Thursday, Dec. 20
Jabil Circuit earnings rise 50%, but outlook disappoints(4:15 pm ET)
SAN FRANCISCO (MarketWatch) -- Jabil Circuit Inc. (JBL: news, chart, profile) on Thursday reported a first-quarter profit of $62 million,or 30 cents a share, on $3.4 billion in sales, compared to earnings of $41.4 milion, or 20 cents a share, on revenue of $3.2 billion in the same period a year ago. Excluding stock-option charges and other items, Jabil reported core earnings of $74.6 million, or 36 cents a share. By that measure, the electronics contract manufacturer met the earnings estimates of analysts surveyed by Thomson Financial, who also forecast sales of $3.3 billion. For its second quarter, Jabil forecast a loss of 3 cents a share to earnings of a penny a share, and sales in a range of $3 billion to $3.1 billion. The company also forecast core earnings between 16 cents and 20 cents a share, which fell below analysts forecast of 31 cents a share on $3.16 billion in revenue.
Research in Motion earnings more than double(4:11 pm ET)
SAN FRANCISCO (MarketWatch) - Research In Motion Ltd. saw earnings more than double for its third fiscal quarter amid continued strong demand for the company's smartphone products. For the quarter ended Dec. 1, the wireless device maker (RIMM: news, chart, profile) reported earnings of $370.5 million, or 65 cents a share, compared to earnings of $175.2 million, or 31 cents a share, for the same period last year. The company said earnings for the recent quarter got a $10.7 million boost from the resolution of a tax issue. Revenue grew 100% to $$1.67 billion. Analysts were expecting earnings of 62 cents a share on revenue of $1.65 billion, according to estimates from Thomson Financial.
Bear's exposure to ACA Capital 'well contained,' CFO says(12:30 pm ET)
SAN FRANCISCO (MarketWatch) -- Bear Stearns Cos.' (BSC: news, chart, profile) exposure to troubled bond insurer ACA Capital (ACAH: news, chart, profile) is "well contained," Chief Financial Officer Sam Molinaro said during a conference call with analysts on Thursday. ACA's rating was slashed to CCC from A by Standard & Poor's on Wednesday. That, in theory, means securities that ACA has guaranteed should also be downgraded. A merchant banking fund run by Bear is an equity investor in ACA, but that exposure is not material, Molinaro said on Thursday. Bear's counterparty credit exposures to ACA are also "quite benign and fully reserved and reflected in earnings," the CFO added. "We have no additional exposure to them so I think that that is quite well contained and behind us, whatever the exposure was," Molinaro said.
French bank Credit Agricole to take $2.3 billion write-down(12:25 pm ET)
LONDON (MarketWatch) -- French bank Credit Agricole (FR:004507: news, chart, profile) said it's taking a write-down on super-senior CDOs and because of the situation at ACA Financial Guaranty, resulting in a 1.6 billion euro ($2.3 billion) hit to 2007 results. Over nine months, it earned 4.9 billion euros. "Credit Agricole reiterates that this write-down does not correspond to an actual loss on the related assets but a conservative appreciation of the current worsening market conditions," it said. Its Calyon corporate and investment banking division will post a loss for the year. Calyon has not initiated any CDO structuring transaction since February. Credit Agricole said it's not cutting the 2007 dividend and is still targeting a Tier 1 solvency ratio between 7.5% and 8%.
Bear's prime brokerage revenue falls 17% (11:42 am ET)
SAN FRANCISCO (MarketWatch) -- Bear Stearns Cos. (BSC: news, chart, profile) said on Thursday that it's prime brokerage business saw a 17% drop in fourth-quarter revenue, versus the three months ending in August. Prime brokers provide services to hedge funds, such as securities lending. Net interest revenue dropped 21% from a record $259 million in the third quarter, Chief Financial Officer Sam Molinaro said during a conference call with analysts on Thursday. Average prime brokerage customer margin balances fell 20% from a record $102 billion in the previous quarter. Average customer short balances were $85 billion, down 17% from the record $102 billion in the August period, Molinaro added. The declines were caused by hedge fund clients cutting leverage and some customers moving some of their business to rivals, he explained. However, customer balances have increased off their lows experienced in the third quarter and new business prospects remain strong, he added.
Bear has $43.6 bln of mortgage, asset-backed securities: CFO(11:24 am ET)
SAN FRANCISCO (MarketWatch) -- Bear Stearns Cos. (BSC: news, chart, profile) holds $43.6 billion of mortgage and other asset-backed securities, down 5% from the end of November, Chief Financial Officer Sam Molinaro said during a conference call with analysts on Thursday. The bank had roughly $500 million of exposure to subprime mortgage loans originated in 2007 and about $750 million of exposure to collateralized debt obligations at the end of November. However, hedging has reduced the bank's mortgage-related exposures significantly, he added, stressing that Bear has net short positions in asset-backed CDOs and subprime mortgages. Roughly 7% of Bear's assets were considered Level 3 assets at the end of November, Molinaro also said. Level 3 assets will likely have increased by $7 billion from the end of August, he said. (Level 3 assets are the hardest to value).
Bear Stearns cut 1,400 jobs in fourth quarter, CFO says(11:12 am ET)
SAN FRANCISCO (MarketWatch) -- Bear Stearns Cos. (BSC: news, chart, profile) cut 1,400 jobs, or roughly 9% of its workforce, during its fourth quarter, as the investment bank adjusted to turmoil in the mortgage market and a slowdown in the securitization business, Chief Financial Officer Sam Molinaro said during a conference call with analysts on Thursday. The firm incurred $100 million in severance costs from the layoffs, but they will reduce operating costs by more than $250 million, helping to boost profitability in 2008, Molinaro added.
McClatchy November ad revenue and total revenue fell 9.2%(9:17 am ET)
TEL AVIV (MarketWatch) -- McClatchy Co., (MNI: news, chart, profile) the Sacramento, Calif., newspaper publisher, reported that for November, total revenue and advertising revenue both fell 9.2%. Ad revenue fell to $162.2 million from $178.7 million, while total revenue was $188.9 million against $208.2 million.
Qualcomm raises guidance for December quarter(9:10 am ET)
SAN FRANCISCO (MarketWatch) -- Qualcomm Inc. (QCOM: news, chart, profile) said early Thursday that it was raising its guidance for the first fiscal quarter, which ends Dec. 30. In a statement before the opening bell, the wireless technology company said it now expects revenue to come in at the high end of its prior guidance range of $2.3 billion to $2.4 billion. Earnings are expected to come in the range of 52-53 cents a share on a pro-forma basis, compared to the company's previously projected range of 50-52 cents. The company based the move on higher-than-expected shipments of Mobile Station Modem, or MSM, chips during the quarter.
Discover swings to 4th-quarter loss on charge at U.K. unit(8:55 am ET)
TEL AVIV (MarketWatch) -- Discover Financial Services, (DFS: news, chart, profile) the Riverwoods, Ill., provider of the Discover credit card, swung to a fiscal fourth-quarter loss from a year-earlier profit because of a charge tied to its Goldfish business in the U.K. For the quarter ended Nov. 30, Discover had a loss of $84.1 million, or 18 cents a share, compared with profit of $186.5 million, or 39 cents, in the year-earlier period. Excluding the charge of 58 cents a share, Discover earned 40 cents in the latest quarter. Analysts surveyed by Thomson Financial were looking for 36 cents of profit in the quarter. Net interest income in the quarter fell 8.1% to $348.2 million. The provision for losses on possible bad loans rose to $339.9 million from $239.7 million.
Bear Stearns write-down grows to $1.9 billion(8:26 am ET)
BOSTON (MarketWatch) -- Bear Stearns Cos. (BSC: news, chart, profile) Thursday said for the quarter ended Nov. 30, total mortgage-related write-downs totaled $1.9 billion, up from its earlier estimate of $1.2 billion. The company said fixed-income net revenue was negative $1.5 billion in the fourth quarter. "The continued repricing of credit risk and the severe dislocation in the structured products market led to illiquidity in the fixed-income markets, lower levels of client activity across the fixed-income sector and a significant revaluation of mortgage inventory," Bear Stearns said in the earnings release.
Bear Stearns posts loss on mortgage write-downs(8:20 am ET)
BOSTON (MarketWatch) -- Bear Stearns Cos. (BSC: news, chart, profile) Thursday reported a fourth-quarter loss of $854 million, or $6.90 a share, compared with net income of $563 million, or $4 a share, in the year-ago period. The company said it wrote down about $1.9 billion in mortgage inventory net of hedges, which reduced fourth-quarter earnings by $8.21 a share. Bear Stearns said members of the executive committee will not receive any bonuses for 2007. "We are obviously upset with our 2007 results, particularly in light of the fact that weakness in fixed income more than offset strong and, in some areas, record-setting performance in other businesses," said James Cayne, chairman and chief executive officer, in a statement.
United Bankshares prepays FHLB loans; cuts interest costs(8:11 am ET)
TEL AVIV (MarketWatch) -- United Bankshares Inc., (UBSI: news, chart, profile) the Charleston, W.Va., parent of United Bank, said it prepaid $380 million of advances from the Federal Home Loan Bank and ended an interest-rate swap tied to one of the advances. The bank will take charges of $13.2 million before tax for the moves but also will cut its interest costs. UBSI replaced the borrowings with $388.6 million of FHLB advances and a new swap. The rate on the new funds is an effective 3.97% versus 5.39% on the advances it prepaid. It paid the previous advances almost 2 1/2 years before they were due. The prepayment will lift net interest income -- the difference between what the bank takes in on loans and pays out on deposits and other matters -- by $5.1 million before taxes a year, United Bankshares estimated.
American Greetings 3rd-quarter net off 42%, sales off 6.8%(7:53 am ET)
TEL AVIV (MarketWatch) -- American Greetings Corp., (AM: news, chart, profile) the Cleveland producer of social-expression products -- greeting cards, gift wrap, party goods, electronic greetings and more -- reported fiscal third-quarter net income fell 42% on 6.8% lower sales. For the quarter ended Nov. 23, profit fell to $29 million, or 52 cents a share, from $49.7 million, or 83 cents, in the year-earlier period. Shares outstanding fell 7.4% to 55.5 million. Revenue dropped to $485.7 million from $521.2 million. A survey of three analysts by Thomson Financial produced a consensus estimate of 57 cents of profit. AM affirmed its estimate that fiscal 2008 earnings will come in between $1.35 and $1.55 a share; Chief Executive Zev Weiss said the company might "perform around the higher end of the range." Thomson's survey is looking for $1.48. (Adds full-year Thomson estimate.)
Ruth's Chris cuts '07 view of net, same-restaurant sales(7:00 am ET)
TEL AVIV(MarketWatch) -- Ruth's Chris Steak House Inc., (RUTH: news, chart, profile) the Heathrow, Fla., restaurant chain, cut its estimate of fiscal-2007 earnings and comparable-store sales. The company now estimates full-year earnings of 79 cents to 81 cents a share compared with 92 cents to 95 cents. Revenue should rise 18% to 19%, to $320 million to $322 million, in fiscal 2007 from $271.5 million in fiscal 2006, which had one more week of operations. A survey of analysts by Thomson Financial produced consensus estimates of 92 cents of profit on $325 million of revenue. Full-year same-restaurant sales -- those from outlets open at least a year, to eliminate the effects of new restaurants and closings -- should be flat compared with the chain's previous estimate of up 0.5% to 1.5%. In the fourth quarter to date, same-store sales are off 4%, due to fewer customers and a smaller average check. That in turn reflects "pressures from the overall macro environment," Ruth's Chris said. The company also quantified the expense related to its purchase of Mitchell's Fish Market at 2 cents a share and said it would also take a 2-cent charge tied to an interest-rate swap.
Par Pharmaceutical tightens range on 2007 projected profit(6:33 am ET)
WASHINGTON (MarketWatch) -- Par Pharmaceutical Cos. (PRX: news, chart, profile) updated its 2007 projected profit range to $1.45 to $1.50 a share, revised from a $1.35-to-$1.50 range previously. On an adjusted basis, the maker of generic pharmaceuticals pegged full-year earnings at $1.50 to $1.55 a share. Analysts, on average, have been looking for Par Pharmaceutical to earn $1.45 a share, according to estimates compiled by Thomson Financial. The company's net revenue for the year is expected to be $760 million to $780 million, Par Pharmaceutical said.
Par Pharmaceuticals' quarterly revenue rises 22%(6:26 am ET)
WASHINGTON (MarketWatch) -- Par Pharmaceutical Cos. (PRX: news, chart, profile) reported third-quarter net income of $1.3 million, or 4 cents a share, down from $4.4 million, or 13 cents, earned in the same period during 2006. Quarterly revenue reached $212.7 million from the prior year's $174 million. The Woodcliff Lake, N.J.-based generic drugmaker recorded costs related to business development activities in support of its branded division against results for the latest quarter. Excluding these costs, Par said it would have earned $11.1 million, or 32 cents a share. Analysts, on average, had been looking for a profit of 23 cents a share, according to estimates compiled by Thomson Financial. With its Form 10-Q filing for the third quarter, the company said it's now current on all reporting obligations with the Securities ane Exchange Commission.
Alliant raises dividend by 10%, gives 2008 earnings guidance(6:21 am ET)
LONDON (MarketWatch) -- Alliant Energy Corp. (LNT: news, chart, profile) said Thursday that its board of directors has approved an increase in its expected 2008 annual dividend by 10% to $1.40 a share from $1.27 a share. The company also said it expects 2008 earnings to be in the range of $2.55 to $2.75 a share and reaffirmed its prior guidance for 2007.
Pier 1 loss narrows, sales slip 7%(6:16 am ET)
LONDON (MarketWatch) -- Home furnishings retailer Pier 1 Imports Inc. (PIR: news, chart, profile) said Thursday that its fiscal third-quarter net loss narrowed to $10 million, or 11 cents a share, from $72.7 million, or 83 cents a share, a year earlier. Net sales for the quarter fell 7.1% to $374.2 million. Analysts polled by Thomson Financial had been forecasting a loss of 24 cents a share on revenue of $375 million. The merchandise margin was 53% of sales, up from 49.7% a year ago and would have been higher but for clearance activity linked to closing its Pier 1 Kids concept. "The fact that we achieved these results with less than perfect execution gives me great optimism about our ability to return to profitability and beyond," said CEO Alex Smith.
Green Bankshares sees 4th-quarter drop in net(2:44 am ET)
TEL AVIV (MarketWatch) -- Green Bankshares Inc., (GRNB: news, chart, profile) the Greeneville, Tenn., parent of GreenBank, expects to report a fourth-quarter drop in net income of 37% to 46% because of higher provisions for potential bad loans and interest-rate cuts by the Federal Reserve. Green Bankshares expects to earn 28 cents to 33 cents a share compared with 52 cents in the year-earlier quarter. For all of 2007, the Company expects to earn $2.17 to $2.22 a share, up 1.4% to 3.7% from $2.14 in 2006. The company withdrew its full-year 2008 earnigns estimates "due to credit-quality concerns related to the deterioration in residential real-estate loans primarily located in its urban markets." The bank estimates that at year's end, total loans not earning interest could range $33 million to $35 million, or 1.42% to 1.5% of total loans. The Fed's rate cuts also pressured the bank's net interest margin in the fourth quarter, Green Bankshares said. The margin is the difference between what a bank takes in on loans and pays out on deposits. At Sept. 30, the bank had $2.96 billion of assets.
Wednesday, Dec. 19
3Com reports loss of $35.6 million(4:45 pm ET)
SAN FRANCISCO (MarketWatch) -- 3Com Corp. (COMS: news, chart, profile) on Wednesday reported a fiscal second-quarter loss of $35.6 million, or 9 cents a share, compared to losing $3.5 million, or a penny a share, in the same period a year ago. The networking equipment company said its sales slipped to $317.8 million from last year's $333 million. 3Com said its loss ballooned due to corporate acquisition charges. Excluding those charges, 3Com would have earned $13 million, or 3 cents a share. By that measure, analysts surveyed by Thomson Financial had forecast 3Com to earn 2 cents a share on $327 million in sales.
Accenture quarterly net rises 34%; firm lifts forecast(4:30 pm ET)
SAN FRANCISCO (MarketWatch) -- Accenture Ltd. (ACN: news, chart, profile) reported a 34% increase in fiscal first-quarter net income late Wednesday and lifted its full-year profit forecast. Net income came in at $381 million in the first quarter vs. $284 million a year earlier. Earnings per share was 60 cents vs. 46 cents. Net revenue climbed 19% to $5.67 billion, the consulting and outsourcing firm reported. Accenture raised its full-year earnings-per-share forecast by 15 cents to a range of $2.36 to $2.41.
Healthways first-quarter profit dips; sales climb(4:21 pm ET)
LOS ANGELES (MarketWatch) -- Healthways Inc. (HWAY: news, chart, profile) said Wednesday that first-quarter net income was $11.2 million, or 30 cents a share, down from the $11.8 million, or 32 cents a share, for the same period a year ago. Reporting after the close, the Nashville, Tenn.-based provider of health-care solutions said sales were $175.8 million, up 50.2% from the $117.1 million reported last year. Analysts polled by Thomson Financial had expected the company to report earnings of 28 cents a share on sales of $177 million. Healthways said it expects 2008 earnings of $1.77 to $1.86 a share on sales of $782 million to $815 million. Analysts expect the company to earn $1.80 a share on sales of $796 million.
Activision raises forecast for December quarter(4:17 pm ET)
SAN FRANCISCO (MarketWatch) -- Activision Inc. said Wednesday afternoon that it is raising its forecast for the December quarter, citing strong sales of its slate of video game titles for the holiday season. In a statement, Activision (ATVI: news, chart, profile) said it was lifting its revenue forecast for its third fiscal quarter to $1.375 billion compared to its previous forecast of $1.225 billion. The company now expects earnings of 76 cents a share, compared to its previous target of 66 cents a share. Activision is the publisher of popular video game franchises such as "Guitar Hero" and "Call of Duty."
Paychex sees earnigns rise 11% in third quarter(4:10 pm ET)
SAN FRANCISCO (MarketWatch) -- Paychex Inc. (PAYX: news, chart, profile) saw earnings climb 11% for the second fiscal quarter ended Nov. 30. After Wednesday's closing bell, the payroll processing company reported earnings of $147.1 million, or 40 cents a share, compared to earnings of $132.7 million, or 35 cents a share, for the same period last year. Revenue grew 12% to $507.8 million. Analysts were expecting earnings of 39 cents a share on revneue of $504.9 million, according to Thomson Financial.
Oracle beats estimates with strong profit, sales gains(4:07 pm ET)
SAN FRANCISCO (MarketWatch) - Oracle Corp. said Wednesday its fiscal second-quarter profit jumped 34%, amid strong sales of the company's business software. Oracle (ORCL: news, chart, profile) said net income for the period ended in November rose to $1.3 billion, or 25 cents a share, from $967 million, or 18 cents a share in the same period a year earlier. Meanwhile revenue rose to $5.3 billion from $4.16 billion. Excluding special items, Oracle said earnings for the quarter were 31 cents a share. Analysts polled by Thomson Financial had been estimating Oracle would post earnings of 27 cents a share, on $5.04 billion in revenue. Oracle said sales of new software license sales grew 38% over the period a year earlier.
Take-Two, Palm lead early tech sector trading action(9:40 am ET)
SAN FRANCISCO (MarketWatch) -- Technology stocks put in a mixed early performance Wednesday, with Take-Two Interactive Software Inc. (TTWO: news, chart, profile) and Palm Inc. (PALM: news, chart, profile) highlighting the sector's action. Take-Two shares rose 92 cents, or more than 5%, to $18.97 following its upbeat fourth-quarter report, which it delivered late Monday. Palm also reported results after Monday's market close, but its shares fell 56 cents, or more than 9%, to $5.36, after the company gave a weaker-than-expected earnings forecast. The tech-heavy Nasdaq Composite Index ($COMPQ: news, chart, profile) fell 4.5 points to 2,591.
Commercial Metals 1st-quarter net off 19%, sales off 12%(9:36 am ET)
TEL AVIV (MarketWatch) -- Commercial Metals Co., (CMC: news, chart, profile) the Irving, Texas, producer and recycler of steel and metal products, reported that fiscal first-quarter earnings fell 19% on 12% higher sales. For the quarter ended Nov. 30, net income fell to $69.2 million, or 57 cents a share, from $85.4 million, or 71 cents, in the year-earlier period. Earnings from continuing operations were 54 cents against 75 cents. Sales reached $2.12 billion from $1.89 billion. A survey of analysts by Thomson Financial produced consensus estimates of 62 cents of profit on $2.23 billion of revenue. Profitability dropped at a Poland mill and startup costs in Croatia also hurt, CMC said. The company estimates second-quarter net at 50 cents to 60 cents against 54 cents a year earlier. Thomson's survey is looking for 63 cents.
Morgan Stanley gets $5 bln capital infusion(8:01 am ET)
BOSTON (MarketWatch) -- Morgan Stanley (MS: news, chart, profile) Wednesday said it has entered into an agreement with China Investment Corp. to issue new capital of about $5 billion through equity units with mandatory conversion into common stock. China Investment Corp.'s total passive ownership in Morgan Stanley common shares, including the conversion of the equity units, will be 9.9% or less of total shares outstanding, the company said.
Mack says Morgan Stanley write-down 'deeply disappointing'(7:46 am ET)
BOSTON (MarketWatch) -- Morgan Stanley (MS: news, chart, profile) Chief Executive John Mack said the $9.4 billion mortgage-related write-down the company took in the fourth quarter is "deeply disappointing." In a statement, the CEO said he plans not to accept a bonus for 2007.
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