Movers: Pfizer, Home Depot, Barclays, Caterpillar, Rohm & Haas
Pfizer (PFE) agrees to acquire Wyeth (WYE) in a $68 billion cash and stock deal. Terms: $50.19 for each WYE share. Each outstanding WYE share will be converted into the right to receive $33 in cash and 0.985 PFE share, subject to terms of the merger agreement. Citigroup says the deal makes strategic sense. Moody's places the Aa1 LT ratings on PFE under review for possible downgrade following the announcement PFE to buy WYE. S&P Equity Research reiterates hold. Separately, WYE posts $0.71, vs. $0.75, fourth quarter EPS on 7.2% revenue drop. Separately, PFE posts $0.04,vs. $0.40, fourth quarter EPS (reported) on 4.1% revenue drop; posts $0.65 vs. $0.50 fourth quarter adjusted EPS. PFE sees $44-$46 billion 2009 adjusted revenues, $1.34-$1.49 reported EPS, $1.85-$1.95 adjusted EPS.
Home Depot (HD) to exit EXPO business as it has weakened significantly as demand for big ticket design and d cor projects has declined due to the current economic environment; eliminate about 7,000 associates. To shift to a region-and district based support model; will reduce about 10% of its officer ranks. Announces a salary freeze. As part of these actions, expects to take total pre-tax charge of about $532 million, of with about $390 million will be recognized in fourth quarter, remaining $142 million in 2009 and beyond. Reaffirms fiscal year 2009 EPS guidance, exc. charges associated with today's announcements.
Barclays PLC (BCS) says it is not looking for further capital from the private sector or British government. It expects 2008 PTP to be well ahead of consensus estimate of GBP5.3 billion. Company may report its 2008 results earlier than planned, the WSJ quotes a person familiar with the matter as saying.
Rohm & Haas (ROH) falls 7.81 to 58.01. ROH says it has been advised by Dow Chemical (DOW) that it does not intend to close the pending acquisition of ROH on or before Tuesday, Jan. 27, 2009. ROH says it plans to pursue all available alternatives to protect its shareholders' interests. S&P maintains hold.
Caterpillar (CAT) posts $1.08, vs. $1.50, fourth quarter EPS as higher operating costs offset 6% revenue rise. Notes current quarter costs include transitional expenses as the company moved to lower volumes and initiated production cuts. Says economic conditions remain uncertain, sees 2009 sales and revenues to be in a range of plus or minus 10% from $40 billion, EPS of $2.50, excluding redundancy costs. Has initiated plans to cut 20,000 jobs.
McDonald's (MCD) posts better-than-expected $0.87, vs. $1.06, (including $0.33 benefit) on 7.2% higher global comp sales. It says it plans to invest $2.1 billion of capital to open about 1,000 new McDonald's restaurants, reinvest in its existing locations in 2009.
Quest Diagnostics (DGX) posts $0.87 (including items), vs. $0.79 a year ago, fourth quarter EPS from continuing operations on 1.7% higher revenues. Sees $3.50-$3.70 EPS (continuing operations) excluding special charges on about 3% higher revenues. Separately, the company announced its board authorized $500 million in stock repurchases.
Eaton (ETN) posts $0.98, vs. $1.71, fourth quarter EPS despite 3% revenue rise. Sees breakeven first quarter operating EPS, $4.20-$5.20 2009. Also sees 8% revenue decline for 2009.
Sprint Nextel (S) says it will reduce internal, external labor costs by about $1.2 billion on annualized basis and cut 8,000 positions. Notes it repaid $2 billion in debt in the second half of 2008, renegotiated its credit facility terms with expectation of sufficient liquidity to pay debt coming due during next two years. Also, Sprint said as part of its cost reductions it has decided to suspend the 401(k) match for 2009, extend a 2008 suspension of annual salary increases through 2009.
Kimberly-Clark (KMB) posts $1.01, vs. $1.07, fourth quarter EPS on 3.4% revenue drop. Earlier reported current EPS of $1.10. Says overall sales volumes below prior year levels due primarily to lower shipments of Huggies diapers and Pull-Ups in North America, as well as the company's consumer tissue and K-C Professional products in North America and Europe. Notes sales volumes for the quarteralso trailed planned levels as customer, consumer demand was impacted by deteriorating economic conditions in these geographies. Sees $4.00-$4.20 2009 adjusted EPS, 4%-5% net sales decline.
ING Groep N.V. (ING) says it intends to cut expenses by €1 billion in 2009, partly by eliminating 7,000 positions. It expects to post a loss of €1 billion in 2008 after taking a €3.3 billion loss in fourth quarter on asset impairments and fair value adjustments. FD.nl reports ING says it wants to sell €2-3 billion in assets by 2010, and that ING's Michel Tilmant will step down from the Executive Board as of today.
Danaher (DHR) posts $0.92 (including charges), vs. $0.97, fourth quarter EPS despite 1.1% sales rise. Expects 2009 to be a difficult year.
Cal Dive International (DVR) enters into a definitive stock repurchase agreement with Helix Energy Solutions (HLX), its majority stockholder, to repurchase about 13.5 million DVR shares for a purchase price of $86 million or $6.34 per share. The repurchase represents 12.6% of DVR's common stock currently outstanding and will reduce HLX's ownership interest in DVR from approximately 57% to 51%.
Halliburton (HAL) posts $0.53, vs. $0.75, fourth quarter EPS as $308M charge to discontinued operations, or $0.34 per share, primarily related to the prospective settlements of DOJ and SEC Foreign Corrupt Practices Act (FCPA) investigations, offset 17% revenue rise.
Arctic Cat (ACAT) announces a workforce reduction in order to align the company's cost structure with current industry-wide market conditions. Approximately 100 positions are being eliminated, effective immediately, primarily in Thief River Falls, Minn., representing 7% of company's 1,400 employees.