September 24, 2008
Movers: AIG, WaMu, Circuit City, Lennar, GE
American International Group (AIG) rose 0.28 to 5.00 after AIG suspends common stock dividend. Separately, CNBC's Charlie Gasparino reported that AIG told employees in a memo that they may lose money in a deferred savings plan, as the funds could go to paying off debts. Earlier, Reuters said AIG shares were higher as CEO Edward Liddy said late Monday on CNBC that he expected AIG to emerge from a federal bailout as a leaner, stronger co. S&P reiterates hold.
WSJ reports that Toronto-Dominion Bank (TD) is among the companies now weighing a bid for Seattle thrift Washington Mutual (WM), according to people familiar with the situation. In addition to TD, potential suitors include Citigroup(C), JM Morgan (JPM), Wells Fargo (WFC) and Banco Santander SA (BCDRF), according to people familiar with the situation.
Oppenheimer cuts estimates on Wachovia (WB), Citigroup, Bank of America (BAC), and Wells Fargo.
Citigroup downgrades Regions Financial (RF) to sell from hold, and downgrades Zions Bancorp (ZION) to hold from buy.
Circuit City Stores (CC) expects to deliver second quarter results that are slightly better than the previously provided range of a loss from cont. ops before income taxes of $170-$185 million, before any unusual/non-cash charges. Also says Philip J. Schoonover, chairman, president and CEO, has agreed to step down from those positions, effective immediately. Schoonover has also resigned as a director. Jefferies says while investors may initially applaud mgmt change, thinks investors should sell into any strength; downgrades to underperform.
Lennar (LEN) posts $0.56 third quarter loss, vs. $3.25 loss a year ago, on 53% revenue drop. Notes third quarter fiscal year 2008 loss includes $0.53 per share charge related to valuation adjustments, other write-offs.
Bristol-Myers Squibb (BMY) increases its offer to buy ImClone Systems (IMCL) to $62 a share from its initial offer of $60 a share. BMY intends to commence a tender offer, valued at about $4.7 billion, for all outstanding IMCL shares not already owned by BMY.
Citigroup (C) names Mike Corbat as CEO of its Global Wealth Management unit [GWM] and Edward Kelly as Head of Global Banking for the Institutional Clients Group [ICG]. Also confirms that Sallie Krawcheck has decided to leave the firm to pursue other opportunities and will remain as Chairman of GWM through the end of the year.
General Electric (GE)- Merrill reportedly downgrades GE to neutral from buy.
Waste Connections (WCN) sees third quarter revenue of $271-$272 million, with pricing growth to be about 6.0% and volume growth to be about negative 2.5%. Operating income before depreciation and amortization expense is estimated to be between $80-$81 million, with operating income of 20.5%-20.8% of revenue. Plans to issue 10 million shares in a registered offering.
3Com (COMS) posts $0.11, vs. $0.03, first quarter non-GAAP EPS on 7% revenue rise. Revenue of $342.7 million beat company guidance of $325-$335 million provided in early August. Reportedly sees second quarter revenue of $345-$350 million.
Union Pacific (UNP) raises $1.10-$1.20 third quarter EPS view to $1.28-$1.33. It says lower diesel fuel costs, strong operating efficiency will more than offset impact of recent hurricanes, lower volumes. Notes widespread commercial power outages associated with Hurricane Ike have impacted operations, limited ability of customers to resume production. UNP's new EPS view includes reduction of about $0.10 as a result of the hurricanes, primarily Ike. S&P maintains hold.
Cache (CACH) cuts $0.01-$0.02 third quarter EPS view to $0.12-$0.14 loss on 4% lower same-store sales. Cites softer-than-anticipated sales performance in the latter part of the period, as a result of a difficult homecoming dress season prompted by the tough economy. Sales were also negatively impacted by tropical storms that caused temporary store closings in Florida, Texas and Louisiana. Now sees 2008 GAAP EPS of $0.10-$0.17. Roth Capital downgrades to hold from buy.
Savvis (SVVS) - Jefferies downgrades SVVS to hold from buy on decreasing visibility, increasing capex.
Air Products and Chemicals (APD) cuts $1.37-$1.42 fourth quarter EPS from continuing operations guidance to $1.24-$1.26. Cites fire at its Ulsan, Korea nitrogen trifluoride production facility; Hurricanes Gustav and Ike reduced short-term demand from U.S. Gulf Coast customers, drove temporary increases in operational costs; continued strengthening of U.S. dollar against Euro and Pound Sterling; slowdown in semiconductor foundry and liquid crystal display [LCD] manufacturing; further weakening of manufacturing environment in Europe.
Sinclair Broadcast Group (SBGI) cuts third quarter guidance for net broadcast revenues to about $149.4 million, flat with year ago level, from previous view of $152.5-$154.4 million. It says $1.7 million of shortfall is due to lower-than-expected political spending as candidates shift their advertising buys from local spot market to the networks. Remaining shortfall is primarily due to advertising cancellations by automobile sector, both at manufacturing and dealer levels, as well as fast food sector.
Dollar Thrifty Automotive Group (DTG) announced that results in third quarter continue to be affected by challenges in the areas of revenue per day and vehicle depreciation costs. Says results are also expected to be affected by the bankruptcy of one of its tour operators. In light of performance to date, says it's seeking an amendment to its senior secured credit facility.