Markets & Finance

McDonald's to Post a Loss


McDonald's (MCD) shares fell after the burger giant said it will post a five cent to six cent fourth quarter loss, including an after-tax restructuring charge of $390 million. The company sees 25 cents to 26 cents earnings per share from operations, below analysts' expectations for 31 cents earnings per share from operations. McDonald's expects Brand McDonald's fourth quarter comparison sales trends to be lower than the first two months of the quarter. S&P reiterates hold. Salomon cut its estimates and target. Lehman upgraded.

Target (TGT) says sales in the past week, and the month-to-date, were "well-below" plan. The retailer said that its best-peforming product categories were pharmacy, entertainment, consumables, perishables and toys. The weakest categories were sporting goods and men's and ladies' apparel.

VaxGen (VXGN) inked a pact allowing it to develop Chemo-Sero-Therapeutic Research Institute's (Kaketsuken) attenuated smallpox vaccine for use in the U.S. InvestTec reiterates buy.

Best Buy (BBY) posted 26 cents vs. 25 cents third quarter earnings per share on 16% higher total sales, and expects flat fourth quarter total comparison sales and earnings per share to be about $1.00-$1.10, down five cents from the previous guidance due to an expected operating loss from its Musicland stores.

Interstate Bakeries (IBC), the manufacturer of Wonder bread and bakery products including Hostess and Drake's, posted 33 cents vs. 41 cents second quarter earnings per share from operations on flat sales, citing a decline in sweet goods volume, and a decrease in branded bread sales volume. S&P cut to avoid; Janney Montgomery downgraded to hold from buy.

The Nasdaq halted Corixa (CRXA) pending news. An FDA committee is discussing the company's application for Bexxar for treatment of relapsed or refractory non-Hodgkin's lymphoma.

Circuit City (CC) posted a ten cent third quarter loss vs. four cents earnings per share from continuing operations on 6% higher same store sales, and 7% higher total sales. Analysts had been expecting losses of 13 cents a share. The electronics retailer cited solid growth in big-screen TV sales, continued demand for entertainment software and growth in PC hardware sales.

General Electric (GE) reiterated its previously issued fourth quarter and 2003 earnings per share guidance. GE's 2003 target of $1.55 to $1.70 is up from $1.51 earnings per share in 2002. CEO Jeff Immelt also laid out an agressive strategy for developing and growing its operations in China, and expects to book $5 billion in revenue from China by 2005.

QLT (QLTI) and Novartis Ophthalmics announced statistically significant preliminary results of six-month vision outcomes of patients being treated with Visudyne for minimally classic wet, age-related macular degeneration.

GlaxoSmithKline (GSK) received an approvable letter from the FDA for Advair Diskus, which is under review for the treatment of chronic obstructive pulmonary disease, also known as smokers' lung.

Kerr-McGee (KMG) plans to exit the forest products business, and close four of its five forest products treating plants. The company sees a fourth quarter charge of about $13 million (after-tax).

Fidelity Bank (FBCI) agreed to be acquired by MAF Bank in an all-stock transaction valued at $101.4 million, or $31 per share. Terms: 0.89 MAF share per Fidelity share.

Monterey Pasta (PSTA) cut the 12%-15% fourth quarter revenue growth guidance to range of flat to 5%, and will reduce earnings per share by about four cents to five cents vs. the earlier guidance of nine cents fourth quarter earnings per share. The company cited weak sales to its second largest customer.

Nasdaq halted trading of MedImmune (MEDI) ahead of Tuesay's FDA review panel meeting for its FluMist nasal-spray flu vaccine.

Steel Dynamics (STLD) plans to privately place $100 million aggregate principal amount of Convertible Subordinated Notes, due 2012.

Maverick Tube (MVK) is delayed. The company anticipates a loss of five cents to 10 cents in the fourth quarter (depending on shipping levels achieved during the last two weeks of the year) on $114 million to $120 million revenue. The company says volume and prices have not increased as expected.

JP Morgan upgraded Teekay Shipping (TK) to overweight from neutral. On Monday the company agreed to acquire Navion ASA from Statoil ASA.

Take-Two Interactive (TTWO) posted 54 cents fourth quarter earnings per share vs. a 12 cent (pro forma) loss on a 79% sales rise, beating Wall Street's expectations for 47 cents a share. The company raised the first quarter fiscal 2002 earnings per share guidance to $1.14, and upped the fiscal 2003 guidance to $2.20 on $950 million sales. Take-Two cited successful development of video games for PlayStation2.

Callaway Golf (ELY) sees 96 cents to $1.00 2002 earnings per share on sales of about $790 million. Analysts were expecting 92 cents earnings per share. The sporting goods company cited the positive launch of new Great Big Bertha II premium titanium drivers, and continued strong demand for the Odyssey White Hot 2-Ball Putter.

Lehman upgraded Walgreen (WAG) to overweight to equal-weight.

Nextel (NXTL) expects to meet its previous 2002 guidance of about 1.9 million net additional subscribers, at least $3.1 billion in operating cash flow, and less than $1.9 billion in capital expenditures.

Standard Microsystems (SMSC) posted three cents third quarter earnings per share vs. an 18 cent loss (pro forma) on a 16% revenue rise (excluding license payment). The company expects 25%-30% fourth quarter revenue growth due to several new product launches, as design wins ramp.

Veeco Instrument (VECO) and FEI Company announced that they will not be able to complete their previously announced merger by Dec. 31. The parties are currently discussing modifications to their agreement.


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