Monday's stocks in the news
From Standard & Poor's Equity ResearchAmerican International Group (AIG) shares move down after the company says in a form 8-K that it has been advised by independent auditors that they have concluded that at Dec. 31, 2007, AIG had a "material weakness in its internal control" over financial reporting and oversight relating to the fair value valuation of AIGFP super senior credit default swap portfolio. It says it should clarify and expand its prior disclosures relating to methodology and data inputs used to determine fair values of this default swap portfolio in respect of multi-sector CDOs. S&P downgrades to sell.
Yahoo (YHOO) says it has unanimously concluded that the proposal offered by Microsoft's (MSFT) to buy the company is not in the best interests of co. and stockholders. Microsoft's deal to buy Yahoo had been valued at about $44.6 billion. The Financial Times reports that Yahoo is seeking to restart merger talks with Time Warner's (TWX) AOL as means of defending itself again Microsoft's bid. S&P reiterates hold on YHOO.
Darden Restaurants (DRI) shares rise after the company says it sees third quarter EPS from continuing operations of $0.78-$0.80 (including costs, adjustments). It said through Feb. 10, 2008, Red Lobster, Olive Garden and LongHorn Steakhouse's combined U.S. same-restaurant sales for the third quarter were up 1.2% over the comparable prior year period. Separately, RBC Capital initiates coverage with outperform, $40 target.
Apple (AAPL) rises after Citigroup names the stock to its Top Picks Live list, and reiterates buy.
CNA Financial (CNA) falls after it posts $0.60, vs. $1.22 a year ago, fourth quarter EPS on lower net written premiums. The company says the decrease in net income is primarily due to net realized investment losses, compared with gains for the same period in 2006. S&P maintains hold.
WebMD Health (WBMD) falls after it says after adjusting for impact of the sale of its offline professional medical reference and textbook publication business, WBMD trims 2008 revenue view to $395-$415 million from $415-$430 million, adjusted EBITDA of $107.5-$120 million from $120-$130 million. It cites more conservative outlook associated with its display advertising distribution agreement with Yahoo, recent legal developments impacting certain of its pharmaceutical advertisers' product marketing plans, and more cautious business environment. S&P keeps hold.
Loews (LTR) posts $0.72, vs. $1.11 a year ago, fourth quarter EPS from continuing operatoins. Notes decrease in fourth quarter net income reflects reduced investment income, decreased results at the company's 51% owned unit, Diamond Offshore Drilling, primarily due to addition tax expense as a result of the repatriation of foreign earnings. S&P cuts target price, but maintains buy.
Bank of America (BAC) and Chevron (CVX) have been added to the Dow Jones Industrial Average, replacing Atria Group (MO) and Honeywell (HON), effective with the market open on Feb. 19.
Carlisle Companies (CSL) posts $0.69, vs. $1.25 a year ago, fourth quarter GAAP EPS as a sharp year-over-year decrease in income from discontinued operations offset 11% sales rise. It says fourth quarter EPS from continuing operations was $0.66, up from $0.61 a year ago. Current quarter EPS is above Street estimates. S&P keeps strong buy.
Motorola (MOT) and Nortel (NT) are in talks to combine their wireless-infrastructure units in a joint venture, the WSJ reports, citing people familiar with the situation. The talks are separate from efforts also under way at Motorola to possibly shed its handset division, the WSJ noted.
Delta Air Lines (DAL) may reach a merger agreement with Northwest Airlines (NWA) that would form the world's largest carrier, two people familiar with the talks said, reports Bloomberg.
According to a Schedule 13D filed with SEC, Warburg Pincus LLC reported a 16.5% stake in MBIA (MBI). Warburg Pincus beneficially owns about 24.83 million shares of MBIAs common stock, including warrants. Also according to the filing, these reported holdings do not include the $300 million in common stock that Warburg intends to buy in MBIA's public offering.
E*Trade Financial (ETFC) says it has signed an Asset Purchase Agreement to sell substantially of the assets of RAA Wealth Management LLC to PHH Investments Ltd. Expects to generate $80 million in proceeds.
Kellwood (KWD) board recommends shareholder tender their shares into Sun Capital's $21 per share offer.
WSJ reports that Google (GOOG) plans to partner with Chinese online music provider Top100.cn to provide free MP3 downloads and other services as it attempts to grow its presence in China.
Hypercom (HYC) receives offer from Ingenico to acquire all outstanding shares of HYC for $6.25 per share in cash. HYC says it will continue to move forward with its intended acquisition of e-Transactions biz of Thales S.A.
Possis Medical (POSS) agrees to be acquired by Medrad Inc., a Warrendale, PA-based affiliate of Bayer AG, for $19.50 per share in cash, or a total of about $361 million. The transaction is expected to close in the first quarter 2008.
Pharmion (PHRM) says it and MethylGene received orphan drug status in the European Union for MGCD0103, a drug used to treat acute myelogenous leukemia, a cancer of the blood and bone marrow. Once approved, the product may qualify for 10 years of marketing exclusivity in the EU.
Natus Medical (BABY) says it will cut jobs in certain segments and centralize its R&D activities in a move to eliminate redundant costs resulting from prior acquisitions. It expects actions to be essentially cost neutral in 2008, as savings during the year will be largely offset by severance costs of about $800,000. It backs first quarter guidance of $0.09-$0.10 EPS on revenue of $34.5-$36 million. It sees $0.68-$0.70 2008 EPS on about $160 million revenue.
Hasbro (HAS) posts $0.84, vs. $0.62 a year ago, fourth quarter EPS on 16% revenue rise.
LCA-Vision (LCAV) posts better-than-expected $0.22, vs. $0.27 a year ago, fourth quarter EPS as higher operating expenses help to offset a 13% rise in same-store revenue, 24% rise in total revenue. Notes that fourth quarter procedure volume decreased 5% to 39,888 from 42,049. Expects industry procedure volume to decline by more than 10% in 2008.
SkyWest (SKYW) reports a 3.4% increase in January traffic, to 1.31 billion revenue passenger miles from 1.27 billion a year earlier. Also reports available seat miles increased 5.1% in January, while load factor declined to 71% from 72.2% a year earlier.
Chattem (CHTT) initiates a voluntary nationwide recall of its Icy Hot Heat Therapy products, including consumer "samples" that were included on a limited promotional basis in cartons of its 3 oz. Aspercreme product. This recall is being conducted to the consumer level. CHTT is recalling these products because it has received some consumer reports of first, second and third degree burns as well as skin irritation resulting from consumer use or possible misuse of these products.
Builders Firstsource (BLDR) sees $0.55-$0.60 fourth quarter loss on revenue of approximately $300 million. Included in the net loss for the quarter are non-cash charges of $11.0 million, or $0.20 per share net of tax, related to goodwill and asset impairment charges, and the write-off of deferred financing fees related to its old credit facility. Additionally, BLDR's net loss included cash charges of $2.1 million, or $0.04 per share, net of tax, related to severance and other items.
Dot Hill Systems (HILL) says it has adopted measures, pursuant to completion of review of potential restructuring and cost reduction opportunities, that could result in one-time charges and cash usage in the range of $1-$2 million in 2008. It sees fourth quarter revenue of $51-$52 million and loss of $0.11-$0.14 before consideration for potential goodwill impairment. These ranges are within guidance released on Jan. 7.
Adolor (ADLR) and GlaxoSmithKline (GSK) announce that FDA has informed ADLR that the Prescription Drug User Fee Act action date for the New Drug Application (NDA) for Entereg has been extended to May 10, 2008. ADLR also announces the submission to the FDA of a revised Risk Management Program for Entereg.
Belo (BLC) completes spin-off of its newspaper businesses and related assets into a publicly-traded company called A. H. Belo Corp. The spin-off was implemented through a special tax-free stock dividend to shareholders on all outstanding shares of BLC common stock.