Movers: GM, Oracle, RIM, Darden, Provident Bankshares
General Motors (GM) - the White House announced a $17.4 billion rescue package for the troubled Detroit auto makers that avoids bankruptcy. The deal would extend $13.4 billion in loans to GM and Chrysler LLC in December and January, with another $4 billion likely available in February. The deal is contingent on the companies' showing that they're financially viable by March.
Oracle (ORCL) posts $0.34, vs. $0.31, second quarter non-GAAP EPS on 6% revenue rise. S&P maintains buy.
Research In Motion (RIMM) posts $0.69, vs. $0.65, third quarter GAAP EPS on 66% revenue rise. Sees fourth quarter revenue of $3.3-$3.5 billion, 2.9 million net subscriber account additions, EPS of $0.83-$0.91. S&P maintains buy.
Darden Restaurants (DRI) posts $0.42, vs. $0.30, second quarter EPS from continuing operations on 9.6% total sales rise. Combined same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were down 0.2% for the second quarter. Expects combined U.S. same-restaurant sales declines in fiscal year 2009 of about 1.25%-2.25% for Red Lobster, Olive Garden and LongHorn Steakhouse. Expects total sales growth of between 8%-9%, EPS from continuing operations decline of 1%-6%.
Provident Bankshares (PBKS) agrees to be acquired by M&T Bank (MTB) in a stock-for-stock transaction valued at about $401 million. Terms: 0.171625 MTB shares for each PBKS share held. Based on MTB's closing stock price Dec. 16, the deal values PBKS shares at $10.50 each. MTB expects the transaction to be accretive to GAAP and operating EPS in 2010, estimates its internal rate of return on the investment to exceed 16%.
Express Scripts (ESRX) rises 2.35 to 61.70. S&P looks for pharmacy benefit managers like ESRX to gain as governments, employers, and health plans seek help limiting their rising drug costs, particularly in a weak economy; S&P upgrades ESRX to strong buy from buy.
Accenture (ACN) posts $0.74, vs. $0.60 a year ago, on 6% revenue rise (in U.S. dollars). New bookings for the quarter were $5.80 billion, with consulting bookings of $3.56 billion and outsourcing bookings of $2.24 billion. Revises outlook for rest of fiscal year 2009 primarily to reflect changing forex assumptions, and continued market uncertainty. Now sees third quarter revenue of $5.45-$5.65 billion, fiscal year 2009 revenue growth of 6%-10%. Cuts $2.85-$2.93 fiscal year 2009 EPS view to $2.78-$2.85. S&P keeps strong buy.
Stryker (SYK) says due to lower-than-expected fourth quarter sales, full year 2008 constant currency revenue growth now projected at 9%-10% vs. its prior forecast of 11%-12%. Cites significant and rapid contraction in hospital capital budgets, which has depressed demand for certain MedSurg Equipment products. Also says it will incur a restructuring charge of about $20M (net of income tax benefit) in fourth quarter, which will reduce EPS by about $0.05. SYK now sees 2008 EPS of $2.77-$2.79.
Weyerhaeuser (WY) says continued housing slump, a weaker pulp market will result in significantly lower-than-expected fourth quarter earnings; expects challenging market conditions to continue through 2009. Declares $0.25 quarterly dividend, lower than previous $0.
60 level, payable March 2009; also authorized repurchase up to $250 million in WY stock.
Palm (PALM) posts $0.73 second quarter loss per share, vs. $0.07 loss, on 45% revenue decline. Smartphone sell-through for the quarter was 599,000 units, down 13% year over year. Smartphone revenue was $171M, down 39%. S&P widens loss estimate, maintains hold.
Carmax (KMX) posts $0.10 third quarter loss vs. $0.14 EPS on 24% lower same-store used-unit sales and 23% lower total sales. Says, as result of unprecedented declines in traffic and sales, continuing volatility in asset-backed credit markets, does not believe it can make a meaningful projection of fiscal year 09 earnings. Also announces it decided to temporarily suspend its store growth.
Potash Corp. of Saskatchewan (POT) sees 2008 EPS of about $10.75, which is 10% below midpoint of company's previously announced target range. Cites softness in demand for crop nutrients as a result of widespread uncertainty in global economy. Anticipates total potash sales volumes for 2008 will be below 9 million tonnes, with potash gross margin more than triple that of '07. Currently anticipates 2009 potash volumes could be similar to slightly above 2008 levels.
Lam Research (LRCX) revises second quarter guidance to reflect continued deterioration in semiconductor equipment market conditions. Now sees $270,000-$285,000 second quarter revenue, $0.04-$0.05 ongoing loss per share. Expects this challenging environment will persist going into 2009.
Armstrong World Industries (AWI) confirms its Board of Directors did not declare a special cash dividend in its regularly scheduled December meeting. The Board will continue to evaluate the return of cash to shareholders Based on factors including actual and forecasted operating results, the outlook for global economies and credit markets, and the Company's current and forecasted capital requirements.
OfficeMax (OMX) says its Board of Directors voted to suspend the payment of quarterly cash dividends on the Company's common stock, effective immediately, due to the impact of continued weak economic conditions.
3Com (COMS) posts $0.12, vs. $0.03, second quarter non-GAAP EPS on 12% revenue rise. COMS generated $56.8 million in cash from operations.
Argule (ARQL) says with respect to ARQ 761, a second generation compound in its E2F program, its partner, Roche (RHHBY), has notified ARQL that it does not intend to exercise its option to license the program, and hence RHHBY's rights to develop and commercialize candidates under the agreement will terminate as of the end of the year.
Cintas (CTAS) posts $0.47, vs. $0.53, second quarter EPS as higher costs, expenses offset flat revenue. Given significant uncertainties that are widespread throughout the marketplace, CTAS removes its revenue and EPS guidance for fiscal year 2009.
Apartmenet Investment and Management (AIV) announces that its Board of Directors has declared a special dividend payable to holders of its Class A Common Stock of $2.08 per share, or approximately $211 million in the aggregate.
Dividend is payable on 1/29/09, to stockholders of record on 12/29/08.
BRE Properties (BRE) sees 2009 EPS of $0.76-$0.96, vs. current 2008 EPS view of $1.97-$2.02. EPS estimates do not reflect projected gains or losses from asset sales for fourth quarter 2008, and do not include projected gains or losses associated with property sales for 2009. Sees 2008 FFO of $2.75-$2.80, 2009 of $2.45-$2.65. Cites reduction in real estate NOI from same store operations, stabilized community sales in 2008, projected dispositions in 2009, and initial operating deficits from development communities entering the leasing phase.
Arthrocare (ARTC) to expand periods covered by previously announced restatement of its financial statements, withdraws estimates of effects of restatement. Michael Gluk, SVP, CFO, two other officers of company resign. Review also identified facts that suggest company had deficiencies, some of which constituted material weaknesses in internal control over financial reporting. ARTC, DiscoCare unit each receive grand jury subpoenas from U.S. Attorney for Southern District of Florida requesting documents.
Jabil Circuit (JBL) posts $0.22, vs. $0.30, first quarter EPS (GAAP) on flat revenue. First quarter core EPS was $0.30, vs. $0.36. Sees $0.04-$0.08 second quarter EPS GAAP ($0.12-$0.16 core EPS) on $2.8-$3.0 billion revenue.
Intrepid Potash (IPI) expects fourth quarter sales levels to be less than half of the levels seen in third quarter due to reduction and deferral of sales of potash and langbeinite. Anticipates producing potash and langbeinite volumes for full-year 2008 to be below previous guidance range, that annual cost of goods sold for both potash and langbeinite will be higher than previous guidance. IPI expects 2009 potash production will be below 800,000 tons.
Panasonic (PC) makes tender offer for Sanyo Electric at 131 yen per share of common stock, 1,310 yen per share of Class A preferred stock and 1,310 yen per share of Class B preferred stock. PC to issue straight bonds in order to secure financial requirement for expanding its business in amount up to 400B yen.