Market Movers

Movers: Bank of America, Microsoft, Apple, eBay, Nokia, Aflac


Bank of America (BAC) names Brian Moynihan President of Global Banking and Global Wealth and Investment Management. Moynihan replaces former Merrill Lynch chief John Thain who is leaving the company. S&P maintains hold.

Ahead of schedule, Microsoft (MSFT) reports EPS of $0.47, $0.02 worse than the First Call consensus of $0.49. Revenues rose 1.6% year-over-year to $16.63 billion, shy of the $17.08 billion consensus. Microsoft said it will eliminate up to 5,000 jobs in R&D, marketing, sales, finance, legal, HR, and IT over the next 18 months, including 1,400 jobs today. The company expects to reduce its annual operating expense run rate by approximately $1.5 billion and reduce fiscal 2009 capital expenditures by $700 million. Microsoft declined to provide guidance, saying that the volatility of market conditions will keep them from providing quantitative revenue and EPS guidance for the balance of the fiscal year.

Apple (AAPL) posts $1.78, vs. $1.76 a year ago, first quarter EPS on 5.9% revenue rise. Sees second quarter revenue of $7.6-$8 billion and EPS of $0.90-$1.00. S&P reiterates strong buy. Citigroup reportedly raises price target to $147; reiterates buy.

eBay (EBAY) posts $0.41, vs. $0.45, fourth quarter non-GAAP EPS ($0.29 vs. $0.39 GAAP EPS) on 6.6% lower revenue. Sees $0.32-$0.34 first quarter non-GAAP EPS ($0.21-$0.23 GAAP EPS) on $1.800-$2.050 billion revenue.

Nokia (NOK) posts EUR 0.26, vs. EUR 0.48, fourth quarter non-IFRS (International Financial Reporting Standards) EPS on 20% sales drop. Says its board will propose a dividend of EUR 0.40 for 2008 vs. EUR 0.53 in 2007. Expects industry mobile device volumes in first quarter 2009 to decline sequentially to a greater extent than the seasonal sequential decrease in first quarter of past few years; expects its mobile device market share in first quarter 2009 to be at about the same level sequentially.

Huntington Bancshares (HBAN) falls 1.30 to 3.31. HBAN posts $1.20 fourth quarter loss, vs. $0.65 loss, on 2% drop in fully taxable equivalent net interest income. Cuts $0.132 quarterly dividend to $0.01. Expects 2009 will be challenging year as it does not anticipate turnaround in underlying economy through at least end of 2009. Expects to see continued levels of elevated charge-offs and provision expense. S&P downgrades to hold from buy.

Janus Capital Group (JNS) posts $0.05, vs. $0.30, fourth quarter EPS from continuing operations on 43% revenue drop. S&P cuts target, keeps hold.

Aflac (AFL) falls 12.40 to 23.87. Morgan Stanley reportedly says AFL's $7.9 billion exposure to hybrid securities issued by European financial institutions is an escalating concern.

Intel (INTC) discloses plans to consolidate and streamline some older capacity, including the closure of 2 existing assembly test facilities in Penang, Malaysia and one in Cavite, Philippines, and will halt production at Fab 20, an older 200mm wafer fabrication facility in Hillsboro, Ore. Additionally, wafer production operations will end at the D2 facility in Santa Clara, Calif. Expects actions to affect 5,000-6,000 employees worldwide.

Citigroup (C) announces that Lead Director and Chair of the Board's Nomination and Governance Committee, Richard D. Parsons, will succeed Sir Win Bischoff as Chairman of the Board of Directors, effective February 23. S&P maintains hold.

Union Pacific (UNP) posts $1.31, vs. $0.93, fourth quarter EPS on 2.4% revenue rise. Says fourth quarter benefitted from lower fuel costs, better pricing, productivity gains, all of which helped offset the impact of declining volumes in the difficult economic environment.

Jones Apparel Group (JNY) expects to report 2008 adjusted EPS from continuing operations in a range of $0.85-$0.88, vs. previous guidance of $0.93-$0.98. Takes cost reduction actions to address uncertainty posed by current economic conditions: personnel reductions, elimination of certain unprofitable divisions, reduction in discretionary spending, resulting in fourth quarter charge. Cuts quarterly dividend from $0.14 to $0.05.

Northrop Grumman (NOC) says it will take a fourth quarter non-cash, after-tax charge of $3-$3.4 billion for impairment of goodwill; as a result company will report net loss for fourth quarter. Expects 2008 EPS from continuing operations before charge to meet the upper end ($5.20) of its prior guidance range.

AmerisourceBergen (ABC) posts $0.73, vs. $0.65, first quarter EPS from continuing operations on 0.3% revenue rise. Sees fiscal year 2009 EPS from continuing operations of $3.08-$3.25, which represents an increase of 7%-12% y/y, revenue growth of 1%-3%, free cash flow of $460-$535 million.

Potash Corp. of Saskatchewan (POT) posts $2.56, vs. $1.16, fourth quarter EPS on 31% revenue rise. Notes global economic crisis led to slower demand for all three nutrients and lower prices for phosphate and nitrogen. Sees first quarter EPS of $0.70-$1.00; as it expects demand to return in major fertilizer markets in second quarter, its full-year EPS are currently estimated to be $10.00-$12.00.

Zoll Medical (ZOLL) posts $0.14, vs. $0.15, first quarter EPS on 3.8% revenue decline.

ITT Educational Services (ESI) posts $1.61, vs. $1.20, fourth quarter EPS on 21% revenue rise. Notes new student enrollment in fourth quarter increased 29%.

SLM Corp. (SLM) posts $0.52 fourth quarter GAAP loss, vs. $3.98 loss. Posts $0.08, vs. $0.36, fourth quarter core EPS, which exclude changes in the value of its derivatives. SLM says it made a total of $4.8 billion of student loans in fourth quarter 2008. Notes that private student loan delinquencies increased during fourth quarter, with 2.6% of traditional managed private student loans in repayment more than 90-days delinquent at Dec. 31, 2008, vs. 2.3% at Sept. 30, 2008.

Williams-Sonoma (WSM) says it will cut 1,400 jobs, or 18% of its full-time staff, close a 38,000 square-foot call center in Camp Hill, PA, and close a 500,000 square-foot distribution facility in Memphis, TN, in order to trim fiscal year 2009 overhead costs by $75 million before taxes. All of the actions will be done by Jan. 31, 2009. WSM expects to incur an after-tax charge in fourth quarter fiscal year 2008 of $0.08-$0.09/share for these actions. Including the charge, WSM sees fourth quarter EPS at the lower end of its previously announced guidance range of $0.10-$0.30.

Amdocs Limited (DOX) posts $0.35 (including $0.08 impact related to restructuring charge and an in-process R&D write-off), vs. $0.44 first quarter GAAP EPS despite 1.6% higher revenue. Non-GAAP first quarter EPS was $0.55, vs. $0.56. Sees $0.34-$0.39 second quarter GAAP EPS ($0.47-$0.51 non-GAAP EPS) on $700-$720 million revenue. S&P cuts target, estimate, but keeps buy. Wedbush Morgan downgrades to hold from buy.

Southwest Airlines (LUV) posts better-than-expected $0.08, vs. $0.12, fourth quarter non-GAAP EPS as higher op. expenses offset 9.7% operating revenue rise. Street was looking for $0.05. Says company substantially reduced its net fuel hedge position to approximately 10% of its estimated fuel gallons in each year from 2009-2013.

Seagate Technology (STX) posts $1.02 second quarter loss (including charges) vs. $0.73 EPS on 34% revenue decline. Sees significant near-term challenges facing Seagate that company believes could potentially continue through the end of the calendar year and into 2010. Sees overall demand for disk drives to be about 110 million units. Expects third quarter revenue of $1.6-$2 billion. Reduces quarterly dividend to $0.03 from $0.12.

Knight Capital Group (NITE) posts $0.89, vs. $0.52, fourth quarter EPS on 28% revenue rise.

UnitedHealth Group (UNH) posts $0.60, vs. $0.92, fourth quarter EPS despite 9.4% revenue rise. Says decreases in EPS, margins primarily driven by a reduction in gross margin in risk-based health benefit products, 100 bps y/y increase in level of operating costs as a percentage of revenue and $373M y/y reduction in investment and other income. Maintains 2009 EPS guidance of $2.90-$3.15.

SunTrust Banks (STI) posts $1.08 fourth quarter loss, vs. $0.01 EPS, as credit-related charges offset 1% rise in net interest income. Cuts $0.54 quarterly dividend to $0.10.

Interwoven (IWOV) agrees to be acquired by Autonomy in a $775 million deal. Terms: $16.20 cash per IWOV share.

Netgear (NTGR) expects fourth quarter net revenue of $155-$160 million, but sees non-GAAP operating margin of just 5%-6% due to reduced profitability in some international markets as a result of the continued strengthening of the US$ against the Australian dollar, British pound and the Euro.

Baxter International (BAX) posts $0.91, vs. $0.76, fourth quarter EPS on 4% sales rise. Street was looking for $0.89. For first quarter, sees 7% sales growth, excl. forex, $0.80-$0.82 EPS (before special items); for 2009, sees 7% sales growth, excl. forex, $3.70-$3.78 EPS (before special items).

F5 Networks (FFIV) posts $0.40, vs. $0.33, first quarter non-GAAP EPS on 7.4% revenue rise. Posts GAAP EPS of $0.27. Sees second quarter non-GAAP EPS of $0.36-$0.38 on revenue of $157-$164 million.

Charlotte Russe Holding (CHIC) says its Board of Directors is engaged in a process to evaluate alternatives, including a possible sale of the Company. Also says that it has received potential expressions of interest from third parties. Posts $0.07 first quarter loss (excluding charge), vs. $0.56 EPS, on 9.1% lower same-store sales, 1.0% higher total sales. Sees second quarter loss of $0.10-$0.20. S&P reiterates hold.

Lockheed Martin (LMT) posts $2.05, vs. $1.89, fourth quarter EPS on 3.1% revenue rise. Raises 2009 revenue forecast to $44.7-$45.7 billion from $44.25-$45.25 billion, but lowers EPS estimates to $7.05-$7.25 from $7.65-$7.90. Says 2009 EPS forecast impacted by many things incl: increase in projected FAS pension expense, reduction in other non-op. income as a result of declines in assumed yields on cash balances.

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