Movers: GM, Red Hat, CIT, UnitedHealth
AMERICAN GREETINGS CORP. (AM)
The company posted a $4.25 third quarter loss from continuing operations vs. $0.52 EPS on 6.5% revenue drop. As a result of accelerated review of goodwill, and other long-lived assets for impairment, says it recorded estimated non-cash pre-tax goodwill, other asset impairment charges of $242.9 million that reduced EPS by $4.46 during the quarter. As result of rapid changes in economy, and the uncertainty of the impact those changes will have, as well as other factors, the company said it's currently unable to provide definitive EPS guidance for balance of this fiscal year.
WARNER CHILCOTT LIMITED (WCRX)
The company said its Warner Chilcott unit, and Barr Pharmacuticals' (BRL) Barr Labs unit entered into a settlement and license agreement to resolve pending patent litigation involving Warner Chilcott's oral contraceptive product, Femcon Fe. Barr will have a license to launch a generic version of Femcon Fe as early as July 1, 2012, approximately 7 years earlier than the expiration of the Warner Chilcott patent at issue in the litigation, or earlier in certain circumstances. Barr will pay Warner Chilcott a royalty on net sales of Barr's generic product.
TEXTRON INC. (TXT)
Textron cut its $400 million fourth quarter manufacturing segment profit forecast to $300 million-$330 million. It also cut its $0.80-$0.90 fourth quarter adjusted EPS from continuing operations guidance to $0.30-$0.40. The company's board approved a plan to exit all of Textron Financial Corp.'s (TFC) commercial finance business other than the portion supporting the financing of customer purchases of Textron-manufactured products. Due to continued market stress, and the impact of exit plan, Textron will increase the finance unit's reserves in the fourth quarter, which is expected to result in fourth quarter pre-tax segment loss of about $130 million.
UNITEDHEALTH GROUP (UNH)
The company reached a settlement with the SEC in connection with previously disclosed investigation into the company's historical stock option practices. Without admitting or denying the SEC's allegations, UnitedHealth agreed to a permanent injunction against any future violations of certain reporting, books and records and internal accounting control provisions of federal securities laws.
GENERAL MOTORS (GM)
S&P Ratings Services late Monday lowered its issue-level ratings on the unsecured debt of General Motors and General Motors of Canada Ltd. to C from CC. At the same time, S&P Ratings revised its recovery rating on GM's debt to 6 from 4, indicating that lenders can expect to receive negligible (0 to 10%) recovery in the event of a payment default. S&P Ratings said the rating actions reflect GM's planned receipt of up to $13.4 billion of U.S. government loans, plus another approximately $2.5 billion from the Canadian and Ontario governments. In addition, Germany and Sweden have signaled that they may make loans to GM units in those countries, which would further diminish the value to unsecured creditors of the equity in foreign subsidiaries, said S&P Ratings.
RED HAT INC. (RHT)
Red Hat posted third quarter GAAP EPS of 12 cents, vs. 10 cents one year earlier, on a 22% revenue rise.
TIBCO SOFTWARE (TIBX)
Tibco posted fourth-quarter GAAP EPS of 18 cents, vs. 14 cents one year earlier, on flat revenue.
CIT GROUP INC. (CIT)
CIT Group said it received preliminary approval from the Treasury Dept. to participate in its Capital Purchase Program, part of the Troubled Assets Relief Program (TARP). CIT said Treasury has preliminarily approved an investment of approximately $2.33 billion in CIT's perpetual preferred stock and related warrants under terms of the program. The company also said the Commissioner of the Utah Dept. of Financial Institutions also approved the application of CIT Bank to convert from Utah-chartered industrial bank to Utah-chartered bank.
OLD DOMINION FREIGHT LINE (ODFL)
The company announced that, due to difficult economic conditions, it is revising its 2008 EPS guidance to a range of $1.73-$1.76, vs. its earlier forecast of $1.90-$1.95.