Markets & Finance

Genetech Gains on Profit Boost


Shares of Genentech (DNA) moved higher Tuesday after the company posted 35 cents vs. 24 cents third quarter earnings per share (non-GAAP) on 46% higher operating revenue and 44% higher product sales. It expects about 50% 2005 earnings per share growth. First Albany upped its estimates and price target on the stock.

RealNetworks (RNWK) and Microsoft (MSFT) are nearing a settlement of RealNetwork's antitrust suit, in a deal valued at about $750 million, according to the Wall Street Journal.

Kirk Kerkorian has reportedly been granted permission by US antitrust authorities to raise his stake in General Motors (GM).

Falconbridge (FAL) agreed to be acquired by Inco (N) at C$34.00 cash or 0.6713 Inco shares plus C$0.05 cash for each Falconbridge share.

VeriSign (VRSN) is to sell its payment gateway business to eBay's (EBAY) PayPal for about $370 million in cash and/or eBay stock. The companies are also inking a multi-year pact whereby eBay will invest in the deployment of VeriSign technologies that enable and protect transactions.

Neoforma (NEOF) agreed to be acquired by Global Healthcare Exchange at $10 cash per Neoforma share.

Arch Capital Group (ACGL) sees a $252 million impact of the hurricanes/floods on its third quarter operating earnings: from Katrina, $173 million and from Rita, $48 million; from Dennis and Emily, $18 million, and from European floods, $13 million. It says that 64% of the third quarter impact is in its reinsurance business and 36% is in the insurance business.

Safeco (SAFC) said that total third quarter 2005 catastrophe losses are estimated at $116 million after tax, or 91 cents per share, including losses from Hurricane Rita of $27 million or 21 cents per share.

Movie Gallery (MOVI) posted 9% lower third quarter same-store sales. It says industry conditions remain challenging due to a weak recent home video release schedule, the maturation of the DVD life-cycle, current game platforms, and an overabundance of DVD titles on the market.

Alcoa (AA) posted 33 cents vs. 33 cents third quarter earnings per share from continuing operations as lower aluminum prices, higher input costs, seasonal weakness in Europe, and automotive markets offset a 13% sales rise.

Potlatch (PCH) said it expects third quarter earnings per share to be significantly below analysts' consensus estimates of 50 cents. It cited the high cost of energy, exacerbated by petroleum, and natural gas supply curtailments in the wake of recent Gulf Coast hurricanes.

Mattel (MAT) consolidated Mattel Brands and Fisher-Price Brands divisions into one division called "Brands". The former Fisher-Price president, Neil Friedman, was promoted to Brands president, while Mattel Brands president Matthew Bousquette will leave Mattel.

In an open letter to Time Warner (TWX) shareholders, Carl Icahn, backed by a group of investment companies, reiterated his past recommendations that Time Warner initiate a $20 stock buyback and spin off its Time Warner Cable unit, according to the New York Times.

Competitive Technologies (CTT) says a US Department of Labor Administrative Law Judge dismissed claims filed against it by the former employee J. Scott Bechtel.

Helen of Troy Limited (HELE) posted lower-than-expected 30 cents vs. 57 cents second quarter earnings per share on a 7.7% revenue drop. It sees second half sales of $317 million to $332 million, and $1.17 to $1.27 earnings per share. It cut its $615 million to $640 million fiscal year 2006 sales forecast to $575 million to $590 million, and its $2.50 to $2.60 earnings per share forecast to between $1.80 and $1.90.

NCR (NCR) raised its 28 cents to 33 cents third quarter earnings per share estimate to between 43 cents and 45 cents (excluding a tax benefit), and its $1.75 to $1.80 2005 estimate to between $2.53 and $2.58. It says revenue and profitability at its Teradata Data Warehousing business is stronger than anticipated.

Phoenix Technologies (PTEC) cut its $27 million to $28 million fourth quarter revenue forecast to $23 million. It expects to be profitable on a pre-tax basis and be cash flow positive for the fourth quarter.

M/I Homes (MHO) said that new contracts for the third quarter rose 20% to 1,163 from 971 in the third quarter 2004. Homes delivered declined 8% to 1,047 from 2004's 1,135. The backlog of homes at Sept. 30, 2005 increased 19% to 3,522 units.

True Religion Apparel (TRLG) raised its $29 million to $30 million third quarter revenue, and 22 cents to 24 cents earnings per share guidance to $35 million revenue and 29 cents to 30 cents earnings per share. It says it's comfortable with fourth quarter consensus estimates of $24.3 million revenues and 20 cents earnings per share.

Comstock Homebuilding Companies (CHCI) revised third quarter guidance to 80 cents earnings per share from a range of 77 cents to 80 cents; it raised guidance for 2005 earnings per share to $2.75, up from the range of $2.68 to $2.73. It sees $3.95 to $4.05 2006 earnings per share.

International Rectifier (IRF) sees 40 cents to 42 cents first quarter earnings per share (adjusted) on lower-than-expected revenue of about $273 million. It says a large percentage of orders came late in the quarter, and product mix was different than what was forecasted.

Sigmatel (SGTL) expects third quarter earnings per share to be about 10 cents below its previously provided guidance. It cited lower-than-expected revenue of $74.4 million, and lower-than-expected gross margin of about 51%, amid an increase in tax rates.

Skyworks Solutions (SWKS) cut its fourth quarter revenue guidance to about $190 million and said it sees operating income of about $7 million to $10 million. It cited one times payment to a customer recorded against fourth quarter revenue and a late quarter shift in product demand.

K2 (KTO) cut its 77 cents to 81 cents 2005 earnings per share (GAAP) guidance to 66 cents to 68 cents; and its 87 cents to 91 cents adjusted earnings per share to between 75 cents and 77 cents. It cited softness in paintball.

Infosys Technologies (INFY) posted 51 cents vs. 36 cents second quarter earnings per American Depositary Share (ADS) on a 38% revenue rise. It sees $556 million to $558 million third quarter revenue, or 53 cents in earnings per ADS, and $2.14 billion fiscal year 2006 revenue, or $2.04 to $2.05 in earnings per ADS.

American States Water (AWR) California's Public Utilities Commission approved an Advice Letter allowing American States Water's Golden State Water Company to impose temporary surcharges to recover under-collection of $2.9 million. It will result in an increase to the company's pre-tax income of $2.9 million in the fourth quarter.

Lightbridge (LTBG) Raises its third quarter revenue guidance to $27 million to $28 million from between $24 million and $25.5 million, based primarily on a strong quarter at both Authorize.Net and its Telecom Decisioning Services business. It sees earnings per share of 2 cents to 6 cents.

Phazar (ANTP) posted 23 cents vs. 39 cents first quarter earnings per share on a 26% sales drop.

Pediatric Services of America (PSAI) agreed to sell selected assets of its Pharmacy reportable segment to Accredo Health Inc., a wholly-owned unit of Medco Health Solutions (MHS). Pediatric Services expects to receive about $72 million in cash.

Forrester Research (FORR) said in a report that it projects technology spending growth will shrink from 7% increases in 2005 and 2006 to a 2% increase in 2007, before rebounding to near double-digit growth by the close of the decade.

Compuware (CPWR) sees 6 cents second quarter earnings per share on revenue of about $288 million, or about $63 million in new license revenue. It says the second quarter was challenging in regard to closing deals. S&P reiterated its hold opinion on the stock.

RF Micro Devices (RFMD) raised its second quarter revenue guidance to about $177 million from the low-to-mid $170 million range. It cited sequential growth and market share gains for cellular power amplifiers and cellular transceivers. S&P kept its buy opinion on the stock.

Lattice Semiconductor (LSCC) sees third quarter revenue coming in at the high end of its previously announced guidance of 1% to 2% sequential revenue growth.

Koss (KOSS) posted 38 cents vs. 23 cents earnings per share on 33% higher net sales.

Kirk Kerkorian has reportedly been granted permission by US antitrust authorities to raise his stake in General Motors (GM).

Vical (VICL) says the National Institutes of Health has begun a Phase II clinical trial of its experimental vaccine for HIV developed by government scientists and made by Vical.

LG. Philips LCD (LPL) posted $218 million vs. $279 million third quarter net income as a 52% rise in the costs of goods sold to offset a 46% rise in revenue.

Newfield Exploration (NFX) sees about 1% annual production growth for 2005, 7% to 15% for 2006, and 18% to 22% for 2007. It says that while storms resulted in an ST production set back, it has key development projects onshore and internationally that remain on track.

TXU (TXU) A report on SparkSpread.com on Friday said the company is looking to spin off its transmission and distribution networks valued at more than $10 billion. The company hired Lehman as its advisor. The company doesn't comment on market speculation and rumors.


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