Markets & Finance

ADC Shares Fall after News of Deal to Buy Andrew


From Standard & Poor's Equity Research

Shares of ADC Telecommunications (ADCT) moved solidly lower Wednesday after the company agreed to acquire Andrew (ANDW), at 0.57 ADC share per Andrew share. Separately, ADC posted 29 cents vs. 33 cents second quarter adjusted EPS from continuing operations despite a 17% sales rise. S&P cut its target on ADC, while Merrill downgraded the stock to neutral.

NRG Energy (NRG) says it has rejected Mirant (MIR)'s $8 billion cash and stock offer, noting concerns about Mirant stock and liquidity.

Freddie Mac (FRE) posts $2.75 vs. $3.94 2005 earnings per share (EPS) (Generally Accepted Accounting Principles) on a 41% decline in net interest income. The decline comes amid narrowing spreads on fixed-rate assets and a greater proportion of floating-rate assets purchased in 2005.

West Corp (WSTC) agrees to be bought out by an investor group led by Thomas H. Lee Partners and Quadrangle Group LLC for approximately $4.1 billion, or $48.75 per share, to all shareholders except founders Gary and Mary West.

E Trade Financial (ET) plans to acquire Retirement Advisors of America, a Dallas-based registered investment adviser managing over $1 billion in assets. It will become part of E*TRADE Wealth Management network. E Trade expects the deal to be slightly accretive to earnings in 2006.

Rambus (RMBS) says the Audit Committee of its Board of Directors has commenced an internal investigation of the timing of past option grants, as well as other potentially related issues.

Merck (MRK) corrects the description of a statistical method used in an APPROVe study of Vioxx. It doesn't think the correction changes results: increased relative risk for heart attack and stroke for VIOXX after 18 months of daily treatment.

Tiffany (TIF) posts 30 cents vs. 27 cents first quarter EPS on 5.8% higher total sales. It sees fiscal year 2007 sales growth of almost 10% and EPS of $1.77 to $1.82.

Microchip Technology (MCHP) reaffirms first quarter sales and EPS guidance of a 5% to 6% sales rise, as well as non-GAAP EPS of about 37 cents before stock-based compensation expense of about 2 cents.

Costco Wholesale (COST) posts 49 cents vs. 43 cents third quarter EPS on 7% higher same-store sales and 11% higher total revenue. It posts 10% higher May comps.

Catapult Communications (CATT) cuts its third quarter revenue guidance to $10.7 million to $11.7 million from the original estimate of about $12.8 million. It says order input is falling short of expectations.

Semtech (SMTC) posts 16 cents vs. 14 cents first quarter EPS (GAAP) on a 17% sales rise. It sees 15 cents to 16 cents second quarter EPS on a flat to 2% rise in quarter over quarter sales. It sets a $50 million stock buyback.

Altera (ALTR) expects up to several million dollars of additional Selling General & Administrative expense in the second quarter resulting from its review of stock option granting practices and related accounting; it also reaffirms second quarter sales guidance of 7% to 10% sequential growth.

Gander Mountain (GMTN) posts $1.61 first quarter loss vs. $1.23 loss on 10% lower same-store sales.


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