Movers: Intel, Time Warner, Alcoa, Monsanto, Satyam
Intel (INTC) sees lower-than-expected fourth quarter revenue of about $8.2 billion, down 20% sequentially, down 23% year over year. The chip maker cites further weakness in end demand and inventory reductions by customers in the global PC supply chain. Says preliminary estimate of fourth quarter gross margin is at the bottom of the previous expectation of 55%, plus or minus a couple of points.
Time Warner (TWX) says the economic environment has proved somewhat more challenging than the company previously expected. TWX now anticipates that growth in 2008 adjusted operating income before depreciation and Amortization will be around 1%. TWX also expects non-cash impairment charge in fourth quarter of about $25 billion related to goodwill and identifiable intangible assets at the Cable, Publishing and AOL segments. Due to this impairment charge, TWX expects an operating loss in 2008 as compared to operating income of $8.9 billion in 2007.
Alcoa (AA) says it will implement further smelting reductions of more than 135,000 metric tons per year (mtpy) resulting in reduction of total primary aluminum output by more than 750,000 mtpy, or 18% of annualized output. Alumina production will also be reduced to a total of 1.5M mtpy. To reduce headcount by more than 13,500 employees or 13% of global workforce by end of 2009, with additional 1,700 contractor positions eliminated. AA has also instituted a global salary and hiring freeze. S&P ups to sell from strong sell.
Monsanto Company (MON) posts $0.98, vs. $0.45 a year ago, first quarter EPS (ongoing) on 29% sales rise. Says greater demand in Latin America for its products propelled it to record-setting results. Raises fiscal year 2009 EPS guidance from a range of $4.20-$4.40 to $4.40-$4.50 on an ongoing basis.
Satyam Computer Services Limited (SAY) shares did not trade on news the company receives a letter from chairman B Ramalinga Raju tendering his resignation and detailing financial irregularities. FT Times reports that B Ramalinga Raju admitted wildly inflating SAY's margins to paint a picture of good performance and retain his management position, in one of the worst scams to have hit India's outsourcing sector.
Family Dollar Stores (FDO) posts $0.42, vs. $0.37, first quarter EPS on 2.1% higher same-store sales, 4.2% higher total sales. Sees $0.48-$0.52 second quarter EPS on 3%-5% higher same-store sales; $1.63-$1.81 fiscal year 2009 EPS on 2%-4% higher same-store sales, 4%-6% higher total sales.
Crucell N.V. (CRXL) rise 4.43 to 20.50 before the shares are halted when the WSJ reports that Wyeth (WYE) is in talks to purchase Crucell NV in deal that could value CRCL at more than $1.35 billion.
Supervalu (SVU) posts $0.62, vs. $0.69, third quarter adjusted EPS on flat sales. Current quarter excludes non-cash goodwill and intangible asset impairment charges of $3.3 billion pre-tax ($3.1 billion after-tax), or $14.57 per share. Sees fiscal year 2009 EPS in range of $2.80-$2.90 vs. previous guidance of $2.90-$3.00, excl. charges and one-time costs.
Time Warner Cable (TWC) says it expects to incur a noncash impairment charge on certain of its indefinite-lived intangible assets (i.e.
, its cable franchise rights) in fourth quarter 2008 of about $15 billion. In addition, TWC says it anticipates incurring a noncash pretax impairment charge of about $350 million related to its investment in Clearwire Corp. As a result of these charges, TWC now expects to incur a net loss and a loss per diluted share in 2008.
Ingersoll-Rand (IR) says the U.S. Department of Energy (DOE) has selected IR's Trane unit, a global provider of indoor comfort systems and comprehensive facility solutions, for an Indefinite Delivery Indefinite Quantity (IDIQ) Energy Savings Performance Contract (ESPC) worth up to $5 billion. Work may extend through 2019 if the government elects to exercise all contract options, IR noted.
Perry Ellis International (PERY) sees lwoer-than-expected fourth quarter revenue of $200-$210 million, EPS of about breakeven. Cites retail partners requesting later deliveries of goods, significant increase in markdowns and sales allowances for holiday season, deceleration in sales at department and specialty store channels, primarily for luxury brands, reduction of private label replenishment bottoms business, weakness in international markets. Sees fiscal year 2009 EPS of $0.55-$0.65 on revenue of $860-$870 million.
Ethan Allen Interiors (ETH) says it plans to consolidate operations of its Eldred, PA, upholstery manufacturing plant and several of its retail service centers. About $8-$9 million of pre-tax restructuring, impairment and other related charges are expected to be taken in the second half of fiscal year 2009.
Microchip Technology (MCHP) expects third quarter sales to be down 29%-31% sequentially, with non-GAAP EPS of $0.23-$0.26.
Constellation Brands (STZ) posts $0.60, vs. $0.55, third quarter non-GAAP EPS as lower interest expense offset 6% reported sales decline. Tightens fiscal year 2009 EPS guidance to a range of $1.68-$1.72 from previous estimate of $1.68-$1.76.
Standard Microsystems (SMSC) posts $0.39, vs. $0.53, third quarter non-GAAP EPS on 20% sales decline, narrowed operating margins. Cites prolonged troubles in the global economy and a major inventory correction in the PC market. Sees fourth quarter sales of $45-$51 million, non-GAAP loss of $0.40-$0.55.
La Jolla Pharmaceutical (LJPC) and Biomarin (BMRN) announce agreement to develop, commercialize Riquent, LJPC's investigational drug for lupus nephritis, in U.S., Europe and all other territories of the world, excl. Asia Pacific region. Following a successful Phase 3 trial, the companies will share equally in all losses and profits. Under terms of agreement, BMRN will receive a company-exclusive license to develop and commercialize Riquent and LJPC could receive up to $289 million in cash through milestones and equity purchases by BMRN.