CA gives strong full-year forecast, shares rise Business software maker CA Inc (CA.O: Quote, Profile, Research) gave full-year forecasts that topped analysts' estimates, citing momentum from growth in big contracts and its focus on cost cuts, lifting its stock by more than 4 percent.
After posting a quarterly profit on Thursday that fell short of Wall Street expectations, CA said it expected to earn a fiscal 2009 profit excluding special items of $1.45 to $1.52 per share on revenue of $4.5 billion to $4.6 billion.
That tops the $1.37 per share and $4.45 billion that were the average forecasts of Wall Street analysts on Reuters Estimates.
CA shares rose 4.6 percent to $25.29 in extended trading, building on its 1.9 percent gain in regular Nasdaq trade.
For its fourth quarter ended in March, CA posted a higher profit, citing double-digit bookings growth as it focused on selling new software licenses while controlling costs and improving its operating margin.
CA said expenses for the quarter fell 8 percent from a year earlier. For the full year, it landed 61 contracts worth more than $10 million, up 45 percent from the previous year.
CA said it expected product and services bookings growth in the mid- to high-single digits. Chief Executive John Swainson said it had "good momentum" entering the new fiscal year and "will continue to focus in this current economic environment on doing the things that drive revenue and increase profit." http://www.reuters.com/article/marketsNews/idUSN2252940320080522
Gap 1st-quarter net profit up 40 pct; shares rise Gap Inc (GPS.N: Quote, Profile, Research) said on Thursday that first-quarter net profit jumped 40 percent, as tighter inventories, fewer markdowns and cost cutting helped lessen the effect of lower sales, and shares rose 2 percent in extended trading.
Chief Executive Officer Glenn Murphy said he saw "no signs of improvement in the psyche of the American consumer," but added that shoppers were responding positively to an improved assortment of classic clothing at its namesake Gap stores, even as the Old Navy chain continues to struggle.
The global apparel company, in the midst of a turnaround effort even as U.S. consumers are cutting back on spending, posted earnings that topped both company and Wall Street estimates, but sales were weaker than analysts expected.
First-quarter net income increased to $249 million, or 34 cents per share, from $178 million, or 22 cents per share, a year earlier.
That was above the 31 cents expected, on average, by analysts, according to Reuters Estimates, and Gap's own forecast of 30 cents to 32 cents per share.
Sales at the San Francisco-based retailer, which also operates the more upscale Banana Republic chain, fell nearly 5 percent to $3.38 billion from $3.55 billion, below the average analyst target of $3.44 billion.
Wall Street has applauded ongoing attempts to reduce spending, improve merchandise and limit markdowns at Gap's chains. Still, it has suffered from weaker traffic and declining same-store sales, a key gauge of retail performance, amid intense competition from rivals and past fashion missteps. http://uk.reuters.com/article/governmentFilingsNews/idUKN2253122020080522
Goldman Downgrade, Airlines on the Mend, Ann Taylor Going Lower
Goldman can’t avoid asset erosion, can it? Dick Bove of Ladenburg Thalmann, who apparently has been bearish on banks since last summer, before it was really fashionable, according to Fortune.com’s Colin Barr, today downgraded shares of Goldman Sachs (GS) from Neutral to Sell, arguing that the company can’t avoid an erosion in its assets as cash markets have failed to keep pace with indexes that mirror cash, according to Briefing.com. Bove says Goldman also is due to suffer some impairment from markets outside of commodities and currencies, where it has done well. Bove lowered his price target on Goldman from $203 to $151, says Briefing. Goldman shares, after trading down about 1%, are actually up fractionally at $178.94.
Airlines flying high again Shares of AMR Corp. (AMR), the parent of American Airlines, were on the mend after yesterday’s 24% decline, precipitated by the announcement that American plans to cut domestic flight capaity by 11% to 12% this year. The shares were up over 8.3% today at $6.74. But there’s always a spoiler: MarketWatch notes that airline analyst Ray Neidl at something called Calyon Securities (who dat?) downgraded Delta Air Lines (DAL) and Northwest Airlines (NWA) on oil prices. Neidl says oil above $130 represents the airlines’ biggest challenge. Delta shares, which yesterday hit a record low, were up 5.2% today at $6.07, while Northwest were up 6.28% at $6.77.
Ann Disappoints, Gamestop Plunges There’s a spate of retail reports out this morning, including Ann Taylor (ANN), Footlocker (FL), and The Bon-Ton Stores (BONT), and none of them seem to be cheering investors. (Gap (GAP) reports today after market close.) Ann Taylor had a tough first quarter, the cmopany’s management said on a conference call with analysts this morning. Although profit in the quarter ended May 3 beat estimates by a penny, excluding costs, net income was down 18% to $25.9 million and the company said it will have an additional $7 million to $8 million, while net store sales declined 11%. The store forecast profit below estimates at 42 cents a share to 47 cents versus consensus estimate of 47 cents. Ann Taylor shares were down 2.35% at $26.14. It’s not clear what’s bugging people about video game retailer Gamestop (GME), meanwhile. Its shares are down almost 10% at $45.92. The company beat its own forecasts with 37 cents a share in profit as sales rose 42% year-over-year to $1.8 billion. The company forecast first quarter earnings a little ahead of consensus, at 26 cents to 28 cents a share. I suppose beating slightly is not what investors expect in the video game business. My colleague Eric Savitz muses on the matter over at TechTrader Daily.
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