Markets & Finance

Ericsson Climbs on Stronger Margin Outlook


Mobile-phone maker Ericsson (ERICY) raised its first-quarter gross margin forecast to above the 41.6% level attained in the fourth quarter of 2003. Ericsson cited better than anticipated benefits of cost of sales reduction activities. It says the first-quarter sales outlook is unchanged. S&P and Banc of America raised their estimates and price targets.

A meeting of the FDA's Neurological Devices Advisory Panel is scheduled for June 15 to review Cyberonics' (CYBX) pre-marketing approval supplement seeking approval to market its VNS Therapy System as an adjunctive long-term treatment of depression for patients who are at least 18 years old. First Albany keeps buy.

Panera Bread (PNRA) posted 3.8% higher March system-wide same store sales, but notes comparison for its next four-week period will be hurt because it includes Easter Sunday, when operating hours are reduced. S&P raised its estimates and price target.

Jack in the Box (JBX) raised its 28 cents second-quarter earnings per share forecast to a range of 42 cents to 44 cents. The quick-service restaurant chain cited a second-quarter same-store sales increase estimated at about 7.5%, vs. the previous forecast of 4.0% to 4.5%. Jack in the Box also noted lower food and labor costs, better leverage on fixed operating costs, and a lower tax rate.

Manugistics (MANU), a maker of software used to track manufacturing suppliers, posted a 73 cents fourth-quarter loss per share (GAAP), vs. a $1.59 loss despite a 12% total revenue decline. The results missed Wall Street's expectations. Manugistics expects first-quarter adjusted operating income to improve sequentially on slightly higher total revenue. Piper Jaffray downgraded to underperform.

On Apr. 8, Dow Jones will add insurance giant American International Group (AIG), drug maker Pfizer (PFE), and telecom Verizon Communications (VZ) to the Dow Jones Industrial Average index. It will delete AT&T (T), Eastman Kodak (EK), and International Paper (IP). The changes are the first since Nov. 1, 1999.

Merrill Lynch downgraded Dillard's (DDS) to sell from neutral, and downgraded AnnTaylor (ANN), Aeropostale (ARO), Zale (ZLC), Dollar Tree (DLTR), Family Dollar Stores (FDO), Target (TGT), Neiman-Marcus (NMG.A), and Wal-Mart (WMT) to neutral from buy.

Supergen (SUPG) says a randomized Phase III study of Dacogen for injection as a treatment for myelodysplastic syndromes showed mixed results.

Pier 1 Imports (PIR) posted 53 cents, vs. 57 cents fourth-quarter earnings per share on a 2.7% same-store sales drop, and a 6.6% total sales rise. Pier 1 notes fourth-quarter 2004 included 2 cents from a California labor litigation settlement and costs. The home-furnishing retailer sees 21 cents to 24 cents first-quarter earnings per share, and $1.44 to $1.52 in fiscal 2005.

Bed Bath & Beyond (BBBY) posted 47 cents, vs. 35 cents fourth-quarter earnings per share on a 8.1% same-store sales rise, and a 24% net sales rise. S&P reiterates accumulate.

American Eagle Outfitters (AEOS) posted 7.8% higher March same-store sales, and 18% higher total sales. The retailer sees first-quarter earnings per share of 25 cents to 30 cents, vs. a year ago's 9 cents.

Banc of America downgraded Qualcomm (QCOM) to neutral from buy.

BellSouth (BLS) says due to changes in the treatment of pension and retiree medical costs, it now expects an incremental year-over-year impact to benefit 2004 earnings per share by just 1 cent, vs. the previous expectation for a benefit of 7 cents.

Coffee chain Starbucks (SBUX) posted a 12% March sames-store sales rise, and a 30% net revenue rise.

Retailer Guess (GES) posted 14% higher March same-store sales, and 19% higher total sales.

UBS Financial upgraded retailer Gap (GPS) to buy from neutral.

Inamed's (IMDC) Inamed Health unit announced the market introduction and FDA approval of a significant product line extension of its BioEnterics Lap-Band System.


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