Thursday, March 22, 2007

Thursday Stocks to Watch

The market is trading mixed in the afternoon after yesterday's massive advance with confirmation. It is time to nibble at stocks again after yesterday's rally confirmation. Although it is no guarantee of success of the new bull emerges, it is time to get back to stocks slowly in case the confirmation is false.
Here are stocks worth watching:

Advancers

Actuant Corp. (ATU) said fiscal second-quarter earnings fell to $18.9 million, or 62 cents a share, from $19.3 million, or 63 cents a share, a year earlier. Excluding a charge related to the restructuring of its European electrical business, earnings would have been 71 cents a share. Revenue rose 24% to $341 million from last year's $276 million, helped by growth in all four of its business units, acquisitions and a weaker U.S. dollar. Analysts surveyed by Thomson Financial had been expecting earnings of 70 cents a share and revenue of $326.9 million, on average. For the third quarter, the Milwaukee diversified industrial company said it expects earnings of 89 to 96 cents a share, vs. analyst forecasts of 90 cents a share, and revenue of $360 million to $370 million. The company raised its 2007 earnings estimate to $3.30 to $3.45 a share and its revenue projection to $1.39 billion to $1.41 billion.

Adams Respiratory Therapeutics Inc. said it settled a patent dispute with Pharmaceutical Holdings Corp. subsidiaries Mutual Pharmaceutical Co. and United Research Laboratories Inc. Adams said the patent covers its extended-release guaifenesin single-agent and combination products.

Alon USA Energy (ALJ) was upgraded to outperform from neutral by Credit Suisse after the company's analyst presentation in New York City. "The presentation reviewed existing operations at the Big Spring refinery, the strategy for the retail business and more details on the economics of the asphalt segment. The key takeaways from the meeting are likely to come from better transparency into the earnings power and EBITDA contribution of the recently acquired California refineries."

Bombay Co. (BBA) said fiscal fourth-quarter losses narrowed to $1.7 million, or 5 cents a share, from $25.1 million, or 69 cents a share, a year earlier. Revenue for the quarter ending Feb. 3 increased to $188.2 million from last year's $186.9 million, while same-store sales 3.1%. The Fort Worth, Tex. home accessories retailer said it has engaged William Blair & Co. to explore ways to provide additional liquidity.

Citi Trends Inc. reported fourth-quarter earnings rose 31% to $10.4 million, or 73 cents a share. The Savannah, Ga., retailer posted revenue of $126.8 million vs. $96.8 million. Analysts polled by Thomson Financial had forecast fourth-quarter earnings of 70 cents a share on revenue of $126 million. Same-store sales for the quarter rose 1.3%.

FortuNet Inc. (FNET) shares rose after the Las Vegas-based maker of multi-game server-based gambling platforms late Wednesday reported fourth-quarter net earnings of $1.27 million, or 11 cents a share, up from $541,418, or 7 cents a share, in the year-ago period. Revenue rose to $4.41 million from $3.7 million.

Glu Mobile's (GLUU) shares surged in the company stock market debut. See full story.

Hutchison Whampoa Ltd. (HUWHY) reported 40% growth in net earnings for 2006, bolstered by a narrower loss incurred in the conglomerate's third-generation, or 3G, mobile-communications business. See full story.

IHS Inc. (IHS) shares rose after the company late Wednesday reported fiscal first-quarter net income of $18.4 million, or 32 cents a share, up from $13.5 million, or 24 cents a share, in the year-ago period. Revenue at the Englewood, Colo.-based oil and natural gas services company rose to $152.6 million from $129.9 million. IHS also raised its revenue growth forecast to a range of 11% to 13% and raised its adjusted EBITDA growth forecast to a range of 18% to 22% percent for the fiscal year ending Nov. 30. Separately, IHS said it has acquired RapiData from Rapid Technology Corp. Financial terms were not disclosed.

Komag Inc. said it expects first-quarter revenue to exceed an earlier forecast. The computer-hard-disk maker estimates its sales to be slightly above 2006 fourth-quarter revenue of $255.9 million; it had forecast first-quarter sales to be down 2% to 3% from the fourth quarter. The company also said its net margins should be below the midpoint of its forecast range of 12% to 14%.

Ligand Pharmaceuticals Inc. plans to pay a dividend of $2.50 a share. The San Diego developer of small-molecule drugs said the dividend is payable April 19 to shareholders of record April 5. Ligand's board also authorized up to $100 million in share repurchases over the next 12 months.

Misonix Inc. (MSON) shares surged after the Farmingdale, N.Y.-based medical device maker said the first human kidney cancer treatments using its Sonatherm 600 were successfully completed with positive ablation effect noted on the cancer cells. The Sonatherm 600 uses high intensity focused ultrasound.

Procter & Gamble (PG) was upgraded to outperform from peer perform at Bear Stearns which said the consumer-products giant's valuation is too low for a company with such a strong track record.

RCM Technologies Inc. reported fourth-quarter earnings nearly tripled to $2.33 million, or 19 cents a share. The Pennsauken, N.J., company posted revenue of $54.2 million vs. $46.8 million.

Saks Inc. (SKS) was upgraded to buy from hold at Citigroup, which said the department-store operator's turnaround initiatives are starting to gain traction.

Sigma Designs Inc. said its fiscal fourth-quarter revenue tripled to $31.2 million. The company's board is still reviewing its stock-option practices. As a result, the Milpitas, Calif., maker of silicon-based media processors may miss the deadline for filing its financial report.

Tweeter Home Entertainment Group Inc. (TWTR) on Thursday said it would restructure its operations, which will include closing 49 stores, two regional facilities, and exiting certain regions of the country. Tweeter will close all of its stores in California, Tennessee, Alabama, New York, and most of Georgia within two to three months, resulting in layoffs of about 20% of its workers. Tweeter will move from 153 stores and $735 million in revenue, to 104 go-forward stores and $555 million in revenue. The move will result in charges of about $50 million to $60 million, related to its store and facilities closings. In addition, Tweeter said it entered into a new $75 million senior secured revolving credit facility with GE Capital Corp. The five year facility provides Tweeter with additional liquidity at more favorable rates.

Tyson Foods (TSN) said it planned to sell two poultry plants in Alabama to Koch Foods Inc. Financial terms of the deal were not disclosed. The Springdale, Ark. meat processor said many of the 1,200 employees at the plants are expected to be offered jobs at Koch, but 400 of 675 jobs at a plant in Gladsen, Ala. will be eliminated.

Decliners

Alcatel-Lucent (ALU) was downgraded to neutral from buy at Goldman Sachs, which said the French-American telecom equipment carrier's revenue was "in free fall" due to integration issues. It doesn't see a sales recovery before the third quarter.

Amerigroup Corp. cut its full-year 2007 profit forecast to account for costs associated with securing litigation-related financing. See full story.

Avalon Pharmaceuticals (AVRX) saw its shares skid Thursday. Late Wednesday, the drugmaker reported a fourth-quarter net loss of $4.4 million, or 43 cents a share, compared with a loss of $3 million, or 37 cents, for the same period in 2005. Avalon also said it's withdrawing its listing from NYSE Arca, formerly the Pacific Exchange, to save on administrative costs. The withdrawal is expected within the next month.

Barnes & Noble Inc. (BKS) turned in a slightly higher fourth-quarter profit on Thursday, but warned investors of a loss in the first quarter, pressuring shares. See full story.

Borders Group, (BGP) outlined a reinvention strategy, with a plan to focus on domestic superstores, slash the size of its Waldenbooks chain and consider alternatives for its international business. See full story.

Clarcor Inc.'s first-quarter net income rose to 32 cents a share from 31 cents in the year-earlier period. The Franklin, Tenn., maker of filtration and industrial-packaging products said sales fell 1.7% to $209.5 million from $213.2 million a year ago. On average, analysts polled by Thomson Financial predicted 36 cents of profit on $222 million of revenue.

CRA International Inc. (CRAI) shares fell after the Boston-based consulting company reported fiscal first-quarter net earnings of $7.1 million, or 56 cents a share, up from $5.6 million, or 47 cents a share, in the comparable period last year. Revenue rose 14.9% to $83.3 million from $72.5 million. Analysts polled by Thomson Financial were expecting a per-share profit of 57 cents on revenue of $86.2 million. The company forecast fiscal 2007 earnings-per-share growth of 18% to 23%, and percentage revenue growth in the mid to high teens.

Shares of International Rectifier Corp. (IRF) fell, hitting a 2-month low in intraday trading, after Lehman Bros. downgraded the power management technology company to equal weight from overweight, citing the belief that business was decelerating.

Intuit Inc. said its TurboTax federal unit sales through March 17 rose 1% to 10.9 million from 10.8 million a year earlier. The Mountain View, Calif., provider of business and financial-management services expects total unit growth of 3% to 5% for the full season. Intuit also affirmed its segment revenue growth forecast of 10% to 15% and its fiscal 2007 outlook.

Herman Miller Inc. reported fiscal third-quarter earnings rose 44% to $32.3 million, or 50 cents a share as revenue rose 14% to $484.8 million. Analysts polled by Thomson Financial were expecting profit of 52 cents on revenue of $491 million. The Zeeland, Mich., furniture maker expects fiscal fourth-quarter earnings of 47 cents to 51 cents on revenue of $485 million to $505 million.

Modine Manufacturing Co. (MOD) said it now expects to breakeven or report a loss for its fiscal fourth-quarter. The Racine, Wis. thermal management systems company said it revised its outlook given the sharp rise in nickel prices since January, and due to an expected charge related to warranty events in its European business. The company said it a slower-than-expected start-up of a new truck customer continues to impact results.

Motorola (MOT) saw its stock drop to a new 52-week low Thursday morning following the company's latest earnings warning, which was again sparked by disappointing sales of its wireless handsets. See full story.

New York & Co. (NWY) fell Thursday after the women's apparel retailer reported a rise in fiscal fourth quarter profit but said its earnings for the current three-month period are apt to come in below Wall Street's hopes. See full story.

Nortel Networks (NT) said it has launched the sale of $1 billion worth of convertible debt. The Toronto telecommunications equipment maker said it will grant the underwriters of the offering options to buy up to $150 million worth of additional debt to cover over-allotments. The company expects use the proceeds from the sale, expected to be about $980 million, to pay down debt.

PDI Inc. said a large pharmaceutical company customer won't renew its contract sales engagement with PDI when it expires May 12. The Saddle River, N.J., provider of commercialization services to biopharmaceutical companies said the contract was for one year and $35 million.

Palm (PALM) shares amid dwindling speculation the company will be purchased by Motorola Inc. (MOT) . See full story.

Raytheon Co. increased its annual dividend by 6% to $1.02 a share from 96 cents.

RF Micro Devices (RFMD) was downgraded to sector performer from sector outperformer by CIBC World Markets, and the broker also removed its $9 price target. "We believe RFMD's story outside of Motorola remains strong and consistent, yet given Motorola's contribution to RFMD's top line we see downside to our fiscal 2008 targets," the broker said.

Scholastic Corp. (SCHL) shares dropped as much as 13% Thursday after the book publisher cut its annual earnings outlook, citing weaker-than-expected results in its school-based and direct-to-home continuity programs. See full story.

Shares of Tessco Technologies (TESS) shares dropped after the wireless systems products company warned late Wednesday that revenue for the current quarter will be lower than expected. The Hunt Valley, Md. company said revenue for the quarter ending March will be up 30% from year-earlier levels but fall short of forecasts, and fiscal year earnings are expected to be at the low end of the previously provided forecast of $1.15 to $1.22 a share

No comments: