Tuesday Stocks to Watch

The market is marching downward in the afternoon. The weakness is due to the following: sub prime lending failure at New Century as well as other loaners; Yen rally against the dollar; weak retail sale; and $1 billion law suit again (GOOG) by Viacom (VIA).
Here is the advancers and decliners list from CBS MarketWatch:

Advancers

Adolor Corp. (ADLR) was upgraded to outperform from market perform at Piper Jaffray. The firm, which lifted its price target on the company to $14 from $8, sees the initiation of a new phase III trial for Entereg as a positive indicator.

Shares of Cadbury Schweppes (CSG) rallied Tuesday after the chocolate and soda maker disclosed that the activist ex-owner of Snapple has built a 2.98% stake in the company. See full story.

Comarco (CMRO) said it's going to pay a special $1 a share dividend on April 23 to shareholders of record on April 5. "The combination of our strong balance sheet, return generated from our investment in SwisQual AG, and the finalization of our fiscal 2008 business plan has enabled us to enhance shareholder returns through this special cash dividend," said Chairman and CEO Tom Franza in a statement. Comarco said the decision shouldn't be construed as a determination to pay regular dividends.

Dick's Sporting Goods (DKS) said fourth-quarter earnings rose to $67.7 million, or $1.20 a share, from $54 million, or $1 a share, a year earlier. Revenue increased 21% to $1.03 billion, the first time topping the $1 billion mark, from last year's $849.5 million. Analysts surveyed by Thomson Financial had been expecting earnings of $1.15 a share and revenue of $997.2 million, on average. Same-store sales for the quarter ending Feb. 3 rose 2%, vs. the company's previous forecast of 2% to 3%. Looking ahead, the sporting goods retailer said it expects first-quarter earnings of 35 to 38 cents a share, vs. analyst forecasts of 28 cents a share, and same-store sales growth of 4% to 6%.

Emisphere Technologies Inc. (EMIS) shares tumbled after the biopharmaceutical company said an addendum to its 2006 Form 10-K contains a paragraph by Emisphere's accountant expressing "substantial doubt" about the company's ability to continue as a going concern. According to Emisphere, the doubt was raised in the audit report because the company does not expect its capital resources to allow it to operate past September of 2007. Emisphere said it is evaluating various financing options.

Expedia (EXPE) was upgraded to buy at Merrill Lynch.

Foundry Networks (FDRY) was upgraded to buy from neutral at Banc of America Securities.

Hertz Global Holdings Inc. (HTZ), the Park Ridge, N.J., car-rental company, swung to a fourth-quarter profit from a year-earlier loss on 8% higher revenue. The company earned $39.8 million, or 14 cents a share, compared with a loss of $27.6 million, or 12 cents, in the year-earlier quarter. Adjusted earnings were 25 cents against 10 cents. Revenue reached $1.99 billion from $1.84 billion. The company cited strong cost controls, particularly in U.S. car-rental and equipment-rental operations, for the turnaround. Pricing also improved and the company diversified its revenue sources, Hertz said. For all of 2007, Hertz expects to earn an adjusted $1.15 to $1.22 a share, compared with 92 cents in 2006. Revenue should reach $8.5 billion to $8.6 billion from 2006's $8.06 billion.

Host Hotels and Resorts will be added to the S&P 500 on a date to be determined, Standard & Poor's said late Monday. Bethesda, Md.-based Host Hotels will replace Phelps Dodge Corp., which is being acquired by Freeport-McMoRan Copper & Gold Inc.

Iberiabank Corp. (IBKC) was upgraded to buy from neutral at SunTrust Robinson Humphrey.

J2 Global Communications Inc. (JCOM) shares surged after the Los Angeles-based provider of messaging and communications services reported a 2006 net profit of $53.1 million, or $1.04 a share, up from $50.6 million, or 99 cents a share, in 2005. Excluding items, the company posted a 2006 profit of $1.19 a share compared with 89 cents a share in 2005. Revenue rose to $181.1 million from $143.9 million. Analysts polled by Thomson Financial were expecting a per-shares profit of $1.09 on revenue of $181.1 million. For fiscal 2007, the Company still expects revenue of $217 million to $229 million and forecast earnings of $1.35 to $1.45 a share.

Ixia (XXIA) shares fell after the Calabasas, Calif.-based company reported late Monday reported fourth-quarter net income of $4.5 million, or 7 cents a share, up from $3.65 million, or 5 cents a share, in the year-ago period. Excluding certain items, Ixia posted a per-share profit of 13 cents compared with 6 cents last year. Revenue climbed to $47.4 million from $35.5 million. Analysts polled by Thomson Financial were expecting a per-share profit of 9 cents on revenue of $42.8 million.

J2 Global Communications (JCOM) was upgraded to buy from hold at Jefferies & Co. The firm also boosted its price target on the stock to $31 from $27. After Monday's closing bell, the Los Angeles messaging and communications services provider forecast earnings of 32 to 33 cents a share for the first quarter on revenue of $51.1 million to $52.1 million. Wall Street's current consensus estimate is for a profit of 31 cents a share in the March period.

Jo-Ann Stores Inc. reported fourth-quarter net earnings of $25.8 million, or $1.05 a share. In the same quarter last year, the company posted a net loss of $18 million, or 78 cents a share. Revenue at the Hudson, Ohio-based fabrics and crafts retailer fell 0.5% to $600.8 million from $604.1 million, while same-store sales dropped 6%. Analysts polled by Thomson Financial were expecting a per-share profit of 98 cents on revenue of $614 million. Jo-Ann expects fiscal 2008 earnings of 55 cents to 65 cents a share and for same-store sales to improve to positive. Analysts are forecasting a per-share profit of 30 cents.

Kroger Co. (KR) said fourth-quarter net income rose to $384.8 million, or 54 cents a share, from $282.1 million, or 39 cents a share, in the year-ago period. Results for the quarter included a 3 cents a share benefit from adjustments of certain deferred tax balances. Sales rose to $16.86 billion from $14.72 billion. Analysts, on average, expected it to earn 45 cents a share on revenue of $16.79 billion, according to Thomson Financial. Identical supermarket sales increased 5.6% with fuel and 5.3% without fuel, the company said. For the year, Kroger expects to earn $1.60 - $1.65 a share. Analysts polled by Thomson Financial expect it to earn $1.58 a share, on average.

Nabi Biopharmaceuticals reported a fourth-quarter net loss of $4 million, or 7 cents a share, compared with a net loss of $75.6 million, or $1.25 a share, in the year-ago period. The Boca Raton, Fla.-based company said revenue in the three months ended Dec. 30 rose to $30.3 million from $26.5 million. Analysts polled by Thomson Financial were expecting a per-share loss of 27 cents on revenue of $20 million.

Option Care Inc. shares rose after Standard & Poor's said it will add the Buffalo Grove, Ill.-based company to the SmallCap 600 index after the close of trading March 15, replacing Hancock Fabrics Inc. .

Peets Coffee & Tea Inc. (PEET) was upgraded to outperform from neutral at Robert W. Baird, citing valuation.

Qualcomm Inc. (QCOM) raised its forecast for the current quarter, its second fiscal period, citing better-than-expected sales of chipsets used in advanced wireless phones. See full story.

Smith & Wesson (SWHC) said fiscal third-quarter net income rose to $1.5 million, or 4 cents a share, from $1.1 million, or 2 cents a share, in the year-ago period. Sales rose to $53.9 million from $38.6 million. Analysts, on average, expected it to earn 4 cents a share on revenue of $51 million, according to Thomson Financial. Smith & Wesson, whose products include, guns, rifles, knives and hunting accessories, expects sales for the fiscal year ending April 30, 2008 of about $320 million, up 42% over forecasted fiscal 2007 sales of about $225 million. This increase in sales is expected to be driven by growth in the core handgun business, the ramp up of its long gun product lines and the full year impact of Thompson/Center Arms. For fiscal 2008, it expects net income of about 60 cents a share. Analysts polled by Thomson Financial expect it to earn 59 cents a share on revenue of $293 million, on average, for fiscal 2008.

Spirit Finance Corp. (SFC) agreed to be acquired by a consortium led by Macquarie Bank Ltd. for $14,50 a share, or $3.5 billion including $1.9 billion of debt. Spirit, Scottsdale, Ariz., said the purchase price is a 15% premium above Spirit's 90-day average closing price and an 11% premium above Spirit's closing price on March 12.

Technitrol Inc. (TNL) shares rose after the Philadelphia-based maker of electronic components forecast first-quarter earnings of 33 cents to 35 cents, excluding items, on revenue of $233 million to $236 million. Analysts are looking for a per-share profit of 35 cents. Separately, the company also announced a restructuring of its automotive electronic components business, including the closure of plants in Germany and Tunisia. Technitrol expects the restructuring to generate $10 million to $12 million in additional annual operating profit. The company estimated the cost of the restructuring at $12 million to $13 million.

WCI Communities (WCI) was in focus after investor Carl Icahn and affiliates said they plan to begin a $22-a-share tender offer for any and all shares of the company. The offer represents a 16% premium over Monday's closing price of $18.97 a share. Icahn said the offer, subject to the redemption of the company's recently adopted "poison pill," will remain open if the current board prevents the conditions from being satisfied so that his nominees, if elected, can enact the conditions. The offer isn't subject to due diligence or financing. "We believe the board and (chief executive) of WCI have not enabled the company to maximize the potential of its unique set of assets which trade at a discount to their GAAP book value," Icahn said in a statement.

Decliners

Shares of Accredited Home Lenders Holdings (LEND) dropped after the company said it's currently exploring its strategic options. The San Diego mortgage company, which operates in the troubled sub-prime loan category, said it plans to seek additional capital since its available cash resources have been hurt by margin calls under its warehouse and repurchase facilities since the beginning of the year. The company said it's paid about $190 million in margin calls on its facilities since Jan. 1 with two-thirds of that coming since Feb. 15. Accredited Home is also seeking waivers and extensions of certain financial and operating covenants under its credit facilities. The company is also pursuing certain restructuring activities, including workforce reductions. In addition, it's continuing to evaluate the impairment of goodwill established in relation to its acquisition of Aames Investment in the fourth quarter, a condition that makes it unlikely the company will be able to file its Form 10-K by March 16 - the previously indicated deadline.

American Oriental Bioengineering Inc. reported fourth-quarter earnings of $10.9 million, or 17 cents a share, up from $4.18 million, or 10 cents a share, in the year-ago period. Revenue at the New York-based pharmaceutical company rose to $41.3 million from $19.8 million. For the first quarter of fiscal 2007, the company expects earnings of 10 cents a share on revenue of $24 million to $25 million. For fiscal 2007, American Oriental forecast revenue of $143 million to $147 million.

Brookdale Senior Living Inc. (BKD), which owns and operates homes for senior citizens, said its fourth-quarter net loss widened to $37.4 million, or 37 cents a share, from $24.5 million, or 41 cents a share a year earlier. Revenue for the quarter more than doubled to $432.3 million from $213 million. Analysts polled by Thomson Financial had been expecting a loss of 35 cents a share. Brookdale said its loss included a charge of $96.9 million, for depreciation, amortization and non-cash compensation expense. The company announced a first-quarter dividend of 45 cents a share and added it is well positioned to realized substantial growth in its dividend over the next few years.

Comstock Homebuilding Cos. (CHCI) swung to a fourth-quarter per-share loss of $1.79 from a net income of 66 cents a share a year earlier. The Reston, Va., company's revenue nearly doubled to $123.3 million from $77.2 million in the year-ago period. On average, analysts expected a per-share loss of $1.42 on revenue of $125.8 million, according to a poll by Thomson Financial.

Continental Airlines Inc. (CAL) said it expects its mainline domestic yield, or pricing number, to be down slightly in the first quarter compared with the same period last year. Yields for Latin America, trans-Atlantic and Pacific routes would be better than a year ago, the Houston-based carrier said in an investor update late Monday. Continental also expects regional yields to be weaker because of increased competition in the northeastern United States. Mainline advanced bookings for all regions are "slightly ahead" of last year, the airline said; total capacity for the first quarter should rise about 4.9% and overall load factor, or the percentage of seats filled with paying passengers, should be 78% to 79%.

Cosi Inc. said Chief Executive Kevin Armstrong has resigned for health reasons. Also, the Deerfield, Ill.-based restaurant operator named Robert Merritt, one of its directors, interim CEO.

Goodrich Petroleum (GDP) said it swung to a fourth-quarter net loss of $24 million, or 96 cents a share, from net profit of $8 million, or 33 cents a share, a year earlier. Results for the latest quarter included a $7.9 million charge reflecting the impact of dry hole costs in South Louisiana and $24.8 million of non impairment charges to oil and gas properties. Revenue climbed 22% to $31 million. The company said its year-end reserves stood at a record 206 billions of cubic feet equivalent.

Lehman Brothers Holdings (LEH) said it has acquired a 20% stake in the investment firm D.E. Shaw for an undisclosed amount. The 19-year-old investment firm has $29 billion in aggregate investment capital. D.E. Shaw received an upfront payment March 12 and will receive "future contingent payments," the companies said.

Marvell Technology (MRVL) was downgraded to reduce from buy at UBS, which cited concerns over weakness in HDD demand after Apple Inc. launches NAND-based products. Analyst Alex Gauna also lowered his stock price target to $18.50 from $28, his fiscal 2009 earnings estimate to 74 cents a share from 92 cents and his revenue forecast to $3.05 billion from $3 billion. The stock closed Monday up 1.2% at $18.86 and has lost 9.8% since the end of February. "We expect HDD demand weakness to phase in, not collapse," Gauna said in a research note. "With NAND and competitive incursion, however, we see limited to no further growth for the HDD segment." He said his checks indicate that Apple will introduce a NAND-based iPod Video.

New Century Financial (NEWC) said in a Securities and Exchange Commission filing that it's received notices of default and reservation of rights from Barclays, Guaranty Bank, Morgan Stanley, State Street Global Markets and UBS Real Estate Securities. Sutton Funding has issued it a servicing transfer notice. Morgan Stanley's last "limited" financing is expected to occur on Tuesday. New Century has now received a grand jury subpoena from the U.S. Attorney's Office for the Central District of California and a letter from the staff of the Pacific Regional Office of the SEC stating that the staff was conducting a prelimimary investigation. In addition, the company's stock is being delisted from the New York Stock Exchange. See full story.

RadioShack (RSH) was downgraded to underperform from sector perform at RBC Capital Markets.

Revlon Inc. (REV) said it swung to a fourth-quarter loss, hurt by restructuring costs and the discontinuation of its Vital Radiance brand. For the quarter, the company posted a loss of $5.5 million, or 1 cent a share. In the year-ago period, it earned $64.3 million, or 17 cents a share. Net sales fell to $378.9 million from $437.8 million. The sales decline was mainly driven by lower shipments, partially offset by lower returns, allowances and discounts. Revlon said it plans to continue to take advantage of opportunities to reduce and refinance its debt, including refinancing the remaining balance of our 8-5/8% senior subordinated notes due on Feb. 1, 2008.

Rockwood Holdings (ROC) was downgraded to neutral from buy at Goldman Sachs.

Saba Software (SABA) said it expects non-GAAP results of between breakeven and a profit of 2 cents a share for the third quarter on revenue of between $24.4 million and $25.5 million. The company's previous non-GAAP outlook was for earnings of 7 to 10 cents a share in the period on revenue of $27 million to $28 million. The company cited lower than expected license revenue for the shortfall due to delays in completing a number of sizeable transactions by the end of the quarter.

Salem Communications Corp. (SALM) reported fourth-quarter net income of $3.27 million, or 14 cents a share, compared with $3.29 million, or 13 cents a share, a year earlier.

Shuffle Master (SHFL) was downgraded to hold from buy at Jefferies & Co. The firm also lowered its price target range to $18-$20 from a prior target of $26, citing a lack of clarity on the outlook for placements. After Monday's close, the Las Vegas gaming equipment company forecast earnings from continuing operations of 5 cents as share on revenue of $37.3 million for the first quarter. It expects its total shuffler installed base to increase 18% to 22,815.

Stewart Enterprises Inc. (STEI), the New Orleans owner and operator of funeral homes and cemeteries, reported fiscal-first-quarter net income rose 42% on 5.2% higher revenue. For the quarter ended Jan. 31, earnings were $11.9 million, or 11 cents a share, compared with $8.4 million, or 8 cents, in the year-earlier period. Revenue reached $132.7 million from $126.1 million. Cemetery revenue rose 10%, helped by sales of cemetery property. In the funeral division, revenue rose 1.5% and the company saw "robust increases" in average revenue per service.

Texas Instruments narrowed the range of its first-quarter sales and profit forecasts. See full story.

TransAct Technologies Inc. (TACT) shares tumbled in Tuesday trade after the Wallingford, Conn.-based printer maker late Monday reported fourth-quarter net earnings of $983,000, or 10 cents a share. In the same quarter last year, the company posted a net loss of $727,000, or 8 cents a share. Revenue rose to $15.7 million from $12.5 million. "On balance, although early 2007 order rates imply a slowdown for the first quarter of 2007 from recent growth rates, we anticipate stronger sales growth, compared to the first quarter 2007, during the remaining quarters of this year," said Chief Executive Bart Shuldman in a statement.

Vail Resorts (MTN) was downgraded to neutral from buy at Banc of America Securities, citing valuation.

Wireless Facilities Inc. said it plans to delay its 2006 annual report as it continues to investigate options backdating. In the delayed report, the company will record a $9.2 million charge related to the accelerated vesting of all of its employees stock options an $18.3 million goodwill impairment charge, and a $3.4 million asset impairment charge.