Movers: Freeport-McMoRan, Constellation Energy, RIM
Freeport-McMoRan Copper & Gold (FCX) announces reduction in copper production and sales of 200 million pounds in 2009 and 500 million pounds in 2010 in response to recent sharp decline in copper, molybdenum prices. Also announces that it has suspended its stock dividend in response to weak conditions in commodity and financial markets. S&P downgrades to sell from buy.
Electricite de France (EDF) proposes to acquire a 50% ownership interest in Constellation Energy Group's (CEG) nuclear generation and operation business (excluding the company's existing interest in the UniStar joint venture) for $4.5 billion. EDF would provide CEG with additional liquidity by entering into asset put option pursuant to which CEG could, at its option, prior to EDF s acquisition of 50% interest in CEG's nuclear biz, sell to EDF non-nuclear generation assets having an aggregate value of up to $2 billion.
Research In Motion Limited (RIMM) sees third quarter revenue of $2.75-$2.78 billion, vs. previous forecast of $2.95-$3.10 billion due to forex, lower than estimated unit shipments of existing products. Cuts $0.89-$0.97 third quarter EPS forecast to $0.81-$0.83 (adjusted), which excludes negative impact on the company's tax rate due to forex.
General Motors (GM) submits restructuring plan to Congress; says 22 of 24 new vehicle launches in 2009-2012 will be more fuel-efficient cars, crossovers; sees full compliance with 2007 Energy Independence and Security Act; reduction in brands, nameplates, retail outlets; full labor cost competitiveness with foreign manufacturers in the U.S. no later than 2012; further manufacturing and structural cost reductions through increased productivity, employment reductions; balance sheet restructuring, supplementing liquidity through Federal assistance.
Bed Bath & Beyond (BBBY) sees $0.31-$0.35 third quarter EPS, net sales to fall by about 0.7%. Says third quarter comp store sales are estimated to have declined by about 5.6%, vs. previous guidance of relatively flat to low single digit decline.
American International Group (AIG) says financing entity created by Federal Reserve Bank of New York, designed to mitigate AIG's liquidity issues in connection with its credit default swaps, similar derivative instruments (CDS) written on multi-sector collateralized debt obligs (CDOs), has been launched. New entity is designed to buy CDOs on which AIG Finl Products Corp. (AIGFP) has written CDS contracts; to date, $46.1 billion of such CDOs have been purchased, related notional amount of CDS transactions terminated in connection with such purchases.
Constellation Brands (STZ) says it has closed out certain forex hedges to take advantage of recent strength of U.S. dollar; net proceeds expected to be used to reduce borrowings. As result, it raises $310-$340 million fiscal year 2009 free cash flow guidance to $360-$390 million. Says it will pay taxes on hedge gains, therefore expects to recognize $0.20 EPS impact for reported fiscal year 2009 results. Sees $0.63-$0.71 fiscal year 2009 EPS on reported basis, $1.68-$1.76 on comparable basis.
Tyco Electronics (TEL) notes that November orders weakened from October levels, primarily in the Electronic Components segment.
Says it currently tracking toward low end of the sales, EPS outlook ranges that it provided on Nov. 6 for first quarter sales of $2.9-$3.0 billion, down 16%-19% from prior year, adj. EPS from continuing operations of $0.24-$0.28.
Interdigital (IDCC) expects fourth quarter revenue to be in the range of about $57-$60 million, including $7 million on non-recurring revenue primarily associated with non-refundable prepayment, made in a prior period.
Del Monte Foods (DLM) posts $0.14, vs. $0.13, (includes $0.01 transformation-related expense) second quarter EPS from continuing operations on 11.5% higher sales. Raises fiscal year 2009 sales growth guidance to 8%-10% from prior expectation of 6%-8%; still sees EPS from continuing operations of $0.58-$0.62, but now expects it to be toward midpoint of range rather than prior forecast of at lower end.
United States Steel (X) says it is taking further steps to consolidate operations to safely, more efficiently meet customer demand including temporarily idling certain facilities..
AMR Corp.'s (AMR) American Airlines unit reported November load factor of 76.6%, a decline of 4.6 points from same period last year. Traffic fell 14.5% and capacity declined 9.3% year over year. The company's American Eagle unit reported a Nov. load factor of 67.3% - down 4.8 points compared to the same period last year. Traffic decreased 21.5% and capacity fell 15.9%.
Marvell Technology Group (MRVL) posts $0.23, vs. $0.14, third quarter non-GAAP EPS on 4.3% revenue rise. Street was looking for $0.20-$0.21. S&P reiterates hold.
Omnivision Technologies (OVTI) posts $0.10 second quarter GAAP loss, vs. $0.36 EPS a year ago, on 29% revenue decline. Based on current trends, sees third quarter revenues of $80-$100 million and GAAP net loss of $0.24-$0.37. Baird downgrades to underperform from neutral.
Infineon Technologies (IFX) posts EUR 763 million fourth quarter net loss, vs. EUR 280 million loss, on 2.3% revenue rise. Notes charges in fourth quarter in connection with its cost-reduction program. Sees first quarter fiscal year 2009 revenues down 30% compared to prior quarter, total segment profit negative in the first quarter, with total segment profit margin of negative mid-to-high teens percentage, mainly due to the sharp revenue decrease, low capacity utilization. Sees fiscal year 2009 revenues down at least 15% from fiscal year 2008, total segment profit to decrease significantly.