Movers: Citigroup, Humana, AIG, Nova Chemicals
Citigroup (C) is in talks with federal officials that could result in U.S. government substantially expanding its ownership of struggling bank, according to the Wall Street Journal. While talks could fall apart, the governmentt could wind up holding as much as 40% of Citi's common stock. Bank executives hope the stake will be closer to 25%, the newspaper reports.
Humana (HUM) says it closely analyzing aspects of Centers for Medicare and Medicaid Services (CMS) preliminary 2010 Medicare Advantage payment rates. Says it finds certain assumptions behind preliminary 2010 rates to be unusual and inconsistent with decades of experience and with past CMS practice. Notes rates, as announced, would have significant adverse impact on 2010 premiums and benefits for Medicare Advantage members if these rates become final. HUM reiterates 2009 EPS guidance of $5.90-$6.10.
American International Group (AIG) falls 0.01 to 0.53. CNBC reports AIG, already 80%-owned by the US, is in talks to secure additional government funds so it can keep operating after next Monday, when it will report the largest loss in US corporate history.
Healthspring (HS) falls 4.80 to 10.01 after Medicare issues preliminary '10 Advantage rate of 0.5%, vs. its 3.6% '09 rate. S&P downgrades HS to hold from buy.
Ford Motor (F) shares are higher after UAW announces that it has reached an agreement with Ford on modifications to the Voluntary Employee Beneficiary Association (VEBA), the union's health care trust for UAW Ford retirees. The union also reaches tentative agreement with the company on other modifications to the 2007 UAW-Ford National Agreement on Feb. 15.
General Motors (GM) - WSJ reports outsider advisers to the U.S. Treasury have started lining up the largest bankruptcy loan ever, talking with banks and other lenders about at least $40 billion in financing for GM and Chrysler, in case the two auto makers need it, said several people familiar with the matter.
Weingarten Realty Investors (WRI) posts $0.14, vs. $0.78, fourth quarter FFO on flat revenue. Notes fourth quarter EPS negatively affected by non-recurring items totaling $0.58 per share. Sees $2.30-$2.60 2009 FFO, including gains from merchant development sales of $0.10 per share.
Limited Brands (LTD) - Citigroup upgrades LTD to buy from hold on strong cash flow, 8% dividend yield.
Blue Nile (NILE) - Citigroup upgrades NILE to buy from hold.
UBS AG (UBS) U.S. tax probe dilemma remains a burden as repercussions of its $780 million fine in the U.S. to avert criminal charges due to tax fraud remain at the forefront of investors' minds. MarketScope Europe also reports that there is pressure on UBS chairman to step down over his handling of the situation.
Garmin Ltd. (GRMN) posts $0.78, vs. $1.39 a year ago, fourth quarter GAAP EPS on 14% sales drop. Says it will not offer specific guidance for 2009 until outlook for year becomes clearer.
Pre-Paid Legal Services (PPD) posts $1.27, vs. $0.
92, fourth quarter EPS as fewer shares offset slightly lower revenues. Board approves additional 1 million share buyback.
Motorola (MOT)- Credit Suisse upgrades MOT to neutral from underperform.
Nova Chemicals (NCX) enters agreement to be acquired by International Petroleum Investment Company (IPIC) for cash consideration of $6 per NCX share. The total value of the deal, including assumption of NCX net debt obligations, is about $2.3 billion.
Valspar (VAL) posts $0.20, vs. $0.24 a year ago, first quarter adjusted EPS on 16% sales drop.
National Health Investors (NHI) posts $0.56, vs. $0.63, fourth quarter adjusted FFO as higher expenses offset 4.7% total revenue rise.
Endo Pharmaceuticals Holdings (ENDP) and Penwest Pharmaceuticals (PPCO) announce that they have settled litigation with Actavis South Atlantic LLC regarding production and sale of generic formulations of Opana ER (oxymorphone hydrochloride) Extended Release Tablets CII. ENDP, PPCO have agreed to dismiss their suit with prejudice and Actavis has agreed to dismiss its counterclaims with prejudice.
Pomeroy IT Solutions (PMRY) says its Board of Directors has received letter from David Pomeroy, II, a director of PMRY and its largest stockholder, proposing to acquire all outstanding shares of PMRY not owned by him for a price of $4.50 per share. The Board has established a Special Committee of the Board to consider Mr. Pomeroy's non-binding indication of interest as well as explore other alternatives that could enhance stockholder value.