Movers: Alcoa, Cisco Systems, Merrill Lynch, Freddie Mac, Fannie Mae, QLogic
Alcoa (AA) posts $0.66, vs. $0.81 a year ago, second quarter GAAP EPS on 5.6% lower sales. Notes that, while second quarter results were down year over year, its profitability compared with the first quarter 2008 rose 80%, as higher input costs impacting the entire aluminum industry were offset by higher volume and stronger pricing. S&P reiterates buy. Friedman Billings upgrades to outperform.
Cisco Systems (CSCO) falls 1.30 to 21.58 after CEO Chambers tells Reuters many of his customers see the economy picking up early next year rather than later this year. UBS Financial cuts target price on CSCO, maintains neutral.
Merrill Lynch (MER) is down 3.03 to 29.74 after CNBC's Charlie Gasparino reports MER and BlackRock (BLK) have scheduled talks about MER's possible sale of all or part of its 49% stock in BlackRock. Earlier, Fitch Ratings Services placed the 'A+' long-term Issuer Default Ratings and its units on Rating Watch Negative for MER.
Freddie Mac (FRE) and Fannie Mae (FNM) shares are seen weaker today on fears the companies will need to raise capital by selling billions of dollars worth of stock.
QLogic (QLGC) sees $0.31-$0.31 first quarter non-GAAP EPS on revenues in the range of $166-$168 million, vs. previous forecast for $0.26-$0.28 non-GAAP EPS, $154-$158 million revenue. Says revenue performance was driven by sequential growth of about 9% for its Host Products, about 8% for its Network Products from Q4 fiscal year 2008.
Steel Dynamics (STLD) and Nucor (NUE) rise after UBS Financial upgrades STLD and NUE to buy from neutral, as it believes upcoming earnings will remind investors of that group's attractiveness.
Cleveland-Cliffs (CLF) rises 17.84 to 109.78 after the company raises its outlook for iron ore revenue from its Asia-Pacific segment to $102 per tonn and its North American segment to $85 per short ton for 2008. Notes recent iron ore pricing settlements in Australia of an 80% increase for fines and a 97% increase for lump, and now expects an approximate 34% increase in adjustment factors related to steel pricing, using an annual average hot band steel price of $750 per ton at certain customer's steelmaking facilities.
Sealy (ZZ) posts $0.13, vs. $0.17, second quarter EPS on 6.6% sales decline. Expects second-half performance to be challenging as industry trends weakened further in June and retail traffic remains soft; also expects to incur significantly higher material costs due to rapidly growing inflation on core materials, along with additional promotional expenses associated with new product launches. S&P maintains hold.
Mohawk Industries (MHK) cuts $1.36-$1.45 second quarter EPS guidance to $1.23-$1.26. Cites continuing decline in the U.S. residential market, slowing European demand and rapidly increasing raw material and energy costs. S&P maintains hold.
Arris Group (ARRS) sees lower-than-expected second quarter revenue of $278-$280 million due to maturing demand for EMTAs as well as for plant extension and installation equipment. Also says GAAP and non-GAAP EPS will be at or near the lower end of previous guidance, but bookings and backlog will be much improved as compared to the first quarter. S&P maintains buy.
Cache (CACH) posts 6% higher June same-store sales, 6% higher total sales.
As a results of the better-than-expected sales, raises second quarter EPS guidance to $0.14-$0.15, vs. previous guidance of $0.12-$0.14.
Charming Shoppes (CHRS) announces the resignation of Dorrit J. Bern as President, CEO, effective immediately. Says its Chairman of the Board, Alan Rosskamm, will serve as CEO on an interim basis.
Circor International (CIR) raises second quarter EPS guidance to $1.04-$1.10 from $0.74-$0.83. Notes strong performance in its Instrumentation & Thermal Fluid Controls segment.
Mattison Technology (MTSN) sees second quarter revenue excluding royalty income of about $35 million, compared to previously announced guidance of $40-$42 million. Sees $0.24-$0.26 loss. Cites protracted weakness in overall semiconductor market that has resulted in lower shipments to some of its major memory customers. Expects gross margins of about 34%, compared to the previous guidance of 39%-41%. S&P cuts estimates, target, reiterates hold.
SGX Pharmaceuticals (SGXP) agrees to be acquired by Eli Lilly (LLY) for $3.00 per share, for a total purchase price of approximately $64 million.
Chico's FAS (CHS) posts 13% lower June same-store sales, 5.1% lower total sales.
Regis Corp. (RGS) plans to close up to 160 underperforming company-owned salons in fiscal year 2009. Sees pre-tax charge of $20-$25 million, which includes about $4.5 million, or $0.06-$0.07 per share, of incremental non-cash fixed asset write-downs which have been recognized in Q4 fiscal year 2008; the balance of $15-$20 million is related to lease termination costs and is expected to be recognized primarily in the first half of fiscal year 2009.
Wolverine World Wide (WWW) posts $0.33, vs. $0.28, second quarter EPS on 6.8% revenue rise. Reaffirms $1.83-$1.90 2008 EPS on $1.23-$1.26 billion revenue.
G-III Apparel Group, Ltd. (GIII) says it has acquired certain assets of Wilsons The Leather Experts (WLSN), including 116 outlet store locations, $18.5 million in inventory, distribution center operations and the Wilsons name and other related trademarks and trade names, for about $22.3 million in cash. Reflecting acquisition, raises fiscal year 2009 guidance to $1.35-$1.40 EPS on sales of $720-$730 million, vs. previous guidance of $1.25-$1.30 EPS on sales of $650-$660 million.