Movers: SLM, MBIA, Morgan Stanely, Palm, Take-Two, Darden
SLM Corp. (SLM) skidded 16% to a new 52-week low after CEO Albert Lord holds conference call to discuss SLM's strategy following last week's failed buyout by J.C. Flowers. Lord mentioned a possible dividend cut to strengthen its balance sheet, but provided little detail regarding the securitization environment. Friedman Billings reportedly downgrades to market perform.
MBIA (MBI) falls after S&P Ratings Services, which operates independently of S&P Equity Research, announces various ratings actions on six financial guaranty insurance companies, including MBIA and Ambac Financial Group (ABK), whose credit ratings outlooks were revised to negative from stable.
Morgan Stanley (MS) posts $3.61 fourth quarter loss from continuing operations, vs. $1.87 EPS; fourth quarter of fiscal year 2007 net revenues were negative $450 million, vs. positive $7.849 billion last year. The additional $5.7 billion writedown of U.S. subprime and other mortgage related exposures in November, and the $3.7 billion writedown as of Oct. 31, result in total fourth quarter writedown of $9.4 billion.
Palm (PALM) posts $0.09 second quarter GAAP loss ($0.07 non-GAAP loss), vs. $0.12 EPS on 11% revenue decline. It sees third quarter revenue of $310-$320 million (vs. second quarter's $349.6 million), $0.31-$0.33 GAAP loss. It says it will suspend specific financial guidance in future quarters. JP Morgan, Bear Stearns cut estimates. S&P widens loss estimate, but keeps hold.
Take-Two Interactive Software (TTWO) posts $0.10 fourth quarter GAAP loss per share, vs. $0.20 loss a year ago, on 10% revenue rise. It posts $0.05 fourth quarter non-GAAP EPS. It sees $0.50-$0.60 first quarter non-GAAP loss on revenue of $175 million-$225 million, $1.30-$1.50 fiscal year 2008 EPS on revenue of $1.1-$1.4 billion.
Darden Restaurants (DRI) posts $0.30 second quarter EPS, vs. $0.41 a year ago, as acquisition costs, other items offset 17% sales rise. It says Olive Garden's U.S. same-restaurant sales increased 3.2%, Red Lobster's U.S. same-restaurant sales increased 0.1%. It sees fiscal year 2008 EPS growth of just 2%-4%. S&P maintains buy.
Union Pacific (UNP) cuts $1.90-$2.00 fourth quarter EPS guidance to $1.70-$1.80, primarily reflecting rapidly rising diesel fuel costs and the corresponding lag in fuel surcharge recoveries. It says it has also been experiencing softer-than-anticipated volumes in recent weeks, which are largely related to recent weather events.
Rambus (RMBS) cuts $45-$50 million fourth quarter revenue guidance to $40 million due to extended contract negotiations for new license agreements originally forecast to complete in current quarter.
Blue Nile (NILE) rises after Citigroup upgrades to buy from hold.
TD Ameritrade Holding (AMTD) sees first quarter EPS of about $0.39, well above the $0.27-$0.33 guidance range previously stated. Reports a record 339,000 average client trades per day in November 2007. It says as of Nov. 30, client assets totaled about $301 billion.
Hovnanian Enterprises (HOV) posts $7.42 fourth quarter loss per share, vs. $1.88 loss a year ago, on 20% sales decline. The home builder says contract cancellation rate, excluding unconsolidated joint ventures, was 40%, compared with the rate of 35% reported in both the fourth quarter of fiscal year 2006 and third quarter of fiscal year 2007. S&P reiterates hold.
General Mills (GIS) posts $1.14 second quarter EPS, vs. $1.08 a year ago, on 7% revenue rise. For fiscal year 2008, the food maker estimates that net sales will grow at a mid-single digit rate, exceeding its long-term goal of low single-digit sales growth. Also reaffirms fiscal year 2008 EPS guidance of $3.39-$3.43.
General Motors (GM) announces price increases, averaging about 1.5%, on most of its 2008 model year vehicles to partially recover increasing steel and commodity costs.
China Fund (CHN) confirms the amount of the previously announced distributions of $12.12 per share. The capital gain portion of the distributions is comprised of long-term capital gains at $9.00 per share and short-term capital gains at $2.84 per share. The net investment income portion of the distributions is $0.28 per share.