Stocks to Watch, April 18: Boston Scientific, Merrill Lynch and Symantec
SAN FRANCISCO – Among the companies whose shares are expected to see active trade in Tuesday's session are Boston Scientific Corp., International Business Machines, Merrill Lynch & Co. and Symantec Corp.
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Boston Scientific (BSX) is expected to report a first-quarter profit of 46 cents a share, according to analysts polled by Thomson First Call.
IBM (IBM) is seen posting earnings of $1.05 a share for the first quarter.
Jefferies Group Inc. (JEF) first quarter is expected to show a per-share profit of 64 cents.
Johnson & Johnson (JNJ) is expected to report 98 cents share in first-quarter earnings.
Mattel Inc.'s (MAT) first quarter is expected to show a per-share profit of a penny.
Merrill Lynch (MER) is expected to report first-quarter income of 32 cents.
Wells Fargo & Co. (WFC) is seen reporting a per-share profit of $1.20 for the first quarter.
Texas Instruments Inc. (TXN) is expected to report earnings of 32 cents a share for the first quarter.
Yahoo Inc. (YHOO) is expected to post first-quarter earnings of 11 cents.
After Monday's closing bell, Symantec Corp. (SYMC) disclosed in a Securities and Exchange Commission filing it has received notice from the Internal Revenue Service claiming that it owes $1 billion in additional taxes, mostly related to Veritas Software Corp., the storage-software firm it acquired for more than $10 billion last July. See full story.
Adtran Inc. (ADTN) said first-quarter net income was $16.3 million, or 21 cents a share, compared with $15.2 million, or 20 cents a share, during the same period in the prior year. On a pro forma basis, Adtran's quarterly per-share income was 23 cents. Analysts were looking for a per-share result of 21 cents. Adtran said first-quarter revenue was $108.6 million, compared with $104.6 million in the prior year. Analysts were looking for revenue of $114 million.
Direct mail services provider Advo Inc. (AD) expects fiscal second-quarter earnings in the range of 16 cents a share to 18 cents a share, on revenue of $355 million. Analysts were expecting a profit of 33 cents a share on revenue of $358.5 million. Advo said results in the quarter were impacted by softness in its zone product category, among other factors. Advo also said it has entered into a joint preprint insert distribution agreement with the Los Angeles Times and MediaNews Group's LANG newspapers. After the program begins in August, Advo says it will realize annual savings in the low double-digit millions.
Berkshire Hathaway Inc. (BRKA) , the insurance-focused conglomerate run by billionaire Warren Buffett, has agreed to buy sports clothing maker Russell Corp. (RML) for $18 a share in cash. The purchase price is a 35% premium over Russell's closing price of $13.30 on Monday and values the company at $598.3 million. The deal is expected to close in the third quarter of 2006, Berkshire added. "Russell will be better positioned against our worldwide competitors in all three segments of our business and that includes apparel, sports equipment and athletic shoes," Jack Ward, Russell's chairman and chief executive officer, said in a statement. See full story
Calpine Corp. (CPNLQ) , facing severe financial constraints following its December 2005 bankruptcy, plans to take about $7.1 billion in one-time charges as part of its restructuring effort. The power generator expects to record about $5.5 billion in non-cash impairment charges in its 2005 results and another $1.6 billion in non-cash valuation allowances against deferred tax assets, to be reflected in its 2005 tax provision. See full story
Champion Enterprises Inc. (CHB) reported first-quarter net earnings of $13.6 million, or 18 cents a share, compared with $2.65 million, or 3 cents a share, during the year-ago period. Revenue at the Auburn Hills, Mich.-based factory-built home construction company rose 42% to $346.5 million from $244.3 million. Analysts had forecast first-quarter revenue of $326 million. Champion said its previous acquisitions of Highland Manufacturing Co. LLC and Calsafe Group Ltd. are expected to add to its 2006 results.
Cherokee Inc. (CHKE) proposed to acquire Mossimo Inc. (MOSS) for $8.50 a share. The offer consists of $6 a share in cash and $2.50 a share in Cherokee stock, and values Mossimo at $135 million. Cherokee, a licensor and brand management company, said it believes the transaction provides fair value to Mossimo shareholders and would immediately add to Cherokee's per-share earnings. Van Nuys, Calif.-based Cherokee is a marketer, licensor and manager of a variety of brands, including Cherokee, Sideout and Carole Little.
Cray Inc. (CRAY) is restating 2004 results, and plans to file its 2005 report, with restated 2004 results, this week. Cray said it is correcting a $3.3 million non-cash revenue error for 2004 that will widen the net loss to $207.4 million, or $2.49 a share, from the previously reported loss of $204 million, or $2.45 a share.
Crown Holdings Inc. (CCK) said first-quarter net income was $7 million, or 4 cents a share. During the same period last year, the company reported a net loss of $10 million, or 6 cents a share. The packaging products supplier said quarterly revenue was $1.58 billion, compared with $1.53 billion last year.
Digi International Inc. (DGII) said second-quarter net income was $2.57 million, or 11 cents a share, down from $8.8 million, or 37 cents a share, during the same period last year. The networking products company said quarterly revenue was $34.4 million, up from $29.3 million last year. Analysts had expected revenue of $34 million. For the third quarter, Digi expects revenue of $32.5 million to $37.5 million, and per-share income of 8 cents to 14 cents. Analysts are looking for revenue of $36 million.
Digital Recorders Inc. (TBUS) said the fourth-quarter net loss was $2.3 million, or 24 cents a share, compared with a net loss of $2.8 million, or 40 cents a share, during the same period in the prior year. The company added that quarterly revenue was $11.2 million, compared with $12.4 million in the prior year.
Exponent Inc. (EXPO) reported first-quarter net earnings of $3.82 million, or 43 cents a share, compared with $3.87 million, or 45 cents, during the year-ago period. Revenue at the Menlo Park, Calif.-based consulting firm rose to $42 million from $39.2 million. Earnings before interest, taxes, depreciation and amortization were $7.92 million vs. $7.51 million. Separately, Exponent said its board has approved a 2-for-1 stock split, subject to shareholder approval at the annual meeting on May 24. Upon the completion of the split, Exponent will have about 16.3 million shares of common stock outstanding, the company said. The board also approved a $35 million share buyback program.
Hologic Inc. (HOLX) has agreed to acquire Suros Surgical Systems Inc. for $240 million, plus a 2-year earn out. The closing consideration will consist of $132 million in cash and an additional $108 million payable, at the election of Hologic, in cash, Hologic shares or a combination of both. Suros Surgical is a privately held, Indiana-based manufacturer of minimally invasive surgical technologies focused on breast biopsy and tissue removal. Hologic said it expects 2006 sales related to the acquisition to be in excess of $40 million, and for the transaction to add to earnings in fiscal 2007, absent the amortization of intangibles related to the transaction.
Host Marriott Corp. (HMT) has changed its name to Host Hotels & Resorts Inc. In addition, the company said its common shares will begin trading on the New York Stock Exchange under the new ticker symbol, "HST," on Tuesday. Its Class C and Class E cumulative redeemable preferred stock will begin trading under the ticker symbols "HST Pr C" and "HST Pr E," respectively, the Bethesda, Md.-based lodging real estate company said.
Krispy Kreme Doughnuts Inc. (KKD) said it expects fourth-quarter revenue of $120 million, compared with $162 million during the same period in the prior year. The revenue decrease principally reflects lower average sales per store, a decrease in the quantity of company stores, lower sales to franchisees and lower royalties, Krispy Kreme said. See full story.
Microsoft Corp. (MSFT) said it has signed a formal agreement with Lenovo Group Ltd. (LNVGY) to reaffirm the companies' joint efforts for market development. The two companies will work together to promote the use and benefits of validly licensed Microsoft software products through joint sales, marketing and training programs in China and around the world, Microsoft said. Lenovo plans to pre-install Microsoft software on PCs manufactured by Lenovo that are sold in more than 65 countries and regions around the world, the company said. Lenovo expects to purchase Microsoft Windows software valued at about $1.2 billion over the next 12 months.
PPD Inc. (PPDI) reported first-quarter net earnings of $41.8 million, or 35 cents a share, up 27% from $32.9 million, or 29 cents a share, during the same period a year ago. Revenue at the Wilmington, N.C.-based pharmaceutical development company rose to $299.4 million from $244.1 million.
Regency Centers Corp. (REG) said it will likely be more profitable than it previously expected during the first quarter. Funds from operations in the period should come in at between 83 cents and 85 cents a share, up from a previous forecast of 75 cents to 80 cents a share, the real estate investment trust said in a statement. Funds from operations, or FFO, is a common measure of REIT performance that excludes gains or losses on the sale of assets and non-cash charges for depreciation. Regency said FFO for the full year 2006 should come in at between $3.78 and $3.86 a share, in line with its previous forecast. "The updated first-quarter guidance primarily reflects a favorable impact from earlier than expected development profits and termination fees," Regency explained.
Sharper Image Corp. (SHRP) earned $6.3 million, or 42 cents a share, in its fiscal fourth quarter — down significantly from the $16.4 million, or $1.01, it earned in the same period a year earlier. Revenue at the retailer came in at $263.7 million, a 12% slump, while total store sales fell 9% to $170 million and same-store sales tumbled 15%. The average estimate of analysts had been for the company to earn 43 cents a share on revenue of $261 million. Shares of Sharper Image ended the regular session down nearly 3% at $12.75.
Standard Management Corp. (SMAN) after Monday's closing bell reported a fourth-quarter net loss of $6.56 million, or 72 cents a share, compared with a net loss of $3.93 million, or 50 cents a share, during the year-ago period. The Indianapolis-based distributor of pharmaceutical products and services posted revenue of $14.1 million vs. $1.76 million.
SurModics Inc. (SRDX) after Monday's closing bell said it has licensed its advanced hydrophilic technology to Devax Inc. to provide the lubricious coating on a stent delivery system. Financial terms were not disclosed.
Universal Forest Products Inc. (UFPI) shares rose more than 6% in after-hours trading Monday. The company said first-quarter net income was $15.9 million, or 82 cents a share, up from $9.23 million, or 49 cents a share, during the same period last year. The wood and wood-alternative products company said quarterly revenue was $665.6 million, up from $537.2 million last year. Universal Forest now expects annual earnings growth of 15% to 20%, compared with its prior view of 10% to 15%.
Wendy's International Inc. (WEN) said Chairman, Chief Executive and President Jack Schuessler is retiring after 30 years with the restaurant operator. The Dublin, Ohio-based company said it has split the roles of chairman and chief executive, naming Chief Financial Officer Kerrii Anderson interim CEO and president and longtime board member James Pickett chairman. The board of Tim Hortons Inc. (THI) , of which 17.25% was spun off in an initial public offering last month, is expected to name Pickett as its chairman as well. Schuessler has agreed to consult with Wendy's for the next two years, the company said. See full story.