Movers: WaMu, Thornburg, Ambac, National Semi, Ciena, Citigroup
Washington Mutual (WM) falls after the Wall Street Journal reports that with federal regulators prodding banks to raise more capital, WaMu and other battered lenders have approached private-equity firms and sovereign-wealth funds about possible cash infusions, according to people familiar with the situation. S&P maintains hold.
Thornburg Mortgage (TMA) falls 0.45 to 1.20 on news it plans to restate financial statements for 2007. TMA notes deterioration of prices of mortgage-backed collateral, liquidity position under unprecedented pressure from increased margin calls by its reverse repurchase agreement lenders, a portion of which the company has been unable to meet, and have raised substantial doubt about company's ability to continue as a going concern. S&P Ratings Services places its 'A-1+' ratings on the extendible asset-backed commercial paper notes issued by TMA program on CreditWatch with negative implications.
Ambac Financial Group (ABK) prices its $1.155 billion offering of 171 million ABK shares at 6.75 per share, grants underwriters 30-day option to purchase up to an additional 25.6 million shares to cover over-allotments, if any. In addition, ABK announces it has concurrently priced its $250 million public offering of 5 million equity units, with a stated amount of $50 per unit. The equity units carry a total distribution rate of 9.5%.
National Semiconductor (NSM) posts $0.28, vs. $0.22 a year ago, third quarter EPS on 5.2% sales rise. Sees $440-$460 million fourth quarter sales.
Ciena (CIEN) posts $0.28, vs. $0.12 a year ago, first quarter GAAP EPS on 38% revenue rise. Posts $0.47 adjusted non-GAAP EPS. Sees revenue growth of up to 27% in fiscal year 2008.
Citigroup (C) says it plans to reduce residential mortgage assets in its U.S. mortgage business by about $45 billion over the next 12 mos, a 20% decrease from December 2007 levels, and will cut the amount of new loans to be held in portfolio by more than 50% in the next year. Separately, CEO Vikram Pandit reportedly denies rumors that the company may put its South Korean unit up for sale.
Alcoa (AA) falls after Friedman Billings downgrades AA, Freeport-McMoRan Copper & Gold (FCX) and Horsehead Holding (ZINC) to market perform from outperform.
The Associated Press reports that federal regulators said Thursday they will seek a civil penalty of $10.2 million against Southwest Airlines (LUV) for failing to inspect older planes for cracks and then flying them before inspections were done. The FAA said Southwest operated nearly 60,000 flights in 2006 and 2007 using 46 planes that had missed inspections for possible fatigue-related cracking on the fuselage areas, according to AP.
NetFlix (NFLX) says its board authorized a stock repurchase program that enables NFLX to purchase up to $150 million of its common stock through the end of 2008. This new authorization is in addition to the $100 million repurchase authorization announced in January.
Quiksilver (ZQK) posts $0.12 first quarter loss from continuning operations, vs. $0.05 EPS a year ago, as higher expenses, delayed reorders of winter sports merchandise and weak consumer spending offset a 14% revenue rise. Says visibility into revenues and earnings is limited for the remainder of the year, however, ZQK believes consensus estimates as published by First Call of $2.6 billion for consolidated revenues and $0.58 for EPS (both from continuing operations) "
should be achievable."
Marvell Technology Group Ltd. (MRVL) posts $0.20, vs. $0.03 a year ago, fourth quarter non-GAAP EPS on 36% revenue rise. Reaches tentative settlement with the plaintiffs in previously disclosed federal derivative lawsuits related to historical stock option practices. MRVL has accrued $16 million in fourth quarter financial statements related to anticipated payments pursuant to tentative settlement.
Dynamic Materials (BOOM) posts lower-than-expected $0.56, vs. $0.54 a year ago, fourth quarter EPS on 55% sales rise. Results were limited by narrowed gross margins. It sees 2008 revenue growth of up to 60%, with GMs comparable to the 32% achieved in 2007. It sees first quarter operating income hurt by lower quarter-to-quarter gross margins and approximately $3 million of acquisition-related amortization expense. Expects added impact of higher interest expense to result in first quarter net income that will be comparable to first quarter 2007.
E-House (China) Holdings Ltd. (EJ) posts $0.29, vs. $0.23 a year ago, fourth quarter EPS on 46% revenue rise. Sees first quarter revenues of $29-$32 million; 2008 revenues of $210-$240 million, an increase of 74%-98% from 2007.
PeopleSupport (PSPT) posts $0.81, vs. $0.18 a year ago, fourth quarter EPS on 15% revenue rise. Sees first quarter revenue of $35-$36 million and EPS of $0.11-$0.12; 2008 revenue of $162-$170 million and EPS of $0.47-$0.58. It says guidance assumes the current Philippine Peso rate of approximately 40.5 pesos to the U.S. dollar. Piper Jaffray reportedly downgrades to neutral from buy. RBC reportedly cuts to sector perform from outperform.
Reddy Ice Holdings (FRZ) announces that federal officials executed a search warrant at the company's corporate office in Dallas on March 5. Says it is cooperating with the authorities and will continue to function in a normal business manner.