times columnist Floyd Norris writes. “For most of its history, Dell appears to have followed advice from investment banks â€" advice that ill-serve! d long-te! rm shareholders to the benefit of corporate executives. The company paid out billions of dollars to buy back stock, and only last year began to distribute some of the money to shareholders who chose to stick with it rather than bail out.” A leveraged buyout, Mr. Norris says, “might have been unnecessary had the company paid more attention to its business, and less to financial engineering.”

ON THE AGENDA  |  Financial and political leaders are converging on Davos, Switzerland, for the World Economic Forum, which begins on Tuesday. General Electric and McMoRan Exploration report earnings before the market opens. James Gorman, Morgan Stanley’s chief executive, is making the television rounds, with appearances on CNBC, on Bloomberg TV at 9 a.m. and on Fox Business Network t 3 p.m. John McAfee is scheduled to appear on CNBC at 2:30 p.m.

FRESH OPTIMISM IN SPAIN  |  So far, the new year has been kind to the euro zone countries most in need of debt financing. The Spanish Treasury on Thursday sold 4.5 billion euros, or $5.9 billion, of debt, including bonds with a maturity of as much as 28 years, The New York Times reports. The average interest rate on the two-year bonds was 2.71 percent, down from 3.36 percent in December. The rate on the benchmark 10-year bond was 5.03 percent on Thursday, after spiking above 7 percent last year. “Optimism is the flavor of the day, but perhaps people are overoptimistic,” said Birgitte Olsen, fund manager at Bellevue Asset Management in Zurich. “We’ve now seen some car companies shift their production lines to Spain, but a lot more r! eforms an! d work need to be done to return to growth and job creation.”

Mergers & Acquisitions Â'

Glencore Extends Deadline for Xstrata Deal  |  The commodities trader Glencore International said on Friday that it had extended the deadline to complete its $35 billion takeover of the mining company Xstrata until March 15.
DealBook Â'

Chrysler Said to Be in Talks with Santander to Start Financing Venture  |  The Chrysler Group is close to reaching a deal with Banco Santander “to establish an in-house financing arm through a joint venture, to be called Chrysler Capital,according to people familiar with the plan,” The Wall Street Journal reports.
WALL STREET JOURNAL

Sony to Sell New York Headquarters for $1.1 Billion  | 
REUTERS

INVESTMENT BANKING Â'

Mortgage Crisis Lingers On at Citigroup and Bank of America  |  Most banks have recovered from the recent financial collapse, but the two companies reported continuing effects on earnings.
DealBook Â'

Small Banks Show Strength in Quarterly Results  | 

The Wall Street Journal writes: “Quarterly earnings reports released Thursday underscore the lingering illnesses afflicting some of the largest, best-known U.S. banks and the comparatively ruddy health of some smaller regional lenders.”
WALL STREET JOURNAL

E*Trade Names Former Barclays Executive as New Chief  |  E*Trade Financial on Thursday named Paul T. Idzik, a former executive at Barclays, as its new chief, ending a five-month search for a new leader.
DealBook Â'

New Barclays Chief Tells Staff to Accept Changes or Leave  |  In a memo to bank employees, the chief executive, Antony P. Jenkins, said: “We must never again be in a position of rewarding people for making the bank money in a way which is unethical or inconsistent with our values.”
DealBook Â'

Few Silver Linings in Gloomy Bank Reports  |  Bank of America and Citigroup are giving investors nothing but reasons to fret, Antony Currie and Agnes T. Crane of Reuters Breakingviews write.
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PRIVATE EQUITY Â'

Blackstone’s Latest Hired Help No, Just Two Well-Dressed Visitors  |  A pair of Magellanic penguins did a meet and greet at Blackstone’s offices in Midtown Manhattan, courtesy of their employer, SeaWorld Parks and Entertainment, a portfolio company of the private equity giant.
DealBook Â'

Apollo and Six Flags Said to Consider a SeaWorld Buyout  |  SeaWorld Parks and Entertainment has filed for an I.P.O. but is also exploring a sale, and has attracted early interest fromApollo Global Management and Six Flags Entertainment, according to Reuters.
REUTERS

Canada Pension Plan Unit to Join K.K.R. Merchant Banking Venture  |  An arm of the Canada Pension Plan Investment Board said on Thursday that it would be the latest partner in a merchant banking business run by Kohlberg Kravis Roberts.
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HEDGE FUNDS Â'

How the Government Pursued SAC’s Cohen  |  Bloomberg Businessweek des! cribes ho! w government agencies went after suspicious trading at SAC Capital Advisors. In 2009, for instance, Sanjay Wadhwa, who is now the senior associate director for enforcement at the Securities and Exchange Commission in New York, received a tip from an F.B.I. agent, B.J. Kang, “that something big might have gone down during the summer of 2008 at SAC Capital.”
BLOOMBERG BUSINESSWEEK

The Sovereign Default Question  |  Argentina’s struggle with its bondholders “suggests that policy makers must develop a more systematic way to deal with sovereign defaults,” The New York Times editorial board writes.
NEW YORK TIMES

I.P.O./OFFERINGS Â'

Norwegian Cruise Line Prices I.P.O. at $19 a share  |  The cruise ship operator has sold shares in itself at $19 apiece, a person briefed on the matter said on Thursday, reaping about $446.5 million in proceeds.
DealBook Â'

Pfizer Unit Looks to Raise $2.2 Billion in I.P.O.  |  Zoetis, Pfizer’s animal health division, is aiming for an I.P.O. that could value it at as much as $12.5 billion.
REUTERS