September 19, 2008

Movers: Morgan Stanley, WaMu, AIG, FedEx

CNBC reports that Morgan Stanley (MS) to begin official merger negotiations with Wachovia (WB) imminently. MS continuing efforts to raise capital from Chinese government. Earlier, CNBC reported Morgan Stanley CEO John Mack is committed to keeping MS independent. In addition to WB, MS has talked to Citigroup (C), foreign banks, according to the report. S&P maintains hold on Morgan and upgrades Wachovia to sell on valuation.

Washington Mutual (WM) shares seen higher on various media reports that firm has put itself up for sale. S&P maintains hold.

American International Group (AIG) - Standard & Poor's Ratings Services said it revised the CreditWatch status of most of its ratings on the AIG group of companies to CreditWatch developing from CreditWatch negative, and that it raised its short-term counterparty ratings on AIG, its guaranteed subsidiaries, and ILFC to A-1 from A-2. Standard & Poor's also lowered ratings on various subsidiaries' preferred shares to B from BBB.

Constellation Energy Group (CEG) agrees to be acquired by MidAmerican Energy Holding Co. in a deal valued at about $4.7 billion, or $26.50 per CEG share.

FedEx (FDX) posts $1.23, vs. $1.58, first quarter EPS as higher operating costs offset 8% sales rise. Expects second quarter EPS to be in the range of $1.40-$1.60, vs. $1.54 a year ago. Reaffirms its EPS guidance of $4.75-$5.25 for fiscal year 2009, which reflects weaker global economic conditions, incorporates current fuel prices, related impact of fuel surcharges.

ConAgra Foods (CAG) posts $0.27, vs. $0.26, first quarter EPS from continuing operations [excluding items] on 17% sales rise. Based on a combination of volume and inflation expectations as well as increased investments for some brands and categories, slightly lowered its fiscal year 2009 outlook; now EPS from continuing operations to be slightly above $1.50 [excluding items].

Prologis (PLD) cuts 2008 FFO guidance to $4.00-$4.35 from $4.65-$4.85, reflecting more conservative outlook for valuation and contribution timing in its CDFS business, as well as appreciation of dollar. Now sees EPS of $2.70-$3.00, down from $3.15-$3.35. Sees 2009 FFO per share of $4.10-$4.35, EPS of $2.75-$3.00. Raises annualized dividend level for 2009 to $2.28 per common share, or $0.57 per quarter, representing a 10.2% increase over 2008.

Baird upgrades Adtran (ADTN) to outperform from neutral.

Tetra Technologies (TTI) withdraws its previous 2008 EPS guidance of $1.30-$1.55 due to the impact of Hurricanes Gustav and Ike.

Black Hills (BKH) sees 2009 EPS from continuing operations of $2.40-$2.65, including approximately $0.10 per share of one-time integration-related expenses. Expects 2008 EPS from continuing operations of $2.15-$2.25.

Media General (MEG) posts total company revenues of $65.7 million in August, compared to year-ago's $68.8 million. Notes Publishing Division revenues were down 16.6%, reflecting continued weak newspaper advertising. Does not see an improvement in the Publishing business during the rest of '08, and Broadcast transactional advertising also continues to be weaker than previously expected.

Clarcor (CLC) posts $0.50, vs. $0.53, third quarter EPS despite 16% sales rise. In third quarter fiscal year 2007, CLC recorded after-tax benefit of $4 million, or $0.08 per share, related to completion of various income tax audits and finalization of certain income tax liabilities. Says it's not expecting a pickup in the U.S. economy for the rest of fiscal year 2008 and Europe appears to be slowing from a good first half. Cuts fiscal year 2008 EPS guidance to $1.88-$1.93. Does not provide fiscal year 2009 EPS estimate.

Pier 1 Imports (PIR) posts wider-than-expected $0.34 second quarter loss, vs. $0.49 loss a year ago, on 1.7% same-store sales drop, 7% total sales drop. Given the difficulties and uncertainties surrounding the macroeconomic environment, company will not provide guidance for remainder of this fiscal year, withdraws previous guidance provided.

Progress Software (PRGS) posts $0.45, vs. $0.44, third quarter non-GAAP EPS on 4.1% revenue rise. Based on the less certain outlook, recent strengthening of the U.S. dollar relative to international currencies in which it does business, forecasts $1.89-$1.91 fiscal year 2008 EPS on $522-$526 million revenue, $2.05-$2.15 fiscal year 2009 on $585-$600 million revenue.