Movers: Fannie Mae, Freddie Mac, Wachovia, Lehman, J&J, Genentech
Shares of U.S. mortgage giants Freddie Mac (FRE) and Fannie Mae (FNM) are lower due to concerns that their rescue plan might hurt the equity stakes of current shareholders, according to Reuters newswire.
New York Post reports that Lehman Brothers (LEH) CEO Dick Fuld is seriously mulling a way to take itself private and out of the public eye. According to sources, NYP says talks internally centering on privatizing LEH have gotten very serious consideration after a blistering onslaught of rumors and questions about the firm's solvency have caused the venerable bond shop to shed more than 79% this year. S&P maintains hold.
Wachovia (WB) wavered up and down after Oppenheimer downgrades WB to underperform from perform.
Kimberly-Clark (KMB) falls after the company posts $1.03, vs. $1.04, second quarter preliminary adjusted EPS despite 11% higher revenue. Preliminary adjusted EPS guidance was $1.08-$1.11; KMB says shortfall driven primarily by rapid escalation in costs in the second quarter. It cuts $4.45-$4.60 2008 EPS guidance to $4.20-$4.30, cites significant increase in cost inflation. S&P maintains buy. Wachovia downgrades to market perform from outperform.
General Motors (GM) announces that it is suspending quarterly dividend, effective immediately. Through a number of internal operating changes and other actions, including further headcount reductions, GM expects to generate about $10 billion of cumulative cash improvements by the end of 2009. In addition to these operating changes and other actions, GM expects to raise additional liquidity of $4-$7 billion through asset sales and financing activities.
Johnson & Johnson (JNJ) posts better-than-expected $1.17, vs. $1.05 a year ago, second quarter EPS on 8.7% sales rise. Raises 2008 EPS guidance to $4.45-$4.50, which does not include impact of any in-process R&D charges or other special items.
Genentech (DNA) posts $0.82, vs. $0.78 a year ago, second quarter non-GAAP EPS on 8% revenue rise. U.S. product sales rose 9%. Sees 2008 non-GAAP EPS guidance to $3.40-$3.50, vs. previous guidance of $3.35-$3.45.
WMS Industries (WMS) is up 2.08 to 28.50 after Oppenheimer believes business trends remain strong for WMS, BYI and IGT, despite modestly lower gaming revenues in most U.S. markets during the June quarter; reiterates outperform. WMS unavailable.
Evergreen Solar (ESLR) enters into a new long-term sales contract valued at about $1.2 billion with German-based IBC Solar AG. This contract extends through 2013 and brings ESLR's total contractual backlog to nearly $3 billion with five customers. S&P maintains strong buy.
Coldwater Creek (CWTR) raises second quarter guidance to breakeven-to-$0.02 EPS on sales of $235-$240 million, from previous guidance of $0.03-$0.09 loss on $215-$239 million sales. For fiscal year 2008, CWTR now sees $0.04 loss-to-$0.09 EPS on sales of $1,105-$1,151 million, from prior guidance of $0.13 loss-to-$0.04 EPS on $1,085-$1,150 million.
U.S. Bancorp (USB) posts $0.53, vs. $0.65, second quarter EPS on 6.8% drop in total interest income.
Federated Investors (FII) says it agreed to acquire certain assets of David W. Tice & Associates LLC that relate to the management of the $1.2 billion Prudent Bear Fund and the $507 million Prudent Global Income Fund.
The purchase price includes a $43 million initial payment and future contingent payments of up to $99.5 million over the next four years. The transaction is expected to close in the fourth quarter of 2008.
W.W. Grainger (GWW) posts $1.43, vs. $1.21, second quarter EPS on 9.7% sales rise. Reiterates 2008 EPS guidance of $5.80-$6.10, including $0.05 charge.
GSC Investment (GNV) posts $0.34, vs. $0.59, first quarter EPS as losses on investments offset 39% higher investment income.
Mosaic Company (MOS) and Investment Saskatchewan announce that they have agreed to sell their jointly owned Saskferco Products ULC nitrogen plant in Belle Plaine, Saskatchewan, to Yara International ASA for about $1.6 billion.
Dun & Bradstreet (DNB) posts $1.15, vs. $0.96, second quarter EPS before non-core gains and charges on 10% higher core and total revenue, before forex. Street was looking for $1.10 EPS. Confirms 2008 guidance of 8%-10% core revenue growth, EPS of $5.19-$5.29, before non-core gains and charges.
Activision Blizzard (ATVID) says stand-alone Activision expects first quarter revenues of about $650 million, GAAP EPS of $0.16-$0.18, an increase from Activision's prior outlook of $500 million in revenues, $0.04 EPS. Cites North American launch of Kung Fu Panda early in the quarter. Late in the quarter, Activision had 2 record-setting North American launches from the Guitar Hero franchise - Guitar Hero: On Tour and Guitar Hero: Aerosmith.
State Street (STT) posts $1.40, vs. $1.07, second quarter operating EPS on 39% revenue rise. Given strength of first half 2008, it now expects 2008 operating EPS to approach the high end of 10%-15% range, revenue to exceed high end of 14%-17% range.
Adtran (ADTN) posts $0.34, vs. $0.28 a year ago, second quarter EPS on 6.1% higher sales.
Polaris Industries (PII) posts $0.72, vs. $0.62, second quarter EPS on 21% revenue rise. Sees $1.07-$1.11 third quarter EPS, raises 2008 EPS guidance to $3.40-$3.48.
Equity Lifestyle Properties (ELS) posts $0.17, vs. $0.07, second quarter EPS, $0.71 vs. $0.59 FFO on 4.5% higher revenue. Continues to see $3.15-$3.30 2008 FFO.
J.B. Hunt Transport Services (JBHT) posts better-than-expected $0.39, vs. $0.45, second quarter EPS as absence of year ago tax benefit offset 14% higher revenue. The increase in operating revenue was primarily attributable to sharply higher fuel surcharge revenue and growth in Intermodal (JBI) segment and its non-asset based Integrated Capacity Solutions segment. Current quarter operating revenue, excluding fuel surcharges, rose 3%.
Eaton (ETN) posts $2.10, vs. $1.70, second quarter operating EPS on 32% sales rise. Sees third quarter operating EPS of $1.90-$2.00. Due to reduction in its expectations for market growth, reduces the midpoint of its guidance by $0.20, now sees $7.70-$8.00 2008 operating EPS.
Novellus Systems (NVLS) posts $0.06, vs. $0.45 a year ago, second quarter non-GAAP EPS on 38% sales decline. Street was looking for $0.04 EPS. Sees third quarter revenue of $240-$252 million (vs. second quarter's $257.7 million). Bookings in second quarter 2008 were $234.6 million, down $62.4 million or 21% from first quarter. Shipments fell 23% from first quarter.