Markets & Finance

Movers: Freddie Mac, Cisco Systems, priceline.com, Whole Foods Market


Stocks in the news on Wednesday

From Standard & Poor's Equity ResearchFreddie Mac (FRE) posts $1.63 second quarter loss, vs. $0.96 EPS a year ago, on 28% revenue drop. It notes other non-interest loss vs. gain last year and sharply higher credit-related expenses. Reaffirms its commitment to raise capital; expects to reduce dividend in third quarter from $0.25 to $0.05 or less per share, and pay full dividends at contractual rates on its preferred stock. S&P maintains sell.

Cisco Systems (CSCO) posts $0.40, vs. $0.36, fourth quarter non-GAAP EPS on 10% sales rise ($10.364 billion in fourth quarter fiscal year 2008). Street was looking for $0.39. S&P reiterates hold.

Priceline.com (PCLN) posts $1.55, vs. $1.11, second quarter pro forma EPS on 45% revenue rise. Gross travel bookings for second quarter 2008 rose 71% year-over-year to $2.1 billion, despite macroeconomic uncertainties and softening travel market trends. Sees 2008 gross travel bookings of $7.55-$7.9 billion, pro forma EBITDA of $360-$380 million and EPS of $5.50-$5.85. S&P keeps hold; notes the company's "cautious macroeconomic tone," and that PCLN "barely met" the low end of its guidance for international gross bookings growth.

Whole Foods Market (WFMI) posts $0.24, vs. $0.35, third quarter EPS on 2.6% higher same-store sales, 22% higher total sales. Sees $0.13-$0.15 fourth quarter EPS and $0.93-$0.95 fiscal year 2008. Current consensus view for fiscal year 2008 EPS is $1.15. Reduces number of stores expected to open in fiscal year 2009 to approximately 15 and has cut all discretionary capital expenditure budgets not related to new stores by 50%. It suspends quarterly cash dividend for foreseeable future. Increases stock repurchase authorization by $100 million, bringing the total current authorization to $200 million.

Time Warner (TWX) posts $0.22, vs. $0.25, second quarter EPS from continuing operations despite 5.2% revenue rise. Notes net impact of certain items affecting comparability was to decrease second quarter 2008's EPS by $0.02, increase second quarter 2007's by $0.03. S&P keeps hold.

Time Warner Cable (TWC) posts $0.28, vs. $0.28, second quarter EPS despite 7.1% revenue rise. Sees 9% growth in 2008 revenues. Revises 2008 EPS outlook to reflect impact of certain financing, transaction costs relating to its planned separation from Time Warner, second quarter loss on cable systems held for sale; now sees 2008 EPS of $1.10-$1.15. S&P maintains strong buy.

Sprint Nextel (S) posts $0.12 loss, vs. $0.01 EPS, on 11% drop in net operating revenues. Posts $0.06 second quarter adjusted EPS. Expects to report higher post-paid subscriber losses in third quarter due to a seasonal uptick in churn when compared with second quarter 2008 results. Expects sequential declines in post-paid gross adds to moderate, modest pressure on post-paid ARPU for the balance of 2008. Says combination of factors expected to result in a sequential reduction in adjusted OIBDA for third quarter.

Nasdaq OMX Group (NDAQ) posts $0.48, vs. $0.39, second quarter operating EPS on 13% revenue rise (includes results of recently acquired OMX AB). S&P raises estimate, maintains hold.

Marsh & McLennan Companies (MMC) posts $0.41 (excluding charge), vs. $0.35, second quarter non-GAAP EPS on 9% revenue rise. Including a non-cash charge of $115 million, MMC posted $0.13 EPS. Street was looking for $0.35.

CarMax (KMX) reports that comp-store used unit sales declined by an average of 17% for the months of June and July. Says the slowdown in customer traffic follows sharp rise in gasoline prices. Says it has made dramatic reductions in its used vehicle inventory levels in June and July to bring them in line with lower current sales rate, has adjusted vehicle mix to reflect changes in consumer preferences. In addition, says as a result of current environment and in order to enhance profitability, the company has decided to temporarily slow its store growth.

Polo Ralph Lauren (RL) posts $0.93, vs. $0.82, first quarter EPS on 4% revenue rise. Raises fiscal year 2009 EPS guidance to $4.00-$4.10, continues to expect a low-to-mid single digit increase in net revenues.

Ambac Financial Group (ABK) posts $2.80, vs. $1.67, second quarter EPS on sharply higher revenues. Says increase in second quarter primarily due to recording net mark-to-market gains on credit derivatives, increased accelerated premiums from refundings, loss reserve reductions on direct residential mortgage-backed securities (RMBS) portfolio, partially offset by market losses on RMBS within finl services investment portfolio. Excl. these items, ABK posted a $1.83 loss.

General Maritime (GMR) and Arlington Tankers (ATB) agree to merge in a stock-for-stock deal. Terms: GMR holders to get 1.34 shares of combined co. for each share held, ATB holders to get one share of combined co. for each share held.


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