Movers: EchoStar, KB Home, SLM, Microsoft, Zale, Rite Aid
EchoStar Communications (DISH) is higher on renewed takeover speculation. TheStreet.com reports that AT&T (T) has rekindled talks to acquire DISH at a potential price of $55 to $65 per share. S&P thinks chances for such a deal are very slim, and maintains sell.
KB Home (KBH) posts third quarter loss from continuing operations of $6.19 per share, vs. $1.60 EPS a year ago, on 32% lower total revenue.
Microsoft (MSFT) says its new videogame Halo 3 generated an estimated $170 million in sales in its first day of release.
SLM Corp. (SLM), or Sallie Mae, rises on hope that its buyout agreement could be salvaged. On Wednesday afternoon, SLM said that it has been informed by a representative of the buyer group led by J. C. Flowers, Bank of America and JPMorgan Chase that the buyer group does not expect to consummate the acquisition of Sallie Mae under the terms of the merger agreement. Sallie Mae said it firmly believes that the buyer group has no contractual basis to repudiate its obligations under the merger agreement and intends to pursue all remedies available to it to the fullest extent permitted by law.
Bear Stearns (BSC) could stay in focus on speculation that it is in talks with several institutions, including Warren Buffett (BRKA), about selling a 20% stake in the investment firm.
Zale Corp. (ZLC) agrees to sell its Bailey Banks & Biddle division for $200 million to Finlay Fine Jewelry Corp., a unit of Finlay Enterprises (FNLY).
Starbucks (SBUX) falls after Banc of America downgrades to sell from neutral.
Rite Aid (RAD) posts $0.10 second quarter loss per share, vs. $0.02 loss per share a year ago, as acquisition of Brooks Eckard stores offset 1.1% same-store sales rise, 54% total sales rise. It sees $24.5-$25.1 billion total fiscal year 2008 sales, $0.15-$0.27 loss, and 1.3%-3.3% same-store sales growth.
Bed Bath & Beyond (BBBY) posts second quarter EPS of $0.55, vs. $0.51 a year ago, on 2.2% higher same-store sales, 10% higher total sales. It sets $1 billion stock buyback.
Paychex (PAYX) posts first quarter EPS of $0.40, vs. $0.35 a year ago, on 10% total revenue rise. It sees 11%-13% increase in fiscal year 2008 total revenue, 12%-14% increase in the net income.
FL Group, a $6 billion investment fund from Reyjavik, Iceland, sent a letter to American Airlines parent's -- AMR Corp. (AMR) -- board urging the company to consider alternatives, including the spinoff of its AAdvantage frequent-flier program, to boost a stock that has fallen almost 50% since January, reports the Wall Street Journal.
Pantry (PTRY) says, based on preliminary data, expects its retail gasoline gross margin for the fourth quarter to be between $0.10-$0.105 per gallon, bringing fiscal year 2007 retail gasoline margin to about $0.109 per gallon, substantially below the previously expected $0.115 per gallon estimate. As a result, it expects fourth quarter and fiscal year 2007 EPS to be below previous expectations.
Vail Resorts (MTN) posts $0.85 fourth quarter loss per share, vs. $0.78 loss per share (excludes stock-based comp expense), on 22% lower total revenue. It says, based on current estimates, that it sees fiscal year 2008 net income of $112-$122 million (including stock-based compensation expense).
Washington Banking Co. (WBCO) agrees to be acquired by Frontier Financial Corp. in a deal valued at about $191 million, or $21.40 per WBCO share.
GSI Group (GSIG) raises third quarter guidance to $82-$84 million in revenue, and EPS, includes restructuring charges, to $0.16-$0.18, assuming an effective tax rate of 23%-25%. Needham raises estimate, reiterates buy.
Getty Images (GYI) will be added to S&P MidCap 400 on a date to be announced, replacing Greater Bay Bancorp, which is being acquired by Wells Fargo (WFC).
Duke Realty (DRE) will be added to S&P MidCap 400 after close of trading on Sept. 28, replacing AG Edwards, which is being acquired by Wachovia (WB).
Boston Beer (SAM) will be added to S&P SmallCap 600 after the close of trading on September 28, replacing Playtex, which is being acquired by Energizer Holdings (ENR).
Superior Well Services (SWSI) will replace Neoware in the S&P SmallCap 600 after the close of trading on Friday, Sept. 28. Neoware is being acquired by S&P 100 and 500 constituent Hewlett-Packard (HPQ).