Movers: Genworth Financial, Reliant Energy, Sovereign Bancorp

Stocks in the news Tuesday

From Standard & Poor's Equity Research

Genworth Financial (GNW) says it is examining a number of alternatives regarding its U.S. Mortgage Insurance business, including a possible spin-off. Reaffirms its sound financial foundation and cash availability to meet liquidity requirements across the company.

Late yesterday, Reliant Energy (RRI) lowered retail contribution margin outlook for 2008 by $300-$350 million as result of effects of Hurricane Ike, including reduced sales volumes, sale of excess supply during this time, updates to retail pricing assumptions, increased storm-related operating costs. Says third quarter results hurt by mild weather, reduced off-peak prices. Estimates 2008 open wholesale contribution margin will be about $480 million lower than previous outlook. Plans to raise $1 billion in capital. Calyon reportedly downgrades to neutral.

Deere & Co. (DE) plans to form joint venture with Ashok Leyland Ltd., the flagship of the Hinduja Group in India, to initially make, market backhoes, four-wheel-drive loaders that will be sold in India, exported to other markets. Joint venture plans to provide full line of construction equipment in future years. Initial production is planned for early 2010.

Sovereign Bancorp (SOV) - WSJ reports that SOV board is scheduled to vote this morning to name Paul Perrault as CEO, starting next year, citing people familiar with the matter. Sandler O'Neill upgrades to hold from sell following precipitous decline in the stock yesterday.

Wells Fargo (WFC) - Baird upgrades to neutral from underperform. Baird thinks WFC will benefit from a flight to quality given its top-tier credit rating, healthy capital position, and willingness to lend in the face of the most difficult credit crisis in decades.

Huntsman (HUN) announces the decision of Delaware Court of Chancery to enter judgment in favor of HUN denying all declarations sought by Apollo Management, L.P. and Hexion Specialty Chemicals, Inc. in their suit requesting that Chancery Court excuse Hexion from its obligation to consummate pending transaction. HUN continues to seek damages exceeding $3 billion in its Texas lawsuit against Apollo and its partners Leon Black and Joshua Harris.

Timken (TKR) raises its third quarter EPS outlook, excluding special items, to $1.00-$1.10, above previous forecast of $0.65-$0.70. Cites continued strong global industrial demand and its capacity-expansion initiatives, as well as declining scrap prices and lower LIFO charges. It raises 2008 EPS outlook, excluding special items, to $3.30-$3.45, up from $2.95-$3.10.

Pepsi Bottling Group (PBG) posts $1.06, vs. $1.12 a year ago, third quarter EPS as $0.14 tax benefit in year-ago quarter offsets 2.3% revenue rise. In 2008, PBG expects to achieve top-line growth in the mid-single digits. Its comparable operating profit is expected to grow in low-single digits. Comparable EPS now forecasted to be $2.32-$2.38. Operating free cash flow is seen at about $620 million.

PMI Group (PMI) announces that, effective Jan. 1, 2009, its primary mortgage insurance company, PMI Mortgage Insurance Co., will terminate all of its existing excess-of-loss reinsurance arrangements with lender affiliated captive reinsurers. On that date, in-force XOL contracts will be placed into runoff and will mature pursuant to their existing terms and conditions.

Constellation Energy Partners LLC (CEP) says it has retained Tudor, Pickering, Holt & Co. Securities, Inc. to assist in a review of its strategic alternatives to enhance unitholder value.

Anadarko Petroleum (APC) says that nearly all of its operated deepwater Gulf of Mexico platforms and Gulf Coast properties are operational. Expects total sales volumes for third quarter to be at or near 51 mln BOE, the low end of its guidance. But says timely repairs to third-party downstream infrastructure could hurt fourth quarter sales volumes, as some production remains shut in or curtailed. APC expects fourth quarter sales volumes of 49 mln-55 mln BOE.

According to the Wall Street Journal, Pfizer (PFE) plans to announce today that it will abandon efforts to develop medicines for heart disease, as part of a broad research reshuffling plan. The article says PFE will be leaving a field that includes its cholesterol-lowering drug Lipitor and other medicines, and is also expected to announce it is exiting therapies for obesity and bone health, to focus on more-profitable areas, such as cancer.

International Rectifier (IRF) sends a letter urging shareholders to reject Vishay's (VSH) $23 offer, as the company believes it is inadequate taking into account the future prospects of IRF and the synergies that VSH can derive from proposed acquisition.