Stocks in the news Tuesday
From Standard & Poor's Equity ResearchGoldman Sachs Group (GS) shares rise after the company posts $4.97 fourth quarter loss per share, vs. $7.01 EPS a year ago, on negative net revenues of $1.58 billion. Street was looking for loss of about $3.50. Investment Banking revenues in fourth quarter declined 48%. S&P keeps hold. Ladenburg Thalmann upgrades to neutral from sell.
General Electric (GE) confirmed fourth quarter EPS guidance of $0.50-$0.52, excluding previously announced $1.0-$1.4 billion of charges ($0.36-$0.42 Q4 EPS, including charges); it sees 2008 EPS of $1.78-$1.84 on $185 billion revenue. For 2009, it has set forth a framework of industrial businesses' earnings growth of 0%-5%. Also says it will no longer provide specific quarterly EPS guidance, but will provide a full-year operating framework with detail in the industrial and financial businesses.
Best Buy (BBY) posts better-than-expected $0.35, vs. $0.53 adjusted third quarter EPS on 5.3% same-store sales drop, 16% total revenue rise. Street was looking for $0.25. Says negative impact of same-store sales drop, expense deleverage was partially offset by revenue gains from new store openings as well as an improvement in gross profit rate. Maintains guidance range for fiscal year 2009 EPS of $2.30- $2.90, excluding the investment impairment charge. S&P keeps buy.
STEC (STEC) cuts fourth quarter revenue guidance to about $55-$59 million from $69-$72 million, citing the cancellation of previously anticipated orders. STEC notes this will negatively affect its operating results, including its previous non-GAAP diluted EPS guidance issued Nov. 10. On that date, STEC forecast $0.11-$0.14 fourth quarter non-GAAP EPS. Needham cuts estimates, target; but maintains strong buy.
Beckman Coulter (BEC) expects 2008 revenue to increase by about 12%, with operating margins on par with prior year results, between 11.5% and 12%. Continues to expect EPS in the $3.55-$3.65 range. Street is looking for 2008 EPS of $3.59. Sees 2009 revenue growth of about 5% on a constant currency basis. Shift in mix toward higher margin recurring revenue and a conservative approach toward spending should allow BEC to achieve its 2009 EPS growth objective of 10%. S&P keeps hold.
Merrill Lynch upgrades Potash (POT), Mosaic (MOS), Intrepid Potash (IPI), and Terra Industries (TRA) to buy from underperform.
Pennsylvania Real Estate Investment Trust (PEI) announces that it has completed three non-recourse mortgage loans with total proceeds of $173 million that are secured separately by Exton Square, Francis Scott Key and Viewmont Malls. Year to date, PEI says it has completed 14 financings for an aggregate of more than $820 million. S&P keeps hold.
Satyam Computer Services Limited (SAY) says its Board has approved the proposals to acquire 100% stake in Maytas Properties, 51% in Maytas Infra. Total outflow for both the acquisitions is expected to be $1.6 billion, comprising of $1.3 billion for 100% stake in Maytas Properties, $300 million for 51% stake in Maytas Infra.
Air Products and Chemicals (APD) plans to take a restructuring charge to first quarter EPS of $140-$160 million (pretax), or about $0.43-$0.50. Says about three-quarters of charge is for severance costs related to elimination of about 1,300 positions, with remainder of charge for business exits, asset management actions. Notes quarter-to-date sales through November were down 6%. Now sees first quarter EPS from continuing operations of $0.95-$1.00, excl. restructuring charge.
Monolithic Power Systems (MPWR) sees fourth quarter revenue of $34-$35 million, down from previous guidance of $39-$43 million. Expects gross margin in the lower end of the company's target range of 60%-63%.
Electricite de France SA (EDF.F) is close to an agreement to buy half the nuclear power business of Constellation Energy Group (CEG) for $4.5 billion, trumping a takeover bid by Warren Buffett's MidAmerican Energy Co., people familiar with the situation said: Bloomberg.
ABM Industries (ABM) posts $0.29, vs. $0.29, fourth quarter EPS from continuing operations as higher total expenses offset 31% revenue rise. In light of the uncertain economic environment, ABM is providing guidance for only the first half of fiscal year 2009. Sees EPS from continuing operations of $0.42-$0.50 for the first half and, for the same period, adjusted EPS from continuing operations of $0.46- $0.54.
Foundry Networks (FDRY) announces that it has completed the sale of its portfolio of auction rate securities. Based on estimated net proceeds of $38.8M from the sale, FDRY anticipates that the previously announced conditional special cash dividend payable to FDRY stockholders of record immediately prior to the completion of the merger between FDRY and a wholly owned unit of BROCADE will be approximately $0.249 per share of FDRY common stock.
American International Group (AIG) says its U.S. life insurance cos have sold to Maiden Lane II LLC (ML II), a newly formed Delaware LLC in which the Federal Reserve Bank of New York (FRBNY) is the sole member, their interests in a pool of $39.3 billion face amount of residential mortgage-backed securities (RMBS) held by their agent, AIG Securities Lending Corp., an AIG subsidiary, in connection with AIG's U.S. securities lending program. The agreement in principle between AIG and FRBNY for this transaction was announced on 11/10/08.
Papa John's International (PZZA) sees 2009 EPS of $1.32-$1.40, excluding impact from the consolidation of the results of the franchisee-owned cheese purchasing company, BIBP Commodities, Inc. (BIBP), a variable interest entity, in accordance with FIN 46. Expects flat to 2% decline in domestic system-wide same-store sales for 2009. Street estimate for 2009 EPS is $1.61.
ITT Corp. (ITT) reaffirms its 2008 EPS from continuing operations forecast (excl. special items) of $3.97-$4.03, representing growth of aproximately 22% year-over-year. Sees $3.60-$4.00 2009 EPS (including restructuring costs). Expects 2009 organic revenue will be up 1% to down 2% vs. 2008 revenue; including forex, total revenue is anticipated to be down 2%-6%. In addition to guidance, says it would recommend a dividend of $0.85 for '09, representing an increase of about 22% over 2008 dividend. Recommendation is subject to Board approval at its February 2009 meeting.
Genzyme (GENZ) announces that FDA has granted marketing approval for Mozobil, a drug intended to be used in combination with granulocyte-colony stimulating factor (G-CSF) to mobilize hematopoietic stem cells to the bloodstream for collection and subsequent autologous transplantation in patients with non-Hodgkin's lymphoma (NHL) and multiple myeloma (MM). The product has also been granted orphan drug designation.
Harley-Davidson (HOG) announces that President and CEO James L. Ziemer has informed the Board of Directors that he intends to retire in 2009. The Board has formed a search committee to review both internal and external candidates. Ziemer will remain in his current role until a new CEO is in place.
Abbott Laboratories (ABT) announces FDA approval for co.'s Trilipix delayed-release capsules for use along with diet to help lower triglycerides and LDL cholesterol, and to raise HDL cholesterol in patients with lipid problems.
Titan Machinery (TITN) posts $0.45, vs. $0.36 a year ago, third quarter EPS on 62% revenue rise. Raises $590-$635 million fiscal year 2009 revenue outlook to $635-$675 million and $0.89-$0.94 EPS to $1.07-$1.11.