Markets & Finance

H&R Block Faces Suits on Tax-Refund Loans


H & R Block (HRB) says it faces lawsuits related to high-interest loans the tax preparer made to customers in anticipation of tax refunds. The company says any payments that may stem from a litigation involving refund anticipation loans will not have a material impact on financials. The stock was halted on the NYSE before the news broke Friday afternoon. S&P downgraded to hold from buy.

Goldman removed Tenet Healthcare (THC) from its recommended list, and now rates the stock as market outperform. On Thursrday Tenet announced an investigation of alleged unnecessary angioplasties, coronary bypasses, heart catherizations and false billings. Goldman, Prudential and Raymond James also downgraded. S&P reaffirms buy.

Salomon downgraded Overture Services (OVER)to in-line.

MCG Capital (MCGC) says chairman and CEO Bryan J. Mitchell told the MCG board, contrary to prior disclosures, that he does not hold a BA degree from Syracuse University. He notes the chairman of the company's audit committee is now looking into the matter.

Hispanic Broadcasting (HSP) posted $0.12 vs. $0.08 third quarter earnings per share from operations on a 6.8% revenue rise, and sees 10%-11% fourth quarter revenue growth, and $0.11-$0.12 operating earnings per share.

ImClone Systems (IMCL) and Bristol-Myers are in talks with the FDA about a development program for Erbitux in the treatment of colorectal cancer.

Carmax (KMX) reaffirmed the 6%-9% third quarter used unit same store sales growth, and ssys its powerful, unique consumer offer continues to drive strong used car sales.

Lancaster Colony (LANC) posted lower than expected $0.56 vs. $0.55 first quarter EPS on a 4% sales rise. The company says it will consolidate its glass manufacturing operations, and says sell-through of seasonal candle products remains a concern.

Morgan Stanley transferred coverage of U.S. Airlines and cut the industry view to cautious from attractive. He downgraded Delta Airlines (DAL) and Southwest Airlines (LUV) to equal-weight. He cut American Airlines (AMR) and Continental Airlines (CAL) to underweight. He is keeping Northwest Airlines (NWAC) at equal-weight.

Eli Lilly (LLY) says its once-daily dose of atomoxetine greatly reduced symptoms of Attention-Deficit/Hyperactivity Disorder in children and adolescents, according to an article in a November issue of the American Journal of Psychiatry.

Cigna (CI) posted a loss of $6.27 vs. $1.81 earnings per share. Excluding charges, Cigna posted $1.49 vs. $1.83 third quarter operating earnings per share despite a 9.2% revenue rise, citing shortfalls in the health care business. Cigna sees $6.50-$6.75 2002 operating earnings per share, and $6.25-$6.50 for 2003.

Andrx (ADRX), Genpharm, and Schwarz Pharmaceutical are reportedly planning to team up to launch a copycat version of Astra Zeneca's ulcer drug Prilosec in the U.S., according to The Wall Street Journal.

The Federal judge overseeing Microsoft's (MSFT) antitrust case is expected to issue her decision Friday on what sanctions should be imposed.

BellSouth (BLS) will take a $114 million third quarter charge to reflect the Florida Supreme Court ruling regarding the company's late-payment fees. Lehman reportedly downgraded BellSouth and Verizon (VZ) to equal-weight from overweight.

Gilead Sciences (GILD) posted $0.10 third quarter earnings per share (including the loss on a sale of its stake in OSI) vs. a $0.13 loss on sharp revenue rise. S&P reiterates buy.

Starbucks (SBUX) posted 10% higher October same store sales, and 24% higher total sales.

Vivendi Universal (V) reportedly is in exclusive talks to sell Houghton Mifflin to a buyout consortium for $1.72 billion, according to The Wall Street Journal.


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