Cisco Falls on Disappointing Sales Outlook

Disney also drops after reporting results, while Rio Tinto and Alltel rise on takeover speculation

From Standard & Poor's Equity Research

After the market close Tuesday, Cisco Systems (CSCO) reported fiscal third quarter EPS of 30 cents a share, up from 22 cents a share a year ago, on a 21% sales rise. But that was below the "whisper number" of 36 cents from WhisperNumber.com that some traders hope for. The networking gear maker reportedly sees fourth-quarter sales of $9.2 billion to $9.3 billion -- slightly lower than analysts' forecast. The shares fell 6.5%.

Dendreon (DNDN) shares plunged 64% after the FDA requests additional clinical data in support of efficacy claim contained in Biologics License Application for Provenge for treatment of prostate cancer.

Disney (DIS) shares were also lower after it reported better-than-expected EPS, but its revenue missed forecasts for its second quarter.

Arrow International (ARRO) shares rose on news that it formed a special committee to explore and evaluate strategic alternatives aimed at enhancing shareholder value.

IBM (IBM) was up after Goldman Sachs upgrades to buy from neutral.

Texas Instruments (TXN) moved higher after the communications chip maker reportedly raises its gross margin and operating margin targets.

Rio Tinto PLC ADS (RTP) shares jumped on an unconfirmed report that BHP Billiton approached Rio Tinto about a takeover. However, Rio Tinto has reportedly said it is not aware of any such approach. S&P reiterates sell opinion on the stock.

Alltel (AT) headed higher after the Wall Street Journal reported that the company is drawing interest from at least three private-equity buyout groups. The wireless firm has a market cap of $22.7 billion.

Toll Brothers (TOL) posted 19% lower second-quarter home building revenues, 32% lower second-quarter-ending backlog, and 25% lower net signed contracts. It sees $90-$130 million in second-quarter writedowns. The home builder no longer expects to achieve its most recent quarterly and annual guidance.

Priceline.com (PCLN) reported first-quarter EPS of 43 cents, vs. 19 cents a year ago (pro forma), on an 18% revenue rise. It sees 80-90 cents second-quarter EPS. The company says lower margins on retail airline tickets and higher return hurdles it imposed on marketing investments will hurt its airline ticket business.