Movers: FedEx, Con-Way, Texas Instruments, UPS, Sony
FedEx (FDX) cuts $4.75-$5.25 fiscal year 2009 EPS guidance to $3.50-$4.75, as significantly weaker macroeconomic conditions are expected to offset the benefits from lower fuel prices and the announced departure of DHL from the U.S. domestic package market. This outlook assumes stable fuel prices. Also, FDX forecasts $1.58 second quarter EPS, which is at high end of previous guidance of $1.40-$1.60. Morgan Keegan maintains market perform.
Con-Way (CNW) cuts $2.60-$2.80 2008 EPS from continuing operations guidance to $2.20-$2.35, excluding charges. Adds that since its conference call on Oct. 23, decline in year-over-year tonnage at Con-way Freight has accelerated significantly as economy has continued to deteriorate. In response, co. reduced its nationwide workforce by about 8%; will result in charge of about $7.5 million.
Texas Instruments (TXN) lowers fourth quarter guidance to $0.10-$0.16 EPS on revenue of $2.3-$2.5 billion from $0.30-$0.36 EPS on revenue of $2.83-$3.07 billion. S&P lowers estimates, target; keeps hold.
United Parcel Service (UPS) falls 4.46 to 54.16 after JP Morgan downgrades UPS to neutral from overweight.
Walt Disney (DIS) falls 1.16 to 23.76 after Pali Research downgrades DIS to neutral from buy. Yesterday DIS announced deal to acquire outstanding shares of Jetix Europe N.V., bringing DIS's ownership of the company to about 96%; Following completion of deal, DIS intends to obtain ownership of 100% of shares in Jetix.
Kroger (KR) posts $0.39 (excluding item), vs. $0.37 a year ago, third quarter EPS on 5.6% higher same-supermarket sales (without fuel), 9.0% higher total sales. Sees fiscal year 2009 identical supermarket sales growth of 4.5%-5.5%, excl. fuel. Raises fiscal year 2009 EPS view to $1.88-$1.91, excl. $0.03 charge related to Hurricane Ike. Implies fourth quarter EPS of $0.49-$0.52. Says guidance considers cautious mindset of consumers this holiday season. Sees fiscal year 2010 identical supermarket sales growth, excluding fuel, of 3%-5%. S&P cuts estimates, target, reiterates buy.
Danaher (DHR) cuts $1.17-$1.25 fourth quarter adjusted EPS from continuing operations view to $1.03-$1.10. Sees 2008 adjusted EPS from continuing operations of $4.15-$4.22. It plans to cut 1,700 jobs. S&P reiterates hold.
Sony (SNE) plans to reduce investment in its electronics business by about 30% in fiscal year 2010 vs. its mid-term plan, reduce total number of manufacturing sites by about 10%, reduce headcount in electronics business worldwide by about 8,000, reduce headcount in its seasonal and temporary workforces.
Broadcom (BRCM) cuts fourth quarter revenue guidance to $1.05-$1.10 billion (inclduing AMD digital TV acquisition) from $1.17-$1.235 billion (excluding AMD Digital TV acquisition). Notes that due to the current global economic environment, customers across each of its targeted end markets requested adjustments in their deliveries in fourth quarter, resulting in significant pushouts and cancellations since BRCM originally provided guidance in October 2008.
Altera (ALTR) now sees sequential fourth quarter sales decline of 9%-12%. Prior guidance was a range of up 1% to down 3%.
Cites slower-than-anticipated sales across all market segments, with particular weakness in the Computer & Storage and Consumer market segments.
Vail Resorts (MTN) posts $0.93 first quarter loss, vs. $0.63 loss a year ago, despite 56% revenue rise. Says if booking trends do not improve from current levels, fiscal year 09 results will almost certainly fall below low end of guidance range.
Hi-Tech Pharmacal (HITK) posts $0.09 second quarter EPS, vs. $0.08 loss a year ago, on 58% higher net sales.
Harris Corp. (HRS) says it is evaluating strategic alternatives related to its majority-owned subsidiary, Harris Stratex Networks (HSTX). HRS currently owns 56% of HSTX. Alternatives under consideration include a spin-off, split-off, secondary public offering, or a sale of all or part of our shares.
ArvinMeritor (ARM) withdraws full-year fiscal year 2009 guidance due to continuing distress in the global markets and the uncertainty associated with projecting production volumes in second half fiscal year 2009. For the first quarter, ARM expects to generate $50-$58 million of EBITDA on slightly more than $1 billion in sales, before special items. Anticipates free cash outflow in the first quarter to be less than its free cash outflow in the same period last year.
Merck & Co. (MRK) says it expects to file NDAs with FDA for Telcagepant, Rolofiscal year lline, Ezetimibe/Atorvastatin. Will seek approval of new indications for Gardasil and Isentress in 2009. The company also says its pipeline continues to progress with 6 new Phase III development programs expected to start in 2009, 7 Phase III programs continuing. MRK plans 3 Phase III programs for new indications to start in 2009, 2 Phase III programs for new indications continuing. Forms Merck BioVentures unit for follow-on biologics.
Analogic (ALOG) posts $0.02, vs. $0.48, first quarter GAAP EPS on 7.8% revenue rise. Says gross margins were negatively impacted by product mix, increased manufacturing costs due to lower production volumes, amortization costs related to the Copley acquisition.
Jarden (JAH) sees fourth quarter revenue of $1.3 billion and 2009 revenue exceeding $5 billion. Anticipates recent significant improvement in raw material commodity costs should have a positive impact on margins in the second half of 2009. It sees 2009 cash flow from operations less capital expenditures exceeding $250 million.
Pep Boys-Manny, Moe & Jack (PBY) posts $0.14 third quarter loss, vs. $0.54 loss, despite 10% lower same-stores sales, 12% lower total sales. Street was looking for about breakeven to $0.01 EPS.
Whole Foods Market (WFMI) announces it has filed an action in the D.C. U.S. District Court to bar the FTC from conducting a trial that would violate its due process rights because the FTC has already publicly prejudged the case against WFMI and has refused to give it enough time to prepare for trial.
Molex (MOLX) cuts $750-$800 million second quarter revenue view to $650-$670 million. Says it is lowering expenses, including headcount and related employee costs.
These cost reductions are in addition to the previously announced expense controls and restructuring initiatives. As these actions have not been fully quantified, MOLX doesn't believe it appropriate to provide a December-quarter EPS view at this time. S&P slashes estimates, reiterates hold.
WyndhamWorldwide (WYN) announces acceleration of its initiatives to increase cash flow and eliminate its reliance on the asset-backed securities (ABS) market by reducing the sales pace and cost structure of Wyndham Vacation Ownership. Now expects to reduce gross Vacation Ownership Interest (VOI) sales in 2009 to about $1.2 billion from expected gross VOI sales of about $2 billion in 2008 by eliminating sales offices and marketing programs. Sees charge of about $50-$60 million in fourth quarter 2008, $10-$15 million in first quarter 2009. Now sees total 2009 revenues of about $3.7-$4.1 billion and adjusted EBITDA of $790-$840 milllion.
Integrated Device Technology (IDTI) sees lower-than-expected $0.14-$0.15 third quarter non-GAAP EPS on revenue of $165-$170 million (down 15%-18% sequentially). Cites weak demand.
United Microelectronics (UMC) says due to weak semiconductor demand resulting from the global economic recession and wafer shipments being pushed out, cuts fourth quarter revenue guidance to NT$18.2-NT$18.7 billion, gross profit margin to 7%- 9%. Maintains that profits from operations will be positive for overall 2008.
AutoZone (AZO) posts $2.2,3 vs. $2.02 a year ago, first quarter EPS on 1.5% lower same-store sales, 1.6% higher total sales. Street was looking for $2.18.
National Semiconductor (NSM) posts $0.14, vs. $0.33, second quarter EPS on 15% sales decline. Sees sequential third quarter sales decline of about 30%. It cites "significantly" lower-than-usual demand levels in the post-holiday season, especially for personal mobile devices. NSM also expects gross margins to decline as the company plans to significantly lower its manufacturing activity in third quarter.