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Fare-Cut News Hits Airline Stocks

Delta Air Lines (DAL) cut airline ticket prices by as much as 50% for travel within the 48 contiguous U.S. states. The company reduced its ticket change fee to $500 from $100. Merrill reportedy cut its rating on the shares to sell from neutral. S&P reiterates hold.

In response to Delta's fare initiatives, Northwest Airlines (NWAC) expects such an initiative, if it becomes general, would immediately adversely, significantly affect industry revenues. Merrill reportedly downgraded Northwest to neutral from buy.

Meanwhile, Merrill reportedly downgraded AMR Corp. (AMR) to neutral from buy, and AirTran (AAI) to sell from neutral. Further details were not available. AMR was unavailable for comment.

American International Group (AIG) raises its quarterly dividend 67% to $0.125.

Krispy Kreme Dounuts (KKD) drops further after the company yesterday said its financial statements for fiscal 2004 and the last three quarters of fiscal 2004 are to be restated to correct errors. The company determines an adjustment between $6.2 million to $8.1 million should be made to lower pre-tax income for fiscal 2004.

Bristol-Myers Squibb (BMY) is considering selling portions of its consumer-medicines business, a unit that markets Excedrin and Bufferin pain medications, according to people familiar with the situation, according to the Wall Street Journal.

Xilinx (XLNX) expects December quarter revenues to be down 11% to 12% sequentially, vs. earlier guidance of down 5% to 8% sequentially. The company says turns business weaker than expected in the month of December. S&P cuts its estimates, and reiterates hold.

Sirius Satellite (SIRI) announces it has selected Window Media Video 9 for use in its mobile video platform, and reaches agreement with Microsoft (MSFT) to collaborate in further development of video applications.

CS First Boston initiates coverage of Kosan Biosciences (KOSN) with an outperform rating.

Nordstrom (JWN) posted 9.3% higher December same-store sales, and 12% higher total sales.

RealNetworks (RNWK) signs an expanded online music agreement with Comcast (CMCSA). S&P views the news favorably.

Circuit City (CC) posted 5.8% lower December same-store sales. Says December sales below expectations, hurt by drop in PC, DVD players, wireless sales, video game hardware and related products.

Forest Labs (FRX) expects third-quarter earnings per share to exceed the current 59 cents consensus estimate by about 15%.

Siebel Systems (SEBL) expects 8 cents, fourth-quarter earnings per share on $387 million to $390 million in revenue, exceeding consensus estimates of 7 cents and $347 million, respectively. S&P reiterates hold.

Monsanto (MON) posted a 15-cent first-quarter loss, vs. a 37-cent loss on a 7% sales rise. The company reaffirms $1.85 to $2.00 fiscal 2005 earnings per share guidance. S&P reiterates sell.

Vivendi Universal (V) might rescue video games maker Ubi Soft from a possible takeover bid by Electronic Arts (ERTS), according to French newspaper L'Agefi.

Federal National Mortgage (FNM) names Adolfo Marzol as interim Chief Risk Officer. The Audit Committee approved engagement of Deloitte & Touche LLP as an nindependent auditor to perform the audit of 2004 and a re-audit of prior period financial statements.

LSI Logic (LSI) raised fourth-quarter sales guidance to $415 million to $420 million from $360 million to $390 million. S&P raised estimates and target, keeps its hold rating.

Oxford Industries (OXM) posted 53 cents, vs. 41 cents second-quarter earnings per share on a 23% sales rise. The company cuts fiscal 2005 earnings per share guidance to $2.60 to $2.75 on sales of about $1.285 billion to $1.31 billion due to "increasingly challenging market conditions" and softer spring bookings in certain sectors.

Too Inc. (TOO) sees fourth-quarter earnings per share of at least 63 cents on a 3% to 4% rise in same-store sales. The company cites higher holiday sales, and fewer promotional markdowns.

Micrel Inc. (MCRL) cuts $65 million to $69 million fourth-quarter revenue guidance to $60 million to $61 million. It cites weakness in demand from customers in computing, industrial/distribution, wireless communication market, and reduced demand from wireless handset makers in China.

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