Markets & Finance

Intel to Take a Charge


After the market close Thursday, Intel (INTC) said it will take a $600 million charge, or 6 cents earnings per share, as a goodwill writedown. The world's largest chipmaker sees revenue at the top end of its range, between $8.5 billion and $8.7 billion. The company also sees 62% gross margin, vs. the previous 60% target.

After the market close Thursday, IBM Corp. (IBM) illustrated its On Demand technology concept, and said it sees demand for business solutions growing twice as fast as the rest of the information-technology industry. The computer maker and technology services firm didn't give any forward earnings or revenue guidance.

Best Buy (BBY) postede 8.6% higher third-quarter same-store sales. The consumer-electronics chain notes that comp-store calculations now reflect an impact of non-point-of-sale revenue transactions. Furthermore, Best Buy narrowed the third-quarter earnings per share guidance from continuing operations to 35 cents to 37 cents. CIBC downgraded to sector perform from outperform.

TiVo (TIVO) is seen lower on reports that Comcast (CMCSK), the nation's largest cable company, will begin development of its own digital-video recording system, much like TiVo's own device. Comcast plans to roll out DVD services to its cable subscribers "big time next year," its CEO said.

Circuit City (CC) posted 4% higher November same-store sales, and 1% lower total sales. Also, the company posted 1% lower third-quarter same-store sales, 1% lower total sales. S&P reiterates hold. Lehman reiterates underweight.

Sandisk (SNDK) is seen lower on concerns over spot market price drops. S&P downgraded to sell. WR Hambrecht thinks the concerns are overblown, and views the weakness as a buying opportunity.

Kohl's (KSS) posted 4.4% lower November same-store sales, and 9.3% higher total sales. Kohl's notes November same-store sales are lower than it expected. The department-store chain continues to target a low to mid-single digit comp-store sales increase for the fourth quarter.

Hot Topic (HOTT) posted 7.3% higher November comp-store sales, and 30% higher total sales. The retailer raised its guidance to a mid-single digit percent increase in comp-store sales for the fourth-quarter, and raised the fourth-quarter earnings per share to 42 cents, from 41 cents.

Southwest Airlines (LUV) says while December bookings are fine at this point, year-over-year comparisons for December will be more difficult. The discount airline thinks December load factors could fall below last year's level of 66%. High energy costs also are negatively impacting the company.

Abercrombie & Fitch (ANF) posted 13% lower November same-store sales, and 1.2% higher total sales. Merrill downgraded to neutral from overweight. S&P cut its estimates.

Mobile-phone maker Qualcomm (QCOM) sees 47 cents to 48 cents first-quarter earnings per share (excluding the QSI segment) on 11% to 12% revenue growth, up from the previous guidance of 37 cents to 40 cents earnings per share (excluding theQSI segment) on a 1% to 6% revenue decline. S&P and JP Morgan upgraded.

Merrill Lynch upgraded Cisco Systems (CSCO) to buy from neutral. The broker also upgraded Jabil Circuit (JBL) to buy from neutral.

Wal-Mart (WMT) posted 3.9% higher total U.S. November same-store sales, and an 11% total sales rise. The world's largest retailer sees 3% to 5% higher total company same-store sales in December.

AnnTaylor (ANN) posted 9.6% higher November same-store sales and 20% higher total sales. The women's retailer raised the 41 cents to 43 cents fourth-quarter earnings per share guidance to 43 cents to 45 cents. It sees 6% to 8% higher December same-store sales and 3% to 5% higher January same-store sales.

Genentech (DNA) says a Phase II trial showed the use of Herceptin, in combination with Taxotere, increased the median survival rate to 51% (or 27.7 months for patients treated with both drugs, vs. 18.3 months for those treated with Taxotere alone).

Safeway (SWY) sees $1.95 to $2.03 2004 earnings per share, without giving effect to any impact from the southern California workers' strike. The grocery chain says the impact of the strike can't be estimated at this time. Safeway estimates free cash flow of $700 million to $900 million in 2004.

On Semiconductor (ONNN) will phase out its manufacturing operations at its facility in East Greenwich, R.I., by the end of 2004 and plans to transfer production to its lower-cost manufacturing facilities outside of North America.

Career Education (CECO) says allegations focused on the handling of student information and personnel issues have been investigated, and are found to be without merit. S&P downgraded the for-profit education provider to hold.

Eon Labs (ELAB) says Andrx (ADRX) brought a suit against the U.S. Food and Drug Administration and Eon, claiming the FDA improperly approved Eon's generic depression drug, Bupropion HCl, ER 100mg tablets. A magistrate recommended that Eon be temporarily restrained from selling the drug.

Chip maker Intel (INTC) is expected to release a fourth-quarter update after Thursday's market close.

Boeing (BA) is more than a year behind schedule and billions of dollars over budget on its program to build reconnaissance satellites for the U.S. government, according to The New York Times.

The Northrop Grumman (NOC) and Raytheon (RTN) team was awarded a Kinetic Energy Interceptor development contract worth up to $4.5 billion over eight years. The team defeated the Lockheed-Martin (LMT) and Boeing team.

Federated Department Stores (FD) posted 0.1% lower November same-store sales, and 0.8% lower total sales. Federated says November same-store sales are consistent with its guidance and continues to expect this range for December and fourth-quarter sales.

Moog (MOG.A) will be added to the S&P SmallCap 600 after the close of trading on Dec. 9.


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