Custom Search

US HOT STOCKS: Esmark, Jazz Tech, United Natural Foods -3-

Last Update: 5/20/2008 12:06:35 PM

Among the companies seeing active trade in Tuesday’s session are Home Depot Inc.
(HD), Microsoft Corp. (MSFT), Yahoo Inc. (YHOO), Fannie Mae (FNM), and Freddie
Mac (FRE).

Home Depot Inc. (HD, $27.39, -$1.48, -5.13%), the largest U.S. home-improvement
retailer, said its first-quarter net income fell 66%, hurt by economic worries
that curtailed home-improvement spending and by costs to close stores and abandon
some new openings in its pipeline.

Microsoft Corp.’s (MSFT, $28.71, -$0.75, -2.55%) proposed alternative to
acquiring Yahoo Inc. (YHOO, $27.35, -$0.33, -1.19%) would involve a breakup of
the Internet giant that people close to Yahoo said is unlikely to win favor with
its board, The Wall Street Journal reported. In recent days, Microsoft floated a
proposal to acquire Yahoo’s search-advertising business, said people familiar
with the matter. Under the proposal, Yahoo would also sell its Asian assets, and
Microsoft would acquire a minority stake in what remained of Yahoo, the people
close to Yahoo said.

A U.S. Senate panel voted Tuesday to broaden oversight over Fannie Mae (FNM,
$27.78, -$1.17, -4.04%) and Freddie Mac (FRE, $26.33, -$0.68, -2.52%), as well as
use the Federal Housing Administration to help refinance cash-strapped
homeowners. Also, Fannie Mae and Freddie Mac ratings were taken off review for a
downgrade by Standard & Poor’s after the rating company affirmed the ratings of
Freddie Mac and lowered the risk-to-the-government ratings on Fannie Mae.

MF Global Ltd. (MF, $14.24, -$0.74, -4.94%) swung to a fiscal fourth-quarter loss
amid a bad-debt provision related to a February trading scandal. The world’s
largest independent derivatives brokerage also announced a $300 million backstop
commitment from J.C. Flowers & Co. to purchase equity-linked securities of the
company.

Staples Inc. (SPLS, $23.68, $0.11, 0.47%) reported a 1.5% rise in fiscal
first-quarter net income as the office-products giant issued a cautious outlook
for the current quarter amid expectations for “the weak economic climate to
continue throughout 2008.”

Target Corp. (TGT, $54.55, -$0.37, -0.67%) reported a 7.5% drop in fiscal
first-quarter net income and closed its credit-card deal with JPMorgan Chase &
Co. (JPM, $44.45, -$1.54, -3.35%) as the retailer saw softer-than-expected sales
amid a tough retail environment. The big-box, cheap-chic retailer posted net
income of $602 million, or 74 cents a share, down from $651 million, or 75 cents
a share, a year earlier. Revenue rose 5.4% to $14.8 billion.

Other Stocks In Focus:

American International Group (AIG, $38.17, -$0.78, -2.00%) will cut business
costs and sell off non-core businesses as part of its effort to recover from
losses caused by its investments in the U.S. mortgage market, the company’s chief
executive said Tuesday.

Amazon.com Inc. (AMZN, $80.84, -$1.45, -1.76%) said it would open a new order
fulfillment center in Hazelton, Pa., and hire 1,100 workers there over the next
three years. The facility is expected to take up more than 600,000 square feet
and is meant for Amazon to better serve customers in the northeastern U.S. The
facility is expected to open in July.

BHP Billiton Ltd. (BHP, $89.00, -$4.49, -4.80%), Rio Tinto PLC (RTP, $519.92,
-$26.68, -4.88%) and Anglo American PLC (AAUK, $34.26, -$1.43, -4.01%) as well as
other international mining stocks trade lower, reflecting losses on the London
exchange. According to traders, losses follow the circulation of an internal
Morgan Stanley memo that says the firm’s analyst is calling for a short-term 10%
to 20% correction in mining stocks due to valuation concerns.

BioAlliance Pharma SA (BIO.FR) acquired the rights to market ondansetron oral
spray in Europe from NovaDel Pharma Inc. (NVD, $0.31, $0.09, 37.78%) for a $3
million license fee. NovaDel, a Flemington, N.J., drug maker, is also eligible
for $24 million of milestone payments plus royalties on sales. The spray prevents
nausea and vomiting in patients who have undergone chemotherapy, radiation, and
surgery, the company said.

China GrenTech Corp. (GRRF, $5.36, -$0.79, -12.85%) late Monday posted a
first-quarter loss of $5.9 million, or 24 cents per American depositary Share.
The company didn’t provide year-earlier figures in American dollars. Revenue was
$10.2 million.

China TechFaith Wireless Communication Technology Ltd. (CNTF, $5.46, -$1.22,
-18.22%) late Monday swung to a first-quarter profit of $2.86 million, or 7 cents
an American depositary share, from a year-earlier loss of $3.43 million, or 8
cents an ADS. The Beijing cell phone products company said revenue jumped 82% to
$49.6 million. For the second quarter, China TechFaith sees revenue of $52
million to $54 million.

Discover Financial Services (DFS, $17.67, -$1.01, -5.38%), Capital One Financial
Corp. (COF, $49.56, -$2.15, -4.16%), American Express Co. (AXP, $47.01, -$1.55,
-3.19%), Visa Inc. (V, $83.35, $0.03, 0.04%) and MasterCard Inc. (MA, $276.39,
-$3.61, -1.29%) shares fall. Recent data indicates none of the big credit card
companies have completely weathered the economic slowdown as rising defaults
could weigh on earnings for longer than expected. Analysts at Oppenheimer & Co.
say that a sustained decline in the amount borrowers repay each month, compared
with a year-earlier, can be a leading indicator that borrowers will start to fall
behind on payments.

Dr. Reddy’s Laboratories Ltd., (RDY, $14.92, -$0.28, -1.84%) the Indian generic
drug maker, reported that earnings for the fiscal year ended March 31 fell 50% on
23% lower revenue.

Elbit Systems Ltd. (ESLT, $58.76, $1.97, 3.47%), the Haifa, Israel, defense
contractor, Tuesday said first-quarter net income rose 68% on 53% higher revenue.

Esmark Inc. (ESMK, $17.80, $2.40, 15.58%) responded to the United Steelworkers’
objections to the company’s plans to accept a $670 million buyout offer from
India’s Essar Steel Holdings, saying it has honored the provisions of the
collective bargaining agreement.

Financial stocks were lower nearly across the board after the inflation data and
remarks from the Fed Vice Chairman Donald Kohn reinforced the idea that interest
rates are unlikely to move lower anytime in the near future. Merrill Lynch & Co.
(MER, $46.13, -$1.58, -3.31%), Morgan Stanley (MS, $44.82, -$1.38, -3.00%),
Citigroup Inc. (C, $22.32, -$0.67, -2.91%) and JPMorgan Chase & Co. (JPM, $44.46,
-$1.53, -3.33%) shares fell. Also, Oppenheimer analyst Meredith Whitney said she
expects the credit crisis to continue into 2009 and “perhaps beyond” and that
large banks like Citigroup and JPMorgan may need to set aside about $170 billion
by the end of next year to cover credit- and mortgage-related losses.

Ford Motor Co. (F, $7.90, -$0.12, -1.50%) is planning a major revamping of its
truck lineup in the U.S. in response to rising fuel prices and a consumer shift
toward more fuel-efficient vehicles, The Detroit News reported in its Tuesday
editions.

Gannett Co.’s (GCI, $29.48, -$0.32, -1.07%) operating revenue for April fell 7.7%
from a year earlier as publishing ad revenue declined 10% to $410.9 million.
Total revenue for April fell to $639.6 million from $693.3 million.

GenCorp Inc., (GY, $8.11, -$0.12, -1.46%) the Sacramento, Calif., provider of
aerospace products and systems, said Chairman Timothy A. Wicks and two other
directors stepped down. The company named James R. Henderson, 50, to succeed
Wicks, who’d been chairman since February 2007. Henderson was named to the board
in March 2008.

Goldman Sachs Group Inc. (GS, $182.18, -$2.22, -1.20%), Morgan Stanley (MS,
$44.81, -$1.39, -3.01%) and UBS AG (UBS, $30.57, $0.17, 0.56%) announced a series
of deals that will allow their clients to share access to all three firms’ pools
of nondisplayed liquidity as they try to address the growing complexity of market
fragmentation amid so-called dark pools.

Imperial Tobacco Group PLC (ITY, $96.75, -$4.88, -4.80%), the No. 4 tobacco
producer, said it would issue GBP4.9 billion ($9.6 billion) of discounted stock
to help pay for its GBP11.3 billion purchase of cigarette maker Altadis. And
Imperial reported that fiscal first-half profit fell 44%.

Medtronic Inc. (MDT, $49.19, $1.31, 2.74%) posted flat fiscal fourth-quarter net
income on prior-year tax gains as the company benefited from the launch of its
Endeavor drug-eluting stent at the beginning of the quarter and an acquisition in
its spinal segment.

Netflix Inc. (NFLX, $32.99, $2.01, 6.49%) shares rose after online DVD rental
pioneer announces new movie-streaming device, and Lehman raises rating to
overweight from equal-weight. New $99.99 set-top box directly downloads movies to
TV and costs less than similar devices by Apple (AAPL, $183.97, $0.37, 0.20%) and
Vudu. Additionally, Lehman says even though it doesn’t expect NFLX to repeat
strong 1Q subscriber numbers, it believes underlying trends remain intact.

New York Community Bancorp Inc. (NYB, $19.39, -$0.30, -1.52%), the Westbury,
N.Y., bank-holding company, priced an offering of 15.5 million shares at $19.35.
The deal price is 1.7% below New York Community Bancorp’s closing price of $19.69
on Monday.

PerkinElmer Inc. (PKI, $28.09, -$0.37, -1.30%) named Michael Battles interim
chief financial officer after Jeffrey Capello resigned.

Power companies were mixed after Credit Suisse upgraded three utilities and
downgraded one. The firm - which raised Exelon Corp. (EXC, $88.45, $2.27, 2.64%)
to outperform from neutral - said the power generation company should see
significant earnings leverage from higher gas and coal prices while its nuclear
fleet could benefit from a change in the U.S.’s carbon dioxide policy. Credit
Suisse also upgraded both FirstEnergy Corp. (FE, $78.98, $0.95, 1.22%) and Public
Service Enterprise Group Inc. (PEG, $44.29, $0.94, 2.17%) to outperform from
neutral. However, the firm downgraded NRG Energy Inc. (NRG, $42.43, -$1.66,
-3.75%) to neutral from outperform.

Saks Inc.’s (SKS, $13.25, -$0.88, -6.23%) fiscal first-quarter net income jumped
66% on prior-year charges as the latest profits were pressured by increased
markdowns. The luxury retailer posted first-quarter net income of $18.3 million,
or 13 cents a share, compared with $11 million, or 7 cents a share, a year
earlier. Sales rose 8.8% to $862.4 million. Analysts were looking for earnings of
17 cents a share on revenue of $841.1 million.

SanDisk Corp. (SNDK, $28.75, -$1.27, -4.23%) spooked the market Monday with
comments that demand for consumer electronics remained soft in April - similar to
the first quarter - and energy costs are weighing down consumer spending.
JPMorgan said the company’s comments give it more confidence in its below
expectation view of the memory-card maker. But Citi said SNDK presents a buying
opportunity as international sales remain strong.

Smart Modular Technologies Inc. (SMOD, $5.34, -$1.09, -16.95%) expects a fiscal
third-quarter net loss of 2 cents to 4 cents a share, hurt by a higher tax rate,
a difficult pricing environment and delays in qualifying module configurations,
which have led to a lower ramp of high density memory modules. On a non-GAAP
basis, the company sees earnings of 5 cents to 7 cents a share. Sales are
expected to be between $150 million and $155 million. Analysts predict earnings
of 17 cents a share on revenue of $165 million.

Tower Semiconductor Ltd. (TSEM, $1.07, -$0.09, -7.76%) on Monday said it agreed
to acquire Jazz Technologies Inc. (JAZ, $1.46, $0.61, 71.76%), an independent
semiconductor foundry, in a stock-for-stock transaction valued at $169 million,
which includes net debt. Additionally, Tower Semiconductor said its first-quarter
loss narrowed while revenue climbed to $57.6 million from $55.6 million.

United Natural Foods Inc. (UNFI, $20.02, $1.75, 9.58%) reported a 5.2% drop in
fiscal third-quarter net income amid continued impact from the November
acquisition of Millbrook Distribution Services. The organic foods wholesaler’s
net income dipped to $13 million, or 30 cents a share, from $13.7 million, or 32
cents a share, a year ago. United Natural estimated the Millbrook purchase
lowered net income by 6 cents a share, in line with the company’s expectations.
Sales rose 21% to $887 million. Analysts were expecting earnings of 29 cents on
revenue of $879.2 million.

Possibly Related Posts:

• US debt clock runs out of digits —- BBCNews
• US to buy stake in banks; first since Depression
• A Great 2008-2009 Depression
• the fear is still there - doubt it will be gone by monday.
• Quote by Thomas Jefferson “If a Central Bank is ever created in America- Through Inflation and Deflation the “Bankers” will Rob The Americans”

Comments