A weblog about stocks, technical analysis, the market and other things that pop into the mind of Manuel Backus, founder and head trader of Portfolio Crafter and First Hour Trading.
Stock of Micron Technology (Nasdaq: MU) closed down $0.56 or 4.6% to $11.51, after reporting quarterly earnings loss that was steeper than expected. The chipmaker also said that prices for memory chips have stabilized recently and that demand should pick up this year. The company took a $52 million loss in its second quarter and was cut to sell by Goldman Sachs. For the first quarter of fiscal 2007, the company reported a profit of $192 million, up from $63 million earned in the same period last year. This topped analysts' consensus estimate. Quarterly sales rose 16% to $1.58 billion, helped by demand for DRAM memory chips used in PCs being built ahead of Microsoft Corp.'s release of Vista.
Shares of Daimler Chrysler (NYSE: DCX) closed up $3.73 or 3% to $84.80, after billionaire investor Kirk Kerkorian offered to buy Chrysler for $4.5 billion. His bid is contingent upon reaching a deal on a new labor agreement with the United Auto Workers union. He would offer ownership stakes to the union and its membership as well as Chrysler management were he to buy it. The offer is contingent on reaching an "equitable arrangement" with DaimlerChrysler for it to assume some of the unfunded pension liabilities and health care costs of Chrysler retirees.
Shares of Best Buy (NYSE: BBY) closed down $1.24 to $47.89, despite reporting higher quarterly earnings that topped estimates. It reported an 18.5% rise in fourth-quarter profit, helped by sales of flat-panel televisions, and announced that it plans to offer Apple computers in 200 stores this year. Net income for the fiscal fourth quarter ended March 3 rose to $763 million, from $644 million a year earlier. Revenue increased 21% to $12.9 billion, and same-store sales increased 5.9%.
Shares of Daimler Chrysler (NYSE: DCX) closed down $0.38 to $82.57, after the CEO confirmed that the company is talking with potential buyers about its money-losing Chrysler unit. However, he was not able to give details of discussions and said all options for the automaker are still on the table.
Stock of Citigroup (NYSE: C) closed down $0.18 to $51.54, after reporting that it is looking to cut 15,000 jobs, as part of a broader restructuring plan that could cost the bank $1 billion. This cut would represent about a 5% reduction in Citigroup's worldwide work force of 327,000. Some of the reduction could be achieved by not filling positions opened through normal attrition.
Shares of Intel (Nasdaq: INTC) closed up $0.02 to $19.29, on news that it will invest $2.5 billion to build a chip plant in China, with the production of chipsets to begin in 2010. Groundbreaking is scheduled for July in Dalian, which will be Intel's first semiconductor plant in Asia. The 12-inch wafer plant will have a monthly capacity of 52,000 wafers and will use 90-nanometer technology to produce chip sets.
Stock of homebuilder KB Home (NYSE: KBH) fell 0.3% after reporting that first-quarter profit dropped 84% and cautioned that problems in sub-prime mortgages and imposition of stricter lending standards may put more stress on a wobbly market. Its first-quarter net income fell to $27.5 million, from $173.3 million earned in the year-earlier first quarter.
Shares of Motorola (NYSE: MOT) closed down $1.24 or 6% to $17.50, after warning that it will post a first-quarter loss and that full-year sales will miss forecasts, owing to weak sales of mobile devices. It also cut its revenue view to a range of $9.2 billion to $9.3 billion, from its January estimate of $10.4 billion to $10.6 billion.
Stock of ABM AMRO (NYSE: ABN) closed down $0.13 to $41.23, on news that it is discussing to be acquired by Barclays (NYSE: BCS) for for $80 billion. Shares of Barklays closed up $1.85 to $55.20. No details of the structure of any deal were released, but at current values a combination would create a $166 billion financial services giant.
Shares of TXU (NYSE: TXU) closed up $1.52 or 2% to $64.27, as it is reportedly being wooed by a private equity group, led by the Blackstone Group. This could upset the record-breaking $32 billion bid for the Texas power company from competing buyout shops. TXU had agreed to be acquired by a private equity group led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group last month in the largest leveraged buyout ever.
Stock of Community Health systems (NYSE: CYH) closed down $1.95 to $34.85, after stating that it was buying Triad Hospitals (NYSE: TRI) for $5.1 billion in cash, ending an existing $4.5 billion deal for Triad to be taken private by a group of private equity funds. Shares of Triad Hospitals closed up$2.52 to $51.88. The deal pays $54 per share in cash, plus $1.7 billion in debt. This is a 9% premium over Friday’s close at $49.36.
Shares of Wal-Mart (NYSE: WMT) closed up $0.29 to $46.29, after it stated that it was withdrawing its application for limited banking operations, after critics said the world's No. 1 retailer might use the bank as a stepping stone to offer a broader range of financial services. They have decided to better focus on other ways to serve customers.
Shares of Caremark RX (NYSE: CMX) closed down $0.46 to $62.29, after it approved a $24 billion takeover bid from drugstore CVS (NYSE: CVSX). Stock of CVS closed down $0.44 to $32.90, after CVS won the battle over the company against Express Scripts (Nasdaq: ESRX). The deal will allow CVS, to expand its prescription benefits business and mail-order operations at a time when traditional pharmacies are under pressure from mail-delivery facilities.
Stock of Accredited Home Lenders (Nasdaq: LEND) closed up $1.55 or 17% to $10.98, after saying it will sell $2.7 billion in loans at a discount as a means of buying time while it contends with a cash crunch. The loan sale is expected to be completed within days, and will result in a pretax charge of about $150 million. The loans are being sold at a substantial discount to alleviate pressures from margin calls.
Shares of Cisco Systems (Nasdaq: CSCO) closed down $0.04 to $25.81, after stating that it would buy WebEx (Nasdaq: WEBX) which makes online collaborative software, for about $3.2 billion. Stock of WebEx closed up $10.18 or 22% to $56.38. The deal will position Cisco to move deeper into the growing market for online software, especially for small- to medium-sized businesses. Cisco will buy all outstanding shares of WebEx for $57 a share in cash, a 23% premium over Wednesday closing price. WebEx, which generated revenues of $380 million in 2006, provides Web-based conferencing software and systems and other collaborative online applications.
Shares of General Motors (NYSE: GM) closed down $0.87 to $29.38, amidst warning about accounting problems, saying that its internal controls over financial reporting are ineffective and could make it hard for the company to execute its business plan. It acknowledged that the company had not maintained a sufficient complement of personnel with an appropriate level of technical accounting expertise and said it would make greater use of outside experts while it added staff with that necessary level of knowledge.
Stock of Ford Motors (Nasdaq: F) closed up $0.01 to $7.94, after it decided to sell its luxury Aston Martin line for $925 million. Aston Martin was founded in 1914, and makes several different sports cars with prices starting at $110,000. As part of the deal, Ford will retain a $77 million stake in the car brand.
Stock of New century Financials (NYSE: NEW) closed down $0.66 or 17% to $3.21, on worries that it will have to file for bankruptcy. The company said it had stopped taking new loan applications because some of its financial backers won't provide access to financing.
Shares of Yahoo (Nasdaq: YHOO) closed down $1.59 or 5% to $29.12, on news that AT&T (NYSE: T) wants to scale back its partnership with the search engine. Stock of AT&T Corp. rose 0.1%. The telecom company and Yahoo Inc. are negotiating potentially sweeping changes that could scale back their partnership. These changes could cost millions in revenue to Yahoo.
Stock of Google (Nasdaq: GOOG) closed up $16.61 to $457.55 after its CEO Eric Schmidt said that his firm and Apple Inc. (Nasdaq: AAPL) are working together on "many more" new projects, which he did not identify. Shares of Apple closed up $1.87 to $88.19 after this news.
Shares of Aeroflex Inc. (Nasdaq: ARXX) gained nearly 19%, as its board agreed to an offer under which it will be acquired by private-equity firms General Atlantic and Francisco Partners in a deal valued at $1 billion. Under terms of the deal, each outstanding share of Aeroflex will be purchased for $13.50 in cash. The bid represents a 23% premium to Friday's closing price of $11.01.
Stock of American International Group, Inc. (NYSE: AIG) closed up $2.40 or 3.6% to $69.81, after reporting higher quarterly earnings. The company also said it would buy back $5 billion in stock in 2007 as part of a broader $8 billion stock buyback plan. Net income came in at $3.44 billion, vs. $444 million, a year earlier.
Shares of Dell (NYSE: DELL) closed up $0.17 or 0.74% to $23.18, after reporting lower quarterly earnings that topped estimates on lower quarterly revenue that missed estimates. The company also cautioned that growth and profit margins will be limited during the next few quarters. It reported a 33% drop in fourth-quarter profits. It reported earnings of $673 million, for the quarter, compared to $1 billion last year. Its sales for the quarter were $14.4 billion, a 5.1% decrease from the year-ago period.
Shares of Oracle (Nasdaq: ORCL) closed up 34 cents to $16.77 on news that it will buy Hyperion Solutions Corp. (Nasdaq: HYSL) for $3.3 billion, to boost its position in the market for performance management software. Stock of Hyperion closed at $51.57. Oracle will pay $52 a share in cash for each Hyperion share, which represents a 21% premium over Wednesday's closing price. Oracle expects to close the deal in April 2007.
Stock of Wal-Mart Stores Inc (NYSE: WMT). fell 3.6% after it agreed to acquire 35% of Trust-Mart, a Taiwanese-owned operator of hypermarkets in China. The world's largest retailer has reportedly agreed to pay around $1 billion for the stake. Taking full control of Trust-Mart would more than double Wal-Mart's retail footprint in China, where it currently operates 68 Super-centers, three Sam's Clubs, and two Neighborhood Markets in 36 cities.
Shares of Station Casinos (NYSE: STN) closed up $3.20 or 4.2% to $86.50, after agreeing to be taken private for $5.4 billion by a firm led by its management. The total transaction is valued at approximately $8.8 billion, including a $3.4 million debt. FCP has agreed to pay $90 per share in cash, which marks a 30% premium over Station's closing stock price on Dec. 1.
Stock of Texas utility (NYSE: TXU) closed up $7.91 or 13% to $67.93, after agreeing to a $45 billion cash and debt buyout led by two private equity firms and the private equity unit of investment bank Goldman Sachs. This is the largest private equity buyout in history. The group will pay $69.25 a share for the company, a premium of 15.4% over Friday's close. The cash component of the deal is valued at $32.3 billion.
Shares of Lowe's (NYSE: LOW) closed up $1.30 to $34.93, after reporting lower fourth-quarter earnings that nonetheless topped estimates and also issuing a first-quarter and full-year forecast that is in line with analysts' estimates. It reported a 11.5% drop in fourth-quarter earnings as the battered U.S. housing market hurt sales. Total sales fell about 4% to $10.4 billion in the quarter, better than analyst estimates, while sales at stores open at least a year declined 5.3%.
Shares of Yum Brand (NYSE: YUM) closed down $0.55 or 1% to $60.51, after a pack of rats were seen scurrying around a closed KFC/Taco Bell restaurant in New York City. The restaurant had been cited in December for a number of health code violations, including evidence of rodents and live cockroaches.
Stock of Toll Brothers (NYSE: TOL) closed down $0.93 or 3.6% to $31.93, after reporting sharply lower fiscal first-quarter profit, reflecting the ongoing collapse of the housing market. It also lowered its fiscal 2007 forecast. Its quarterly net earnings fell, after a $96.9 million write-down for the lower value of land, as the housing market continued to flounder. It earned $54.3 million, down from $163.9 million in the year earlier quarter.
Shares of Cisco (Nasdaq: CSCO) closed up $0.02 to $27.40, and Apple Computers (Nasdaq: AAPL) closed up $0.31 to $89.51, after reaching an agreement so that both can use the iPhone name. This agreement has been reached after Cisco sued the iPod maker for using it for a new multimedia phone. In addition, the two companies will explore opportunities to work together in the areas of security, and consumer and institutional communications.
Stock of Whole Foods (Nasdaq: WFMI) closed up $6.41 to $52.11, after stating that it will buy Wild Oats (Nasdaq: OATS) for around $565 million in cash. Stock of Wild Oats closed $2.69 to $18.41, in active trading. This will allow Whole Foods to compete with much larger traditional grocers, which are increasingly offering organic foods. Whole Foods will pay $18.50 a share in cash - an 18% premium to the company's closing share price on Wednesday. Whole Foods will also assume $106 million of Wild Oats' debt.
Stock of United Technologies Corp. (NYSE: UTX) slipped 0.8%, as one of its unit Otis was fined a total of $1.3 billion by the European Commission for allegedly rigging prices to install and maintain escalators and elevators. The fine narrowly tops the 855 million euro penalty against eight vitamin makers in 2001 and a recent 750 million euro fine for electrical generation equipment makers.
Stock of Hewlett-Packard (NYSE: HPQ) closed down $2.03 or 4.7% to $41.10, despite reporting quarterly sales and earnings that increased from a year earlier and topped estimates. The company also forecast fiscal year 2007 sales and earnings in a range that beats analysts' forecasts. Its net income rose to $1.5 billion, up 26% from $1.2 billion a year ago. Quarterly revenue rose 11% to $25.1 billion during the quarter, from $22.6 billion a year ago. Analysts were anticipating the company to report $24.3 billion in sales during the quarter.
Shares of Arcelor Mittal (NYSE: MT) closed 1.6% higher, after reporting a 3.5% slip in 2006 net income due to a higher tax rate and also said it will distribute $2.4 billion to shareholders via a dividend and share buybacks. Full-year pro-forma profit fell to $7.97 billion from $8.26 billion. Its EBITDA rose 2.1% to $15.27 billion in 2006, but missed analysts' expectations of $15.32 billion. In the fourth quarter, Arcelor-Mittal earned $2.37 billion, compared with $2.18 billion, in the third quarter. Sales climbed 5% to $23.3 billion. The company generated $4.3 billion in cash during the latest quarter and cut debt by $2.3 billion.
Shares of Arcelor Mittal (NYSE: MT) closed 1.6% higher, after reporting a 3.5% slip in 2006 net income due to a higher tax rate and also said it will distribute $2.4 billion to shareholders via a dividend and share buybacks. Full-year pro-forma profit fell to $7.97 billion from $8.26 billion. Its EBITDA rose 2.1% to $15.27 billion in 2006, but missed analysts' expectations of $15.32 billion. In the fourth quarter, Arcelor-Mittal earned $2.37 billion, compared with $2.18 billion, in the third quarter. Sales climbed 5% to $23.3 billion. The company generated $4.3 billion in cash during the latest quarter and cut debt by $2.3 billion.
Shares of JetBlue (Nasdaq: JBLU) closed down $0.66 or 5% to $12.90, its CEO announced an overhaul that could cost the company $30 million dollars. The tag includes about $10 million for refunding tickets for canceled flights, $16 million for issuing travel vouchers and $4 million for incremental costs such as hiring overtime crews.
Stock of Sirius (Nasdaq: SIRI) jumped nearly 7% and XM Satellite (Nasdaq: XMSR) shares gained 13% on news of their deal. Although there was some doubt about whether regulators would approve the deal. Shares of Sirus closed up $0.22 to $3.92, and those of XM Satellite closed up $1.44 to $15.42. Each will own half of the combined company, which would offer listeners a much wider variety of programming, including sports, news and high-profile entertainers such as shock jock Howard Stern. XM Chairman Gary Parsons would remain chairman of the combined firm, while Sirius' Mel Karmazin would assume the role of CEO. The company would have a market value of roughly $13 billion, including approximately $1.6 billion in net debt. XM shareholders would get 4.6 shares of Sirius stock for each share of XM they own.
Stock of Home Depot (NYSE: HD) closed down $0.15 to $41.29, after reporting lower quarterly earnings that missed estimates. It posted a 28% drop in fourth quarter profit as the weak U.S. housing market depressed sales at its retail stores. Earnings in the fourth quarter fell to $925 million, from $1.3 billion, a year earlier. Total sales rose 4% to $20.3 billion, below analysts' estimates of $20.8 billion. Retail store sales fell 2% to $17.4 billion, while sales at stores open at least a year fell 6.6%. Sales at Home Depot Supply, rose 64% to $2.9 billion.
Stock of AMR (NYSE: AMR) closed up $0.79 or 2% to $38.84, on media reports that the parent of American Airlines may be a buyout target for a group that includes Goldman Sachs (NYSE: GS) and British Airways (NYSE: BAB). The proposed bid is said to be between $9.8 billion, or $46 a share, and $11.1 billion, or $52 a share.
Shares of Microsoft (Nasdaq: MSFT) closed down $0.72 or over 2% to $28.74, after the software leader's CEO said that some analysts' forecasts for Vista revenue in fiscal-year 2008 are too aggressive. He also said that operating expenses should wane.
Shares of Applied Materials (Nasdaq: AMAT) closed up $0.70 or 4% to $18.89, after reporting quarterly earnings that beat forecast. While revenue was less than expected, investors focused on the strong earnings and positive forecast. Its net profit was $403.5 million, compared with $142.8 million a year earlier. Revenue was $2.28 billion, up 23% from a year earlier but lower than the $2.35 billion expected by analysts.
Shares of DaimlerChrysler (NYSE: DCX) jumped 8.3% to close at $69.78, after the automaker said it would consider "far reaching" options for Chrysler, including finding a partner. It also expects to eliminate 13,000 jobs in the Chrysler division. The move aims to cut $4.5 billion in costs as the company struggles to get back in the black by 2008.
Stock of 3M (NYSE: MMM) closed up $1.84 or 2.3% to $76.43, after its board approved a $7 billion share buyback plan and boosted its quarterly dividend. It has proposed to buy back up to $7 billion of its own shares over the next two years.
Shares of Caremark Rx (NYSE: CMX) closed up $1.97 or 3% to $62.88, after drug store CVS (NYSE: CVS) increased its bid by tripling a proposed special cash dividend to $6 a share. Stock of CVS closed down $0.40 to $32.09. CVS would pay $23.7 billion, or $54.26 per share, in stock plus the $6 cash dividend. On the other hand, Express Scripts' cash-and-stock offer has valued Caremark at $26.6 billion, or $61.08 per share.
Shares of Home Depot (NYSE: HD) closed up $0.44 or 1.6% to $41.44, on reports that it is considering the sale of its wholesale distribution unit, HD Supply, as it focuses on its retail business. HD supply has an annual revenue of about $12 billion. HD Supply has nearly 1,000 locations in the United States and Canada and has more than 26,000 employees.
Shares of Vodafone (NYSE: VOD) closed up $0.58 to $29.53, after it won a majority stake in Indian mobile firm Hutchison Essar, in a deal worth $11.1 billion. This values India's fourth-biggest mobile firm at around $19 billion, including debt. India's Essar Group, which owns 33% of Hutch Essar and had also been bidding for the 67% being sold by Hutchison Telecommunications International Ltd, confirmed the deal on Sunday. The deal is a critical move by Vodafone CEO Arun Sarin, who is under pressure amid slowing growth in Vodafone's core European markets to expand the business while at the same time not overpay for acquisitions.
Stock of MasterCard International (NYSE: MA) closed down $11.14 to $103.60, despite reporting fourth-quarter earnings that rose from a year earlier and topped estimates. However, investors focused on the company's cautious comments about gross margin growth in 2007. The company earned $40.9 million, in the fourth quarter, compared with a loss of $52.9 million a year ago. Revenue in the quarter was $839.2 million, up 17% from $715.9 million a year ago.
Shares of Lear Corp. (NYSE: LEA) dropped 1.7% to $39.39 as the company's board accepted a buyout offer from a partnership backed by Icahn's American Real Estate Partners L.P (NYSE: ACP). The group offered $5.3 billion, or $36 a share, for Lear. But Pzena Investment management, which holds a 10.1% stake in Lear, said that it believes the company's value to be closer to $60 a share.
Shares of Gateway Inc. (NYSE: GTW) fell 9.7% to $1.94, as it reported mixed fourth-quarter results that showed a drop in revenue even as it posted a profit of $8.8 million. The company turned in an EPS of 2 cents, compared to a loss of $20.9 million a year ago. Revenue slipped to $1.02 billion from $1.12 billion in the year-ago quarter, owing to the weaker-than-normal demand in its retail business. Retail sales fell 5% from a year ago, to $755 million, and professional sales totaled $181 million, down 16% from a year ago. Direct sales revenue fell 26%, to $85 million in the quarter.
Shares of HSBC (NYSE: HBC) closed down $2.44 to $89.78, after warning that its bad-debt charge for last year would be higher than expected. This is a result of problems with its U.S. mortgage lending. It expects that bad debt provisions would be 20% higher than analysts had forecast for 2006.
Shares of Walt Disney (NYSE: DIS) closed down $0.19 to $35.29, despite reporting quarterly sales and earnings that rose from a year ago and topped estimates. Sales climbed 10% to $9.7 billion, ahead of the expected $9.5 billion, and net profit more than doubled to $1.7 billion.
Shares of Cisco Systems (Nasdaq: CSCO) rose 4% after the company reported quarterly sales and earnings that rose from a year earlier and topped forecasts. The company also issued bullish guidance for its current quarter, giving hope to investors that corporate tech spending will show strength in 2007. Sales came in at $8.4 billion, compared to projections of $8.28 billion, and up 27% over the last year. The second-quarter net income was up 40% to $1.9 billion.
Stock of Whirlpool (NYSE: WHR) lost 2.9% to $86.70. 3% as the company reported a 13% profit decline on discontinued operations, while revenue rose 25%. Its net income totaled $117 million, compared with $114 million a year earlier. Third-quarter earnings from continuing operations totaled $134 million, sales in the third quarter surged 35% to $4.8 billion, and the total revenue rose about 8%.
Shares of Wal-Mart Stores Inc. (NYSE: WMT) rose slightly after the retailer announced that it is testing a possible video download service that would offer more than 3,000 films and television shows. This will bring the company into the burgeoning market for digital entertainment delivered to U.S. homes.
Stock of National Semiconductor (NYSE: NSM) closed down $0.64 or 2.7% to $22.68, after warning that revenue in its fiscal third quarter will fall more substantially from the second quarter, due to slower shipments. It projected a 14% to 15% decrease in third-quarter revenue from second-quarter levels.
Stock of Apple (Nasdaq: AAPL) fell 1% even after the tech icon reached an agreement with the Beatle's Apple Corps. Ltd over their to long-standing trademark dispute. This may pave the way for Beatles songs to be made available for sale on Apple's iTunes Music Store.
Stock of Triad Hospitals (NYSE: TRI) closed up $6.38 or 15% to $49.65, after it agreed to a $4.7 billion private equity buyout offer. The deal includes about $1.7 billion of debt and is valued at $6.4 billion. The buyers will pay $50.25 per share, which is a 16% premium over the Friday closing. Triad can solicit superior proposals from third parties during the next 40 days.
Shares of Wal-Mart Stores (NYSE: WMT) closed up $0.44 or 1% to $48.52, after stating that January rose 2.2%, beating its prior forecast calling for a gain of 1% to 2%. However, this is the lowest annual sales growth in more than 25 years.
Shares of Chevron (NYSE: CVX) closed down $0.43 to $74.04, after reporting lower fourth-quarter profit, hurt by falling natural gas prices. Net income in the quarter dropped to $3.77 billion, from $4.14 billion in 2005. Revenue in the quarter fell to $47.75 billion from $53.79 billion last year. The company said that it added slightly more oil and gas to its reserves than it produced in 2006 - 950 million barrels of oil equivalent, or 101% of production
Shares of Electronics Arts (Nasdaq: ERTS) gained 1.2% at $51.13, as investors looked past a 37% drop in profit and a sales forecast that lagged Wall Street estimates. The results came as a pleasant surprise to several analysts who had expected the company to come in below consensus forecasts. The company also outlined a plan for the coming fiscal year that includes stepped-up development for Nintendo platforms, including the popular Wii that debuted on the market in November and has outsold PlayStation 3.
Stock of Amazon (Nasdaq: AMZN) closed down $1.31 or 4% to $37.39, after the company reported lower fourth-quarter earnings that topped estimates and lifted its revenue forecast for the first quarter. The company reported net income of $98 million, down from $199 million a year earlier. Sales jumped 34% to $3.99 billion as shoppers took advantage of its unlimited free-shipping incentives.
Shares of Google (Nasdaq: GOOG) closed down $19.75 to $481.75, as investors took a "sell the news" approach in response to its earnings. The Internet search leader reported higher quarterly and full-year financial results that topped analysts' estimates. It reported a net income surge of 177% to $1 billion. The company reported a profit of $3.18 after backing out tax adjustments, stock compensation cost and other items. Revenue jumped 67% to $3.21 billion.
Shares of Exxon Mobil (NYSE: XOM) closed up $0.98 to $75.08, after reporting the highest annual profit in U.S. history, although fourth-quarter net income slipped from a year earlier. For the year, Exxon Mobil earned $39.5 billion, up from its previous record $36.1 billion in 2005. Net income in the fourth quarter slipped to $10.25 billion, from $10.71 billion a year earlier. Revenue in the quarter fell 9.4% to $90.03 billion. Earnings from exploration and production activities were $6.22 billion, down $818 million from a year earlier due to the natural gas price drop and decreased volumes driven by lower demand in Europe. Earnings from refining and marketing operations totaled $1.86 billion, down $430 million due to lower margins.
Shares of Altria (NYSE: MO) closed down $0.15 to $87.39, after reporting higher fourth-quarter profit. Additionally, the company said it would spin off its majority stake in Kraft foods (NYSE: KFT). Its profit was $2.96 billion, compared with $2.29 billion, a year earlier. Its 89% stake in Kraft Foods will be distributed March 30 to shareholders on record as of March 16.
Delta Air Lines (OTC: DALRQ) rejected a hostile takeover bid from US Airways Group (NYSE: LCC). Shares of US Airways closed up $2.88 to $55.98. US Air announced that the creditors' committee, whose approval Delta needs to emerge from bankruptcy, would not give its support to the nearly $10 billion cash-and-stock offer.
Stock of 3M (NYSE: MMM) closed down $4.26 or 5.4% to $74.70, on posting a weaker-than-expected fourth-quarter profit and caution about the slowdown in the global economy. The slowdown in the U.S. housing and automotive markets had a significant negative impact on sales and gross margins in a handful of divisions. The company had a net profit of $1.18 billion, up from $746 million earned in the year-ago period.
Shares of United Parcel Service (NYSE: UPS) slumped about 2.7% after reporting fourth-quarter earnings that matched expectations but revenue and a 2007 outlook that fell short, as it forecast slowing domestic demand in the U.S. The company reported fourth-quarter earnings of $1.13 billion, up from $1.05 billion a year earlier. Its revenue rose 5.6% to $12.63 billion from $11.95 billion a year ago. In addition, UPS said it expects 2007 EPS of $4.10.
Stock of Procter & Gamble (NYSE: PG) closed down $0.29 to $64.59, after reporting higher quarterly sales and earnings that topped estimates, thanks to strong sales of its consumer products. The company also boosted its 2007 profit outlook. However, investors focused on the company's organic sales growth, which came in at the lower end of its guidance. Its second-quarter income rose 12% to $2.86 billion, from $2.55 billion a year ago. Its sales advanced 8% to $19.73 billion from $18.34 billion. Organic sales rose 5%, toward the low end of the company's guidance.
Shares of Motorola (NYSE: MOT) closed up $1.27 or 7% to $19.58, on news that billionaire investor Carl Icahn is looking for a seat on the telecom's board. Icahn owns about 33.5 million shares of the company, or about 1.3% of its shares outstanding. Icahn is famous for pressuring management for changes at companies in which he invests.
Shares of Bristol-Myers Squibb (NYSE: BMY) closed up $1.22 or 4.7% to $27.43, on merger speculation with the French pharmaceutical giant Sanofi-Aventis (NYSE: SNY). This would make it the biggest drug company in the world. Bristol is understood to have signed a pre-merger deal. Stock of Sanofi closed down $0.64 to $44.70.
Stock of Amgen (Nasdaq: AMGN) closed down $3.35 or 5% to $71.50, after reporting higher quarterly earnings that missed estimates on higher sales that topped estimates. Its EPS jumped 20% to 90 cents from 75 cents for the same period the previous year. It reported sales of $3.83 billion, a 17% increase compared to the year-ago period, when sales totaled $3.27 billion. For the full year 2006, its EPS increased 22% to $3.90 from the prior year, and sales jumped 15% to $14.3 billion.
Shares of Honeywell (NYSE: HON) closed down $0.07 to $44.13, despite reporting higher quarterly sales and earnings. However, the company also issued a 2007 earnings forecast in a range that could miss analysts' estimates. Its quarterly profit rose 13.8% on strong demand for its airplane components and systems used in commercial construction. Fourth-quarter earnings increased to $585 million, from $514 million, a year earlier. Revenue came in at $8.28 billion, up 13.8% from $7.28 billion.
Stock of Microsoft (Nasdaq: MSFT) closed up $0.17 to $30.60, on reporting strong quarterly sales and earnings that beat estimates. While it reported a drop in profit for its fiscal second quarter, its sales and earnings beat analyst expectations thanks to strong sales of its Xbox 360 game console during the holidays. The company reported quarterly revenues of $12.54 billion, up 6% from a year ago and ahead of the $12.09 billion expected by analysts.
Shares of Caterpillar (NYSE: CAT) closed up $1.46 or 2.5% to $61.09, after reporting higher quarterly earnings that missed estimates on higher sales that topped estimates. The company also issued a bullish 2007 earnings forecast. Its net quarterly profit rose 4.3%, helped by increased sales of its engines and other machinery. It reported a fourth-quarter profit of $882 million, up from $846 million, last year. Sales rose 14 percent to $11 billion, lifted by a 13% jump in machinery sales and a 17% rise in engines sales.
Stock of Nokia Corp. (NYSE: NOK) rose 5.4% after delivering a forecast beating 19% increase in fourth-quarter profit. It also plans to buy back up to 4 billion euros in stock, and proposed an annual dividend of 0.43 euro a share, up 16% from 2005. Quarterly net income improved to 1.27 billion euros, from 1.07 billion euros a year earlier. Sales climbed 13% to 11.7 billion euros.
Shares of AT&T (Nasdaq: T) closed up $0.21 to $36.84, after reporting quarterly earnings that rose from a year earlier and topped estimates. The company also raised its forecast on the predicted benefits of its merger with SBC. The fourth-quarter income rose 17% to $1.9 billion, compared with $1.7 billion a year earlier. Revenue rose 23.1% to $15.9 billion from $12.9 billion. Looking ahead, AT&T said it expects to generate sharply higher savings from the BellSouth merger than originally forecast -- $22 billion vs. an original forecast of $18 billion.
Stock of eBay (Nasdaq: EBAY) closed up $2.45 or 7.5% to $32.45, after reporting higher quarterly earnings that topped forecasts and issued a bullish first-quarter and full-year profit outlook. It reported an EPS of 31 cents against the expected 28 cents. Revenue was higher at $1.72 billion, up 29% from the $1.33 billion last year, and higher than the $1.67 billion predicted by analysts. The total value of all items sold on the site in the quarter reached $14.4 billion, up 20% from $12.0 billion in the year-ago quarter.
Shares of Yahoo (Nasdaq: YHOO) closed up $1.98 to $28.94, after reporting fourth-quarter sales and earnings that rose from a year ago and topped estimates. Yahoo also announced an early launch for "Project Panama," its enhanced search engine that is expected to boost ad revenue. While the forecast first-quarter and full-year 2007 profit is short of forecasts, investors focused on the positive news and sent shares higher.
Stock of Sun Microsystems (Nasdaq: SUNW) closed up $0.49 or 8.6% to $6.15, owing to higher sales of its computer servers. Additionally, Kohlberg Kravis Roberts said it will invest $700 million into the group. The company earned a net income of $126 million, compared to a loss of $223 million in the year-ago period. Revenue climbed 7%, to $3.57 billion from $3.34 billion. Sun said the results were helped by a 14% rise in revenue from its systems products, including several lines of servers.
Shares of AT&T Inc. (NYSE: T) rose over 4% after the company's wireless unit Cingular reported better-than-expected earnings. Its fourth-quarter profit more than tripled as the company added an industry record 2.4 million net subscribers. Its net income jumped to $782 million from $204 million a year earlier. Revenue rose 10.2% to $9.8 billion from $8.85 billion.
Shares of McDonald's Corp (NYSE: MCD) closed down $0.69 to $44.16, after reporting fourth-quarter results that surged from a year earlier and met analysts' EPS forecast. Income was helped by brisk sales of breakfast items and its new Snack Wrap in the U.S., along with steady demand across all geographic regions. It reported earnings of $1.24 billion, up from $609 million in the year-earlier period. Same-store sales rose by 6.3% system-wide from the year-earlier quarter and by 5.7% for the full year.
Shares of Texas Instruments (NYSE: TXN) closed up $0.98 or 2% to $29.57, after reporting that fourth-quarter sales and earnings rose from a year ago and topped estimates. It also forecast first-quarter revenue that is short of estimates. It forecast first-quarter EPS of 28 cents to 34 cents on revenue of $2.95 billion to $3.2 billion. Analyst had expected first-quarter earnings of 35 cents a share on revenue of $3.3 billion.
Stock of Pfizer (NYSE: PFE) closed down $0.63 to $26.32, for a second session on a Bear Stearns downgrade. It also announced that it will cut 10,000 jobs and close five plants, including three R&D sites and two factories, by the end of 2008. It also said that it does not expect sales to grow in 2007 and 2008, and that it might purchase up to $10 billion of its own stock. The announcement was part of Pfizer's five-year plan to reduce its manufacturing plants from 93 to 48 by the end of 2008. The company plans to invest $3 billion of the money it saves in cost cuts in new products and business development through the end of 2008.
Shares of Pfizer (NYSE: PFE) closed down $0.27 or 1% to $26.95, despite reporting higher earnings on flat sales. Additionally, the company also announced that it would cut 10,000 jobs and shutter 5 plants as part of a broad restructuring. It revealed an additional $1 billion in restructuring moves, and also said it does not expect sales to grow in 2007 and 2008, and that it might purchase up to $10 billion of its own stock. The cuts include the recently announced termination of 2,200 sales representatives in the U.S. This announcement is part of Pfizer's five-year plan to reduce its manufacturing plants from 93 to 48 by the end of 2008.
Shares of Citigroup (NYSE: C) closed up $0.18 to $54.68, on news that it has moved its CFO, Sallie Krawcheck, to the job as head of its Global Wealth Management division. Additionally, Citigroup has also agreed to buy ABN Amro's mortgage Group for an estimated $3 billion. This will increase its customer base by 1.5 million customers. The unit has $9 billion in assets and a $224 billion mortgage service portfolio.
Shares of Intel Corp. (Nasdaq: INTC) lost 0.1% even after reaching a deal with Sun Microsystems (Nasdaq: SUNW), which will now use Intel chips. Shares of Sun Micro fell 0.4% while Intel rival Advanced Micro Devices (NYSE: AMD), which could suffer a blow from the deal, dropped 1.1%. Sun would now buy Intel chips to use in its server systems, and the agreement could include an Intel endorsement of Sun's Solaris operating system. This would be a blow to AMD, which is now Sun's exclusive source for chips based on the popular x86 design used in most personal computers and servers.
Shares of IBM (NYSE: IBM) closed down $3.37 or 5.5% to $96.08, despite posting quarterly sales and earnings that topped estimates, due to strength in services and its recent software acquisitions. However, investors took a 'sell the news' approach and sent shares lower. It reported an EPS of $2.20, compared to the expected $2.19. Its net income was $3.54 billion, compared to $3.19 billion in the fourth quarter last year. Its revenue was $26.3 billion, compared to the expected $25.66 billion. For its technology consulting business, IBM signed contracts totaling $17.8 billion in the quarter, up 55% from the year-ago quarter.
Stock of Citigroup (NYSE: C) closed down $0.06 to $54.33, after reporting quarterly earnings that fell from a year earlier, but also topped estimates. Its fourth-quarter profit fell 26% on the year, mainly because the firm booked a $2.1 billion gain a year earlier on the sale of its asset-management unit to Legg Mason. It also reported $415 million of previously announced charges in the latest quarter related to its Japanese consumer-finance business. The company earned $5.13 billion in the quarter, compared to $6.93 billion a year ago. The company also raised its quarterly dividend 10% to 54 cents a share. Its revenue rose 15% to a record $23.83 billion compared to $20.78 billion.
Shares of General Electric (NYSE: GE) closed down $1.04 or 1.5% to $36.96, despite reporting higher quarterly earnings that met estimates. However, the company also said it would restate financial results for the years 2001 through 2005, as well as the first three quarters of 2006. For the fourth quarter, the company had income from continuing operations of $6.6 billion, up from the $5.9 billion, a year earlier. Revenue at continuing operations was up 11% to $44.6 billion, better than the forecast of $44.2 billion.
General Electric Co. (NYSE: GE) said o it will buy two of Abbott Laboratories (NYSE: ABT) diagnostics business units for $8.13 billion, broadening itss reach into diagnostics. Shares of Abbott Laboratories closed up $0.50 to $53.29. Abbott's Molecular Diagnostics and Diabetes Care businesses are not part of the transaction and will remain part of Abbott. For GE, a foray into more traditional test-tube-based diagnostics would follow its $10.7 billion acquisition in 2004 of British bioscience company Amersham, which is developing molecular agents that could enhance PET scans and other advanced tests.
Stock of Alcoa Inc. (NYSE: AA) closed up 3.6% after saying it plans to buy back up to 10% of its outstanding stock and hike its dividend by 13%. It plans to buy back about 87 million shares over the next three years, in its first new buyback plan since July 2001. It will also raise its annual dividend to 68 cents a share from 60 cents. The company will fund the buyback and the dividend through its cash generation, adding that it's committed to maintaining a debt-to-capital ratio of 30% to 35%.
Shares of Motorola (NYSE: MOT) closed up $0.53 or 2.5% to $19.24, after the company said it plans to cut 3500 jobs in a bid to improve operating costs. The company forecast 2007 EPS to be flat to slightly above its 2006 earnings of $1.13 on sales of $46 billion to $49 billion. Profit from continuing operations fell to $528 million, from $1.177 billion in the year-ago quarter.
Shares of Apple (Nasdaq: AAPL) closed down $5.88 or 5% to $89.07, after it issued fiscal second-quarter sales and earnings guidance that was short of analysts' forecasts. In the latest quarter, Apple reported an EPS of $1.14, beating the 78 cents expected by analysts. It reported a net quarterly income of $1.0 billion, up 77% from $565 million in the year-ago quarter. It reported quarterly revenue of $7.1 billion, against the expected $6.42 billion.
Stock of McDonald's Corp. (NYSE: MCD) closed up $0.29 to $44.86, after stating that fourth-quarter earnings and December sales would top estimates. It expects an EPS of 61 cents from continuing operations for the fourth quarter, against the expected 58 cents. Its sale at its hamburger restaurants rose 7.2% in December, against the expected 4%. Same-store sales rose 6.9% in the United States, 8.2% in Europe, and 4.8% in Asia, Middle East and Africa.
Shares of JP Morgan Chase (NYSE: JP) closed up $0.04 to $48.43, on reporting quarterly earnings that surged from a year ago and topped estimates. Strength in investment banking helped it post record quarterly results, but it also reported a decline in retail banking profit. Its fourth-quarter net income soared 68% from the year-ago period to $4.5 billion, and the revenue climbed 14% to $16.9 billion from the same quarter last year. Quarterly income from continuing operations came in at $3.9 billion, up from $2.6 billion, a year earlier. Analysts had forecast an EPS of 95 cents.
Shares of Intel (Nasdaq: INTC) closed down $1.26 or 5.7% to $21.04, after reporting quarterly EPS of 26 cents, a penny more than what analysts were expecting but down from 40 cents a year earlier. It also warned that gross margins, a key measure of profitability, would be weaker in 2007.
Stock of General Electric (NYSE: GE) closed up $0.25 to $38.14, after it agreed to buy the aerospace unit of Smiths Group for $4.8 billion in cash as it seeks to further capitalize on the airline industry's return to health and robust U.S. military spending. It has also signed a letter of intent to combine its homeland protection division with Smiths' detection unit in a joint venture called Smiths GE Detection. This acquisition signals GE's determination to cash in on record new plane orders and the accompanying surge in demand for flight management technology and aircraft components. This satisfies its long-held ambition of going "beyond the engine" and will complement its existing aviation division to create a $16 billion giant.
Shares of Symantec (Nasdaq: SYMC) closed down $2.69 or 7% to $17.79, after the web and network security software maker warned that fiscal third quarter and 2007 profit will miss forecasts. It expects to see third quarter EPS of 10 to 11 cents, compared to earlier expectations of 14 to 15 cents, and $1.29 to $1.31 billion in revenue, compared to previously anticipated $1.315 to $1.345 billion in revenue. Additionally, Symantec also received a pair of downgrades. CIBC World Markets downgraded the stock to sector performer from sector out performer, while J.P. Morgan a downgraded the stock to neutral from overweight.
Shares of Wells Fargo (NYSE: WFC) closed up $0.73 to $36.24, after it reported quarterly earnings that rose from a year ago. Wells Fargo said earnings increased to $2.18 billion, from $1.93 billion last year. Revenue grew by 11%, reaching $9.4 billion. Additionally, Bear Stearns (NYSE: BSC) said it'll pay an undisclosed price to buy from Wells Fargo its direct and indirect consumer-finance subsidiaries serving Latin America.
Shares of Cisco Systems (Nasdaq: CSCO) closed up $0.02 to $28.70, on stating that it is suing Apple (Nasdaq: AAPL) for trademark infringement over the name of its new device iPhone.. Stock of Apple closed down $1.23 to $95.77. Cisco has held the trademark on 'iPhone' since 2000, and is seeking an injunction preventing Apple from using the 'iPhone' name.
Shares of Genentech (NYSE: DNA) closed up $3.67 or 4.3% to $87.41, after reporting quarterly sales and earnings that rose from a year ago and topped estimates. It also issued a 2007 earnings growth projection that is more than analysts are currently forecasting. It had very strong sales of its flagship oncology drugs and new eye medication Lucentis. It reported a net income of $594 million, or 55 cents a share, compared with $339 million, or 31 cents a share, for the same quarter last year. Operating revenue rose to $2.7 billion, up from $1.9 billion in 2005. This is against an EPS of 56 cents on revenue of $2.55 billion. Sales of its top-selling drug Rituxan jumped 16% to $560 million.
Shares of Alcoa (NYSE: AA) closed up $1.71 or 6% to $30.23, as it launched the reporting period, becoming the first Dow component to release results, as is traditional. It reported that fourth-quarter earnings increased by 60%, far outpacing big restructuring costs. Its net income rose to $359 million, or 41 cents a share, from $224 million, or 26 cents a share, in the year-ago period. Its revenue climbed 20% to $7.8 billion.
Shares of US Airways (NYSE: LCC) closed up $1.03 or 3% to $58.93, after it increased its takeover bid for bankrupt Delta Air Lines by almost 20% to $10.2 billion. Delta's unsecured creditors would receive $5 billion in cash and 89.5 million shares of US Airways stock. It has set a deadline of Feb. 1 for its new offer to be endorsed by Delta's creditor's committee.
Shares of Sprint Nextel (NYSE: S) closed down $2.19 or 11% to $17.45, after stating that its 2007 revenue will fall in a range that sets the midpoint below analysts' forecasts. It also said that it will cut about 5,000 jobs next year. It expects to report full-year revenue of about $41 billion, below the average analyst forecast of $41.5 billion.
Apple (Nasdaq: AAPL) stole the show at the annual Macworld conference. CEO Steve Jobs said that the company would launch the "iPhone" - with iPod, cell phone and "Internet communicator" capabilities. Additionally, the company will be renamed Apple Inc. to reflect its larger focus on consumer electronics. Shares of Apple closed up $7.10 or 8.3% to $92.57.
Shares of General electric (NYSE: GE) closed down $0.01 to $37.55, after it stated that it will buy privately owned Vetco Gray for $1.9 billion. The company supplies drilling and production equipment. Vetco Gray is a subsidiary of Vetco International Ltd, which is owned by three private equity firms, Candover, 3i Group and JP Morgan Partners. The transaction is expected to close in early 2007. Vetco is expected to generate more than $1.6 billion in sales in 2006. It has 5,000 employees in more than 30 countries. This acquisition enables GE to seize faster growth in a rapidly expanding global business.
Shares of Gap (NYSE: GPS) closed up $1.37 or 10% to $20.26, on reports that that it has hired Goldman Sachs (NYSE: GS) to help it look into strategic alternatives, including the possibility of putting itself up for sale. The company has been plagued with a protracted string of sales declines at its namesake stores. It operates more than 3,000 stores in the United States, including its Gap, Banana Republic, Old Navy, and Forth & Towne divisions.
Shares of Motorola (NYSE: MOT) closed down $1.61 or 9% to $18.94, after the cell phone manufacturer lowered its fourth-quarter forecast due to a shortfall of mobile device sales. Although Motorola sold more handsets than Wall Street expected - a record 66 million - it was forced to cut prices to entice customers as it battled rivals in markets around the globe. Its fourth-quarter sales is expected to range between $11.6 billion and $11.8 billion, lower than the previously pegged $11.8 billion to $12.1 billion. Analysts had forecast sales of $11.99 billion.
Shares of Apple (Nasdaq: AAPL) closed up $3.97 to $84.84, after the company restated its earnings and acknowledged that options were wrongly dated but it said CEO Steve Jobs didn't benefit as a result. Apple said it has recognized total additional non-cash stock-based compensation expenses of $84 million after taxes, including $4 million and $7 million in fiscal years 2006 and 2005, respectively. The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team.
Shares of AT&T (NYSE: T) closed up $0.22 or 0.7% to $35.72, on news that it has offered concessions that should lead the way to winning approval of its $85 billion buyout of BellSouth (NYSE: BLS). The stock of BellSouth closed up $0.31 to $47.11. New conditions include a promise to observe "network neutrality" principles, an offer of affordable stand-alone digital subscriber line service and divestment of some wireless spectrum. This would be the largest telecommunications merger in U.S. history. For the year, shares of AT&T Corp. have gained 46%.
Shares of General Motors (NYSE: GM) closed up $0.11 to $30.73, and this was the best-performing Dow stock of the year. GM that lost half of its value in 2005 as investors feared the automobile giant might go bankrupt, rose 58.2% in 2006.
Shares of Apple (Nasdaq: AAPL) closed down $0.59 or 0.7% to $80.93, amid ongoing concerns about its options practices, which are under federal investigation. Apparently, the company gave CEO Steve Jobs 7.5 million stock options in 2001 without the approval of the board.
Shares of IBM (NYSE: IBM) closed down $0.14 to $97.06, after IBM and Siemens AG received a 10-year, $9.3 billion contract from the German armed forces to modernize their data centers, software and computers. Siemens will receive a 60% share of the deal, and IBM would get the rest. Stock of Siemens rose 1.2% to 75.02 euros on the news and were the top gainer in a flat German DAX. The two companies will co-manage the project, jointly holding 50.1% in the consortium running it. The German government holds the remaining 49.9%.
Shares of Apple (Nasdaq: AAPL) closed up $0.01 to $81.52, on news that federal prosecutors are looking into whether company executives falsified stock options documents. The shares sank as much as 6% in the morning, before recovering.
Shares of Eli Lilly & Co. (NYSE: LLY) finished 0.8% higher at $51.78, after the FDA approved Byetta injection as an add-on therapy to improve blood-sugar control. The treatment has been approved for people with type 2 diabetes who have not achieved adequate control on other medications.
Stock of Microsoft Corp. (Nasdaq: MSFT) closed up 1.2% at $29.97, after it was in focus following a WSJ.com report that the company is leveraging personal and search information gleaned from its Hotmail e-mail program and its Live Search engine in a worldwide effort to target ads at users of its sites. The method, called behavioral targeting, is designed to allow advertisers to more efficiently reach exactly the audiences they want. However, computer-security experts have found potentially serious flaws in Microsoft's new Vista operating system.
Stock of Research In Motion Ltd. (Nasdaq: RIMM) closed down $3.70 to $130.00, despite reporting 47% growth in quarterly profit on strong shipments of its handheld devices. Additionally, Pacific Crest Securities raised the price target for the shares to $160 from $150. The company reported a third-quarter profit of $176 million, compared with last year's $120.1 million. Sales for the quarter rose 49% to $835.1 million, compared to the $560.6 million a year ago.
Shares of Red Hat (Nasdaq: RHAT) shot up $4.50 or 23% to $22.46, after the software developer posted strong sales and added more than 12,000 new customers. However, the company said third-quarter net income fell 37% to $15.5 million, from $24.5 million a year earlier. Yet sales rose 45% to $105.8 million from $73.1 million last year on the back of higher subscription sales of the company's open-source software. Its subscription revenue was $88.9 million, up 48% year-over-year.
Shares of Bed Bath & Beyond (Nasdaq: BBBY) closed down $1.44 or 4% to $38.49, as it disappointed investors with its quarterly earnings report. The home goods retailer reported a higher quarterly profit, but the results fell short of forecasts.
Shares of General Mills Inc. (NYSE: GIS) gained 1.6%. to close at $58.95. The company posted a 4% rise in second-quarter income, to $385 million from $370 million a year ago. Sales for the quarter rose 5.3% to $3.47 billion, while worldwide unit volume expanded 3%.
Shares of Swedish telecommunications equipment provider Ericsson (Nasdaq: ERICY) fell 0.1% after news it agreed to buy Redback Networks (Nasdaq: RBAK) for $2.1 billion. Shares of Redback closed up $4.49 or 21% to $25.66. Redback makes "edge" routers that connect computers to the Internet and allow operators to simultaneously deliver broadband, television and telephone services over networks using standard Internet infrastructure. This technology is essential to carriers that want to offer increasingly popular "triple-play" communications services.
Stock of Harrah Entertainment (NYSE: HET) closed up $0.37 to $82.69, after it agreed to be bought for $17.1 billion by private investors Apollo Management and Texas Pacific Group. The deal is for $90 a share in cash, along with the assumption of $10.7 billion in debt and is valued at $27.8 billion. The $90 a share price represents a 36% premium to its Sept. 29 closing price, the day before an initial offer of $81 a share was made.
Steel giant Arcelor Mittal (NYSE: MT) gained 1% to $42.12 after news it is buying Mexico's Sicartsa from Grupo Villacero for $1.44 billion. This will continue the steel-industry consolidation trend that started when Mittal Steel bought Arcelor. It has also agreed to a 50-50 joint venture to distribute and trade its long products in Mexico and the southwestern U.S. Sicartsa already shares a production site with Mittal Steel Lazaro Cardenas, and combining the two companies will help drive estimated annual synergies of $130 million.
Shares of Oracle (Nasdaq: ORCL) closed down $0.81 or 14% to $17.10, despite reporting earnings in line with expectations. It reported a net income of $967 million, or an EPS of 18 cents against the 22 cents expected by analyst. Investors were disappointed that its sales of new software licenses rose less than expected.
Shares of Morgan Stanley (NYSE: MS) closed up 2% after the company posted strong earnings and said it would spin off its Discovery credit card unit. The investment bank reported a 10% decline in net income for the fourth quarter, but profit still managed to outpace analysts' expectations. Its net income slipped to $2.21 billion from $2.47 billion a year ago. The consolidated net revenue for the latest quarter was $8.63 billion versus $6.96 billion a year ago.
Shares of financial services giant Citigroup (NYSE: C) closed up $1.37 or 2.5% to $55.44, on an upgrade. Merrill Lynch (NYSE: MER) upgraded the stock to a buy from a neutral, with the broker citing the stock's attractive valuation and saying it has greater confidence the bank will achieve its 2007 earnings target.
Harrah's Entertainment (NYSE: HET) reportedly is on the verge of being sold to two private-equity firms for at least $90 a share. The stock closed up $2.80 or 3% to $82.30, in what would be one of the largest private deals in history. Apollo Management and Texas Pacific Group are set to win an auction to acquire the gambling giant, beating out an offer from Penn National Gaming Inc (Nasdaq: PENN). The deal could be valued at more than $16 billion. Penn reportedly offered about $87 a share. Harrah had a revenue of more than $7 billion last year and a current market capitalization of nearly $15 billion. It owns 39 casinos in the U.S., including some gems of the Las Vegas Strip such as Caesars Palace and Paris.
Stock of Biomet Inc. (Nasdaq: BMET) closed down $0.47 or 1% to $41.53, after it said it will be bought by a group of private equity firms for about $10.9 billion. The group that includes Blackstone Group, Goldman Sachs Capital Partners and Kohlberg Kravis Roberts. Additionally, it also said it would be delaying its fiscal second quarter earnings report "due to developments related to the review of historical stock option practices. The bid is 27% over its closing price on April 3, the day before market speculation arose that the company had retained Morgan Stanley to assist it in "exploring strategic alternatives." However, it is only a couple of dollars above Friday's close of $42 a share.
Stock of Adobe Systems (Nasdaq: ADBE) closed up $1.99 or 5% to $42.80, after the software maker reported higher quarterly earnings and revenue. Its quarterly profit rose 16% after its acquisition of Macromedia helped boost sales of its computer programs used for design and document sharing. Its fourth-quarter net income rose to $181.9 million, from $156.3 million a year earlier. Revenue rose to $682.2 million, from $510.4 million in the year-earlier quarter. It said it is targeting revenue growth of about 15% for 2007 and an operating margin of 25 to 27% for the year.
Stock of Ford Motor Co. (Nasdaq: F) closed down 0.4% to $7.08, after news of its first management reshuffling under new CEO Alan Mulally. The company will expand the role of its head of product development in the Americas to include the rest of the world. Derrick Kuzak will be in charge of global product development asit seeks to integrate its international operations and streamline the design and creation of new car models.
Shares of Costco Wholesale Corp. (Nasdaq: COST) rose 1.8% after reporting a first-quarter profit of $236.9 million, up from $215.8 million in the year-earlier period. The 10% rise in first-quarter income is attributable to tight spending, higher membership fees and robust sales of electronics and toys. Revenue reached $14.15 billion, up 9%, as it rang up a 9% increase in sales of big-ticket electronics, diamond rings and fine wines and a 14% jump in membership fees. Same-store sales rose 4%.
Stock of Bear Stearns (NYSE: BSC) gained 2.6%, after reporting fourth-quarter net income rise 38% to $562.8 million – way past analyst forecasts. Higher underwriting fees and a strong merger and acquisitions trend boosted its profits by more than half in its fourth quarter, helping the company report its most profitable quarter ever and its fifth straight year of record earnings. The revenue increased to $4.47 billion, from $3.18 billion last year.
Shares of Hilton Hotels Corp. (NYSE: HLT) gained 2.4% after affirming its 2007 financial targets, including growth rates for management/franchise fees, margins and revenue per average room. The hotels operator also said it anticipates adding some 120,000 rooms globally between 2007 and 2009.
Shares of Home Depot (NYSE: HD) closed up $0.35 to $39.05, on stating that it is buying Chinese home improvement chain The Home Way for an undisclosed amount, in its first foray into retailing in China. The acquisition will give it 12 stores in six cities and access to a $50 billion home-improvement market that is growing at 20% per year. While the company did not disclose the terms of the deal or a purchase price, the acquisition is valued at $100 million.
Stock of Texas Instruments (NYSE: TXN) closed up $0.47 or 1.6% to $29.77, after it cut its earnings and revenue outlook. Despite that, J.P. Morgan upgraded the chipmaker. TI forecast sales in the range of $3.35 billion to $3.50 billion. It also forecast an EPS of 37 cents and 40 cents from its previous range of 40 cents to 46 cents.
Stock of Citigroup Inc. (NYSE: C) closed down $0.63 or 1% to $52.25, after the company failed to announce a major management shakeup. It has promoted corporate and investment banking head Robert Druskin to chief operating officer, but CEO Chuck Prince said there wouldn't be any further changes. This ended market speculation that the bank would announce an in-depth restructuring.
Stock of DuPont (NYSE: DD) gained 1.1% to $47.42 after it lifted its 2006 earnings forecast and said it would cut 1,500 jobs worldwide. The company plans to cut jobs in its agricultural business and then funnel the cost savings into seeds, where it has struggled to keep pace in the market for genetically modified corn. Additionally, it will also close or streamline manufacturing units at about 10 of the division's 250 sites. These changes will trigger $200 million in fourth-quarter restructuring charges, which will be offset with one-time tax and insurance gains.
Shares of Southwest Airlines Co. (NYSE: LUV) rose 1.7% after a story said that the shares could advance 15% next year, and the airline could be the target of a leveraged buyout. The stock has been outperformed by the so called legacy carriers, noting that the Amex Airline Index is up 8% for the year so far, while Southwest is down about 5%.
Stock of American International Group Inc. (NYSE: AIG) rose almost 1% after it said that one of its subsidiaries is buying port operations in several U.S. cities from Dubai Ports World for an undisclosed sum. AIG's Global Investment Group moved to buy the port businesses after Dubai Ports World decided in March to sell it to a domestic entity in a bid to end a political firestorm.
Stock of Bank of America Corp. (NYSE: BAC).dropped 1.6% after a Merrill Lynch analyst said that the bank is "very interested" in acquiring U.K. bank Barclays Plc (NYSE: BCS).It is expected that Bank of America is about to make a bid in a deal that would create the world's biggest bank.
Shares of Hewlett Packard (NYSE: HPQ) closed down $0.22 to $39.64, after stating that it will pay $14.5 million as part of an agreement to settle civil claims related to its controversial leak investigation with the California attorney general's office. Of this payment, $13.5 million will be used to establish a fund that helps California state prosecutors investigate violations of privacy rights and intellectual property rights.
Stock of McDonald's Corp. (NYSE: MCD), gained 1.1% at $43.76, after it said that global November sales at restaurants open at least one year rose 6.2%. The system wide sales rose 10.5%. McDonald's continues to produce strong results in all regions driven by the successful combination of a value menu/premium products, operational initiatives, and growth in both the breakfast, late night parts, and new product promotions.
Stock of General Motors (NYSE: GM) closed down $0.32 to $29.05, despite stating that its market share has bottomed out and that it sees crossover vehicles as the means of driving market share gains in the future. The company is also making progress in key negotiations on labor and contract issues with former unit Delphi Corp.
Shares of Vanda Pharmaceuticals (Nasdaq: VNDA) closed up $10.65 or 69% to $26.15, after its experimental schizophrenia drug was found effective in a late-stage trial. The company said it expects to file a marketing application for the drug, iloperidone, with U.S. regulators in late 2007. The trial has met its main goal of showing a statistically significant improvement in treating the symptoms of schizophrenia in patients taking the drug compared to those taking a placebo.
Shares of Apple (Nasdaq: AAPL) dropped 3% after the company stated that it will release its latest multimedia device - the iPhone - late in the first quarter or early in the second quarter of 2007. It was speculated that the new blockbuster would be coming out soon, so any perception of a delay will take some steam out of the stock.
Stock of Novell (Nasdaq: NOVL) closed down $0.34 or 5.4% to $5.99, after stating that it swung to a fourth-quarter profit from a loss a year earlier, but also issued fiscal 2007 revenue guidance in a range that is below analysts' estimates.
Yahoo Inc. (Nasdaq: YHOO) is revamping its operations and reshuffling its executive ranks amid stiff competition from others. However, the moves fell short of what some on Wall Street had hoped for and its shares fell $0.57 or 2.1% to $26.86. Its shakeup includes putting its current CFO in a position to potentially succeed its CEO.
Shares of Sirius Satellite Radio (Nasdaq: SIRI) slumped 7.7% at $4.17, after it said that retail sales since Thanksgiving were below forecast. It now expects to have between 5.9 million and 6.1 million subscribers by the end of the year, compared with its previous expectation of 6.3 million subscribers. This however, represents a growth rate nearly 20% above that of 2005.
Stock of Microsoft Corp. (Nasdaq: MSFT) dropped 0.7%, as its CFO said that the company remains on track to achieve revenue growth of 13% to 15% in 2007, with sales of its new Vista software product likely to be a key contributor. It also expects the EPS to grow 13% to 15%. They also believe that they can sell 10 million XBox Live units by the end of the Christmas season. Microsoft has earmarked additional spending of $300 million for acquisitions and operating costs, $1 billion for high growth products, and $500 million for online services.
Stock of Bank of New York (NYSE: BK) closed up $4.27 or 12% to $39.75, and Melon Bank (NYSE: MEL) closed up $2.73 or 6.8% to $42.78, after announcing a $16.5 billion deal the companies are calling a merger of equals. Bank of New York Co. agreed to buy Mellon Financial Corp., for $16.5 billion, creating a powerhouse in securities servicing and asset management. The new company will be called the Bank of New York Mellon Corp. Following the merger, Bank of New York will own 63% of the combined company and hold 10 of the 18 board seats.
Poultry producer Pilgrim's Pride Corp (NYSE: PPC) rose 10%, after agreeing to acquire Gold Kist Inc. (NYSE: GKIS) for about $1.1 billion and $144 million in debt. This would create a company with a larger share of the poultry market than industry leader Tyson Foods Inc. The deal, for $21 a share in cash, represents a 62% premium over Gold Kist's closing stock price on Aug. 18.
Shares of Pfizer (NYSE: PFE) closed down $2.96 or 11.5% to $24.90, on news that it has halted development of a once-promising cholesterol drug due to safety concerns. Investors worried what the company would do to replace the successor to its best-selling cholesterol-lowering drug, Lipitor. The company has halting all clinical development for torcetrapib, after independent safety monitors determined there was unexpectedly high death rate during a key clinical trial. Some analysts had estimated torcetrapib could be on the market by late 2008.
Shares of Home Depot (NYSE: HD) closed up $1.00 or 3% to $38.97, on speculation that the company could be a takeover target for two powerful private equity firms - Kohlberg Kravis Roberts and Texas Pacific Group are circling the retailer. This would be priced at around $100 billion, according to a report in Friday's New York Post.
Shares of General Motors (NYSE: GM) closed up $0.11 or over 2% to $29.34 - even after billionaire investor Kirk Kerkorian walked away from his investment in the company. He has sold his entire stake in to Bank of America, according to a report by The Wall Street Journal. Stock of Bank of America closed down $0.51 to $53.34, after it bought 28 million shares of GM.
Stock of Microsoft Corp. (Nasdaq: MSFT) closed down 0.7% despite announcing that it will begin shipping its next-generation Vista OS to corporate customers. It's taken five years for Microsoft Corp. to roll out a new version of its Windows OS, so it's understandable that CEO Steve Ballmer is celebrating its release by ringing the bell at the Nasdaq stock market. However, no one is predicting that its launch will have much of an impact on Microsoft's finance, especially for the fiscal year ending in June.
Shares of Pfizer (NYSE: PFE) closed up $0.42 or 1.6% to $27.49, after the company boosted its fiscal 2006 earnings forecast, reflecting lower costs and higher revenues in the fourth quarter. It expected the adjusted diluted EPS to be at least $2.05, compared with a prior forecast of about $2. The higher forecast comes on the heels of its plans to cut 20% of its U.S. sales force, part of its ongoing effort to streamline operations and cut costs.
Shares of Pfizer (NYSE: PFE) closed up $0.02 to $27.07, after it announced that it was cutting its U.S. sales force by 20% as a means of reducing costs. However, it did not say when the reductions would take place. Pfizer is hoping to produce annual savings of $4 billion a year by 2008. Separately, a FDA advisory panel said that Pfizer's pain reliever Celebrex should be approved for treating rheumatoid arthritis in children, although the panel also questioned its safety.
Shares of Tiffany Co. (NYSE: TIF) closed up $2.29 or 6.4% to $38.22, after reporting 23% higher quarterly earnings that beat estimates and issuing bullish EPS guidance for fiscal 2007. The growth was helped by growth in the U.S. The company reported a net profit of $29.1 million, from $23.8 million in the year-ago period. Net sales rose 9.5% to $547.8 million, while same-store sales rose 4%. Analysts had expected a revenue of $544 million.
Shares of Boeing (NYSE: BA) closed up $0.57 to $87.94, on news that it has received a $5.7 billion order from Air Berlin for 85 jets to be delivered between 2007 and 2014. Air Berlin, said it would order 60 Boeing 737-800 jets. Adding that 25 additional planes would be for its subsidiary DBA, which it bought in August.
Stock of Palm Inc. (Nasdaq: PALM) fell 7.7% to $14.19 after the company slashed its fiscal second-quarter forecast, citing the delayed U.S. rollout of one of the newest versions of its Treo line of handheld smartphones. The Treo 750, which is already selling in Europe, has not been certified in time to sell in the U.S. this quarter.
Stock of Scottish Power (NYSE: SPI) closed down $0.02 to $57.58, after Spain's Iberdrola said that it will buy it for $22.5 billion in cash and shares to create Europe's third-biggest utility and a world leader in renewable energy. The price is slightly below that expected by some analysts. Rumors had suggested the bid could be for as much as £12 billion, so the fact that the actual figure falls short will prove frustrating to investors.
Shares of General Motors (NYSE: GM) closed down $1.52 or 4.7% to $31.09, on news that billionaire investor Kirk Kerkorian's Tracinda Corp. has cut its stake in the automaker to 7.4% from 9.9%. This is in the aftermath of lifting of the moratorium that had prevented Tracinda from trading the shares for 45 days.
Shares of Dell (NYSE: DELL) closed up $2.31 to $27.13, after reporting higher quarterly earnings that topped estimates on revenue that was just short of estimates. It reported net income of $677 million, up 12% from $606 million, last year. Its revenue rose 3.5% to $14.38 billion, up from $13.91 billion but slightly lower than the $14.44 billion expected by analysts. Gross margin climbed to 17% from 16.2% a year ago. However, the company called the results preliminary and subject to change as it faces an ongoing probe by federal securities regulators into its accounting practices.
Stock of Alcoa (NYSE: AA) closed up $1.24 or 4.2% to $30.43, after it unveiled a broad restructuring program. The company would cut its work force by about 10%, and lead to a spin-off of its molded soft-alloy business via a joint venture with Norway's Orkla ASA. Plant closures and consolidations in the U.S. and overseas will eliminate 6,700 Alcoa jobs over the next 12 months, with bulk of those in units that make parts for the auto industry. The downsizing aims to save the company $125 million pre-tax a year.
Stock of Merck (NYSE: MRK) closed up $0.15 to $44.37, after it was dealt a court victory when a federal judge denied a motion that would have allowed class-action status for injury and death cases involving Vioxx, the company's withdrawn painkiller. Judge Eldon Fallon of New Orleans, who is overseeing federal lawsuits involving Vioxx, denied a request by plaintiffs' attorneys for the class-action status.
Maker of iPod, Apple (Nasdaq: AAPL) closed up $2.13 to $88.60 - at an all-time high as investors expressed optimism about the strength of the company's iPod sales in the crucial holiday period. There is also speculation that it is working on the launch of an Iphone that would combine the capability of its blockbuster Ipod media player with a phone.
Stock of Medtronic (NYSE: MDT) closed up $4.60 or 9.4% to $53.55, as it reported higher than expected quarterly earnings. Its quarterly profit beat expectations as it gained share from rivals in the market for implantable devices that manage irregular heart rhythms. Its second-quarter net earnings were $681 million, down from $817 million a year ago. However, excluding special items in both periods, it reported an EPS of 59 cents, compared with 52 cents last year. Second-quarter revenue rose 11% to about $3.08 billion. Sales of ICDs, rose 4% to $764 million. Revenue in the overall Cardiac Rhythm Disease Management business, which also includes pacemakers, rose 6% to $1.363 billion. The company said it expects an EPS for fiscal 2007 of $2.30 to $2.38, on revenue of $12.2 billion to $12.6 billion.
Shares of Phelps Dodge Corp. (NYSE: PD) closed up $25.45 or 27% to $120.47. Its acquisition by Freeport-McMoRan Copper & Gold (NYSE: FCX) will create the world's largest publicly traded copper producer. However, shares of Freeport closed down $1.77 or 3% to $55.63. Phelps Dodge will be bought for $25.9 billion in cash and stock.
Russian steelmaker Evraz will buy Oregon Steel Mills (Nasdaq: OS) closed in a $2.3 billion deal, creating the world's largest rail producer. Shares of Oregon Steel up $4.81 or 7% to $63.77. The offer is 22.3% above the weighted average stock price for the past three months. The combined company would produce 16.8 million tons a year of crude steel, placing it just outside the world's top 10, and will ship 17.4 million tons of steel products in 2006.
Shares of Bank of America (NYSE: BAC) closed up $0.05 to $54.90, after it declared that it was buying U.S. Trust - the private banking unit of Charles Schwab (Nasdaq: SCHW) for $3.3 billion. Shares of Charles Schwab closed up $0.38 or 2% to $18.94. This would vault Bank of America to the top tier of private banks.
Stock of Johnson & Johnson (NYSE: JNJ) closed up $0.71 or 1% to $67.24, on announcing that it would buy Conor Medsystems for around $1.4 billion in cash. Shares of Conor closed up $5.16 or 19% to $32.68. It will pay $33.50 for each share of Conor that makes drug-eluting stents used to keep blocked arteries open.
Shares of Starbucks (Nasdaq: SBUX) closed down $2.01 or 5% to $37.42, after it reported lower profits and issued a sales and earnings forecast in a range that could miss analysts' expectations. Net income for the fiscal fourth quarter was $117.3 million, compared with $123.7 million a year ago. Total revenue jumped 20.7% to $2.003 billion but fell short of the forecast of $2.01 billion.
Shares of Hewlett-Packard (NYSE: HPQ) closed down $0.36 to $39.77, despite reporting higher earnings and revenue that topped forecasts, and offered a bullish outlook for the current period. Its net income rose to $1.7 billion, up four-fold from the year-earlier period when the company took a hefty restructuring charge. Its sales rose 7% to $24.6 billion during the quarter, above the expected $24.1 billion.
Stock of Altira (NYSE: MO) closed up $1.44 or 2% to $85.01, after a U.S. Appeals Court decided to grant a permanent stay in the class action suit against light cigarettes. The court has decided to review a lower court ruling that let a $200 billion lawsuit filed by "light" cigarette smokers.
Shares of Dell (NYSE: DELL) closed down $0.65 or 2.6% to $25.10, as it stated that it would delay filing its quarterly report until later in the month. It clarified that the delay was due to issues it's facing in preparing the results and not linked to an ongoing SEC probe into its accounting. Analysts expect the EPS to sink 38% to 24 cents and the revenue to edge higher by 4% to $14.4 billion.
Stock of Applied Materials (Nasdaq: AMAT) closed down $0.67 or 4% to $17.98, despite reporting higher quarterly earnings and revenue that was shy of forecasts. The company also warned that sales and earnings in the current quarter will miss forecasts. It expects an EPS of 26 to 27 cents against the expected EPS of 29 cents.
US Airways (NYSE: LCC) made a surprise cash and stock bid for larger rival Delta (OTC: DALRQ). Shares of US Air closed up $8.57 or 17% to $59.50, while shares of Delta climbed 3%. This bid could spark a round of mergers leaving the US with just a handful of major airlines. The proposal is for about $4 billion in cash and 78.5 million shares of US Airways stock, also worth $4 billion. US Air has also proposed keeping the Delta name if the merger is completed. The "new" Delta would be the number one airline across the Atlantic and the second largest airline to the Caribbean.
Shares of Pfizer Inc. (NYSE: PFE) rose 1% to close at $26.53, after it announced its animal health division is buying agricultural biotechnology company Embrex Inc. (NYSE: EMBX) for $155 million. Shares of Embrex rose $4.72 or 40% to close at $16.64. The buy out price of $17, represents a 43% premium to Embrex shares' closing level on Tuesday. Embrex posted revenue of $52.5 million in 2005, 37% of which came from outside of the U.S.
Stock of Target (NYSE: TGT) closed up $1.40 to $59.16, on reporting earnings that beat forecasts on sales that rose from a year ago and met forecasts. The company earned $506 million or 16%, up from $435 million in the same period a year earlier. Sales in the quarter grew 11.2% to $13.5 billion, up from $12.2 billion a year ago.
Shares of Wal-Mart (NYSE: WMT) closed up $1.34 or 3% to $47.66, reported higher quarterly earnings that topped estimates. Strength in its international business and new store openings helped offset disappointing U.S. sales. Its net income rose to $2.65 billion or 11%, from $2.37 billion a year earlier. CEO Lee Scott was upbeat about the holiday season and vowed that the company would lure customers via deep discounting.
Shares of Merck & Co. (NYSE: MRK) closed up 34 cents to $43.46, after the FDA said it needed more time to evaluate the safety of a diabetes drug from Switzerland's Novartis (NYSE: NVS). The oral diabetes drug, known as Galvus, would be a direct competitor for Merck's diabetes treatment Januvia, which received FDA approval last month.
Shares of Novartis (NYSE: NVS) fell 1.8% to $58.30, after reporting that the FDA required three more months to determine whether problems encountered by animals taking its oral diabetes drug Galvus may pose risks to humans. Galvus is a key drug in the Novartis pipeline, and is one of the new class of drugs, called DPP-IV, that are starting to hit the market. DPP-IV drugs enhance the body's ability to lower blood sugar.
Shares of Isis Pharmaceuticals Inc. (Nasdaq: ISIS) closed up $2.05 or 20% to $12.43, after two Phase II trials showed its cholesterol-lowering drug worked well to cut LDL, or so-called "bad" cholesterol. The data also showed that the drug had a "strong safety profile," and it was well-tolerated in both studies. Its study reported, patients with high cholesterol on stable doses of statins were treated with ISIS 301012 for five weeks. Patients who received 300 milligrams a week achieved a 51% reduction in LDL cholesterol, a 42% reduction in total cholesterol, and a 41% reduction in triglycerides beyond the levels achieved with statins alone.
Shares of Boeing (NYSE: BA) rose 0.6% to $85.62, after the Air Force selected it to provide the U.S. military's next generation of combat search and rescue helicopters -- an order the company said is worth up to $10 billion. Under the contract, Boeing will deliver 145 of its HH-47 helicopters, including four test aircraft, through 2019, with the first aircraft slated for deployment by 2012. The new aircraft will gradually replace the military's existing fleet of HH-60G Hawk Combat Search and Rescue helicopters.
Stock of American International Group Inc. (NYSE: AIG) closed up $1.59 or 2.3% to $69.63, after reporting reported higher quarterly earnings and revenue that topped forecasts. Third-quarter net income came in at $4.22 billion, more than double its profit of $1.75 billion for same period last year. Its general-insurance division, which sells property and casualty insurance and reinsurance, reported a third-quarter operating profit of $2.6 billion, compared with an operating loss of $208 million a year ago.
Stock of Walt Disney (NYSE: DIS) closed down $1.18 or 3.5% to $32.40, despite reporting quarterly earnings and revenue that topped forecasts. Its fourth-quarter net income more than doubled, powered by strong box-office results and growth in its amusement parks and media networks. However, plans for increased capital spending in fiscal 2007 put a chill on investors. Its net income leaped to $782 million, on sales of $8.78 billion. Last year the figures were $379 million, on sales of $7.73 billion.
Shares of 3M Co. (NYSE: MMM) closed down 52 cents at $78.90. The company said that it would sell its global branded pharmaceutical business in three deals for a total $2.1 billion. Graceway Pharmaceuticals Inc. agreed to acquire 3M's pharmaceutical operations in the U.S., Canada, and Latin America for $875 million. Meda AB has agreed to acquire it in Europe for $857 million, and Ironbridge Capital and Archer Capital will buy the Asia-Pacific operations, including Australia and South Africa, for $349 million. 3M expects to close the deals in the fourth quarter.
The star of the day, Cisco Systems (Nasdaq: CSCO) closed up $1.60 or 6.3% to $26.69, after reporting higher fiscal first quarter earnings and sales that topped estimates. The company also issued a bullish fiscal second quarter revenue outlook. Its first-quarter earnings rose 28% to $1.61 billion, from $1.26 billion a year earlier. Sales rose 25% to $8.18 billion. Revenue was boosted by acquisition of Scientific Atlanta, which contributed $584 million in quarterly sales.
Shares of mortgage-finance companies Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) rose on expectations that Democrats will take a more conciliatory approach toward the two institutions. The companies hold about $1.5 trillion worth in mortgage-backed securities, a sum that Republicans have criticized for being too high and as potentially putting the financial system at risk. Fannie shares closed up almost 3%, while Freddie gained about 2%.
Shares of Federated Department Stores Inc. (NYSE: FD) closed down 1.2% to $39.87 after posting quarterly results that fell shy of Wall Street expectations. The company reported a loss of $3 million, against a profit of $436 million last year. Results include $145 million in charges in efforts to turn May Co. stores, which it acquired last year, into Macy's as well as what the company called "related inventory valuation adjustments." However, sales climbed 6%, reaching $5.89 billion from $5.56 billion.
Shares of Sirius Satellite Radio Inc. (Nasdaq: SIRI) gained almost 1% to close at $4.12 after the company reported a narrower third-quarter loss and reiterated its forecast for 2006, as subscriber additions soared, especially among customers with Sirius-equipped cars and trucks who opted to take the service. The company lost $163 million, compared to $180.5 million a year earlier. Total revenue more than doubled to $167.1 million from $66.8 million.
Shares of Nortel Networks (NYSE: NT) closed down $0.26 or 11% to $2.13, after the company reported a narrower quarterly loss that was nonetheless short of analysts' estimates on higher sales. The telecom gear maker also issued a mixed fourth-quarter outlook. Additionally, its board has approved a 1-for-10 reverse stock split to boost the nominal value of its shares. Its revenue rose 17% to $2.96 billion from $2.52 billion a year earlier, helped by higher sales of "next-generation" equipment to big phone companies as well as rising purchases by corporate customers.
Shares of RealNetworks (Nasdaq: RNWK) closed up 9.8% to $11.91, after the digital-entertainment provider reported a surge in third-quarter profit based on strong demand for its games. Its quarterly profit nearly quadrupled, reaching $42.2 million, from $11.2 million last year. Sales grew 14% to $93.7 million, exceeding the $92.7 million average forecast by analysts.
Shares of Boeing (NYSE: BA) closed up $4.37 or 5.4% to $84.85, after FedEx announced that it would buy 15 of the company's 777 Freighter aircraft and had cancelled its order for 10 Airbus aircraft due to delays in delivery. Stock of FedEx closed up $1.09 to $115.03
Shares of Four Seasons Hotels (NYSE: FS) closed up $18.63 or 29% to $82.50, after it received a $3.7 billion management led buyout offer. The offer is led by a group including shareholder Isadore Sharp and Triples Holdings Limited, Kingdom Hotels International, a company owned by a trust created by Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, and Bill Gates' Cascade Investment LLC. The group would acquire the outstanding limited voting shares for $82 per share in cash. The board of Four Seasons has established a special committee of independent directors to consider the offer.
Stock of Abbott Laboratories (NYSE: ABT) closed down $0.17 or 0.4% to $47.47, after it stated that it will buy Kos Pharmaceuticals (Nasdaq: KOSP), for $3.7 billion. Shares of Kos closed up $26.97 or 54% to $77.06. Kos Pharmaceuticals is a developer of proprietary medications for the treatment of chronic cardiovascular, metabolic and respiratory diseases.
Stock of McKesson (NYSE: MCK), a prescription drug distributor, closed up $1.17 or 2.4% to $49.69, after it said that it was buying Per-Se Technologies (Nasdaq: PSTI), a health administration company, for about $1.23 billion. Shares of Per Se closed up $3.10 or 12.7% to $27.55. Excluding items and the anticipated synergies, McKesson expects the transaction to be neutral to marginally dilutive to earnings in fiscal 2008 and accretive thereafter.
Stock of Oracle Corp. (Nasdaq: ORCL) fell 2.7% to $17.78, as it announced its decision to buy software developer Stellent Inc. (Nasdaq: STEL) for $440 million. Shares of Stellent shot up 26% to $13.35. This bid is a 27% premium to Stellent's Thursday closing price of $10.62. Last month, Oracle had agreed to pay $219.2 million cash to acquire MetaSolv Software Inc. (Nasdaq: MSLV), a maker of specialty support products aimed at telecommunications providers.
Stock of Qualcomm Inc. (Nasdaq: QCOM) closed up $0.11 to $36.47, after reporting fourth-quarter earnings and sales that rose from a year ago and topped estimates. The company posted a 14% jump in quarterly net income as it sold more of its cell-phone chip technology. It had an income of $614 million, versus $538 million last year. Sales rose 28% to $2 billion for the three month period ended Sept. 24. Qualcomm derives licensing revenue on each phone sale and computer chips that power handsets based on CDMA technology. There are 402 million subscribers worldwide using third generation CDMA-based networks versus 273 million at the same time last year.
