Markets & Finance

Movers: SLM, NetManage, Bank of America, Office Depot, International Speedway


Wednesday's stocks in the news

From Standard & Poor's Equity ResearchSLM Corp. (SLM) expects fourth quarter core EPS to be in range of $0.52-$0.57, excluding non-recurring items such as merger related costs, impacted by funding costs, increased reserves for FFELP loan portfolio. It lowers 2008 core EPS guidance from $3.25 to $2.60-$2.80, primarily due to increased costs from replacing company's interim funding facility. It says Flowers Group has indicated that it does not wish to pursue opportunities proposed by SLM for the acquisition of the company.

United Online (UNTD) says its wholly-owned subsidiary, Classmates Media Corp., intends to withdraw its S-1 registration statement as previously filed with the SEC. UNTD says proceeding with the IPO under current market conditions would not be in the best interests of its stockholders.

NetManage (NETM) agrees to be acquired by privately held Rocket Software for $7.20 per share, a 95% premium over NETM's closing share price on Dec. 11, for an aggregate transaction value of about $69 million. The acquisition is expected to be completed in February, 2008.

Akamai Technologies (AKAM) falls after Cowen downgrades to neutral from outperform.

Schering-Plough (SGP) falls after a Congressional committee is investigating Merck (MRK) and Schering-Plough for their handling of a critical clinical trial of Zetia, their blockbuster cholesterol-lowering drug, according to the New York Times.

Morgan Stanley reportedly downgrades Delta Air Lines (DAL), US Airways (LCC), and Northwest Airlines (NWA) to equal-weight.

Bank of America (BAC) expects provision expense to be about $3.3 billion in the fourth quarter, reflecting increased reserves of about $1.3 billion. It says about one-third of the increase is due to growth, seasoning in its consumer lending portfolios with remaining two-thirds due to deterioration principally in consumer real estate, some in small business. It says based on conditions today, expects recently forecast sizeable writedowns particularly in CDOs will be larger than already reported, but won't know until the company closes the fourth quarter. Merrill reportedly downgrades to neutral.

Merrill Lynch reportedly downgrades JP Morgan Chase & Co. (JPM) to neutral from buy. It also reportedly downgrades Wachovia (WB) to sell from neutral.

NYSE Euronext (NYX) agrees to acquire the 50% stake in AtosEuronext Market Solutions (AEMS) owned by Atos Origin. Upon successful completion of this transaction, NYX would re-acquire ownership of NSC cash trading and LIFFE CONNECT derivatives trading platform technology, as well as AEMS's third-party exchange technology business. Atos Origin would acquire the third-party Clearing & Settlement and Capital Markets businesses from AEMS.

International Speedway (ISCA) says driven by a strong fourth quarter, it raises fiscal year 2007 EPS guidance to $2.75-$2.80 (excluding items) on $810-$815 million revenue. For fiscal year 2008, it expects revenues of $805-$825 million, EPS of $3.05-$3.15. It notes the company is currently more comfortable at the low to mid-point of the earnings range.

Office Depot (ODP) says weakness in housing-related economic conditions in certain of its key markets, particularly Florida and California, that impacted third quarter results, appears to be spreading to other U.S. retail markets, creating addl pressure on sales, margins. Further, it says since inventory purchases are down due to lower sales and disciplined inventory management, fourth quarter vendor program support levels are currently expected to be about $70 million lower than last year.

Coca-Cola Enterprises (CCE) raises its 2007 EPS guidance to $1.36-$1.39 (including foreign currency impact, excluding items affecting comparability). For 2008 it expects operating income will increase at the high end of long term target range of 5%-6%, EPS will be in line with long term objective of high single-digit growth.

Federal Signal (FSS) announces that Robert D. Welding will retire from his position as president and CEO on Jan. 1, 2008. The board appoints James E. Goodwin as interim president and CEO, while it conducts a search for a replacement.

Manitowoc (MTW) raises $2.45-$2.50 2007 EPS guidance to $2.55-$2.60. It expects 2008 EPS, before unusual items, of $3.20-$3.40. It cites continued robust demand in all markets for entire line of Crane products as well as continued solid contributions from Foodservice and Marine segments.

Cooper Companies (COO) posts $0.54 fourth quarter GAAP loss per share, vs. $0.30 EPS a year ago, despite 17% revenue rise. It sees fiscal year 2008 revenue of $1.04-$1.09 billion, GAAP EPS of $1.30-$1.80 (non-GAAP EPS of $2.40-$2.65).

Learning Tree International (LTRE) posts $0.48 fourth quarter EPS, vs. $0.21 loss, on 14% revenue rise. It says EPS for the fourth quarter of both years were significantly affected by one-time adjustments to the income tax provision, unrelated to current operations.

Cummins (CMI) sets 2-for-1 stock split and $500 million stock buyback.

Canadian Pacific Railway (CP) says 2007 adjusted EPS may be at the bottom of, or even below, earlier guidance of C$4.30-C$4.45. It cites recent harsh weather conditions that caused disruptions in train operations in CP's busy Western corridor, and a lag in the fuel recovery program.

Morgan Stanley reportedly downgrades Boeing (BA) to equal-weight from overweight.

Covenant Transportation Group (CVTI) says its results for first two months of the fourth quarter tracked significantly ahead of internal expectations. It expects results for December to exceed internal expectations as well. It expects to report consolidated results of operations in range of break-even to a net loss of $0.10, which, if achieved, would be significantly better than its forecast at beginning of quarter.

Cytori Therapeutics (CYTX) receives 510(k) regulatory clearance from FDA's Center for Devices and Radiological Health for the Cytori Autologous Fat Transfer System. This system may be used to harvest, filter, and transfer a patient's own adipose (fat) tissue from one part of a patient's body to another at the point-of-care in the same surgical procedure.

Maguire Properties (MPG) announces it is taking steps to help it achieve greater value for shareholders, including: formation of a special committee to focus on strategic alternatives, including possible sale of company; and release of all parties from future conduct limitations imposed by existing standstill provisions entered into in connection with discussions since the beginning of 2006 with third parties.


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