Movers: Dow Chemical, SanDisk, Motorola, UPS, D.R. Horton
Dow Chemical (DOW) posts $0.62 fourth quarter loss per share, vs. $0.84 EPS a year ago (both exclude certain items), on 23% sales decline. Notes volume declined 17%, and was down in all operating segments, in all geographic areas, reflecting global economic downturn, de-stocking that occurred through most value chains.
SanDisk (SNDK) posts $1.65 fourth quarter non-GAAP loss, vs. $0.69 EPS, on 31% revenue decline. Current results exclude charges in the aggregate of $1.91B, due to "significant" asset impairment and inventory related charges. S&P reiterates hold. Caris downgrades to below average from average. Goldman downgrades to neutral to buy.
Motorola (MOT) posts $1.57 fourth quarter loss, vs. $0.04 EPS, on 26% revenue drop. Notes fourth quarter 2008 loss includes net charges of $1.56 per share for certain items; substantially all of the charges for these items are non-cash, primarily related to impairment of goodwill and an increase in deferred tax asset valuation reserves. Sees first quarter loss of $0.10-$0.12, exclduing charges associated with operating expense reduction initiatives, other items. Suspends quarterly dividend.
D.R. Horton (DHI) posts $0.20 first quarter loss per share, vs. $0.41 loss, despite 47% revenue drop. Says it continues to adjust its business to current homebuilding environment by reducing its homes under construction and its owned lot position, controlling costs and repaying debt.
Merck & Co. (MRK) posts $0.87 (excluding restructuring charges), vs. $0.80, fourth quarter non-GAAP EPS despite 3.4% sales drop. Reaffirms expectations for 2009 revenue of $23.7-$24.2 billion, adding that revenues likely to be in lower half of range. Reiterates expectations for 2009 non-GAAP EPS of $3.15-$3.30, excluding certain items, 2009 GAAP EPS of $2.95-$3.17. Expects both first quarter GAAP, non-GAAP EPS to be less than one-fourth of full-year EPS.
Corinthian Colleges (COCO) posts $0.18, vs. $0.11, second quarter EPS on 18% revenue rise. Says although difficult to quantifiscal year , current trends indicate the recession has helped increase marketing leads and student enrollments. Says if the proposed economic stimulus bills under consideration, including increased funding for post-secondary students, the unemployed, and dislocated workers, is implemented, these measures could benefit current and prospective students and the company.
United Parcel Service (UPS) posts $0.25 fourth quarter EPS, vs. $2.52 loss (both include charges), despite 5.2% revenue drop. Posts $0.83 vs. $1.07 fourth quarter adjusted EPS. Says it will provide guidance only for first quarter EPS of $0.52-$0.68.
Avon Products (AVP) posts $0.54, vs. $0.30, fourth quarter EPS as lower costs offset 9% lower sales. Street was looking for $0.59. Raises its quarterly dividend by 5% to $0.21 per share from $0.20.
Archer-Daniels-Midland (ADM) posts $0.91, vs. $0.73, second quarter EPS on 1.1% rise in net sales and other operating income.
Scotts Miracle-Gro (SMG) posts $0.88 first quarter adjusted GAAP loss, vs. $0.89, loss on 3% sales rise. Raises fiscal year 2009 adjusted EPS forecast to $2.10-$2.30 (up from $2.00), as a result of lower-than-expected commodity inflation, incremental volume in private label categories and favorable interest rates. Expects to generate free cash flow of $150-$170 million for fiscal year 2009, up approximately 20% vs. a year ago.
Tyco International Ltd. (TYC) posts $0.58, vs. $0.73, first quarter EPS on 8.5% revenue drop. Notes first quarter impacted by strengthening of US$ against foreign currencies, but overall revenue came in at high end of our expectations.
Celanese (CE) posts $0.38 fourth quarter loss, vs. $0.93 EPS (both adjusted), on 27% sales decline. Cites significantly lower volumes on weak global demand and unprecedented inventory destocking throughout its end-consumer supply chains. While has chosen not to provide a full-year outlook for 2009, expect earnings to improve from fourth quarter levels throughout the year, as the impact of destocking, negative effects of inventory accounting decrease.
Liz Claiborne (LIZ) announces it will eliminate about 725 positions, or 8% of its U.S. workforce, and suspend merit pay increases for all employees. Says these actions are in response to the highly uncertain economic environment.
Sangamo Biosciences (SGMO) announces that its collaborators at the University of Pennsylvania have opened a Phase 1 clinical trial to evaluate SB-728-T for the treatment of HIV/AIDS. Says based on its zinc finger DNA-binding protein nuclease (ZFN) technology, SB-728-T has been shown in an animal model of HIV infection to lead to an increase in CD4+ T-cell counts, a reduction in viral load and expansion of CCR5-modified T-cells, suggesting resistance to HIV.
Goodyear Tire & Rubber (GT) says fourth quarter industry volumes were well below expected levels, prompting a significant increase to its production cuts that now extend across all of its business units. Says it continues to adjust production to reduce inventory levels and to keep pace with the lower demand environment; plans to announce a series of new actions on its full-year conference call scheduled for February 18.
Pentair (PNR) posts $0.41, vs. $0.52, fourth quarter adjusted EPS on 4.8% sales decline. Street was looking for $0.41. Sees $0.20-$0.30 first quarter EPS (a decrease of 43%-62% y/y), maintains 2009 EPS guidance of $1.70-$2.00, expects 2009 free cash flow to equal or exceed net income.
99 Cents Only Stores (NDN) says its board has decided to suspend NDN's exit from the Texas market for up to six months to re-evaluate its Texas operations in light of a significant improvement in January sales and the potential beneficial opportunities resulting from a recessionary economy. The board also has directed management to close about one third of its Texas stores by March 28, 2009, its fiscal year end.
Rigel Pharmaceuticals (RIGL) says it will delay further partnership talks regarding R788 until after results from Phase 2b clinical trials are available. Expects results to substantially further the understanding of R788's potential and may therefore drive enhanced economics in a possible deal. Also says it has cut its research programs in virology and oncology as well as certain related development and administrative staff, resulting in dismissal of 36 employees or about 20% of its workforce.
Rent-A-Center (RCII) posts $0.47, vs. $0.42, fourth quarter non-GAAP EPS, before items in both periods, despite flat same-store sales, 2.4% lower total revenues. Sees $0.54-$0.60 first quarter EPS on flat-to-2% lower same-store sales, $721-$741 million total revenues; $2.15-$2.32 2009 EPS on flat same-store sales, $2.830-$2.890 billion total revenues.
Schering-Plough (SGP) posts $0.39, vs. $0.27, fourth quarter EPS (excludingspecial, other items) on 17% sales rise. Posts $0.27 fourth quarter GAAP EPS vs. $2.08 loss. Street was looking for $0.30
Aflac (AFL) posts $0.98, vs. $0.78, fourth quarter operating EPS on 6% total revenue rise. Says results benefited from strengthening of the yen to US$. Believes flat sales to a 5% increase in both Japan and U.S. are reasonable targets for this year. Sees operating EPS for 2009 of $4.51-$4.59, excluding impact of the yen. However, the yen is currently stronger to US$ than it was in '08. If the stronger yen persists and averages 90-95 for the full year, we expects reported EPS of $4.73-$4.96.
Emerson Electric (EMR) posts $0.60, vs. $0.65, first quarter EPS from continuing operations on 1.8% sales decline. Street was looking for $0.57. Sees $2.70-$2.95 fiscal year 2009 EPS, 3%-6% sales decline. Targets a strong year in free cash flow at 11.0%-11.5% of sales for fiscal year 2009.
Penske Automotive Group (PAG) says it board has decided to suspend PAG's quarterly dividend as part of ongoing efforts to cut costs and manage cash. Such efforts also include staff reductions, executive and director pay cuts, and suspension of PAG's U.S. 401(k) match. Previously, PAG paid a quarterly dividend of $0.09 per share.
W. R. Grace & Co. (GRA) posts $0.60, vs. $0.52, fourth quarter EPS, which includes Ch. 11 expenses, litigation and other matters in both periods, despite 4.4% sales decline. Excluding Ch. 11 related costs, fourth quarter net income would have declined 8.8%. Sales decrease was attributable primarily to lower volumes and unfavorable currency translation.