Markets & Finance

Movers: Intel, Citigroup, Staples, Thornburg, Ambac


Tuesday's stocks in the news

From Standard & Poor's Equity ResearchIntel (INTC) lowers first quarter gross margin forecast to 54%, plus or minus a point, as compared to previous forecast of 56%, plus or minus a couple of points, due to lower-than-expected prices for NAND flash memory chips.

Citigroup (C) could move on news that Sameer Al Ansari, CEO of Dubai International Capital reportedly told delegates at a private equity conference that it will take more than the combined efforts of the Abu Dhabi Investment Authority, the Kuwait Investment Authority and Saudi investor Prince Alwaleed bin Talal to save Citigroup.

Following this morning's report in the Financial Times that Ambac Financial Group (ABK) has decided against splitting in two as part of a $2-$3 billion recapitalization, new speculation that bailout of this bond insurer was imminent drove shares even higher.

Staples (SPLS) posts $0.47, vs. $0.46 a year ago, fourth quarter EPS on slight sales rise. It expects weak economic climate to continue throughout fiscal year 2009, sees mid single-digit sales growth for fiscal year 2009, high single-digit EPS growth, excluding fiscal year 2008's $38 million pre-tax charge related to settlement of California wage and hour class action litigation. Raises annual dividend 14%.

Thornburg Mortgage (TMA) falls after RBC downgrades to underperform from sector perform. Yesterday the company announced completion of collateralized mortgage debt transaction collateralized by $992 million of TMA's prime hybrid adjustable-rate mortgage (ARM) loans in publicly registered Thornburg Mortgage Securities Trust 2008-1. S&P Ratings, Moody's downgraded various forms of TMA debt.

Jackson Hewitt Tax Service (JTX) posts $0.61, vs. $0.83 a year ago, third quarter EPS on 15% lower revenue. Expects to report $1.48-$1.60 fiscal year 2008 (April) EPS on $282-$292 million revenue. It notes its EPS guidance excludes $0.26 primarily related to severance costs and internal review-related expenses.

E*Trade Financial (ETFC) falls 0.54 to 3.81. Some investors hope (new CEO) Donald Layton can sell off the troubled online broker. But first ETFC will have to conquer its lingering problems with risky debt, reports BusinessWeek.com.

Applied Materials (AMAT) rises 1.44 to 20.32 after it enters sales agreements with privately-held corp. based outside U.S., under which AMAT will supply equipment and installation/warranty services for multiple solar factories to be constructed by the unidentified company. The aggregates purchase price for equipment, related services to be provided by AMAT is about $1.9 billion. S&P maintains buy.

Theravance (THRX) falls after the company says it has been informed by the FDA that the Feb 27 planned review of telavancin by the Anti-Infective Drugs Advisory Committee was cancelled on Feb. 23 in order to allow time for the FDA to further evaluate study site monitoring and study conduct to ensure data integrity in the ATLAS Phase 3 program for the treatment of complicated skin and skin structure infections. S&P downgrades to hold from buy. Lehman cuts target.

Altera (ALTR) reaffirms that it expects first quarter sales to be flat to 2% higher vs. fourth quarter 2007, in line with prior guidance. The company's new product category is showing solid growth in comparison to the similar period in the prior quarter, led by Stratix II FPGAs, the company's largest selling product family.

BP PLC (BP) says it has set aside $2.13 billion to settle claims arising from a fatal Texas refinery accident in 2005, higher than a previously disclosed $1.6 billion provision.

Barr Pharmaceuticals (BRL) announces the U.S. District Court for the District of New Jersey has ruled in favor of its subsidiary, Barr Laboratories, in the challenge of the patent listed by Bayer Schering Pharma, AG in connection with Bayer Schering's Yasmin oral contraceptive. In his ruling, Judge Peter G. Sheridan found that the patent at issue was invalid, because it was obvious.

PMI Group (PMI) says due to delays in obtaining 2007 financial results from FGIC Corp., it has filed a Form 12b-25 with SEC for a late filing of its 2007 Form 10-K. Because PMI lacks necessary financial information from FGIC, PMI isn't yet able to calculate financial results of its Financial Guaranty segment, but expects this segment to report "significant" net loss for the fourth quarter.

Conseco (CNO) extends due date of its Annual Report on Form 10-K to March 17, 2008. It estimates to report about breakeven for three months ended Dec. 31, 2007, including estimated net realized investment losses (after related amortization and taxes) of $25 million, but before any adjustments which may result from finalizing the incomplete items.

Home Inns & Hotels Management (HMIN) posts RMB 0.22 fourth quarter loss ($0.03), vs. RMB 0.18 EPS, as higher operating costs and forex effects offset 45% revenue rise. Fourth quarter loss per ADS is RMB 0.43 ($0.06). Sees first quarter revenue of RMB 330-RMB 350 million ($45-$48 million), expects full-year 2008 revenue to grow 70%-80%.

Blount International (BLT ) posts $0.19, vs. $0.18 a year ago, fourth quarter EPS from continuing operations on 7.4% sales rise. It expects 2008 sales to increase from 3% to 5% to between $530-$540 million, as weak market conditions are expected to continue in U.S. with some slowing of growth from record sales performance in international markets.

Perficient (PRFT) posts $0.15, vs. $0.10 a year ago, fourth quarter EPS on 26% revenue rise. It expects first quarter 2008 services and revenue, including reimbursed expenses, to be in the range of $54.8-$58.9 million, comprised of $53.8-$56.4 million of revenue from services including reimbursed expenses and $1-$2.5 million of revenue from sales of software.

51Job (JOBS) posts $0.17 fourth quarter non-GAAP earnings per ADS on 25% revenue rise. It says earnings exceeded the company's guidance. It sees first quarter revenue of $30.2-$31.5 million, non-GAAP EPADS of $0.12-$0.14. It says in January 2008, it identified some irregularities and non-compliance to contract terms by a third party. Outcome of related investigation is not known at this time, but JOBS currently estimates there could be a potential financial impact of up to $1.2 million should JOBS be unable to recover funds from the contractor and be liable for the loss.

Genesco (GCO) is in definitive agreement with Finish Line (FINL) and UBS (UBS) for termination of merger deal with FINL, settlement of all related litigation among FINL, GCO, UBS. Financing commitment from UBS to FINL will be terminated; UBS, FINL will pay to GCO $175 million in cash along with a number of FINL shares equal to 12% of total post-issuance FINL outstanding shares of common stock.

Clearwire (CLWR) posts $289 million fourth quarter adjusted EBITDA loss, vs. $164.2 million loss a year ago, as higher direct operating costs related to the 14 new markets company launched in 2007, increased SG&A related new markets, and other corporate initiatives offset sharply higher consolidated service revenues.

Trina Solar Ltd. (TSL) posts $0.62, vs. $0.28 a year ago, fourth quarter EPS on sharply higher revenue.

Ceradyne (CRDN) says its board authorized the repurchase of up to $100 million worth of common stock. Any shares purchased under the program will be done so by using cash on hand and excess free cash flow.

Barnes & Noble (BKS) sees fiscal year 2009 EPS of $1.70-$1.90, noting recessionary pressures. Posts slight decline in the fourth quarter fiscal year 2008 same-store sales, 2.8% rise in total sales, excluding the impact of the extra week during fiscal year 2007. It sees fourth quarter EPS of $1.76-$1.82, primarily due to two non-operating benefits received in January 2008. Excluding these non-operating items, fourth quarter are expected to be in the middle of the previously issued guidance range of $1.57-$1.76. JP Morgan reportedly cuts to underweight from neutral.

Tech Data (TECD) posts $0.92, vs. $0.66 a year ago, fourth quarter GAAP EPS on 5.9% revenue rise. Sees first quarter sales of $5.65-$5.80 billion.

Leapfrog Enterprises (LF) posts $0.51 fourth quarter loss per shaer, vs. $0.73 loss a year ago, as widened gross margin, lower operating costs offset slight sales decline. Sees 2008 sales growth percentage in the mid-to-high teens, loss to be nominal.


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