Business Briefs - Thursday
The department store reported after the market closed that Q4 earnings rose 37% to $1.48 a share, topping views by a nickel. Kohls’ () sales rose 17% to $5.43 bil, just beating analysts’ projections. The company said same-store sales were up 4.1%. The midlevel retailer said it benefited from strong sales of its exclusive brands. The department store sees ‘07 earnings of $3.68-$3.84 a share, the midpoint below views of $3.82. Shares climbed 2% in late trading.
Sears beats, same-store sales fall
The operator of Sears () and Kmart discount stores said Q4 profit rose 33% to $5.36 a share ex items, 18 cents above views. Revenue inched up 1% to $16.29 bil, also topping expectations. Results were helped by higher profit margins on apparel at Kmart and Sears stores, despite weaker sales at older stores. Same-store sales at Sears slid 4.9% while Kmart’s dipped slightly. Shares fell 2.3% to 176.07.
Staples tops, delivery sales surge
The nation’s biggest office products supplier said Q4 profit climbed 24% to 46 cents, beating views by a penny. Sales grew 18% to $5.29 bil, credited to strong delivery business. Same-store sales in North America rose 1%. Staples () said PC sales slowed over the holidays as consumers awaited the Jan. release of Windows Vista. Staples expects Q1 EPS growth of 15%-20%. Also it sees Q1 same-store sales in North America to be up low single digits. Shares slid 2.6% to 25.35.
Wal-Mart to open bank in June
The retail giant’s Mexican subsidiary said it will open its first in-store bank branch in June. Wal-Mart () de Mexico, or Walmex, said it will open up to 15 banks in the 2nd half of the year. Wal-Mart has faced stiff opposition in the U.S. to its bid to open an “industrial bank” in Utah. Shares fell 0.9% to 47.89.
CVS Corp., () the No. 2 U.S. drugstore chain, said Feb. same-store sales rose 7% as demand for prescription medications increased. Total sales lifted 22.5% to $3.8 bil and same-store pharmacy sales jumped 7.4%. Shares dipped 0.3% to 31.34.
Steven Madden, () the footwear maker lowered Q1 EPS guidance to 40-43 cents, below views of 52 cents. It also cut its sales outlook. Share fell 3.5% to 28.53.
TECHNOLOGY
STATS ChipPAC gets $1.6 bil bid
The world’s No. 4 microchip packager received an offer to acquire a 64.4% stake from Singapore state investor Temasek Holding. If STATS ChipPAC’s () convertible bonds are exercised and included, the deal would be worth as much as $2.85 bil. Analysts said Temasek’s move to take STATS private could be a prelude to the government investment firm’s selling it off in the future or merging it with a rival. STATS leapt 22.8% to 11.87.
Lenovo recalls 100,000 batteries
The computer maker said it recalled 100,000 lithium-ion batteries used in ThinkPad laptops. The Sanyo-built batteries, according to 4 reports, overheated and even caused minor eye irritation in one case. In Sept. Lenovo recalled 526,000 rechargeable, lithium-ion Sony () batteries. Lenovo bought IBM’s PC division in ‘05.
Microsoft may face antitrust fine
The EU threatened Microsoft () with fines as high as $4 mil a day, claiming the software giant is still not offering a fair deal to rivals seeking to make their products more compatible with Windows. “This is a company that apparently does not like to have to conform with antitrust decisions,” an EU spokesman said. Microsoft said the demands are unreasonable. Microsoft slipped 0.3% to 28.09.
MEDICAL
HealthSouth narrows EPS losses
The largest operator of rehabilitation centers narrowed Q4 losses to 97 cents a share, from $1.06 a year earlier. It missed forecasts of a 9- cent loss. HealthSouth’s () revenue edged down to $730 mil, in line with expectations. The company said its inpatient hospitals’ operating earnings rose 3%, but that revenue declines in its outpatient and diagnostic units offset the gains. Shares slipped 2.8% to 23.33.
Laboratory Corp. of America () said No. 3 U.S. health insurer Aetna () terminated its LabCorp. contract effective July 1. That will likely cut LabCorp.’s ‘07 earnings by 4-12 cents a share. Analysts had projected’07 EPS of $4.02. LabCorp. tumbled 12% to 70.17.
Amgen () predicted sales of its anemia drug Aranesp will remain strong despite recent safety concerns that drugs in the class to which it belongs are suspected of harming scancer and kidney patients. Shares fell 3% to 61.70.
FINANCIAL
VeriFone beats, revenue jumps
The maker of electronic payment machines reported after hours that its Q1 profit jumped 54.2% to 37 cents ex items, beating views by 3 cents. Revenue jumped 61% to $216.6 mil, topping expectations, on strong international performance. VeriFone () boosted Q2 EPS outlook to 36-37 cents above views of 35 cents. Its sales growth came in at 17%-21% in the past six quarters.
Chicago bourses’ trading rises
The Chicago Mercantile Exchange () said its February volume rose 27% to 6 mil contracts a day. The Merc’s monthly volume was 115 mil. Its Globex electronic trading platform’s daily load jumped 40% to 4.6 mil contracts. The Chicago Board of Trade said its daily volume rose 29% to 4.5 mil. The No. 2 futures exchange said its February trading volume soared 50% to 66.559 mil on strong agricultural and metals trading. The Chicago Merc rose 1.1% to 545.23. CBOT edged up 0.9% to 163.
TELECOM
Motorola rises on Icahn interest
Four investment groups run by Carl Icahn plan to buy more than $2 bil in Motorola () common shares, according to SEC filings. The purchase would make the billionaire the second-biggest institutional holder, with a 4.4% stake. Meanwhile, the mobile phone maker seeks better profits by cutting the costs of its cheapest phones by $2-$5 per handset. Last week Motorola said it is facing a “rocky” first half in ‘07. Shares climbed 1.7% to 18.83.
Deutsche Telekom turns Q4 loss
The No. 1 European telecom company, which owns U.S. wireless carrier T-Mobile, turned a Q4 loss of $1.2 bil, from last year’s $882 mil profit. Analysts expected the company to make $20.7 mil. Deutshe Telekom said the loss was due to losses in its fixed-line phone customers. Sales rose 3% to $21.01 bil. Shares fell 4.5% to 17.16.
Telefonica profit falls on payout
The Spanish telecom giant said Q4 profit fell 11.8% to $1.39 bil. Revenue jumped 37.4% to $18.75 bil. Telefonica () attributed the decline in profit to a $664.5 mil payout for early retirements and $177 mil for an executive pension plan. The company’s mobile unit achieved the highest revenue among the company’s divisions in 2006. Shares slipped 1.5% to 63.41.
Ciena misses, lowers guidance
The communications equipment maker swung to a Q1 profit of 22 cents a share from a year-ago loss, missing views by a penny. Revenue grew 37% to $165.1 mil, slightly above forecasts. It expects Q2 EPS of 22-26 cents ex items, the midpoint below analysts’ expectations of 26 cents. Ciena () said operating expenses will rise through ‘07, although they will decline as a percentage of revenue as the firm spends to install its equipment. Shares tumbled 10% to 28.28.
MEDIA
EchoStar beats Q4 EPS views
The No. 2 satellite television provider said its earnings rose 17% to 35 cents a share, beating views by 3 cents. EchoStar’s () revenue increased 17% to $2.58 bil. The company added 350,000 new subscribers; the year before, it added 330,000 in the quarter. Bernstein Global Wealth had predicted EchoStar would add 251,000 customers, and the quarter shows the company is moving along well despite competition from cable TV operators. Shares rose 5% to 42.58.
Viacom tops, inks Internet deal
The media giant, Viacom () which owns BET, VH1, MTV and other cable channels, more than doubled Q4 EPS to 69 cents, besting views by 9 cents. Revenue increased 32% to $3.59 bil, helped by last year’s acquisition of DreamWorks studio. Its cable networks business sales rose 6% to $809.9 mil. It recently signed a deal with startup company Joost to distribute programming from its cable networks online, after demanding that Google’s () video sharing site YouTube take down more than 100,000 unauthorized Viacom clips. Shares fell 2.4% to 38.61.
Blockbuster may buy Movielink
The No. 1 U.S. movie rental company is in talks with Movielink to provide online movie downloads, according to a published report. If the advanced talks progress, Blockbuster will buy the company for $50 mil in cash and stock. Blockbuster () said it intends to offer a “triple play” that gives customers the ability to rent in stores, through the mail or via online downloads. Rival Netflix launched its online stream of 1,000 streaming movies in January. Shares rose 2.6% to 6.81.
FOOD
Bacteria found in ConAgra plant
Federal inspectors found the strain of salmonella at the food company’s plant that made tainted peanut butter, FDA said. ConAgra Foods () recalled all Peter Pan and Great Value peanut butter made at the Georgia plant after federal officials linked the product to an outbreak that began in August. 370 people fell ill in the outbreak. Shares slipped 0.3% to 25.14.
Nash Finch, () a food distributor and retailer, said Q4 earnings dropped 43% to 52 cents a share ex items, missing views by 3 cents. Sales fell 2% to $1.1 bil, just beating $1.03 bil forecasts. The company said slow sales were due to underperforming retail stores and slower growth in its food distribution sector. Shares fell 3.8% to 28.93.
