Markets & Finance

Movers: J.C. Penney, Apollo Group, EA, Take-Two, KB Home


Friday's stocks in the news

From Standard & Poor's Equity ResearchJ.C. Penney (JCP) said it expects its first-quarter profit of 50 cents per share, down from an earlier target of 75 cents to 80 cents. The retailer says with sales through the Easter holiday well below expectations, it now guides to a low-double digit comp-store sales decline for March, and a high-single digit decline for the first quarter. It notes consumer confidence is at a multi-year low, and expects a difficult environment over the course of 2008.

Apollo Group (APOL) shares fall after the education provider posts second quarter EPS of $0.41, below the $0.52 consensus estimate and down from $0.44 a year ago. Revenues increased 14% during the past year to $693.6 million. Analysts were expecting heftier revenues, closer to $703 million. Total degreed enrollment grew to 330,000, an increase of almost 11% from the prior year.

Electronic Arts (ERTS) extends its $26-per-share tender offer for Take-Two (TTWO) to April 18 from April 11. EA also demanded that Take-Two's board invalidate a provision of a poison pill plan invoked to prevent Electronic Arts from acquiring the company.

Oplink Communications (OPLK) cuts $41-$45 million third quarter revenue guidance to $39-$40 million, due to softer-than-expected demand from customers in Europe. Also expects to record a substantial charge for the quarter relating to excess and obsolete inventory, which will reduce GAAP EPS further, resulting in a GAAP net loss for the quarter. Needham downgrades to hold from strong buy.

Lehman Brothers (LEH) was upgraded to buy from hold at Citigroup, which said Lehman has ample liquidity to run its business.

KB Home (KBH) reports fiscal first quarter (February) loss of $3.47 per share, which included the effect of a $100 million deferred tax valuation allowance charge. Revenues fell 42.8% year-over-year to $794.2 million, which was below the $805.7 million consensus estimate.

Maguire Properties (MPG) says it is finalizing its review of strategic alternatives; its review no longer includes active pursuit of the possibility of sale of the company, given the current market conditions, particularly in the credit markets, and the lack of any viable acquisition proposal received from third parties.

United Technologies (UTX) says it has accumulated 3.5% of Diebold (DBD) shares. Diebold says this news does not change Diebold's belief that UTX's $40 per share offer significantly undervalues the company and does not reflect significant progress against current strategic initiatives and Diebold's previously disclosed $100 million cost reduction program.

Steelcase (SCS) posts disappointing fourth quarter earnings per share results. The office furniture company says fourth quarter EPS was $0.22, below analysts' $0.25 consensus estimate, vs. $0.21 a year ago. Revenues totaled $901 million in the company's final fiscal quarter, up almost 16% from the same period one year ago and abouve analysts forecast of $864 million.

Accenture (ACN) posts better than expected second quarter results. Second quarter revenues rose 17% during the past year to $5.6 billion, while EPS was $0.64, above the consensus of $0.56 per share. Year-over-year, adjusted earnings per share increased by roughly 40%. For the third quarter, the company expects revenues to range from $5.8 billion to $6.1 billion, while analysts had forecast sales of $5.7 billion (the company did not give an EPS forecast). For the full year, the consulting company raised its EPS target by $0.19 to the range $2.55 to $2.60 per share.

Mercantile Bank (MBWM) says deteriorating economic conditions and real estate valuations have had a negative impact on the commercial loan portfolio of its wholly-owned subsidiary, Mercantile Bank of Michigan. In response, the Bank expects to record a provision for loan and lease losses in the range of $8.7 million to $9.2 million for the first quarter. This provision will negatively impact Mercantile Bank's operating results between $5.7 milllion and $6.0 milllion on an after-tax basis, or between $0.67 and $0.70 per diluted share, and will result in a net loss for the first quarter.


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