US HOT STOCKS: New York Times, Peabody Energy, Sprint
By Daniel at 24 October, 2008, 12:23 pm
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Among the companies being actively trading in Friday’s session are Celestica Inc.
(CLS), Developers Diversified Realty Corp. (DDR) and VCA Antech Inc. (WOOF).
Celestica ($4.29, $0.63, 17.21%) posted weaker quarterly results, but earnings
excluding items topped analysts’ expectations for the third-party electronics
manufacturer.
Developers Diversified Realty ($10.92, $2.42, 28.47%) will sell 13 properties to
an unnamed joint venture, cancel its fourth-quarter dividend and slash its 2009
dividends as the debt-ridden shopping-center developer attempts to boost its
balance sheet. The moves come a week after as the real-estate investment trust
disclosed moves intended to ease investor worries about the company, which has
watched its stock tumble 74% this month amid liquidity and other concerns.
VCA Antech Inc.’s ($17.11, -$3.75, -17.98%) third-quarter net income rose 11% as
the animal health-care company increased revenue, but the company lowered this
year’s earnings forecast amid demand declines.
PNC Financial Services Group Inc. (PNC, $58.99, $2.11, 3.71%) will acquire Ohio
bank National City Corp. (NCC, $2.14, -$0.61, -22.18%) in a $5.58 billion
cash-and-stock deal that makes the regional bank, which had been crippled by bad
real-estate loans, the latest bank in the credit crisis to fall into the hands of
a stronger rival. PNC also said it could raise up to $1 billion in new capital
from selling common shares. Meanwhile, fellow Ohio-based bank Fifth Third Bancorp
(FITB, $9.64, -$1.68, -14.84%) also fell, on a downgrade.
Other financial stocks fell broadly Friday as fears about a global economic
recession and forced selling by hedge funds weighed on the beaten-down group.
Among the top decliners were Morgan Stanley (MS, $16.65, -$1.43, -7.91%), Credit
Suisse Group (CS, $35.53, -$2.65, -6.94%), Goldman Sachs Group Inc. (GS, $99.10,
-$9.48, -8.73%) and Bank of America Corp. (BAC, $21.22, -$1.78, -7.74%).
Avis Budget Group Inc.’s (CAR, $1.13, -$0.22, -16.30%) credit ratings were cut
further into junk territory by Standard & Poor’s Ratings Service amid a weak
earnings outlook and concerns over what price a $1.5 billion refinancing needed
in the next week takes place.
Idexx Laboratories Inc.’s (IDXX, $31.75, -$5.48, -14.72%) third-quarter net
income fell 0.4% as international revenue grew. The maker of animal-health
products company lowered its 2008 outlook and issued a 2009 view below analysts’
expectations.
Moody’s Investors Service is considering cutting its credit ratings on XL Capital
Ltd. (XL, $7.29, -$0.99, -11.96%) and its insurance units following the company’s
recent warning of a $1.6 billion to $1.7 billion third-quarter loss.
Timken Co.’s (TKR, $14.69, -$3.98, -21.32%) third-quarter net income more than
tripled amid price hikes and an inventory gain that was recorded earlier than
expected. The maker of ball bearings, steel components and motion-control systems
raised the low end of last month’s boosted 2008 profit view.
Other Stocks In Focus
Align Technology Inc. (ALGN, $5.74, $0.74, 14.80%), provider of the Invisalign
teeth-misalignment treatment, said it was cutting an additional 7.9% of its work
force and projected higher-than-expected third-quarter profits.
Struggling insurance giant American International Group (AIG, $1.81, -$0.29,
-13.81%) has already used up three-quarters of a $123 billion government rescue
loan, the Washington Post reported Friday. Meanwhile, U.K. insurance company
Prudential PLC (PUK, $9.37, -$1.26, -11.85%) might buy parts of AIG beyond its
Asia operations, according to media reports.
Avis Budget Group Inc. (CAR, $1.13, -$0.22, -16.30%) saw its credit ratings cut
further into junk territory by Standard & Poor’s Ratings Service amid a weak
earnings outlook and concerns over the pricing of a $1.5 billion refinancing
needed in the next week.
CNA Surety Corp. (SUR, $11.71, -$1.12, -8.73%) reported a 23% jump in
third-quarter net income as the surety and fidelity-bond provider benefited from
revisions to prior-year loss reserves that helped offset lower net written
premiums. Despite the improved loss activity, Chief Executive John F. Welch said
the company increased its loss provision for the current accident year to reflect
economic conditions.
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Columbia Sportswear Co.’s (COLM, $33.25, $2.21, 7.12%) quarterly net income
slipped 6.8% amid a difficult retail environment, but the active apparel retailer
boosted its 2008 profit target.
Retailers fell generally in line with the broader market as recession realities
hit and as companies head into what’s expected to be the worst holiday shopping
season in years. Dillard’s Inc. (DDS, $3.37, -$0.55, -14.03%), Gamestop Corp.
(GME, $25.74, -$1.33, -4.91%) and Nordstrom Inc. (JWN, $15.83, -$1.05, -6.22%)
were among the worst hit.
Exelon Corp.’s (EXC, $48.13, -$1.75, -3.51%) third-quarter net income fell 10%
amid increased operating and maintenance costs, including an increase in
uncollectible accounts at the power company’s Commonwealth Edison unit. The
nuclear power company now expects 2008 earnings to be “near the bottom” of its
outlook.
Real-estate investment trust Friedman Billings Ramsey Group Inc. (FBR, $0.42,
-$0.05, -10.62%) posted a narrower fiscal first-quarter loss and said it is
considering a sale of the company.
Gannett Co.’s (GCI, $9.12, -$0.52, -5.39%) third-quarter net income slid 32% as
revenue and margins fell and the broadcaster and newspaper publisher grappled
with “significantly higher” newsprint prices and unfavorable foreign-exchange
rates. The company also has temporarily halted its share-buyback program amid the
global financial crisis and said it will discuss its dividend.
Cerberus Capital Management LP would look to retain a “meaningful stake” in the
company that would emerge from a combined Chrysler LLC and General Motors Corp.
(GM, $5.27, -$0.83, -13.61%), and would likely push to breathe “fresh air” into
its top management, people familiar with the matter told The Wall Street Journal.
Hansen Medical Inc.’s (HNSN, $8.07, $1.29, 19.03%) third-quarter loss widened on
higher costs, but shares rose 11% in after-hours trading as results beat Wall
Street’s estimates.
Ingersoll-Rand Co.’s (IR, $17.02, -$1.12, -6.17%) third-quarter net income fell
15% amid weakening sales despite a revenue boost from its $10.1 billion Trane
acquisition. The maker of climate control, industrial and security products
reaffirmed its earnings outlook for the full year.
Juniper Networks Inc. (JNPR, $17.01, -$0.82, -4.60%) reported its third-quarter
net income jumped 75% as the company’s chief executive said he was “cautiously
optimistic” about the near term. The high-end networking switch maker also raised
its fiscal 2008 profit guidance modestly to a range of $1.17 to $1.20 a share.
Still, shares fell with other technology companies after another round of
warnings over a tightening IT spending environment.
Liz Claiborne Inc. (LIZ, $7.11, -$0.19, -2.60%) said it will post a third-quarter
net loss because of restructuring charges as it cut its 2008 earnings view again
because of projected end-of-year weakness and will curtail capital spending this
year and next. The apparel maker added if current trends deteriorate further, it
may further cut the guidance.
Semiconductor wafter maker MEMC Electronic Materials Inc. (WFR, $19.32, $1.54,
8.66%) reported its third-quarter net income rose 21% on sales growth of 15%.
Meanwhile, memory chips makers led other semiconductors down amid a broader
selloff after Samsung Electronics Co. issued a gloomy demand outlook. DRAM memory
maker Micron Technology Inc. (MU, $3.71, -$0.21, -5.36%), Qimonda AG (QI, $0.48,
-$0.10, -17.24%) dropped, while flash memory makers Spansion Inc. (SPSN, $0.54,
-$0.11, -16.92%) and SanDisk Corp. (SNDK, $8.33, -$0.81, -8.86%) also declined.
Oil futures fell as poor demand overpowered an OPEC cut, causing energy companies
to decline. National Oilwell Varco Inc. (NOV, $23.99, -$2.79, -10.42%), which had
its stock-investment rating downgraded by JPMorgan due to risk short term, was
one of the top decliners. Transocean Inc. (RIG, $63.81, -$8.01, -11.15%) and
Noble Corp. (NE, $25.12, -$2.62, -9.44%) also slid.
Click here to go to Dow Jones NewsPlus, a web front page of today’s most
important business and market news, analysis and commentary:
http://www.djnewsplus.com/al?rnd=7M4aS1rE8qLXeI8Zfy29Mw%3D%3D. You can use this
link on the day this article is published and the following day.
Nektar Therapeutics (NKTR, $4.24, -$0.18, -4.07%) said it saw positive data from
an early-stage trial for its lead cancer drug candidate, which is now in Phase 2
clinical development.
Standard & Poor’s Ratings Services cut its corporate credit rating on New York
Times Co. (NYT, $9.56, -$1.14, -10.65%) three notches into junk status Thursday
after fellow ratings agency Moody’s Investors Service said earlier that it might
make a similar move. The owner of the Boston Globe and New York Times also
reported Thursday its net income fell 51% and it will consider cutting its
dividend.
Peabody Energy (BTU, $28.72, -$1.82, -5.96%) doubled the size of its
three-year-old stock-buyback plan to $1 billion as it looks to take advantage of
a slumping stock that has lost half its value this year.
Pulte Homes Inc. (PHM, $8.67, $0.56, 6.91%) regained some recent losses spurned
by Wednesday’s weak earnings report and Thursday’s comments about the industry’s
cash flow generation dropping in 2009. Fellow homebuilders D.R. Horton Inc. (DHI,
$5.45, $0.32, 6.24%) and Hovnanian Enterprises Inc. (HOV, $3.84, $0.08, 2.13%)
also gained as September existing home figures were better than expected and
inventory decreased. Builders hope once inventory overhang clears, new home sales
will pick up.
Sprint Nextel Corp. (S, $3.21, -$0.27, -7.76%) appointed Sven-Christer Nilsson to
its board, replacing Ralph V. Whitworth, who resigned. Whitworth had joined the
board in February saying he would push for dramatic changes.
Zimmer Holdings Inc. (ZMH, $40.16, -$4.53, -10.14%), which lowered its full-year
outlook Wednesday, saw its stock investment rating cut by a couple firms amid its
third-quarter earnings results and outlook for the coming year.
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