Movers: Citigroup, Merrill Lynch, Marvel Entertainment, IAC/InterActiveCorp
Citigroup (C) says chairman and CEO Charles Prince will retire. The company estimates reduction in revenues related to subprime will range from about $8-$11 billion (representing a decline of about $5-$7 billion in net income on after-tax basis). Robert Rubin is named chairman, while Sir Win Bischoff to serve as acting CEO. CNBC reports Saudi Prince Alwaleed, Citi's largest shareholder, told Chuck Prince last week that Alwaleed could no longer support Prince as CEO. Prince Alwaleed met with former Citigroup Chief Sandy Weill on Oct. 29, according to the CNBC report. Also, S&P Ratings puts Citigroup on CreditWatch with negative implications. Late Friday, S&P reiterated hold.
CNBC reportedly says Merrill Lynch (MER) offered the post of chief executive to Blackrock CEO Laurence Fink. Also, Merrill announces a class action lawsuit has been filed against it alleging that defendants issued materially false and misleading statements regarding Merrill's business and financial results.
Marvel Entertainment (MVL) posts $0.45, vs. $0.16 a year ago, third quarter EPS on 34% sales rise. It raises 2007 guidance to $1.60-$1.65 EPS on $455-$475 million revenue.
Time Warner (TWX) chief Parsons is stepping down, with Jeff Bewkes expected to take CEO spot, as of Jan. 1.
IAC/InterActiveCorp (IACI) says its Board of Directors has approved a plan to separate IACI into five publicly traded companies. As such, IACI will spinoff HSN, TicketMaster, Interval International, and LendingTree. Upon completion of the transaction, IACI's shareholders will own 100% of the equity in all five companies (IAC, HSN, Ticketmaster, Interval and LendingTree). The transaction is expected to be tax-free for both IAC and its shareholders. S&P reiterates buy.
PetroChina (PTR) is among Chinese ADRs under pressure as Shanghai stock market fell 2.48%. Separately, Bear Stearns downgrades to underperform from peer perform.
Kenneth Cole Productions (KCP) rises as Barron's notes profits at KCP have slumped since 2005 and the stock, at $18, is trading close to a four-year low. But KCP is launching initiatives, including a new line of mens' sportswear, that promise to get its financial house in order and more than double the stock over the next three years.
Cardinal Health (CAH) posts first quarter EPS of $0.82, vs. $0.66 a year ago, on 4.9% revenue rise. It says it is disappointed with performance in its Healthcare Supply Chain Services-Pharmaceutical segment. It reiterates fiscal year 2008 EPS guidance of $3.95-$4.15 for non-GAAP diluted EPS from continuing operations. S&P keeps buy.
Stillwater Mining (SWC) posts $0.12 third quarter loss per share, vs. $0.07 EPS a year ago, on 9.8% revenue decline. It cites lost production related to 7-day strike at its Stillwater Mine and Columbus processing facilities and unusually higher miner attrition in 2007. It says mine output for all of 2007 is now expected to be approximately 550,000 ounces from previous production guidance of 555,000-585,000.
Mentor Graphics (MENT) sees lower-than-expected third quarter revenue of about $185 million, vs. guidance of $200 million, non-GAAP EPS slightly below break-even as compared to a previously estimated $0.10. For fiscal year 2008, it sees revenue of about $860 million, non-GAAP EPS of $1.02. It says preliminary guidance for fiscal year 2009 is for revenue of $920 million, non-GAAP EPS of about $1.22.
Burger King Holdings (BKC) posts $0.35, vs. $0.30 a year ago, first quarter EPS on 5.9% worldwide same-store sales rise, 10% total revenue rise. Separately, it says private equity funds intend to initially offer 23 millio BKC shares in an underwritten offering.
WellCare Health Plans (WCG) posts preliminary third quarter results of $1.71, vs. $1.06 EPS a year ago, on 42% total revenue rise. The results have not been reviewed by outside auditors and the filing of 10-Q will be delayed. Separately, says its previously formed special committee of its Board will conduct independent investigation into matters raised as part of ongoing investigation and inquiries by certain federal and state agencies or other regulatory bodies or organizations as well as other governmental or private party proceedings that may commence.
Boston Scientific (BSX) sells its Cardiac Surgery and Vascular Surgery businesses to Getinge Group for $750 million cash.
Entergy (ETR) posts $2.30, vs. $1.80 a year ago, third quarter operating EPS on 1.1% revenue rise. It reaffirms 2007 as-reported and operating EPS earnings guidance of $5.40-$5.70, sets 2008 EPS guidance at $6.50-$6.90 on as-reported and operating bases on a business-as-usual basis. Plans to spin off non-utility nuclear biz.
American Financial Realty Trust (AFR) agrees to be acquired by Gramercy Capital (GKK) in a $3.4 billion deal, which includes assumption of AFR's outstanding indebtedness. Terms: $5.50 cash and 0.12096 GKK share for each AFR share.
Alfa Corp. (ALFA) says Alfa Mutual Insurance Company and Alfa Mutual Fire Insurance Company (Alfa MutualGroup) to acquire all of the outstanding shares of ALFA's common stock that it does not currently own for $22.00 per share.