Markets & Finance

Movers: Yahoo, Boeing, AT&T, SAP, Wells Fargo


Stocks in the news Wednesday

From Standard & Poor's Equity ResearchYahoo (YHOO) posts $0.22 fourth quarter GAAP loss per share, vs. $0.15 EPS a year ago, on 1.4% lower revenue and more than $600 million in unusual charges. On non-GAAP basis, however, posts $0.17 vs. $0.13 fourth quarter EPS. Reportedly sees first quarter revenue in the range of $1.53-$1.73 billion, compared with year-ago first quarter revenue of $1.82 billion.

Citigroup (C), Banc of America (BAC), JPMorgan Chase (JPM) and other banks are higher as Bloomberg reports that the Federal Deposit nsurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up as it tries to break the back of the credit crisis, two people familiar with the matter said.

Target (TGT) says it will reduce the staff at its headquarters by 9%, affecting about 600 employees and 400 open positions, and close a Little Rock, AK distribution center. The majority of these changes are effective today. TGT added that expects to record a charge of about $0.03 per share, the majority of which will occur in its FY 09 Q4, and that it believes the annualized benefit resulting from these actions will exceed the charge.

Boeing (BA) posts $0.08 fourth quarter loss, vs. $1.36 EPS, on 27% revenue drop. It says current quarter results reflect now-settled machinists' strike (EPS impact estimated at $1.09/share), charge related to 747 ($0.61/share), litigation-related reserve ($0.09/share). Sees $68-$69 billion 2009 revenue, $5.05-$5.35 EPS. Notes guidance continues to assume stable delivery levels for in-production commercial airplanes over the next several years, but also considers op., market risks. Expects to issue 2010 guidance later in the year.

AT&T (T) posts $0.41, vs. $0.51, fourth quarter EPS as higher expenses offset 2.4% rise in revenues; fourth quarter adjusted EPS were $0.64, vs. $0.71. See 2009 consolidated revenue growth in low single-digit range, led by gains in wireless and IP data services, stable reported consolidated earnings and margins excluding pension and retiree benefit costs. Sees about $0.19 of incremental noncash pressure to 2009 reported EPS due to increased expenses related to pension and retiree benefits.

SAP AG (SAP) posts €0.72, vs. €0.62 fourth quarter EPS from continuing operations (basic, US GAAP) on 8.5% rise in revenue. Sees 2009 non-GAAP operating margin, which excludes a non-recurring deferred support revenue write-down from the acquisition of Business Objects of about €9 million and acquisition-related charges, to be in range of 24.5%-25.5% at constant currencies.

Wells Fargo & Co. (WFC) posts $0.79 fourth quarter loss (includes items), vs. $0.41 EPS, on 3.8% revenue drop, addition of $8.1 billion to credit reserves, including a $3.9 billion provision to conform reserve practices of both Wachovia and WFC. Says it has no plans to request additional TARP capital.

Websense (WBSN) posts $0.31, vs. $0.28, non-GAAP EPS on flat revenues. Sees Q1 2009 billings growth in low single-digits vs. year ago; expects trend of modest sequential declines in revenue to continue in H1 '09, with revenue growth resuming in H2. It sees $1.20-$1.30 '09 non-GAAP EPS. S&P notes fourth quarter operating EPS of $0.23 vs. $0.21 is $0.02 below its estimate; maintains hold.

Amylin Pharmaceuticals (AMLN) posts $0.76 second quarter GAAP loss vs. $0.57 loss on 8.8% total revenue decline. Posts non-GAAP loss of $0.36. Sales of co.'s Byetta declined 7.7%. Reportedly says it will not provide a revenue outlook for 2009.

United Technologies (UTX) says Lufthansa has selected International Aero Engines (IEA) consortium to power a new order for 20 firm Airbus A321's plus options with the V2500 SelectOne engine. Notes contract is valued at more than $283 million to UTX's Pratt & Whitney (PW) unit, if all options are exercised, as P&W is a major participant in IAE.

General Dynamics (GD) posts $1.62, vs. $1.42, fourth quarter EPS from continuing operations on 5.3% revenue rise. Says given strength of its performance in 2008, its record backlog going into the new year, expects 2009 EPS to be in the range of $6.70-$6.75.

Black Box (BBOX) posts $0.88, vs. $0.85, fourth quarter non-GAAP EPS on 1% higher revenue. On GAAP basis, posts $0.56 vs. $0.64 EPS. For fiscal year 2009, it sees revenues of $990 million to $1 billion and operating EPS of $3.25-$3.30.

McCormick & Co. (MKC) posts $0.84, vs. $0.75, fourth quarter adjusted EPS on 9% sales rise. Sees $2.24-$2.28 2009 EPS on 9%-11% sales growth.

General Electric (GE) - Moody's Investors Service says it is reviewing for possible downgrade the long-term AAA credit rating on GE, citing increased uncertainty over General Electric Capital's (GECC) asset quality and future earnings performance.

Total System Services (TSS) posts $0.34, vs. $0.23, fourth quarter EPS on 7.6% revenue rise. Says unexpected strengthening of US$ in fourth quarter resulted in a decrease related to the translation of foreign currency denominated financial statements of $0.02 for fourth quarter. Sees 2009 revenue of $1.939-$1.97 billion (flat to +2%), net income of $243-$250 million (flat to -3%). S&P maintains hold.

Legg Mason (LM) posts $10.55 third quarter loss, vs. $1.07 EPS, on 39% revenue drop. Says third quarter loss resulted from: non-cash goodwill, intangible asset impairment charges in Wealth Management division of $1.2 billion, representing $850.7 million net of income taxes, or $6.03/ share; loss of $842.1 million, representing $512.4 million net of operating expense reductions, income taxes, or $3.63/share, as result of previously announced sale of Axon Financial SIV securities; other charges of $279.3M, or $1.23/share.

Diamond Food (DMND) sees second quarter EPS of $0.29-$0.34, $0.05 above the company's previous guidance. Also raises fiscal year 2009 EPS guidance by $0.05 to $1.25-$1.32 on the strength of improving gross margins, which are now expected to be more than 400 basis points above the prior year's level.

BE Aerospace (BEAV) expects to record fourth quarter non-cash, after-tax charge of about $300 million for impairment of goodwill. Estimated impairment charge is primarily driven by adverse equity market conditions that caused a decrease in current market multiples and BEAV's stock price as of Dec. 31, 2008. Company sees fourth quarter 2008 revenues and operating EPS to increase by about 14%, 34%, respectively, to about $527 million and $91 million, respectively, vs. 2007. Exclusive of the effects of the non-cash goodwill impairment charge, sees fourth quarter EPS of about $0.47.

Molex (MOLX) posts $0.50 second quarter loss, vs. $0.33 EPS, on 21% revenue decline, narrowed gross margin. Orders fell 35% year-over-year. Sees third quarter revenue of $500-$570 million; given wide range of potential revenue and difficulty in quantifiscal yearing impact of product mix on overall margin, MOLX says it will not provide EPS outlook at this time. S&P keeps hold; cuts estimates.

Sun Microsystems (JAVA) posts $0.28 second quarter GAAP loss, vs. $0.32 EPS, on 11% revenue decline, narrowed gross margin. Includes charge of $222 million primarily related to restructuring announcement of November 2008. Posts $0.15 vs. $0.50 non-GAAP EPS. Street was looking for $0.10 loss.

Stryker (SYK) posts $0.74, vs. $0.66, fourth quarter adjusted EPS from continuing operations on 3.6% sales rise. Maintains guidance of $3.12-$3.22 2009 EPS on constant currency net sales increase of 6%-9%.

CV Therapeutics (CVTX) confirms it received unsolicited proposal from Astellas Pharma on Nov. 13, 2008, to acquire CVTX at $16.00 per share. CVTX says, after careful deliberation its board had, on Nov. 21, '08, concluded that the Astellas proposal was not in the best interests of CVTX, its stockholders. Notes because Astellas, by its recent announcement, has sought to revive its previously rejected proposal, CVTX's board will again review developments in the context of the company's strategic plans, long-term interests of its stockholders.

Warner Chilcott Limited (WCRX) sees 2009 revenue of $1.015-$1.025 billion, primarily driven by Loestrin 24 FE, Doryx, and Taclonex, cash EPS of $1.55-$1.60. Gross profit margin, as a percentage of total revenues, is anticipated to be 79%-80%. Street EPS view is $1.57.


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