Movers: Merrill Lynch, Washington Mutual, Research in Motion, ABN Amro
Merrill Lynch (MER) expects a third quarter loss of as much as $0.50 per share because of $5.5 billion in write-downs on collateralized debt obligations, subprime mortgages and leveraged finance commitments. S&P reiterates buy on the stock.
Washington Mutual (WM) expects third quarter net income to decline about 75% from a year ago, subject to finalization of third quarter results. The lender and bank cites the weakening housing market and disruptions in the secondary market. It says it continues to have the liquidity and capital necessary to grow the company's business and support its current dividend.
Research In Motion (RIMM) posts second quarter EPS of $0.50, vs. $0.25 a year ago, on a sharp revenue rise. It sees third quarter revenue of $1.60-$1.67 billion and EPS of $0.59-$0.63. S&P raises estimates, keeps hold. Morgan Keegan raises estimates, keeps outperform.
ABN Amro Holding (ABN) shareholders are expected to approve $101 billion takeover offer from a consortium led by Royal Bank of Scotland (RBS.L). Barclays (BCS) says that it has withdrawn its offer for the Dutch bank.
Dow Jones reports that Barclays will restart its share buyback program without the restrictions specific to the ABN offer. Under the new, restarted program, up to £1.55 billion remains available to purchase a maximum of 196 million shares.
Alcoa (AA) plans to proceed with sale of its Packaging and Consumer business. Also, says it is near a definitive agreement to sell its Automotive Castings business and should close the transaction by the end of the year. Expects to take a total of $845 million of restructuring and impairment charges in the third quarter. S&P views these transactions as positive, ups target, reiterates hold.
Sealy (ZZ) posts $0.22, vs. $0.30 a year ago, third quarter EPS as lower gross profit offset 7.5% sales rise. Citigroup reportedly downgrades to sell from buy.
Emmis Communications (EMMS) posts $0.03, vs. $0.06 a year ago, second quarter EPS from continuing operations on 3.5% lower revenue. It cites lower revenue at its New York and Los Angeles radio stations.
Nabors Industries (NBR) expects third quarter profit to be below the current analysts' consensus forecast due to operational and other factors. It sees third quarter EPS of $0.73-$0.76, inclusive of gains identified in the company's second quartere earnings release, arising from the sale of certain oil and gas properties and its Sea Mar entity.
Lawson Software (LWSN) posts $0.03 first quarter GAAP EPS, vs. $0.08 loss a year ago, on a 16% revenue rise. It sees $0.02-$0.04 second quarter GAAP EPS on revenue of $200-$205 million.
Longs Drug Stores (LDG) posts 1.8% higher September same-store sales, 3.5% higher total sales.
Medifast (MED) cuts 2007 guidance to $0.31-$0.33 EPS on revenue of $81-$83 million, from previous guidance of $0.45-$0.46 EPS on revenue of $85-$88 million.