Marketwatch: Goldman Sachs, Circuit City, Tempur-Pedic

SAN FRANCISCO – Among the companies whose shares are expected to see active trade in Tuesday's session are Circuit City Stores, Entergy, FactSet Research, Goldman Sachs, Pfizer, Tempur-Pedic and Tenet Healthcare.

Circuit City Stores Inc. (CC) said it swung to a second-quarter profit of $1.3 million, or 1 cent a share, from a year-ago loss of $11.9 million, or 6 cents. Sales for the three months ended Aug. 31 rose to $2.56 billion from $2.38 billion in last year's second quarter, while same-store sales, or sales from stores open at least a year, gained 5.3%. Analysts were looking for a loss, on average, of 3 cents a share and sales of $2.44 billion, according to Thomson First Call. For fiscal 2006, the Richmond, Va.-based consumer electronics retailer now sees sales growth of 5% to 8%, up from its prior expectation of a 3% to 6% increase.

Electric power distributor Entergy Corp. (ETR) said it sees between $750 million and $1.1 billion in restoration costs from Hurricane Katrina and warned Entergy New Orleans may have to file for bankruptcy. By last night, Entergy had restored power to approximately 874,000 of the 1.1 million customers who lost power at the peak of the storm. Some customers in the most devastated areas of greater New Orleans and surrounding parishes, estimated to be in the range of 150,000 to 170,000, are unable to accept electric and gas service, and therefore cannot be restored at the current time, it said.

FactSet Research (FDS) reported fiscal fourth-quarter earnings of $18.6 million, or 37 cents a share, up from $14.7 million, or 30 cents a share in the year-earlier period, and above the average analyst estimate compiled by Thomson First Call of 36 cents a share. Revenue rose to $82.8 million from last year's $67.7 million, topping analyst forecasts of $81.1 million. Subscriptions grew 23% to $336.5 million. For its fiscal first quarter, the provider of financial and economic information expects revenue of $88 million to $90 million, which is above analyst projections of $83 million.

Goldman Sachs (GS) said its third quarter profit hit a record $1.62 billion, or $3.25 a share, driven by the best performance in four years in its investment banking business. Goldman's total revenue rose 81% to $12.3 billion from last year's $8.9 billion. According to analysts polled by Thomson First Call, the average estimate for the fiscal third quarter earnings was $2.38 a share. Goldman said its investment banking revenue rose 14% compared to year ago levels, to just over $1 billion from $890 million a year ago.

Pfizer Inc. (PFE) said it received a non-approvable letter from the U.S. Food and Drug Administration regarding its injectable pain treatment parecoxib sodium. Pfizer said it disagrees with the FDA's conclusions, as it is already widely available worldwide, and plans a meeting to discuss the agency's concerns.

Tempur-Pedic International Inc. (TPX) lowered its 2005 earnings forecast to $1.04 to $1.06 a share on net sales of $845 million to $855 million. The Lexington-based company previously forecast 2005 earnings of $1.08 to $1.11 a share on net sales of $880 million to $890 million. Tempur-Pedic also lowered its 2005 pro forma earnings forecast to $1.05 to $1.07 a share from $1.10 to $1.13 a share. The mattress and pillow maker expects third-quarter earnings of 21 cents to 22 cents a share on net sales of $203 million to $207 million.

Tenet Healthcare (THC) said five of its hospitals in the New Orleans area and one hospital in Mississippi suffered considerable damage from Hurricane Katrina and that the flood damage may not be covered by the company's insurance. Tenet said all but one of the hospitals required complete evacuation. The company said that it expects to incur significant costs from Katrina, but it has not yet determined what the full impact of the storm was. To minimize the financial consequences of possible flood limits in its insurance policies, Tenet said it is pursuing a purchase of a reinstatement of flood limits with its carriers or it may buy replacement insurance.

Watch list

American Financial Group Inc. (AFG) estimated its after-tax Hurricane Katrina-related loss at $20 million. Despite the loss, the Cincinnati-based insurance and financial services company said it believes its 2005 earnings forecast of $3.40 to $3.70 a share "remains achievable."

Armor Holdings Inc. (AH) said it received an extension to a prior contract with the Philadelphia Defense Supply Center worth $17.2 million for tactical vests. The contract also was modified to include additional options up to about $48.2 million for goods in 2006 and 2007.

Ceradyne Inc. (CRDN) it has won orders totaling $14.6 million to supply the U.S. Army with lightweight ceramic armor systems. One order, worth about $12 million, is to supply armor systems to certain U.S. fighting units. A second order totaling $2.6 million was received from the U.S. Marine Corps. Shipments are expected to start in October 2005 and be completed by August 2006.

Lehman Brothers downgraded Coca-Cola Enterprises (CCE) to equal weight from overweight, citing cost inflation resulting from the recent rise in energy prices. The broker also said volume growth is likely to be sluggish and more volatile as bottlers and retailers use pricing to cover some of these cost pressures.

Lehman Brothers cut soft-drink bottler Cott Corp. (COT) to underweight from equal weight, citing an onerous cost environment and top-line challenges that could result in margin contraction and lower profit.

Cyberonics Inc. (CYBX) said that it plans to offer $125 million of its convertible senior subordinated notes due 2012. The marketed range for the interest rate on the notes is expected to be 2.5% to 3%, it said. Cyberonics plans to use a portion of proceeds to buy back up to $20 million of its shares.

Estee Lauder Cos. Inc. (EL) reaffirmed its sales and earnings forecast for fiscal full-year 2006, and revised its outlook for first-half results. The company said it sees first-quarter 2006 net sales growing in the low-single digits in constant currency, and first-quarter net earnings significantly below the prior-year period. The company expects net sales for the first half of fiscal 2006 to grow between 5% and 6% in constant currency, compared with its previous forecast of between 7% and 8%. Estee Lauder also forecast per-share earnings for the first half of fiscal 2006 of 87 cents and 92 cents, including stock-based compensation expensing.