Thursday's stocks in the news
From Standard & Poor's Equity ResearchAfter the market close, Google (GOOG) reports third quarter EPS (GAAP basis) of $3.38, vs. $2.36 a year ago. Excluding one-time items, EPS was $3.91. Revenue rose 57% to $4.23 billion. The report was better than analysts expected.
Bank of America (BAC) posts third quarter EPS of $0.82, vs. $1.18 a year ago, on a 12% drop in revenue net of interest expense. It notes a $1.33 billion decline in earnings in Global Corporate, Investment Banking given significant disruption in financial markets during the third quarter. Its earnings were much lower than expected.
Washington Mutual (WM) posts third quarter EPS of $0.23, vs. $0.77 a year ago, as $967 million provision for loan losses offsets 3.4% rise in net interest income. It cites the weaker housing market and disruptions in the capital markets. S&P downgrades to sell from hold. Friedman Billings downgrades to underperform from market perform.
Pfizer (PFE) said third quarter earnings dropped to 11 cents per share, from 46 cents a year ago, due to a $2.8 billion pretax charge to end investment in inhaled insulin drug Exubera, and lower sales of blockbuster cholesterol drug Lipitor. Third quarter adjusted EPS was $0.58, vs. $0.54 a year ago, on a 2.4% revenue drop. It ups $47.0-$48.0 billion 2007 revenue guidance to $47.5-$48.0 billion, $2.08-$2.15 adjusted EPS guidance to $2.10-$2.15.
Nokia (NOK) posts €0.40, vs. €0.21 a year ago, third quarter EPS on 28% sales rise. It expects industry mobile device volumes in the fourth quarter to be up sequentially. It expects its device market share in the fourth quarter to be approximately at same level sequentially, leading to estimated increase of Nokia's market share in 2007. S&P maintains sell.
SAP AG (SAP) posts €0.34, vs. €0.30 a year ago, third quarter EPS on 9.4% revenue rise. It reaffirms expectations for 2007 software and software related service revenues to increase 12%-14% at constant currencies, but now expects to reach upper end of range. It plans to invest additional €300-400 million over eight quarters to build up a new business.
eBay (EBAY) posts $0.69 third quarter loss per share, vs. $0.20 EPS (GAAP) a year ago, as goodwill impairment charge related to acquisition of Skype offset 30% revenue rise. It posts $0.41 non-GAAP EPS. It sees $0.39-$0.41 fourth quarter non-GAAP EPS on $2.1-$2.15 billion revenue, $1.47-$1.49 2007 EPS on $7.6-$7.65 billion revenue. S&P maintains buy. Deutsche Bank reportedly downgrades to sell.
Textron (TXT) posts $1.00, vs. $0.66 a year ago, third quarter EPS on 15% revenue rise. It sees 2007 revenue rise of about 13%, EPS from continuing operations of $3.40-$3.50, about $0.22 higher than previous target.
Citrix System (CTXS) posts $0.41, vs. $0.34 a year ago, third quarter non-GAAP EPS on a 26% revenue rise. It sees fourth quarter revenue of $374-$382 million, non-GAAP EPS of $0.42-$0.43. Guidance is seen as disappointing. S&P reiterates strong buy. Needham downgrades to hold from buy.
IMS Health (RX) posts $0.29, vs. $0.34 a year ago, third quarter EPS as a tax provision offsets a 12% revenue rise. Goldman reportedly downgrades to sell from netural.
Baxter International (BAX) posts $0.61 (includes charges), vs. $0.57 a year ago, third quarter EPS on 7.5% sales rise. It raises 2007 EPS forecast to $2.75-$2.77, compared to its previous range of $2.65 to $2.70, both excluding special items. It sees 4%-5% 2007 sales growth (excluding forex). S&P keeps hold.
Eli Lilly (LLY) posts $0.85 (including charge), vs. $0.80 a year ago, third quarter EPS on 19% sales rise. Raises pro forma adj. EPS forecast to $3.50-$3.55, which is expected to be fueled by pro forma sales growing at a faster rate than pro forma operating expenses.
E*Trade Financial (ETFC) posts $0.14 third quarter loss per share, vs. $0.35 EPS a year ago, on 45% decline in revenue, $187 million loan loss provision, $197 million securities write-down. It cuts 2007 EPS view to $0.75-$0.90.
Allstate (ALL) posts $1.54, vs. $1.88 a year ago, third quarter operating EPS as higher catastrophe losses offset 2.9% revenue rise. S&P downgrades to buy from strong buy.
Hershey Company (HSY) posts $0.27, vs. $0.78 a year ago, third quarter EPS (GAAP) on 1.2% sales drop. It says the current quarter includes pre-tax charges of $151.9 million, or $0.41 per share associated with Global Supply Chain Transformation plan. As a result of higher dairy costs and increased business investment, it sees $2.08-$2.12 2007 EPS from operations.
McGraw-Hill Companies (MHP), which owns BusinessWeek and Standard & Poor's, posts $1.34, vs. $1.06 a year ago, third quarter EPS on 9.8% revenue rise.