Movers: AIG, Lehman, Citigroup, Wal-Mart, VeriSign

Stocks in the news Thursday

From Standard & Poor's Equity Research

American International Group (AIG) posts $0.51 second quarter adjusted loss per share, vs. $1.77 adjusted EPS a year ago. Net loss was $2.06, vs. $1.64 EPS, reflecting $11.6 billion in investment losses/write-downs largely tied to AIG's outsized mortgage exposure. AIG said the continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on its second quarter 2008 results. S&P maintains hold.

Lehman Brothers (LEH) shares fall after the NY Post, citing sources, reports LEH CEO Dick Fuld is in scramble mode as he pursues multiple strategies designed to raise much-needed capital while at the same time ensuring that LEH remains in one piece. In recent days, Fuld has held discussions with various private-equity and foreign investors, including some from South Korea and other parts of Asia, about possibly raising more capital as he tries to offset a sale of $30 billion in hard-to-value mortgage assets, the newspaper said.

Citigroup (C) shares are in focus after a newswire report says that N.Y. Attorney General Andrew Cuomo will make a "major announcement" on an investigation into U.S. auction rate securities at 11:00 a.m. ET. Earlier, the WSJ reported that Citigroup could reach a preliminary agreement with regulators as soon as Thursday to buy back $5-$8 billion of auction-rate securities to settle allegations that it wrongly told customers the debt was safe. S&P maintains hold.

Wal-Mart Stores (WMT) posts 3.0% higher July total U.S. same-store sales without fuel, 3.7% higher with fuel, 9.4% higher total company sales. Notes with the end of stimulus checks, it knows consumers are spending more cautiously. Sees August U.S. same-store sales, excluding fuel, up 1%-2%, because it still sees sales volatility from week to week, especially around paycheck cycles. S&P says it is disappointed by soft sales in apparel and home categories, keeps buy.

VeriSign (VRSN) posts $0.25 second quarter non-GAAP EPS, vs. $0.02 loss, on 17% revenue rise. Reportedly says its divestiture process has been impacted by economic downturn; expects divestiture to take longer. Sees third quarter core revenue of $236-$241 million. S&P upgrades to sell from strong sell. Oppenheimer reportedly downgrades to perform from outperform.

Avis Budget Group (CAR) posts better-than-expected $0.15, vs. $0.22, second quarter EPS on 4.0% higher total revenue. Excluding items, the Street on average expected EPS of $0.06. CAR projects its 2008 revenue will increase vs. 2007, but EBITDA will be about $350 million, and pretax income will be about $140 million, excluding unusual items. In 2007, revenue was $6.0 billion, EBITDA was $409 million and pretax income was $198 million, excluding unusual items.

Martin Marietta Materials (MLM) posts $1.52, vs. $1.92, second quarter EPS on 1% sales drop. Notes the cost of petroleum-based products were up $18 million, which reduced EPS by $0.26; heritage aggregates product line pricing was up 6% and volume was down 9%. Lowers 2008 EPS guidance to $5.00-$5.65 from previous range of $6.25-$7.00. Cites challenging economic environment, energy inflation, credit market uncertainty, lagging infrastructure demand.

J.C. Penney (JCP) raises $0.38 second quarter EPS guidance to $0.50-$0.52, due to better-than-expected sell-through of promotionally priced merchandise, continued expense management measures taken over course of second quarter as part of the company's Bridge Plan. Posts 6.5% lower July same-store sales, 4.9% total sales drop. Notes its guidance was for July sales to decrease in mid-single digits.

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