GM, Ford Fall on Ratings Downgrade to Junk

IBM sets restructuring plan; GE unloads storage business; plus more of Thursday's stocks in the news

Shares of General Motors (GM ) and Ford Motor Co. (F ) traded lower Thursday after Standard & Poor's Ratings Services cut the companies' credit ratings to below investment grade.

Merck (MRK ) names Richard T. Clark as CEO and president, effective immediately, replacing Raymond V. Gilmartin. The pharmaceutical company also announces Lawrence A. Bossidy will serve as chairperson of the board's newly structured Executive Committee.

General Electric's (GE ) Commercial Finance agrees to sell Storage USA for $2.3 billion in cash to joint venture between Extra Space Storage (EXR ) and Prudential Real Estate Investors, which is acting on behalf of its institutional clients.

International Business Machines (IBM ) sets a restructuring plan. As a result, the company estimates it will take a $1.3 billion to $1.7 billion ssecond-quarter pre-tax charge and reduce its worldwide workforce by 10,000 to 13,000 employees. S&P reiterates hold.

Prudential Financial (PRU ) posted $1.18, vs. 74 cents first-quarter operating earnings per share on a 19% revenue rise.

Federated Dept Stores (FD ) posted 2.8% higher April same-store sales and 2.6% higher total sales. It raises 45 cents to 50 cents first-quarter earnings per share guidance to 65 cents to 70 cents.

Blockbuster (BBI ) posted a 31-cent first-quarter loss, vs. a 63 cents earnings per share despite a 3% revenue rise. The company says second-quarter operating income will be reduced year-over-year by $70 million from its "No Late Fees" program and $30 million due to Blockbuster Online. It sees 2005 adjusted operating income flat with 2004.

MCI (MCIP ) posted a 1-cent first-quarter loss, vs. a $1.19 loss on a 12% revenue drop. It continues to see 2005 revenues of $18 billion to $19 billion, operating profit before depreciation, amortization of $1.8 billion to $2.0 billion, excluding merger-related costs.

Starbucks Corp. (SBUX ) posted 9% higher April same-store sales and 23% higher total sales.

J.C. Penney (JCP ) posted better-than-expected 3.6% higher April comparable dept store sales and 4.7% higher total sales. Based on April sales performance, the company now expects first-quarter earnings per share of about 61 cents, second-quarter earnings per share in the 25 cents to 30 cents range, and $2.94 to $3.06 fiscal 2006 earnings per share.

News Corp. (NWS ) posted 15 cents, vs. 15 cents first-quarter earnings per share (before items) on a 17% revenue rise. S&P keeps strong buy.

iVillage Inc. (IVIL ) posted a 2 cent first-quarter loss, vs. a one-cent loss despite an 11% revenue rise. It sees a second-quarter net loss of $500,000 to $1 million, and revenue of $20 million to $21 million. Jefferies reportedly downgrades to hold from buy.

Logitech (LOGI ) says it will ask shareholders to approve a 2-for-1 stock split. It reconfirms targets for fiscal 2006 of 15% sales and operating income growth. The company eexpects fiscal 2006 gross margin to be at the high end of the company's ongoing target range of 32% to 34%.

Goody's Family Clothing (GDYS ) posted 12% lower April same-store sales and 6.9% lower total sales. It now expects to report a loss in the mid-single digits for the first quarter.

Gen-Probe (GPRO ) posted 26 cents, vs. 39 cents first-quarter earnings per share on a 10% revenue decline. It sees $1.17 to $1.22 2005 earnings per share on revenue of $287 million to $295 million.

Imation Corp. (IMN ) raises its quarterly dividend 20% to 12 cents.

R.R. Donnelley & Co. (RRD ) posted 49 cents first-quarter earnings per share, vs. a 39-cent loss (GAAP) on a 50% sales rise. It raises guidance for non-GAAP 2005 earnings per share from continuing operations by 10 cents to $2.07.

Pier 1 Imports (PIR ) posted 8.1% lower April same-store sales and a 2.1% total sales drop. It notes gross margins are under pressure, and the first-quarter may be at the lower end of its 3-cent to 10-cent loss guidance.

Whole Foods Markets (WFMI ) posted 61 cents, vs. 53 cents second-quarter earnings per share on a 12% higher same-store sales and 20% higher total sales. It raises fiscal 2005 same-store sales guidance to 8% to 10% growth. The company is to delay accelerating vesting of options.

Celadon Group (CLDN ) sets a $5 million stock buyback.

Bombay Company (BBA ) posted 7% higher April same-store sales and 9% higher total sales. It says April sales trends are encouraging but not sufficient to offset deleveraging effects caused by weaker sales results in February and March.

Blue Nile (NILE ) posted 14 cents, vs. 12 cents first-quarter earnings per share on a 23% sales rise. It sees 11 cents to 13 cents second-quarter earnings per share on sales of $41.5 million to $43.5 million and 67 cents to 72 cents 2005 earnings per share on sales of $200 million to $212 million.

Goodrich Petroleum (GDP ) defers pricing of its previously announced public offering of common stock pending completion next week of regularly scheduled auditor review of first-quarter financial results.

Hot Topic (HOTT ) posted 4.1% lower April same-store sales and 11% higher total sales. The company posted slightly higher comparable sales in the first quarter and 17% higher first-quarter total sales. It reiterates first-quarter earnings per share guidance of 11 cents.

Maxtor Corp. (MXO ) posted a 10-cent first-quarter loss, vs. 3 cents earnings per share as charges and lower gross profit offset a 4.9% revenue rise.

Aeropostale (ARO ) posted 5.7% lower April same-store sales, 4.4% higher first-quarter comparable sales, 14% higher April total sales, and 26% higher first-quarter total sales. The clothing retailer says it is disappointed with the retail environment during April.

American Eagle Outfitters (AEOS ) posted 20% higher April same-store sales, and 30% higher total sales. It raises first-quarter earnings per share guidance to 33 cents to 34 cents. S&P raises estimates and keeps buy.

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