Movers: UAL, Fifth Third Bancorp, FedEx, Morgan Stanley, CarMax
UAL Corp. (UAUA) falls after CNBC reports the airline plans to cut 1,400 to 1,600 jobs, reduce mainline domestic capacity.
Fifth Third Bancorp (FITB) announces actions to strengthen its capital position in light of continued deterioration in credit trends, including planned issuance of $1 billion in Tier 1 capital in form of convertible preferred shares, reduction in quarterly dividend to $0.15 per share from $0.44 per share; anticipated sales of certain non-core businesses. Revises capital targets and is now targeting an 8%-9% range for its Tier 1 capital ratio. S&P downgrades to sell from hold.
Morgan Stanley (MS) posts $0.95, vs. $2.24, second quarter EPS from continuing operations on 38% lower net revenue. Says difficult market conditions, lower levels of client activity impacted results, particularly in fixed income and asset management.
FedEx (FDX) posts $1.45, vs. $1.90 a year ago, fourth quarter EPS (excluding items) as record high fuel prices and a weak U.S. economy offset 7.8% revenue rise. It sees $0.80-$1.00 first quarter EPS vs. $1.58 last year; targets fiscal year 2009 EPS of $4.75-$5.25, which includes current high fuel prices, related impact on fuel surcharges, which reducing demand for FDX services, impacting yield across the company's transportation segments. Says outlook assumes no additional increases to current fuel prices and no further weakening in economy. S&P downgrades to buy from strong buy.
MF Global Ltd. (MF) sees first quarter revenue of $360-$390 million. Says it estimates the narrowing of short term credit spreads has had a negative impact on net interest income and overall pre-tax margins in first quarter. Sees higher non-compensation costs in first quarter. Also says it plans to offer about $150 million of non-cumulative perpetual convertible preference shares (plus up to an additional 20% under an option to be granted to the initial purchasers) and $150 million of convertible senior notes (plus up to an additional 20%under an option to be granted to the initial purchasers), in two private offerings.
Northwest Airlines (NWA) announces further capacity reductions for the fourth quarter 2008 in response to the high cost of fuel. Specifically, says it will reduce its system mainline capacity (domestic and international) in the fourth quarter by 8.5% - 9.5% vs. fourth quarter 2007. This includes the reductions previously announced in April. Notes it has not yet finalized the specific employee impacts related to the reduced flying. S&P reiterates hold.
CarMax (KMX) posts $0.13, vs. $0.30, first quarter EPS as reductions in gross profit per unit and CarMax Auto Finance income, lower-than-expected sales offset 1% higher same-store used unit sales, 3% total sales rise. As a result of uncertain economic conditions, rising fuel and food costs and weak consumer sentiment, exacerbated by rapid depreciation in SUVs and trucks, temporarily suspends guidance on same-store sales, EPS for fiscal year 2009.
Cabot Oil & Gas (COG) plans to offer 3.6 million shares of stock. Proceeds of the offering are expected to partially fund the purchase price of the recently announced property acquisition in East Texas.
Panera Bread (PNRA) raises second quarter EPS guidance to $0.48-$0.50 from previous target of $0.40-$0.44. Says increase is driven by projected company-owned comparable bakery-cafe sales growth of 6.1%-6.4% (versus previous target of 5%-6%), and better-than-expected margin improvement on higher growth in gross profit per transaction.
YRC Worldwide (YRCW) updates second quarter EPS guidance to $0.55-$0.65, which now includes net curtailment gains of $0.34 and a charge for a significant accident of $0.09. Excluding the curtailment gains and the accident charge, expects second quarter EPS from core operations to be consistent with previously issued guidance of $0.30-$0.40.
Clarcor (CLC) posts $0.48, vs. $0.41, second quarter EPS on 14% sales rise. Sees $1.90-$2.00 fiscal year 2008 EPS on sales growth of about 19%. According to a wire report, in March, CLC forecast EPS of $1.85-$2.05. S&P reiterates hold.
Lindsay Corp. (LNN) posts lower-than-expected $1.15, vs. $0.62, third quarter EPS on 54% revenue rise. Notes lower gross margin vs. year ago.
Somanetics (SMTS) posts $0.21, vs. $0.17, second quarter EPS on 40% revenue rise. Sees fiscal year 2008 revenue of $46.2-$50 million, income before taxes of $15.3- $17.5 million.
Stora Enso Oyj (SEOAY) expects its second quarter operating profit excluding non-recurring items to be about half the €223 million achieved in second quarter 2007. Cites continued poor performance of its Wood Products business, higher pulpwood costs, impacts from escalating oil prices, negative forex movements, effects of maintenance and technical stoppages during second quarter 2008.