Markets & Finance

Ford Lowers Earnings Outlook


Ford Motor (F) cut its 2005 earnings outlook Friday afternoon, citing "difficult business conditions" affecting the auto industry. The company lowered its 2005 earnings forecast to $1.25 to $1.50 per share from a prior expectation at the low end of a $1.75 to $1.95 range. The company said its full-year guidance excludes special items totaling about 8 cents to 10 cents a share. In addition, the auto maker says it no longer expects to achieve its goal of $7 billion in pretax profits, excluding special items, for 2006, according to news reports. Standard & Poor's Ratings Services said it revised the rating outlook on Ford Motor Co., Ford Motor Credit Co. (Ford Credit), and all related entities to negative from stable.

Borland Software (BORL) cut its 3 cents to 5 cents first-quarter earnings per share (GAAP) estimate to a 1-cent to 3-cent loss on lower-than-expected revenue of $70 million to $72 million. The company cited slower closure rates in U.S. and Europe, and a weaker-than-expected spending environment.

Time Warner (TWX), Comcast (CMCSA), and Adelphia creditors reached an agreement in principle for the two cable giants to buy Adelphia in a cash and stock deal valued at slightly over $17.6 billion, according to the Wall Street Journal.

Software company Ariba Inc. (ARBA) sees lower-than-expected second-quarter total revenue of $79 million to $81 million and license revenues of about $12 million. The company anticipates a loss of about 13 cents to 15 cents (including charges) per share. It says the broad market environment for enterprise software remains soft.

Shopko Stores (SKO) agrees to be acquired by private equity investment firm Goldner Hawn Johnson & Morrison Inc., in a deal valued at slightly more than $1 billion, including about $330 million in debt assumption. Terms of the agreement give holders $24 per Shopko share.

May Department Stores (MAY) and Federated Department Stores (FD) say the Federal Trade Commission (FTC) has requested additional information in connection with its review of the proposed merger between the two companines.

USF Corp. (USFC) sees 12 cents to 16 cents first-quarter earnings per share, excluding significant items, vs. a year ago's 32 cents. The company cited reduced volumes, productivity in Midwest region, slower-than-expected growth in Northeast, density, and pricing competition.

Trex Co. (TWP) sees first-quarter earnings per share of 50 cents to 52 cents, vs. a year ago's 63 cents, on net sales of about $90 million. The company reaffirms previously announced guidance for 2005, which calls for earnings per share of $2.16 to $2.23 on net sales of $300 million to $310 million.

Accenture (ACN) posted 35 cents, vs. 22 cents second-quarter earnings per share on a 15% revenue rise. The company sees 48 cents to 50 cents third-quarter earnings per share (GAAP) and $1.49 to $1.53 fiscal 2005 earnings per share.

Magma Design Automation (LAVA) sees lower-than-expected fourth-quarter revenue of $34.5 million to $35.5 million and 6 cents to 10 cents earnings per share (pro forma). The company cites delays in processing of a number of completed sales orders.

Lufkin Industries (LUFK) raised its first-quarter earnings per share guidance to 95 cents to $1.05 from 65 cents to 85 cents.

Constellation Brands (STZ) posted 62 cents, vs. 55 cents fourth-quarter earnings per share (excluding charges), on a 17% sales rise. The company sees 45 cents to 49 cents first-quarter earnings per share (56 cents to 60 cents on a comparable basis).

BioSource International (BIOI) says it has been informed by Genstar Capital Partners II L.P., its largest stockholder, that BIO-RAD's $8.50 per share cash offer is "significantly" below Genstar's view of BioSource's inherent value.

Party City (PCTY) posted 7.1% lower March same-store sales and 6.9% lower total sales. The company withdrew a previous financial outlook for the fourth quarter, and will not be providing an outlook for future periods.

Darden Restaurants (DRI) says same-restaurant sales at Olive Garden were up 9% to 10% for March and same-restaurant sales at Red Lobster were up 3% to 4%.


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