Markets & Finance

JetBlue Airways Declines on a Warning


Corinthian Colleges (COCO) was halted earlier after shares plunged 33% Friday. The shares have mostly recovered, and the company says it doesn't know of any events or activities that would warrant concerns. Corinthian is the second leading name in the for-profit segment to be hit by selling this week. Earlier this week, Career Education (CECO) shares fell sharply in the wake of allegations raised by a former employee of its Brooks Institute of Photography, who accused officials of inflating enrollment numbers to boost profits. Similar charges were made last month by another former employee at Career Ed's Gibbs College unit in Montclair, N.J. S&P says buy Corinthian.

JetBlue Airways (JBLU) revised its fourth-quarter operating margin guidance lower to between 13% to 14%, citing a challenging revenue environment due to capacity additions resulting in lower average fares. Morgan Stanley cut its estimates. S&P keeps hold.

America West Holdings (AWA) and Southwest Airlines (LUV) are lower after JetBlue cut its guidance. On Thursday Southwest said December year-over-year comparisons will be more difficult, and said December's load factors could fall below last year's level. S&P reiterated its buy ranking.

Elizabeth Arden (RDEN) posted $1.59, vs. $1.64 third-quarter earnings per share despite a 2.1% sales rise. The cosmetics company revised the 93 cents to 98 cents 2004 earnings per sharee stimate to 90 cents to 95 cents to include interest savings from the repurchase of senior notes and more shares.

Deutsche Bank downgraded Terayon Communications (TERN), a maker of broadband data systems, to sell from hold.

Wachovia downgraded Hormel Foods (HRL) to market perform from outperform, citing valuation.

Wedbush Morgan upgraded Guitar Center (GTRC) estimates.

Home-decor retailer Kirkland's (KIRK) posted 6 cents (including a charge), vs. 6 cents third-quarter earnings per share on 9.2% higher same-store sales and 12% higher total sales. Jefferies downgraded to hold from buy.

Intel (INTC) sees $8.5 billion to $8.7 billion fourth-quarter revenue, vs. the previous guidance of $8.1 billion to $8.7 billion. The world's largest chipmaker sees 62% fourth-quarter gross margin, vs. the previous 60% target. Intel sees a $600 million charge, or 6 cents earnings per share, for a goodwill writedown and tax items. The forecast disappointed investors, some who had hoped the chipmaker would raise its revenue guidance. S&P raised its estimates and price target, and reiterated its buy ranking.

Tyson Foods (TSN) will close two older plants to improve its manufacturing efficiency. The poultry processor now expects to take pre-tax charges associated with these closures of $23 million to $27 million, or 4 cents to 5 cents earnings per share in the first half of fiscal 2004.

Integrated Devices (IDTI) sees third-quarter revenue at the high end of its 1% to 5% sequential growth guidance.

Albertson's (ABS) posted 25 cents, vs. 47 cents third-quarter earnings per share on an 0.8% same-store sales drop and a 1.6% total sales rise. Albertson's notes the results were materially impacted by two labor disputes, particularly an ongoing labor dispute with the United Food and Commercial Workers union in Southern California.

For-profit education company DeVry (DV) posted a 6.2% increase in new undergraduate enrollment for the 2003 fall term (excluding its Toronto school). Bear Stearns reiterated the peer perform rating.

Lexar Media (LEXR) settled a patent-infringement lawsuit against SimpleTech, a maker of memory products. Both parties agreed to dismiss the lawsuit, and Simple Tech will take a royalty-bearing license under Lexar's patents for past and future sales of its Memory Stick products.


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