Movers: GE, Staples, Goldman Sachs, Palm, Sears
General Electric (GE) says fourth quarter EPS trending toward $0.50-$0.52, the low end of previous view of $0.50-$0.65. It says it's evaluating restructuring and other charges to accelerate cost out and reviewing losses in current credit environment. Expects $1-$1.4 billion after tax charge. Additionally, says it is reorganizing GE Capital; for 2009, it targets to reduce leverage to 6:1, lower outstanding commercial paper balance to $50 billion and reduce overall funding needs. Moody's affirms Aaa long-term and Prime-1 short-term rating of GE and GE Capital.
Staples (SPLS) posts $0.42, vs. $0.42, third quarter adjusted EPS on 8% lower North American same-store sales, 34% higher total sales. Posts $0.22 third quarter EPS (including charges). Street was looking for $0.41. As a result of the Corporate Express acquisition, anticipates total annual synergies to build, over a three-year period, to $300 million.
St. Jude Medical (STJ) sees $0.56-$0.60 fourth quarter EPS reflecting lower revenues due to forex; now sees fourth quarter total revenue of $1.058-$1.123 billion. Sees 2009 EPS of $2.47-$2.52, including forex. S&P trims estimate, keeps buy.
Cooper Industries (CBE) sees $0.70-$0.80 fourth quarter EPS, excl. restructuring charges. As a result, expects 2008 EPS of $3.45-$3.55, excl. charges. Cites severe tightening in credit markets, significant fluctuations in commodity prices, rapid appreciation of U.S. dollar. Says it has taken additional measures that reduce its cost structure and lowers its overall levels of inventory in preparation for what it expects to be a continued challenging business environment in 2009.
Goldman Sachs Group (GS), known for avoiding many of the blowups that have battered its Wall Street rivals, now is likely to report a net loss of as much as $2 billion for its quarter ended Nov. 28, according to industry insiders: The loss, equal to about $5 a share, would be more than five times as steep as the current analyst consensus for the Wall Street firm, as it faces write-downs on everything from private equity to commercial real estate: WSJ.
Palm (PALM) sees second quarter revenues of $190-$195 million, down from first quarter fiscal year 2009 and second quarter fiscal year 2008 due to reduced demand for maturing smartphone and handheld products. Sees second quarter restructuring charges of $7-$9 million. Sees second quarter gross margin as a percent of revenue of 18%-19%, after accounting for the impact of a charge for inventory component purchase commitments of $10-$15 million. Merrill reportedly downgrades to neutral from buy.
Sears Holdings (SHLD) posts $1.16 third quarter loss, vs. $0.03 EPS a year ago, on 9.0% lower domestic same-store sales, 7.8% lower total sales. Posts $0.90 third quarter loss (excluding items). Street was looking for loss of $0.49. Says current quarter results include a charge of $101 million ($61 million after tax or $0.49 per share) related to costs associated with closure of 14 stores and asset impairments, of which $76 million ($46 million after tax or $0.37 per share) relates to non-cash items. Raises stock buyback by $500 million.
Mylan (MYL) says it entered into a settlement agreement with Novartis AG (NVS) related to Letrozole Tablets, the generic version of NVS's Femara.
Under the agreement, MYL is provided a patent license that will enable it to market Letrozole Tablets, 2.5 mg.
General Growth Properties (GGP) announces that it has reached an interim agreement with the beneficial holder of the $58 million TRCLP Notes to extend the maturity date of the Notes to Dec. 11, 2008.
Shanda Interactive Entertainment (SNDA) posts RMB 4.78, vs. RMB 3.46, third quarter non-GAAP EPADS on 43% revenue rise.
Skyworks Solutions (SWKS) cuts $240 million first quarter revenue guidance to $210-$215 million, $0.23 non-GAAP EPS to $0.15-$0.17 to reflect weakness in handset and broader analog markets.
Wuxi Pharmatech (Cayman) (WX) says it will dedicate its Philadelphia facility to company's expanding biologics testing, cell banking and cell therapy services, as of Dec. 31 2008, will discontinue its U.S. biologics manufacturing operations. In conjunction, approximately 100 biologics manufacturing and supporting positions at Phila. facility will be eliminated. Expects to record restructuring charges of $2.5-$3.5 million. Beginning in 2009, expects to realize approximately $10 million in annual cost savings resulting from this change.
Mosaic Company (MOS) says phosphate sales volumes for its second quarter were about 1.3 million tonnes, or about 800,000 tonnes lower than first quarter. Sees impact to phosphate gross margins due to high cost raw materials used to produce phosphates in second quarter. Says third quarter sales volumes are expected to remain soft followed by a strong recovery in fourth quarter. Also expects to record an operating loss for the second quarter in its Offshore business segment due to inventory valuation adjustments. Withdraws fiscal year 2009 sales volume guidance for phosphates, potash.
Allos Therapeutics (ALTH) says FDA granted orphan drug designation to co.'s novel antifolate, pralatrexate (PDX), for the treatment of patients with follicular lymphoma.