Markets & Finance

Spectrum Brands Stumbles


From Standard & Poor's Equity Research

Spectrum Brands (SPC) shares tumbled Monday after the company said its forecast of third quarter results indicates full year 2006 EPS will be substantially lower than guidance due to lower-than-expected sales volumes. It hires Goldman to assist in evaluating potential selective asset sales. S&P cut its price target on the shares to $9 from $17.

Citigroup (C) posts $1.05 vs. 97 cents second quarter earnings per share (EPS) on a 10% revenue rise.

Falconbridge (FAL), Phelps (PD), and Inco (N) revise the terms of their combination. Under the terms, Inco is offering Falconbridge C$18.50 plus 0.55676 Inco shares per Falconbridge share; Phelps will acquire all Inco shares for C$80.70 ($20.25 cash and 0.672 share). Falconbridge sets a C$0.75 special dividend.

United Parcel Service (UPS) received a subpoena from the Antitrust Division of the US Department of Justice requesting records concerning the ongoing investigation related to air cargo pricing practices of a number of airlines. UPS does not believe it is the target of the investigation.

General Motors (GM) GM's board is to hold a conference to discuss a proposed alliance with Renault and Nissan, after Wagoner and Ghosn agreed to a study of a three-way global pact that could change the industry's competitive balance, according to the Wall Street Journal.

Mcdonald's (MCD) posts 8.1% (6.9% in constant currencies) higher June systemwide same-store sales and 6.6% higher second quarter systemwide same-store sales. It sees 67 cents second quarter earnings per share (EPS.)

Mattel (MAT) posts 10 cents second quarter EPS vs. 23 cents loss on an 8% revenue rise. It notes last year's loss was impacted by incremental tax expense of 28 cents per share resulting from its decision to repatriate $2.4 billion in unremitted foreign earnings.

W.W. Grainger (GWW) posts $1.02 vs. 89 cents second quarter earnings per share on an 8% sales rise. It says it remains on track to achieve $4.00-$4.15 2006 EPS, but based on some softening in certain segments of North American economies, it sees sales up 7%-9%. Mothers Work (MWRK) raises $1.20-$1.34 third quarter EPS guidance to between $1.52 and $1.56 (after stock option expense) due to better-than-expected sales and comps.

Harley-Davidson (HDI) posts 91 cents vs. 84 cents second quarter EPS on a 3.3% revenue rise. It sees 11%-17% annual EPS growth and says its wholesale shipment target for 2006 remains 348,000-352,000 Harley-Davidson motorcycles, with 97,000 targeted for the third quarter.

Mattel (MAT) posts 10 cents second quarter EPS vs. 23 cents loss on an 8% revenue rise. It notes that last year's loss was impacted by incremental tax expense of 28 cents per share resulting from its decision to repatriate $2.4 billion in unremitted foreign earnings.

Republic Services (RSG) despite the stocks' nearly 80% increase, shares still have room to run, spurred by the company's further growth in Sunbelt states. Raymond James' William Fisher notes the quality of EPS is "higher than at any time in its past": Barron's.

Ametek (AME) raises 57 cents to 59 cents second quarter EPS guidance to between 64 cents and 65 cents; it also sees second quarter sales up 28%. It raises $2.30 to $2.35 2006 EPS guidance to between $2.42 and $2.46.

Medtronic (MDT) the Food and Drug Administration approves the company's Guardian REAL-Time System, a doctor-prescribed continuous glucose monitoring system for improved diabetes management.

Progenics Pharmaceuticals (PGNX) and Wyeth announce an intravenous form of methylnaltrexone being investigated for treatment of postoperative ileus has been designated for Fast Track status by the FDA.

Eaton (ETN) posts $1.64 vs. $1.37 second quarter EPS (including charges) on a 12% sales rise. It raises its second quarter dividend by 11% to 39 cents. However, it still expects growth in many of its markets to slow during the second half of 2006.


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