Markets & Finance

Movers: J.C. Penney, Merrill Lynch, Ralcorp, Applied Materials


Thursday's stocks in the news

From Standard & Poor's Equity ResearchJ.C. Penney (JCP) posts $1.17, vs. $1.26 a year ago, third quarter EPS from continuing operations on 3.5% lower same-store sales, 1.1% lower total sales. The current quarter includes $0.14 of federal and state income tax credits. It cuts fourth quarter EPS guidance to $1.65-$1.80 from previous guidance of $2.41, fiscal year 2008 EPS guidance to $4.63-$4.78, vs. previous guidance of $5.50.

Merrill Lynch (MER) announces that John A. Thain, CEO of NYSE Euronext (NYX), has been appointed Chairman and CEO of Merrill, effective Dec. 1, 2007. The confirmation follows media reports on Wednesday, which said Thain was to be offered the job. S&P reiterates hold.

Ralcorp Holdings (RAH) inks deal with Kraft Foods (KFT) to acquire Kraft's Post cereals in an all-stock transaction valued at $2.6 billion, including issuance and assumption of debt. Ralcorp posts $0.46, vs. $0.53 a year ago, fourth quarter EPS despite 20% revenue rise. It expects fiscal year 2008 EPS to be about 5% above fiscal year 2007 results.

Telefonos de Mexico (TMX) plans to spin off all its Latin American businesses and its Mexican yellow pages business to a new holding co. S&P maintains hold. Citigroup upgrades to buy from hold.

Carmax (KMX) shares seen higher on reports that Warren Buffett's Berkshire Hathaway (BRKA) reported holding 14 million KMX shares.

Novastar Financial (NFI) posts $64.05 third quarter loss per share, vs. $2.91 EPS. It does not plan to pay dividends on its common stock for the foreseeable future. In the interest of conserving liquidity, Board of Directors has suspended payment of the next regularly scheduled dividend on the company's Series C Preferred Stock and Series D-1 Preferred Stock. Believes there is a high likelihood that its securities will be de-listed from the NYSE; trading is likely to take place on the OTCBB.

Green Mountain Coffee Roasters (GMCR) posts lower-than-expected $0.14, vs. $0.06 a year ago, fourth quarter EPS on 39% sales rise. It sees $0.10-$0.14 first quarter GAAP EPS. It expects $0.70-$0.75 fiscal year 2008 GAAP EPS, 35%- 40% revenue growth.

Sotheby's (BID) shares are higher on report the company auctioned a pure white flawless brilliant cut diamond for $16.2 million. The company disclosed last week that it estimated the diamond to sell for $12 million to $16 million.

Washington Group International (WNG) says at special meeting of stockholders held earlier today, its stockholders adopted and approved WNG's amended merger agreement with URS CORP., providing for the acquisition of Washington Group by URS. S&P reiterates hold on WNG.

Sina (SINA) posts $0.28, vs. $0.19 a year ago, third quarter GAAP EPS on 15% revenue rise. Gross margin of 62% was down from year ago's 64%, and flat with the previous quarter. It sees fourth quarter total revenue of $68-$70 million. Citigroup reportedly downgrades to hold from buy.

Applied Materials (AMAT) posts $0.30, vs. $0.30 a year ago fourth quarter GAAP EPS on 6.0% sales decline. New orders fell 18%. It sees $0.16-$0.20 first quarter EPS on 13%-18% revenue decline. Bear Stearns cuts estimates.

Network Appliance (NTAP) posts $0.32, vs. $0.28 a year ago, second quarter non-GAAP EPS on 21% revenue rise. It sees $0.33-$0.34 third quarter non-GAAP EPS on $872-$883 million revenue. On a conference call, CFO Steve Gomo reportedly forecast gross margin decline of 1-5 percentage points due to increase in the company's mix of products sold through IBM as well as some "selective pricing actions." Also says planned addition of up to 350 new employees would shave margins to 15%-15.5%, below the company's targeted range.

Pitney Bowes (PBI) sets strategic plan; to explore alternatives for its U.S. Management Services business; sets $500 million stock buyback; raises quarterly dividend by 6%. It plans to take $300-$400 million charge in connection with transition initiatives. It sees $2.80-$2.90 2008 adjusted EPS from continuing operations, excluding transition initiatives, accounting alignment of MapInfo.

Williams-Sonoma (WSM) posts $0.25, vs. $0.25 a year ago, third quarter EPS despite 5% revenue rise. It reiterates fourth quarter revenue, non-GAAP diluted EPS guidance of $1.387-$1.417 billion and $1.20-$1.26, respectively; it believes retail traffic is slower than it had expected, therefore, would expect most likely outcome to be at low end of guidance ranges.

Tyco International (TYC) posts $0.42, vs. $0.64 a year ago, fourth quarter EPS from continuing operations as restructuring and separation-related costs offset 8.9% revenue rise.

BorgWarner (BWA) sets 2-for-1 stock split. Raises quarterly cash dividend 29% to $0.11 (post-split) from $0.085.

Broadcom (BRCM) sets $1 billion Class A stock buyback.

American Superconductor (AMSC) says it expects revenues to continue to grow in fiscal year 2008 to more than $150 million. Also reiterates that it expects to achieve EBITDAS positive results in fiscal year 2008.

Longs Drug Stores (LDG) posts $0.51, vs. $0.35 a year ago, third quarter EPS from continuing operations on 1.4% higher same-store sales, 3.3% higher total revenue. It sees $0.92-$0.98 fourth quarter EPS from continuing operations on 10%-12% total revenue rise, flat to 2% gain in comps,$2.67-$2.73 fiscal year 2008 EPS on 5%-7% total revenue rise, 1%-3% gain in comps. Fiscal year 2008 EPS view excludes net charges related to the disposition of previously designated stores of about $0.16.

Charlotte Russe Holding (CHIC) posts better-than-expected $0.33, vs. $0.51 a year ago, fourth quarter EPS from continuing operations on 5.3% lower same-store sales, slightly higher total sales. Sees flat-to-low single-digit decline in the first quarter same-store sales, EPS from continuing operations of $0.47-$0.50 (vs. EPS of $0.55 in year-ago first quarter).


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