Emulex Slides on an Earnings Warning
Emulex (ELX ) cut the fourth-quarter EPS guidance to 18 cents (non-GAAP) on lower-than-expected revenue of $85 million to $86 million, citing "tepid" demand from two manufacturers. The maker of adapters used in data storage also sees first-quarter revenue below current Street estimates. JP Morgan cut its rating on the stock to neutral. S&P downgraded to hold from buy.
Citigroup downgraded Yahoo! (YHOO ) to hold from buy, citing valuation.
Amkor Technology (AMKR ) cut the 17 cents to 22 cents second-quarter EPS guidance to about 6 cents, mostly due to lower-than-anticipated gross margin, which it now sees at around 19%, vs. the former 24% guidance. Amkor sees second-quarter revenues approximately 6% above first-quarter revenues, vs. the prior estimate of up 5% to 8%.
Cardinal Health (CAH ) cut the fourth-quarter EPS estimate to 93 cents to 95 cents fourth-quarter EPS, excluding items. It received a Securities & Exchange Commission subpoena for documents relating to revenue classification, and says the U.S. Attorney's Office commenced an inquiry of the same subject. Bear Stearns downgraded. S&P keeps hold.
DRS Technologies (DRS ) rejected an unsolicited proposal from L-3 Communications (LVLT ) to acquire DRS for $42 per share in cash.
Ceradyne (CRDN ) agreed to buy Germany's Wacker Ceramics for about $136 million in cash in order to diversify into non-military markets.
Inveresk Research (IRGI ) agreed to be acquired by Charles River Labs (CRL ) in a deal valued at about $1.5 billion. Terms: 0.48 Charles River share, and $15.15 cash per Inveresk share. S&P raised its price target, but downgraded the shares to hold from accumulate.
Time Warner (TWX ) is reportedly putting together nearly $5 billion in cash and a stock offer to acquire Metro-Goldwyn-Mayer (MGM ). The bid would rival a proposal from Sony (SNE ).
Constellation Brands (STZ ) posted 45 cents, vs. 41 cents first-quarter EPS (GAAP) on a 20% sales rise. The wine and spirits distributor raised the fiscal 2005 EPS (as reported) estimate to $2.42 to $2.52. S&P reiterates buy.
Merix (MERX ) posted a 5-cent fourth-quarter loss (pro forma) vs. a 25-cent loss on a sharp sales rise. Merix sees $40 million to $43 million in first-quarter sales, and an 11-cent to 18-cent loss (including pre-tax charge), citing the belief that some customers have excess inventories.
West Marine (WMAR ) sees second-quarter same-store sales growth of about 4% to 5%. It sees total sales of $252 million to $256 million. The retailer now sees June sales of flat to up 3%, citing unseasonably cool and wet weather in some key markets. West Marine cut the second-quarter EPS estimate to $1.16 to $1.18.
Robert Mondavi (MOND ) sees fiscal 2005 EPS (GAAP) of $1.80 to $2.00 on sales volume and revenue growth of 2% to 4%. Mondavi says equity income is projected to be below fiscal 2004 levels.
ConAgra Foods (CAG ) posted fourth-quarter earnings per share of 40 cents, vs. 28 cents, on an 11% sales rise.