Movers: Countrywide, Amgen, KKR Financial, Applied Materials, Macy's
Countrywide Financial (CFC) is down sharply on an unconfirmed report the company is unable to borrow money from the commercial paper market. Merrill Lynch downgraded the stock to sell from buy and raised the possibility of bancruptcy. Yesterday, Countrywide reported mortgage funding volume of $39 billion for July 2007, down 14% from June.
Amgen (AMGN) said late Wednesday it plans to reduce its work force by 12-14%, or between 2,200 and 2,600 positions, and take restructuring charges of $600 million to $700 million in 2007 and 2008. Amgen also reduced its adjusted earnings per share guidance for the full year to between $4.13 and $4.23 per share from prior estimates of $4.28 per share. The biotech company cited lower-than-expected sales of anemia drug Aranesp, since the FDA brought up safety concerns and label changes for it back in March.
KKR Financial (KFN) says it may need to record a charge of up to amount of its $200 million net equity investment in asset-backed liquidity note facilities and additional liabilities in estimated range of up to $50 million. Lehman downgrades to equal-weight.
Thornburg Mortgage (TMA) rebounds after plunging 46% to $7.65 Wednesday (trading was halted) after the company delayed its second-quarter dividend because of the credit crunch in the mortgage industry. Its dividend of 68 cents per share was postponed to Sept. 17 from Aug. 15. It also said its book value per share fell to $14.28 at Aug. 13 from $19.38 at June 30. S&P says the stock is higher on news the company has met all margin calls, but it believes growing uncertainty in the mortgage and credit markets pose risks; reiterates sell.
VMware (VMW) rose 6.68 to 57.68 after Caris initiates coverage with above average opinion. Yesterday, the unit of EMC (EMC) had its IPO of 33 million Class A shares at $29 per share.
Applied Materials (AMAT) posted third quarter earnings per share of $0.34, vs. $0.33 a year ago, on a slight sales rise. The semiconductor equipment maker says new orders fell 14%, reflecting weakening orders from DRAM chipmakers and foundries.
Macy's (M) reported second quarter EPS of $0.16, vs. $0.57 a year ago, on a 2.6% same-store sales drop and 1.7% total sales decline. The retailer notes second quarter was below initial expectations. It sees $0.05-$0.10 third quarter EPS, excluding merger integration costs, and $1.70-$1.80 in the fourth quarter.
Deere & Co. (DE) posted $2.37, vs. $1.85 a year ago, third quarter EPS on 5.9% sales rise. It sees worldwide sales of its agricultural equipment increasing by about 16% for 2007, including about 3 points of currency impact.
Agilent Technologies (A) falls after posting $0.48, vs. $0.39 a year ago, third quarter adjusted EPS on 11% revenue rise. Due to weak Asian electronic measurement markets, the company sees fourth quarter revenues up 5%-8% from a year ago, $0.50-$0.54 adjusted EPS. S&P and Goldman cut estimates.
Ethan Allen Interiors (ETH) says same-store sales rose modestly in June and that trend continued in July. The furniture retailer remains cautiously aware consumer confidence can be impacted by several factors beyond its control. Wedbush Morgan upgrades the stock to market perform from underperform, noting that the shares have pulled back 11% year-to-date.
Impac Mortgage Holdings (IMH) posts $2.05 second quarter loss, vs. $0.30 EPS a year ago, on sharp increase in loan loss provisions due to deteriorating market conditions,
Levitt Corp. (LEV) drops after it receives notice from BFC Financial (BFF) terminating their merger pact. Levitt plans to now proceed with its previously proposed rights offering to shareholders of up to $200 million of additional Class A shares. S&P keeps hold.
Fossil (FOSL) rises after Piper Jaffray reportedly upgrades to outperform. Yesterday the company posted $0.21 (including expenses), vs. $0.16 a year ago, second quarter EPS on 18% revenue rise. It forecast $0.33 third quarter EPS, $1.58 2007 (both including expenses).
Midwest Air Group (MEH) receives letter from Airtran Holdings (AAI) indicating that AAI was increased its offer to acquire all shares of MEH. Midwest Air board says it will take AAI revised bid under consideration. S&P reiterates hold.