- 19Oct
U.S. stocks fell Monday as the Dow Jones Industrial Average declined 160 points to 10983, the S&P 500 fell 18 points to 1167 and Nasdaq Composite declined 51 points to 2430. Among the companies whose shares are actively trading in the session Apple Inc. (AAPL), International Business Machines Corp. (IBM) and Massey Energy Co. (MEE).
Apple's (AAPL, $306.73, -$11.27, -3.54%) fiscal fourth-quarter profit surged 70% as the company posted strong iPhone and Mac computer sales that pushed revenue above $20 billion for the first time. However, the company's shares slipped as gross margins and iPad sales numbers failed to meet analyst expectations.
IBM's (IBM, $137.59, -$5.24, -3.67%) third-quarter profit jumped 12% as the tech giant benefited from higher revenue and reported strong demand in growth markets. The company also said it expects earnings this year to rise to "at least" $11.40 a share, its third increase to the projection. But shares slipped after setting a new all-time high in Monday's session amid concerns about weakness in new business signings for services. JPMorgan said it expected "a temporary pit stop" in the shares but added "the levers are in place to drive long-term stock appreciation from current levels."
Massey Energy ($38.80, +$3.24, +9.11%), the nation's sixth-largest coal miner, is exploring strategic alternatives, including a possible sale, people familiar with the matter told the Wall Street Journal.
Parker Hannifin Corp. (PH, $75.89, +$3.47, +4.79%) posted a record fiscal first-quarter profit on better-than-expected revenue as margins improved significantly. The maker of hydraulic gear and motors also raised its earnings forecast as results handily topped analysts' expectations.
Capital One Financial Corp.'s (COF, $38.90, +$1.67, +4.49%) third-quarter profit more than doubled as revenue jumped and loan-loss provisions declined sharply from a year ago.
Other Stocks In Focus:
American Electric Power (AEP, $36.90, +$0.57, +1.57%) is looking at ways to contract coal for its power generating operations given regulatory concerns and the natural gas production, said Nick Akins, the company's executive vice president of generation. Speaking at American Electric Power's analyst conference day in New York Akins did not say how those contracts could be structured. The company is seeking to replace 5,000 MW of coal power generation and further production can be switched depend on regulations.
Barclays Capital initiated coverage on LED companies Cree Inc. (CREE, $53.49, -$2.07, -3.73%) and Veeco Instruments (VECO, $38.38, -$0.69, -1.75%). The firm gave Cree an equal weight rating and Veeco an overweight rating, citing concerns about LED BLU demand for TVs, a pause before an increase in general lighting, and the negative impact of the anticipated capacity on pricing and margins.
Bank of America Corp. (BAC, $12.11, -$0.23, -1.87%) announced that its third-quarter loss widened, though adjusted results topped analysts' views. But it wrote off $10.4 billion related to its credit-card unit, which was at the high end of what the bank projected in July, and reported sharply lower revenue from banking fees over last quarter.
BlackRock Kelso Capital Corp. (BKCC, $11.75, -$0.94, -7.41%) announced plans to sell at least 6 million shares, raising capital to make investments and repay debt.
Cerberus Capital Management LP pulled its bid to buy the minority stake in BlueLinx Holdings Inc. (BXC, $3.38, -$0.58, -14.67%), going through with its threat to walk away if support for it didn't grow.
Brown & Brown Inc.'s (BRO, $21.21, +$0.47, +2.27%) third-quarter earnings rose 8.1%, surprising Wall Street's expectations for a slim decline, as the insurance agency and brokerage firm booked higher sales on lower costs.
CBS Corp. (CBS, $17.11, -$0.38, -2.17%) had a modest response to its a tender offer for up to $250 million of debt that matures in 2012. The broadcaster said that $259.5 million, or 35%, of the notes were tendered and not withdrawn as of the early deadline of 5 p.m. EDT Monday.
Coldwater Creek Inc. (CWTR, $3.49, -$1.88, -34.98%) projected fiscal third-quarter results below already-cautious expectations, saying same-store sales have slumped nearly 20%.
Domino's Pizza Inc.'s (DPZ, $15.24, +$0.61, +4.17%) sales continued to surge due to its revamped pizza recipe and heavier advertising levels, as third-quarter earnings exceeded expectations. Domino's, whose third-quarter profit fell 6.9% following prior-year gains, saw same-store sales jump 11.7% at U.S. stores, which continue to benefit from a rollout late last year of a new pizza recipe and subsequent advertising campaign offering two medium, two topping pizzas for $5.99 each.
Goldman Sachs Group Inc.'s (GS, $156.09, +$2.39, +1.55%) third-quarter earnings declined a less-than-feared 40% as the giant investment bank's revenue fell 27%. Investment banking results helped make up for weaker trading, though trading still carried the quarter, contributing 71% of the firm's overall net revenue.
Hanger Orthopedic Group Inc. (HGR, $17.17, +$0.58, +3.50%) signed a deal to acquire Accelerated Care Plus, a provider of rehabilitation technologies, for $155 million in cash and also announced preliminary third-quarter earnings that slightly topped Wall Street estimates.
Harley-Davidson Inc.'s (HOG, $31.04, -$1.46, -4.48%) third-quarter profit more than tripled as its financial-service business swung to a profit. But motorcycle sales decreased and thhe company lowered its capital expenditures view for the year.
Hotel owner Hersha Hospitality Trust (HT, $6.00, -$0.24, -3.85%) said it plans to sell at least 21 million shares in its third stock sale this year. The sale would increase the real estate investment trust's outstanding shares by about 15%.
Infinera Corp. (INFN, $8.01, -$4.32, -35.04%) swung to a third-quarter profit on a sharp increase in revenue, but its fourth-quarter guidance fell far short of Wall Street's expectations. The communications-gear maker also said Chairman Jagdeep Singh notified it last week that he is resigning from that post and as a director, effective immediately, to pursue his next ventures.
In unexpected move affecting the wound-care sector, the federal court in Texas rendered Kinetic Concepts Inc. (KCI, $35.14, -$2.96, -7.77%) patent claims on patents it licensed from Wake Forest University invalid. This involves a big case Kinetic Concepts has against Smith & Nephew PLC (SNN, $43.08, -$1.11, -2.51%) -- concerning vacuum-pressure wound systems where Kinetic is the heavyweight and Smith & Nephew is the challenger. Kinetic appeared to win the case in March when the jury decided Smith & Nephew infringed upon two Kinetic patents. This new ruling effectively overturns the jury's decision.
Lincare Holdings Inc.'s (LNCR, $25.63, -$1.83, -6.66%) third-quarter profit climbed 26% on improved revenue and margins, but the oxygen-equipment provider increased its bad-debt allowance 86% because more customers are unable to pay because of job or insurance losses.
Lockheed Martin Corp.'s (LMT, $68.26, -$1.78, -2.54%) third-quarter profit dropped 28% as a charge related to an executive buyout program weighed on the bottom line, masking a rise in revenue. The defense contractor also lowered its outlook for the year--incorporating items such as the lack of sales from a business it plans to divest and a pension contribution.
McClatchy Co.'s (MNI, $3.35, -$0.07, -2.05%) third-quarter profit fell 49% on a prior-year gain related to tax-rate adjustments, as revenue and margins decreased. The owner of the Sacramento Bee and the Miami Herald, like many others in the newspaper industry, has seen declines in advertising revenue slow in recent quarters. In the third quarter, the company recorded an bigger-than-expected 6.4% decrease, following a 28% slump a year earlier and an 8% decline in the second quarter. The company had expected a low-single digit drop for the third quarter.
MGIC Investment Corp.'s (MTG, $9.83, +$0.26, +2.72%) third-quarter loss narrowed more sharply than analysts expected as claims losses plunged. The biggest mortgage insurer for both Fannie Mae (FNMA, $0.39, -$0.03, -7.63%) and Freddie Mac (FMCC, $0.41, -$0.02, -5.03%) returned to the red after posting a surprise second-quarter profit--its first in three years--in July because of plunging claims costs. It has struggled mightily amid high delinquencies and defaults.
Occidental Petroleum Corp.'s (OXY, $83.49, -$1.96, -2.29%) third-quarter earnings rose 28%, beating analysts' estimates, as the company benefited from higher commodity prices and reported record production. But production in California, considered a key area for future growth, slipped 2% compared with the second quarter given issues at a legacy plant.
NuPathe Inc. (PATH, $7.20, +$1.18, +19.60%) said a yearlong study showed its experimental Zelrix migraine patch was shown to relieve migraine headache pain in a majority of incidences.
OncoGenex Pharmaceuticals Inc. (OGXI, $16.49, -$2.26, -12.05%) announced a public offering of common stock and warrants, the net proceeds of which will be used to advance its product pipeline as well as for general corporate purposes. The size of the offering wasn't disclosed.
Opto Circuits Ltd. has reached a deal to buy cardiology device maker Cardiac Science Corp. (CSCX, $2.28, +$0.18, +8.57%) for about $54.6 million. Opto Circuits Chairman and Managing Director Vinod Ramnani said the deal helps his company venture into the noninvasive diagnostic monitoring and "high-growth" automated external-defibrillation markets.
Packaging Corp. of America's (PKG, $23.70, -$0.65, -2.67%) third-quarter profit improved 28% on strong demand for corrugated products and on higher pricing, while mills ran smoothly and allowed the company to replenish inventories. The company forecast fourth-quarter earnings above analysts' estimate. But it warned wood and energy costs are expected to be higher with colder weather and said recycled costs have begun to trend higher.
Shares of ResCare Inc. (RSCR, $13.21, -$0.49, -3.58%) slumped after the home care company failed to solicit new acquisition proposals to counter an offer from Toronto-based investment firm Onex Corp.
State Street Corp.'s (STT, $40.02, -$1.19, -2.89%) third-quarter earnings jumped 65% as the institutional money-management company benefited from strong servicing-fee revenue growth and cost controls that resulted in a 12% decline in overhead costs. Management fees in the advisory business were down slightly and Cheif Executive James Hooley acknowledged the low level of interest rates worldwide continues to create headwinds.
Steel Dynamics Inc.'s (STLD, $14.16, -$0.39, -2.68%) third-quarter profit sank 73% on a steep drop in margins as steel prices fell even further than scrap prices.
Supervalu Inc. (SVU, $11.33, -$1.07, -8.63%) swung to a fiscal second-quarter loss, and adjusted results fell short of analysts' estimates, as the company posted a $1.6 billion write-down related to a labor dispute.
Transcept Pharmaceuticals Inc. (TSPT, $6.76, +$0.15, +2.27%) said a new study shows its Intermezzo insomnia medicine has no significant effect on highway driving performance as the company plans to resubmit the drug in the first quarter for review by the U.S. Food and Drug Administration.
United Online Inc. (UNTD, $5.82, -$0.18, -3.00%) said it may be subject to governmental investigations or other legal actions in connection with its former post-transaction sales practices. It said it had received subpoenas from the attorneys general for Kansas and Maryland relating to units FTD.com Inc. and Classmates Online Inc.
VMware Inc.'s (VMW, $71.45, -$6.90, -8.81%) third-quarter profit more than doubled and revenue topped the company's bullish expectations as it benefited from the growing trend of virtualization and cloud computing. But the company's overall bookings disappointed investors.
Weatherford International Ltd.'s (WFT, $17.42, -$1.00, -5.43%) third-quarter earnings surged 87% as the oilfield-services company reported that revenue from its North America operations soared. However, total revenue fell short of analysts' expectations as decreased project volume in Mexico weighed on international performance.
Werner Enterprises Inc.'s (WERN, $20.54, -$0.58, -2.75%) third-quarter earnings grew 27% as the trucking company reported higher revenue due to improved freight market trends, although it warned of sequential weakness.
