Movers: WaMu, Alcoa, AMD, Novellus Systems, Apple
Washington Mutual (WM) gets a $7 billion investment from a group led by private-equity firm TPG Capital in return for stock. The bank said it will lose $1.1 billion during the first quarter and take a provision for loan losses of $3.5 billion. It will cut its quarterly dividend to 1 cent from 15 cents. And it will also no longer purchase mortgages from brokers and close all its freestanding home loan offices. WaMu says it sold about 176 million shares at $8.75 each to an investment vehicle managed by TPG Capital and other investors. WM also issued about 55,000 convertible, perpetual non-cumulative preferred stock at a purchase price and liquidation preference of $100,000 per share.
Alcoa (AA) posts lower-than-expected $0.44, vs. $0.79 a year ago (excluding tax impacts), first quarter EPS from continuing operations (both excluding restructuring charges) on 6.7% revenue decline. Says first quarter 2008 earnings were hurt by higher input and energy costs, and the impact of a weaker U.S. dollar. S&P keeps hold; cuts estimate.
Advanced Micro Devices (AMD) expects first quarter revenue of about $1.5 billion, down 15% from the fourth quarter due to lower-than-expected sales across all business segments. In addition, AMD plans to reduce its workforce by about 10% by end of the third quarter 2008; will record a restructuring charge in the second quarter of 2008. S&P maintains hold.
Novellus Systems (NVLS) says revenue for first quarter is expected to be at the low end of previously communicated range of $315-$325 million, while EPS is expected to be between $0.15-$0.17 vs. previous guidance of $0.21-$0.24. Cites less-favorable-than-expected product mix, among other things.
First Marblehead (FMD) says, in response to The Education Resources Institute (TERI) petition for reorganization under Chapter 11, that it's working diligently on securing an alternative guarantor as well as structural solutions for loan default guarantees for future originations. FMD has been in a strategic alliance with TERI since 2001, pursuant to which TERI had been exclusive third-party provider of borrower default guarantees for its clients private student loans. Also, TERI guaranteed loans held by The National Collegiate Student Loan Trusts (NCSLT) the series of trusts FMD used in its securitization program.
Morgan Keegan downgrades Apple (AAPL) to underperform from market perform, citing mounting evidence of broad-based weakness in consumer technology spending in the United States and Europe.
Agria (GRO) shares are down 4.37 to 4.43 after Zhixin (Frank) Xue resigns as chief operating officer and director. Separately, the company's independent auditors have been unable to begin their audit of the company's financial statements for 2007. Given the substantial delay in commencement of audit process, there is a risk that GRO may not be able to file its Annual Report on Form 20-F for year ended Dec. 31, 2007 by June 30, 2008. Retracts prior guidance for fourth quarter 2007, and first quarter and full year 2008.
Garmin Ltd. (GRMN) shares seen lower after Dutch navigation device maker, TomTom, reportedly cut is first quarter sales outlook. Soleil reportedly downgrades to hold from buy.
NutriSystem (NTRI) rise 3.65 to 18.59 after announcings that Joseph Redling, President and Chief Operating Officer, will succeed Michael J. Hagan as Chief Executive Officer, effective May 1, 2008, and has been elected to the Board of Directors effective immediately.
CDC Corp. (CHINA) expects to exit the second quarterfwith positive adjusted net income, revenue in the range of $11-$12 million. Notes outlook is solely for CDC Games business unit.
Repligen (RGEN) reaches settlement with Bristol-Myers Squibb (BMY) in its lawsuit alleging infringement regarding the sale of Orencia for treatment of rheumatoid arthritis. Settlement provides for BMY to make initial payment of $5,000,000, and to pay royalties on U.S. net sales of Orencia for any clinical indication at rate of 1.8% for the first $500,000,000 of annual sales, 2.0% for next $500,000,000, and 4% of U.S. annual sales in excess of $1 billion for each year from January 1, 2008 until Dec. 31, 2013. Settlement also provides for grant of exclusive worldwide license to BMY under certain patent rights.
MSC Industrial Direct (MSM) posts $0.73, vs. $0.61 a year ago, second quarter EPS on 7.9% sales rise. Expects third quarter EPS to be in the range of $0.77-$0.79, sales to be between $457-$463 million.
LDK Solar (LDK) says for first quarter, it estimates revenue of $225-$235 million and earnings per ADS of $0.40-$0.44. Plans to offer $300 million senior convertible notes, due 2013.