Movers: Wells Fargo, Merrill Lynch, Microsoft, Intel, Seagate, Alpha Natural Resources
Wells Fargo (WFC) posts better-than-expected $0.53, vs. $0.67 a year ago, second quarter EPS as higher provision expense offset 16% revenue rise. Street was looking for $0.50. Raises quarterly dividend by 10% to $0.34.
Merrill Lynch (MER) is up 3.31 to 28.00 after CNBC reports that Merrill will announce tomorrow a deal to sell its stake in Bloomberg for $4.5 billion. Also reports no word of MER selling its BlackRock (BLK) stake.
Microsoft (MSFT) rises 1.11 to 27.26 after WSJ.com, citing people familiar with the situation, reports that Microsoft is planning to meet executives from Time Warner's (TWX) AOL today to advance discussions on a possible tie-up, as the software giant seeks an alternative to a deal with Yahoo (YHOO).
Intel (INTC) posts $0.28, vs. $0.22 a year ago, second quarter EPS on 9% revenue rise. Says revenue were at the high end of expectations, and that demand remains strong for its microprocessor and chipset products in all segments and all parts of the globe. Sees third quarter revenue of $10-$10.6 billion, gross margin of 58% plus or minus a couple of points, 2008 gross margin of about 57%. S&P reiterates hold.
Seagate Technology (STX) posts $0.37 (including restructuring charge of $0.07), vs. $0.96 a year ago, fourth quarter EPS despite 5.6% revenue rise. Notes some product execution issues in the notebook and nearline markets. Expects residual effects of the missed execution to be reflected in first quarter. As such, sees first quarter non-GAAP EPS of $0.22-$0.26 on revenue of $3.15-$3.3 billion.
Alpha Natural Resources (ANR) agrees to be acquired by Cleveland-Cliffs (CLF) in a cash and stock deal valued at about $10 billion. Terms: 0.95 CLF share and $22.23 in cash for each ANR share.
St. Jude Medical (STJ) posts $0.58, vs. $0.39, second quarter EPS on 20% revenue rise. Sees $0.56-$0.58 third quarter EPS. Raises 2008 EPS forecast to $2.28-$2.33. In addition to reflecting the strength in the business, says increased guidance assumes that the federal research and development tax credit is approved and the benefit is recognized during 2008.
Charles Schwab (SCHW) is up 2.74 to 21.96 after SCHW posts $0.27, vs. $0.20, second quarter EPS from continuing operations on 8.5% revenue rise. S&P maintains buy.
Knight Capital Group (NITE) posts lower-than-expected $0.32, vs. $0.24, second quarter EPS on 8.8% revenue rise.
Gannett (GCI) posts $1.02, vs. $1.24, second quarter EPS from cont. ops on 9.9% lower total operating revenue. Notes results do not include non-cash charges to be recorded in quarter, which have not yet been finalized, for impairment of goodwill, other intangible assets, certain other charges.
AMR Corp. (AMR) posts $1.13 second quarter loss per share, excluding more than $1 billion in special charges, vs. $1.13 EPS a year ago, as record jet fuel prices offset 5.1% consolidated revenue rise. Street was looking for $1.40 loss. AMR paid $3.19 per gallon for jet fuel in the second quarter 2008 compared to $2.09 in second quarter 2007, a 53% increase. Given current industry environment, AMR has decided to place on hold its planned divestiture of American Eagle, its regional affiliate, until industry conditions are more stable and favorable.
S&P reiterates hold.
Delta Air Lines (DAL) reports $0.35 second quarter operating EPS, excluding writedowns, on 10% revenue rise. Posts second quarter net income, excluding charges, of $137 million, vs. $274 million. It says year-over-year decrease in net income was driven primarily by unprecedented fuel prices, partially offset by increase in operating revenue from intl expansion. Delta now expects system capacity for the second half of 2008 to be down 4% vs. 2007, with domestic capacity down 13% and international capacity up 14%. DAL is now targeting to remove the equivalent of 100 regional aircraft from the system by the end of the year. S&P reiterates hold.
Terex (TEX) says it board authorized an increase in its share repurchase program, under which TEX now may buy an additional $500 million of its common shares outstanding. This brings the total amount that may be repurchased under the program to $1.2 billion, while keeping the program period expiration date of June 30, 2009.
Chicago Bridge & Iron (CBI) falls 7.34 to 29.05 after it says it will recognize a pre-tax charge of about $317 million or $2.38 per share in the second quarter for forecasted cost overruns associated with two major LNG projects in the UK. Continued poor labor productivity, weather delays, and the need to supplement critical subcontractor areas will adversely impact the schedule and necessitate substantial expenditures well above previous estimates. With both projects scheduled for first gas early in the fourth quarter and with continued strong performance from the balance of the backlog, sees 2008 EPS of $0.40-$0.60.
Abbott Laboratories (ABT) posts $0.85, vs. $0.63, second quarter GAAP EPS on 15% sales rise. Sees third quarter GAAP EPS of $0.72-$0.74. Based on H1 2008 results, outlook for the remainder of year, raises 2008 GAAP EPS forecast to $3.16-$3.20, sales forecast to mid-teens growth. Also expects continued double-digit EPS growth in 2009.
BE Aerospace (BEAV) sees second quarter EPS in excess of consensus estimates, expects to report record quarterly bookings, backlog, revenues, op. EPS, net income. Separately, BEAV receives regulatory approval for its acquisition of Honeywell's Consumables Solutions distribution business, expects to close deal before end of third quarter.
ASML Holding N.V. (ASML) posts € 0.44, vs. € 0.33 a year ago, second quarter EPS despite 9.3% revenue drop. Says current macro-economic weakness may force its customers to focus only on technology transfers to immersion, delay capacity additions for non-leading edge processes. In that case, ASML's 2008 net sales may potentially drop by as much as 20% vs. 2007.
Sun Microsystems (JAVA) expects fourth quarter revenue of $3.725-$3.8 billion, total gross margins as a percent of revenues of 44%-45%. Sees GAAP EPS of $0.05-$0.15, non-GAAP EPS of $0.25-$0.35.
Altera (ALTR) posts $0.32, vs. $0.22, second quarter EPS on 13% sales rise. Street was looking for $0.27 EPS. Sees third quarter sales flat to down 3% sequentially, with gross margins of about 67%. S&P maintains hold; raises estimate, target.
Intervoice (INTV) agrees to be acquired by Convergys in $335 million deal. Terms: $8.25 per share in cash for each INTV share held.
CSX Corp. (CSX) posts $0.93, vs. $0.71, second quarter EPS (GAAP) on 15% higher revenue. Notes EPS for second quarter '08 included $0.04 associated with the resolution of certain tax matters. Says it continues to target the upper end of its previously announced 2008 EPS guidance of $3.40-$3.60 on a comparable basis. Merrill reportedly upgrades to buy from neutral.
ImClone Systems (IMCL) announces that Erbitux has received marketing authorization in Japan for use in treating patients with advanced or metastatic colorectal cancer (mCRC).