Movers: Merck, H&R Block, Nokia, Delta
Merck (MRK) lowered its earnings outlook. It sees 2007 GAAP EPS of $1.45-$1.51, which includes previously disclosed pretax charges for Vioxx product liability litigation settlement, global restructuring program, plus charge for anticipated resolution of investigations of civil claims relating to certain past marketing, selling activities, gain. The drug maker maintains $3.08-$3.14 2007 non-GAAP EPS guidance. It sees $3.96-$4.06 2008 GAAP EPS, $3.28-$3.38 non-GAAP EPS.
H&R Block (HRB) says it has terminated purchase agreement entered into in April 2007 under which an affiliate of Cerberus Capital Management would have acquired HRB's Option One Mortgage unit. Option One to cease origination activities, HRB to record related $75 million pretax restructuring charge.
Nokia (NOK) raised its forecast for operating profit margins to 16%-17% in one to two years, up from 15% predicted a year ago. But it also reportedly says ASPs on phones will slightly decline due to heavy sales in developing markets and competitive price cutting.
Delta Air Lines (DAL) falls after saying in an 8-K filing that higher-than-expected fuel prices will dampen fourth quarter results. It cuts 3%-5% fourth quarter operating margin growth guidance to flat to down 2%.
Goldman Sachs Group (GS) falls after JP Morgan reportedly cuts earnings estimates for the financial sector's fiscal fourth quarter and 2008. Separately, Punk Ziegel downgrades GS, Bear Stearns (BSC) and Lehman Brothers (LEH) to sell from market perform.
AutoZone (AZO) posts $2.02 first quarter EPS, vs. $1.73 a year ago, on 1.3% higher domestic same-store sales, 4.5% higher total sales.
Dow Chemical (DOW) plans to shut down a number of assets, make organizational changes within targeted support functions. It says about 1,000 jobs will be eliminated from across several functions, geographies and businesses. It sees $500-$600 million change in the fourth quarter.
Merrill Lynch (MER) says Nelson Chai has been appointed executive vice president and chief financial officer of the company, effective Dec. 10, 2007.
Isle of Capri Casinos (ISLE) posts $0.80 second quarter loss per share, vs. $0.32 EPS a year ago, as various charges offset 15% revenue rise.
Phillips-Van Heusen (PVH) posts $1.05, vs. $0.89 a year ago, third quarter EPS on 23% revenue rise. It sets $200 million stock buyback. It sees fiscal year 2008 EPS of $3.16-$3.18 on revenue of about $2.44 billion. It sees fiscal year 2009 EPS of $3.55-$3.65; reflects cautious view of fiscal year 2009 and a belief that the current difficult economic environment will continue into next year.
MDU Resources Group (MDU) sees 2007 EPS from continuing operations of $1.65-$1.75, excluding a $91.5 million (after tax) gain on the sale of the domestic independent power production assets. It sees 2008 EPS of $1.65-$1.90. It expects continued cyclicality in the construction materials business related to private markets. Current Thomson consensus estimates call for 2007 EPS of $1.74 and 2008 EPS of $1.94.
Arrow Electronics (ARW) raises fourth quarter guidance to $0.92-$0.97 EPS, excluding any charges but including an estimate for amortization of intangible assets of $0.02-$0.03, on revenue of $4.25-$4.45 billion; from $0.90-$0.95 EPS on revenue of $4.15-$4.45 billion.
CBRL Group (CBRL) posts 2.5% higher November same-store sales at its Cracker Barrel Old Country Store restaurants and gift shops, 4.4% higher comparable-store retail sales.
Cost Plus (CPWM) posts narrower-than-expected $0.63 third quarter loss per share, vs. $0.55 loss a year ago, on 4.3% same-store sales decline, 2.4% total sales rise. It sees fourth quarter total sales of $377-$389 million, based on a same-store sales decrease of 1%-4%. It sees fourth quarter EPS of $0.37-$0.50, fiscal year 2008 loss of $1.45-$1.58.
R.H. Donnelley (RHD) says iIn 2008, sees advertising sales of $2.745 billion, adjusted EBITDA (excluding impact of FAS 123 R expense, other expenses) of at least $1.44 billion and operating income of $930 million.