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Updates, advisories and surprises
By MarketWatch.com
Monday, June 30
Fortune sees second-quarter EPS down as much as mid-20%(4:52 pm ET)
SAN FRANCISCO (MarketWatch) -- Fortune Brands Inc. (FO: news, chart, profile) late Monday lowered its second-quarter earnings outlook due to weaker consumer sentiment in the U.S. The spirits company now expects earnings per share before charges and gains to fall by high 10% to mid-20% range from $1.51 a share in the year-earlier period. Fortune had earlier projected earnings per share to fall at a high single digit to mid-10% rate. For 2008, the company is forecasting earnings before charges and gains will be down by a high single-digit to high-10% range from $5.06 a share in 2007. Its previous target was flat to single-digit percentage drop. Wall Street is projecting the company will report earnings of $1.37 a share in the second quarter and $4.84 a share in 2008.
Sirius says merger with XM would boost financial health(9:27 am ET)
WASHINGTON (MarketWatch) - Sirius Satellite Radio said Monday that the company could achieve positive adjusted earnings and generate free cash flow for the very first time in 2009 if its acquisition of rival XM Satellite Radio Holdings Inc. is approved. Sirius (SIRI: news, chart, profile) predicted that synergies, or savings, of a combined company could total about $400 million in 2009. Adjusted earnings before interest, taxes, depreciation and amortization could reach $300 million, Sirius said. And the merged company would be expected to generate free cash flow, Sirius said. "To date, neither SIRIUS nor XM has reported positive adjusted EBITDA or achieved free cash flow for a full year," the company noted. Sirius and XM (XMSR: news, chart, profile) are waiting for approval from the Federal Communications Commission, which is reviewing the merger. The U.S. Justice Department has already approved the deal. To win FCC permission, the two companies have offered a number of significant concessions, including a freeze on prices. The forecast by Sirius represents the latest push by the company to drum up support for the merger.
Diebold to file 2007, 1st-half 2008 financials in 4-6 weeks(9:13 am ET)
NEW YORK (MarketWatch) -- Diebold, Inc. (DBD: news, chart, profile) said Monday it expects to release preliminary financial results for 2007 and the first and second quarters of 2008 in four to six weeks. Diebold also said it will then file fully restated financial statements "as soon as is practical" after the preliminary results are released. It added that "previously disclosed investigations by the Securities and Exchange Commission and U.S. Department of Justice remain ongoing and there can be no assurance that the results of these investigations will not impact previously reported financial statements."
E-Trade cuts debt, says credit markets still tough(9:00 am ET)
BOSTON (MarketWatch) -- E-Trade Financial Corp. (ETFC: news, chart, profile) on Monday said it reduced debt by about $95.8 million in the second quarter, for a total year-to-date reduction of $155.8 million. The company in statement said it "continued to experience strong performance in its retail franchise during the second quarter, generating positive trends in net new customer accounts and asset flows." Although the overall credit environment is still "highly challenging, the strength and stability of the company's retail business continues to generate earnings in the bank to absorb credit losses in excess of management's current three-year forecast." E-Trade affirmed it continues to expect excess risk-based capital at the bank to approach $1 billion by year-end.
H&R Block swings to fourth-quarter profit, sales up 11%(6:15 am ET)
LONDON (MarketWatch) -- H&R Block, Inc. (HRB: news, chart, profile) on Monday said it swung to fourth-quarter consolidated net earnings of $543.6 million, or $1.66 a share, compared to a net loss of $85.6 million, or 26 cents a share, reported in the year-earlier period. Revenue rose 11% to $2.6 billion. The company said it expects fiscal 2009 earnings from continuing operations in the range of $1.60 to $1.70 a share. It forecast an increase in marketing expenditure and said it is planning other investments to continue driving market share growth in core retail tax services and to enhance it market share online. It sees pre-tax margins rising 12%.
Drax expects to beat earnings forecasts(2:30 am ET)
LONDON (MarketWatch) -- U.K. coal-fired power station operator Drax Group (UK:DRX: news, chart, profile) said Monday that it expects earnings before interest, taxes depreciation and amortization for its fiscal year to be "modestly higher" than the market consensus of around 400 million pounds ($797 million). The group said the current commodity prices make it profitable to generate additional power and it therefore expects generation levels to be modestly higher than in previous years.