Markets & Finance

Movers: Mosaic, Con-Way, Marriott, Micron


Stocks in the news Thursday

From Standard & Poor's Equity ResearchMosaic Company (MOS) posts lower-than-expected $2.65, vs. $0.69, first quarter EPS on sharply higher sales. Street was looking for $2.94. Company notes momentum has slowed in Phosphates business near-term due to soft seasonal demand, higher customer inventory levels, falling raw material costs. Merrill reportedly downgrades to underperform from buy.

Con-Way (CNW) cuts $3.00-$3.40 2008 EPS guidance to $2.60-$2.80. Cites weak demand for freight transportation services. S&P reiterates hold; cuts estimates and target. Stifel downgrades to hold.

Marriott International (MAR) posts $0.26, vs. $0.31 a year ago, third quarter EPS from continuing operations on 1% lower comparable company-operated REVPAR in North America (NA), 1% higher total revenue. Posts $0.34 third quarter adjusted EPS from continuing operations. Street was looking for $0.32. Given current soft economic climate in NA, weakening markets outside NA, expects worldwide and NA REVPAR to decline. Also expects worldwide comparable systemwide REVPAR to be flat for 2009, comparable company-operated REVPAR in NA at best to decline 3%. Sees $1.48-$1.60 fiscal year 2009.

Micron Technology (MU) posts $0.27 fourth quarter non-GAAP loss per share, vs. $0.18 loss a year ago, on despite slightly higher net sales. Implements 20% reduction in salary compensation for MU senior executives.

Take-Two Interactive Software (TTWO) says its board has determined it is in the best interest of holders to continue operating and building the company as an independent company.

Brush Engineered Materials (BW) expects 2008 EPS of $1.15-$1.30, below Street estimates. Says it has seen new widespread weakness in global consumer electronics, telecom and automotive markets which is affecting expected demand from both Specialty Engineered Alloys and Engineered Materials Systems segments.

Constellation Brands (STZ) posts $0.45, vs. $0.33 a year ago, second quarter EPS on 7.2% higher net sales. Sees $1.68-$1.76 fiscal year 2009 EPS.

Embarq (EQ), the fourth-largest U.S. phone company by customers, put itself up for sale in recent weeks, but its plans were thwarted when the credit crunch made it difficult for potential acquirers to raise capital, people familiar with the situation said: WSJ. S&P maintains buy.

Standard Microsystems (SMSC) posts $0.38, vs. $0.39, second quarter GAAP EPS on slight revenue decline. Posts $0.46 non-GAAP EPS, which is a penny below consensus. Says current financial market crisis has caused a sharp drop in visibility and uncertainty in demand planning for the H2 fiscal year 2009. Names Christine King as President, CEO, effective Oct. 20, succeeding Steven Bilodeau, who is retiring.

Molex (MOLX) now expects first quarter revenue of $840-$845 million, compared with its prior outlook of $860-$880 million, EPS of $0.25-$0.29 (including estimated restructuring charge of approximately $0.06) vs. prior outlook of $0.35-$0.40 (including $0.01 estimated restructuring charge). Cites reduced demand primarily from the telecom/data infrastructure and automotive markets. Notes industrial, consumer electronic markets are also below company's original outlook.

Nabors Industries (NBR) sees $0.65-$0.68 third quarter EPS, which includes significant charges in its Investment Income and Other Expense items as well as a tax rate adjustment for an expected higher full-year effective tax rate.

O2Micro International (OIIM) expects third quarter revenue of $37-$38 million. According to Reuters, analysts were expecting revenue of $41.4 million. Sees R&D expense above second quarter level, while SG&A expense should be down sequentially; overall operating expenses should be similar to the second quarter. S&P reiterates hold.

Administaff (ASF) - Baird downgrades ASF to neutral from outperform.

Barnes Group (B) withdraws earnings guidance for the full year. Says the business disruption related to the Boeing (BA) strike will affect Barnes Aerospace's Original Equipment Manufacturing (OEM) business, which represents about 20% of total company sales. Further uncertainty arises from the effects of recent developments in the credit markets on B's customers and a softening of the industrial base that the conpany serves, including North American and European transportation markets.

Cooper Tire & Rubber (CTB) says it continues to adjust production schedules at its U.S. facilities primarily due to raw material shortages and soft demand in the North American market. Estimates production adjustments impact to third quarter financials of $9-$11 million.

Matrix Service (MTRX) posts $0.36, vs. $0.23, first quarter EPS on 16% revenue rise. Maintains fiscal year 2009 forecast of $1.35-$1.60 EPS on $800-$850 million revenue.

Natco Group (NTG) sees $155-$160 million third quarter revenue, segment profit of $11-$13 milllion, $175-$180 million fourth quarter revenue, segment profit of $23-$25 million, (both excluding certain legal compliance review costs). Says third quarter and fourth quarter will be negatively affected by number of hurricane related issues in all business units, certain other factors. Notes continuing difficulty in fully recovering rising material costs in North America equipment sales, its decision to wind down current operations in Kazakhstan earlier than anticipated will also impact results.


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