Data Feed

Gapping up: FCPO +101%, FRPT +17.6%, MLNM +12.4%, LEH +5.4%, BBY +5.3%, ASTI +5.2%, ADBE +4.7%, GOLD +3.7%, BSC +3.1%, MT +3.0%, BOBJ +2.5%, BHP +2.5%, ALU +2.3%, GS +2.2%… Gapping down: MEND -19.0%, NFI -15.3%, NXG -10.1%, ETFC -6.8%, LEND -2.8%, CELG -2.2%, TWX -1.2%, GSK -1.0%.

Buyers: Caribou Coffee (CBOU 6.19) Director bought 7K shares at $6.05…ZymoGenetics (ZGEN 12.36) 10% Owner Warburg Pincus Equity Partners bought 253,108 shares at $11.93… Blonder Tongue Labs (BDR 1.21) President bought 20K shares at $1.00… Noven Pharma (NOVN 16.10) 10% Owner OSS Capital Mgmt bought 35K shares at $16.47… Halozyme Therapeutics (HALO 8.63) Director bought 431,426 shares at $8.69… Credit Acceptance (CACC 21.07) Director bought 15,158 shares at $20.57… Basic Energy Services (BAS 22.24) Director bought 8K shares at $22.18… TerreStar (TSTR 9.65) 10% Owner Harbinger Capital Partners Master Fund bought 728,492 shares at $8.85… Ashworth (ASHW 6.15) 10% Owner Parche LLC bought 51,614 shares at $5.76… ECtel (ECTX 3.50) 10% Owner Diker Mgmt bought 74,600 shares at $3.52… Pep Boys (PBY 14.74) Director Barrington Capital Group bought 55,700 shares at $14.84. Sellers: Zumiez (ZUMZ 47.57) CEO sold 192,500 shares at $47.14 – $47.54… Watson Pharma (WPI 30.99) Executive Chairman sold 200K shares at $31.21… TXCO Resources (TXCO 8.76) Director sold 15K shares at $8.75… Weatherford Int’l (WFT 65.18) Director sold 173,632 shares at $62.68 – $63.33… Dril-Quip (DRQ 48.06) C0-Chairman sold 61,464 shares at $48.92 – $49.09… Perry Ellis (PERY 27.82) President sold 22,500 shares at $27.24… Methode Electronics (METH 14.91) CEO sold 11,750 shares at $15.42… Omniture (OMTR 27.01) Director sold 346,300 shares at $26.39 – $27.11… TASER (TASR 14.91) Director sold 50K shares at $14.30… Obagi Medical Products (OMPI 16.37) 10% Owner sold 50,400 shares at $17.10… ICO (ICOC 14.05) Director sold 50K shares at $13.71.

CROX Crocs: Got Crocs? Be careful on the escalator – AP (56.78 )
AP reports at rail stations and shopping malls around the world, reports are popping up of people, particularly young children, getting their toes caught in escalators. The one common theme seems to be the clunky soft-soled clogs known by the name of the most popular brand, Crocs. One of the nation’s largest subway systems — the Washington Metro — has even posted ads warning riders about wearing such shoes on its moving stairways. The ads feature a photo of a crocodile, though they don’t mention Crocs by name. According to reports appearing across the United States and as far away as Singapore and Japan, entrapments occur because of two of the biggest selling points of shoes like Crocs: their flexibility and grip. Crocs Inc. said it does not keep records of the reasons for customer-service calls. But the co said it is aware of “very few” problems relating to accidents involving the shoes, which are made of a soft, synthetic resin. “Thankfully, escalator accidents like the one in Virginia are rare,” the co said in a statement. Crocs officials said they were working with the Elevator Escalator Safety Foundation on public education initiatives. But the group’s executive director, Barbara Allen, said that’s not true.

PPI y/y +2.2% vs +2.2% consensus, prior +2.3%
PPI y/y +2.2% vs +3.2% consensus, prior +4.0%
Core PPI m/m +0.2% vs +0.1% consensus
PPI m/m -1.4% vs -0.3% consensus

ThinkEquity notes that VMware (VMW 77.92) 2Q07 EPS was $0.03 lower than consensus estimates, driven mainly by a sharp increase in R&D expense compared to last quarter and our estimate. The firm is impressed by the improvement in license revenue gross margin and a higher-than-expected shift in the revenue mix toward higher gross margin license revenue. They are not concerned by the higher operating expense as it suggests the co’s investments ahead of the growth opportunity in server and desktop virtualization. Firm maintains their FY08 estimates, price target of $60 (60x FY08 EPS estimate of $1.00), and Source of Funds rating… Jefferies says their experts’ discussions indicate significant mkt opportunities for Optimer Pharma’s (OPTR 8.06) OPT-80 for CDAD, even if it shows a similar efficacy profile as Vancocin.

LVS Las Vegas Sands tgt raised to $145 at Stifel; Y07 and Y08 ests raised (125.60 )
Stifel raises their tgt on LVS to $145 from $100 and their FY07 and FY08 EPS ests to $1.38 and $2.64 from $1.27 and $2.34, respectively. Firm believes over the next 24 months LVS shares are attractive for four main reasons. 1) For the remainder of the year they expect LVS shares to rally in anticipation of the Palazzo opening in Dec. 2) Believe LVS’ Macau operations will ultimately differentiate themselves from competitors and generate above-average returns. 3) Expect LVS to generate significant cash flows over the next two years from sales of retail and residential space. 4) Believe there could be other development opportunities that are not included in their ests (Japan, Asia, Massachusetts).

Bond Watch: It’s FOMC Day
The market is still fairly pinned to recent levels with, if anything, a slight negative, corrective bias. Trade has worked off super-cut expectations the last few sessions & now appears sufficiently priced for the day’s event risk which also includes some inflation data. Little action guided trade through the night, despite some heavy hitting UK (CPI) & Eurozone (ZEW) data as all eyes are on the Fed. The 2-10-yr yield spread got another shave to 38.9 as curve trade unwinds a little more of its rate cut fever. Bond prices in the EuroZone were down despite a drop in investor confidence as trade pared back the likelihood of a rate cut anytime soon while in Japan, bonds were pushed up by weak equities as markets played catch-up after a long weekend. Treasuries will get a taste of producer prices as well as foreign appetite for demand. That should give trade something to feed upon as it awaits FOMC. Of course, the data is not expected to give trade any reason to jump out of its comfort zone. FOMC still rules the roost & the bonds will be looking for a 25 basis point cut with at least a similar (if not bigger) cut in the discount rate. The statement will be key as it is likely to steer clear of suggesting more easing. The buck drove through bids on the euro below 1.3850 as data dented the common currency, but has since retraced much of the move. Against the yen, the dollar is gnawing through offers around 115.5000. Currencies were largely lying in wait, with the pound being the big exception as it was hit by soft inflation data. Spot gold is kicking a little higher at 719.990 (+1.99) while crude oil is up at 80.73 (+0.16). The calendar has PPI (8:30) followed by net foreign purchases (9) & FOMC (14:15). The euro is at 1.3866 & the yen is at 115.5300 while the 10-yr is -02/32nds yielding 4.474%.

MOT Motorola handset PCB orders growing – DigiTimes (16.83 )
DigiTimes reports taiwan-based handset printed circuit board (PCB) suppliers have seen orders rising from clients, including Motorola, which was hit by inventory issues during the first half of the year, according to industry and co sources. But Motorola managed to almost clear its inventory later, and orders from the US vendors for PCBs for both old and new handset models began to pick up in mid August, the sources said. Orders from Motorola have been growing even faster in September although growth still has been outpaced by orders from other handset vendors, the sources added.

BBY Best Buy beats by $0.11; raises lower end of FY08 guidance, sees results at upper half of range (44.54 )
Reports Q2 (Aug) earnings of $0.55 per share, $0.11 better than the Reuters Estimates consensus of $0.44; revenues rose 15.1% year/year to $8.75 bln vs the $8.45 bln consensus. Co reports Q2 comparable store sales +3.6%, driven by higher revenue from computers, flat-panel televisions, video gaming and mobile navigation. These gains more than offset comparable store sales declines in tube and projection TVs, MP3 players and CDs. Co raises bottom end of FY08 EPS guidance by $0.05, sees EPS of $3.00-3.15 vs. $3.03 consensus, prior guidance $2.95-3.15. Co believes that earnings will finish in the upper half of their new guidance range. Co sees FY08 comparable store sales at the midpoint of 3-5% guidance range.

ADBE Adobe Systems: Color on quarter (43.06 )
Jefferies notes ADBE continues to have the most attractive product-cycle story with positive EPS revisions in their industry. Firm thinks the co could enter FY08 with healthy double digit growth in the plan. They raise their rev and EPS ests and have retained the $50PT. Firm notes ADBE blew out F3Q07 revs and EPS, and guided well above Street expectations for F4Q07. They continue to think that mgmt has been relatively prudent with guidance and that momentum is building for another year of solid double-digit growth in FY08… Wachovia believes that the strength in the CS3 product cycle due to pent up demand, the multiple product bundles and segments of CS3, the rebound in Mac business and the future impact of AIR will bode well for the long term growth of the company. Firm is increasing their FQ4 EPS to $0.47 (from $0.45) on higher revs of $884.5 mln (from $857.6 mln). Firm is raising their FY 2008 rev est to $3.60 bln and EPS to $1.76 compared to their earlier esti of revs of $3.55 bln and EPS of $1.74.

LEH Lehman Brothers: Following earnings, stock pops over 3 pts during the past 10 mins, pushing futures to pre-mkt highs (58.62 ) -Update- -Technical-
Would keep an eye on others in the group…BSC, GS, MER, MS, JPM, LAZ, LM

LEH Lehman Brothers beats by $0.07, reports in line revs (58.62 )
Reports Q3 (Aug) earnings of $1.54 per share, $0.07 better than the Reuters Estimates consensus of $1.47; revenues fell 22.0% year/year to $4.3 bln vs the $4.3 bln consensus. “Despite challenging conditions in the markets, our results once again demonstrate the diversity and financial strength of the Lehman Brothers franchise, as well as our ability to perform across cycles. For the quarter, we reported record net revenues in Investment Management, and our second highest net revenues in both Investment Banking and Equities Capital Markets. In addition, more than half of our net revenues for the quarter came from outside the U.S. We remain focused on delivering significant long term value for our clients and shareholders.” Capital Markets reported net revenues of $2.4 billion for the third quarter of fiscal 2007, a decrease of 14% from $2.8 billion in the third quarter of fiscal 2006… Within Fixed Income Capital Markets, the Firm recorded very substantial valuation reductions, most significantly on leveraged loan commitments and residential mortgage-related positions. These losses were partially offset by large valuation gains on economic hedges and other liabilities. The result of these valuation items was a net reduction in revenues of approximately $700 mln… Investment Banking also reported its second highest net revenue quarter, with net revenues of $1.1 billion representing an increase of 48% from $726 million in the third quarter of fiscal 2006. Book value per common share was $38.29.

CROX Crocs: Nollenberger believes CROX has outgrown its fad stage; velocity of brand remains outstanding; room for continued earnings growth (56.78 )
Nollenberger believes CROX has created a category in footwear and has outgrown its fad stage. Firm believes the velocity of the brand remains outstanding. They believe CROX’s hybrid shoe continues to reinvent itself and has become a household staple for many consumers. Given the demand for the product and its continued opportunity in the marketplace, firm believes CROX has room for continued earnings growth.

BCSI Blue Coat tgt raised to $101 from $94 at ThinkEquity (82.63 )
ThinkEquity raises their tgt on BCSI to $101 from $94 saying the CFO of BCSI presented yesterday at their 5th annual growth conference. The firm says Blue Coat’s mobile SG client with byte level caching is expected to be released in two months’ time, and they are impressed by BCSI’s execution of its differential strategy.

AAPL Apple: Continue to believe AAPL is on track to meet 3.9 mln iPhone est- Cross Research (138.41 ) -Update-
Cross Research notes in-line with expectations, Apple (AAPL) announced O2 (TEF) as its U.K. wireless partner for iPhone. The firm says with sales expected to begin Nov 9th, they continue to believe Apple is on track to meet their 3.9 mln iPhone estimate for calendar 2007. They think today’s announcement was generally in-line with expectations, however, Apple did not launch additional European carriers (not surprising since the event was held in London). Firm notes Apple did say that additional countries would be announced in the next quarter.

MER Merrill Lynch will cut jobs at Franklin unit – WSJ (72.85 )
WSJ reports the co said it will cut jobs at its First Franklin Financial unit, which it acquired less than a year ago, as weakness in the mortgage mkt weighs on the lender’s business. The co wouldn’t detail how many jobs would be cut. First Franklin had 2,800 employees at the start of the year.

Government soothes Northern Rock worries – Reuters.com
Reuters.com reports that shares in mortgage bank Northern Rock (NHRKF.PK) rebounded on Tues after the government pledged to guarantee deposits, calming fears over the bank’s funding problems sparked by a global credit crunch. Northern Rock shares were up 10.7% at 313 pence, valuing the bank at 1.3 bln pounds. Chancellor Alistair Darling, speaking after the stock market closed on Mon, said that if necessary the government and the Bank of England would guarantee all existing Northern Rock deposits during the current instability. The financial watchdog said the move was aimed at restoring confidence across the bank sector and said the current industry backed scheme on bank deposits had limitations and there was a need to revisit the area of deposit guarantees. Queues formed at branches of Northern Rock again early on Tues, but lines were significantly shorter than on Fri, Sat and Mon. The crisis at the bank makes it likely it will be taken over, analysts say, and it said on Monday it would consider all strategic options.

Gartner says worldwide IT services market to grow 9% in 2007 – DigiTimes
DigiTimes reports despite the slowing US economy, growth in IT services is expected to remain solid as worldwide IT services end-user spending is forecast to exceed $730 bln in 2007, up 8.7% from 2006, according to Gartner. Core outsourcing (IT management and process management) remains the highest growth area in the mkt. In 2007, core outsourcing services are on track to represent 41% of total worldwide IT services end-user spending. The development and integration (D&I) segment continues to exhibit steady growth fueled by regulatory and compliance initiatives, and a continued push for improved business change management and agile architectures driven by merger and acquisition activities. The worldwide D&I segment is forecast to reach $225 bln in 2007, up 9% from $206 bln in 2006.

MCO Moody’s looks at ratings reform – FT (42.87 )
FT reports the co is considering overhauling the way it rates complex financial instruments to analyze for the first time how these products might behave in a liquidity shock. Such measures of so-called “liquidity” and “market value” risk could be issued alongside the traditional ratings, which currently just indicate the risk that an instrument will default. The move, which is also being mulled by the other two rating agencies, would potentially mark a significant shift in direction of this industry, which has hitherto focused primarily on measuring so-called “credit risk”, or the chance that an issuer will not repay a bond. However, the reforms come as ratings agencies are scrambling to offset mounting criticism from regulators and investors that they have been too slow to warn investors about the potential risks in structured finance.

Homebuilding Industry: Rate cuts have historical basis for stimulating housing market – Pali Research
Pali Research says unsurprisingly they found that during a Fed Funds easing cycle, the equities tend to outperform the S&P 500. Assuming that the historical relationship holds, firm can expect the homebuilder equities to outperform during a Fed easing cycle. During the most recent tightening cycle, the correlation reversed through a large portion of the cycle as the equities rallied while rates increased. As the cycle matured, the traditional relationships were re-established, but if the historical correlation has indeed broken down, the builders could yet have another slide. Firm also notes that based on history, they can argue that as the Fed starts cutting rates, New Home Sales, Housing Starts, and Housing Permits increase, while Inventory and Month’s Supply decrease—all positives for the equities. Thus, under this framework, firm can make a strong case that an easing by the Fed would signal an impending bottom for the fundamentals of the industry.

CRM Salesforce.com: 900K subs reached at Dreamforce – Broadpoint Capital (formerly First Albany) (45.73 )
Broadpoint Capital (formerly First Albany) notes CRM unexpectedly stated that it has now garnered at least 900K subscribers. This implies that CRM has already added 100K new subscribers since the end of 2Q, and it is only halfway through its 3Q. While firm cannot discern the ASP level of the 100K additions, they do note that: 1) it is mid-quarter and CRM has already eclipsed their 875K ending subscriber target for 3Q; and 2) sources yesterday suggested that 3Q is off to “a red-hot start,” and that it is not strictly large-deal driven.

Friedman Billings expects 15% more downside to mid-sized bank/thrift industry
Friedman Billings recommends investors continue to approach the small and mid-cap bank space with caution. They believe there is at least a 50% probability that the small and mid-sized bank/thrift industry experiences another 15% decline in stock values from current levels, based on historical risk premium ranges. Moderate rate cuts alone will put a small band-aid on a sizeable gash in the residential real estate housing market and expected deteriorating consumer spending; a buying rally based on rate cuts will be short-lived. Although firm recommends underweighting the industry, they recommend owning HCBK, UCBH, TBBK, and FCBP because of the niche nature of the businesses, as discussed later in this summary opinion.

Downgrades: Merrill downgrades Navigant (NCI 13.74) to Neutral from Buy… UBS downgrades Sasol (SSL 42.16) to Neutral from Buy. Miscellaneous: JP Morgan resumes Delta Air Lines (DAL 17.15) with an Overweight… JP Morgan resumes Northwest Airlines (NWA 17.20) with an Overweight… JP Morgan initiates WuXi PharmaTech (WX 27.11) with a Neutral… Citigroup initiates Cypress Bioscience (CYPB 14.19) with a Buy and a $22 tgt… Citigroup initiates Myriad Genetics (MYGN 45.98) with a Hold and a $50 tgt… Jefferies initiates Gaylord Entertainment (GET 50.44) with a Buy and sets a $64 tgt, based on its highly visible business model and a brand that is under-penetrated in the domestic meeting market with significant demand from meeting planners for additional properties… Wachovia initiates Liberty Media Capital Group (LCAPA 116.25) with an Outperfrom saying although Liberty has numerous options for its DTV stake, they believe the most likely move is to raise its stake in DTV to 50+% from ~40%. The firm says this move should allow it to effectively take control of an undervalued DIRECTV and put it in a position to realize a greater % of the benefits from beneficial moves at DTV.

Upgrades: Lehman upgrades RSC Holdings (RRR 15.60) to Overweight from Equal-weight… Lehman upgrades Greenfield Online (SRVY 14.34) to Overweight from Equal-weight… CIBC upgrades Enbridge (ENB 34.72) to Outperform from Sector Perform saying concerns about slowing near-term growth and new oil pipeline competition from credible players Kinder Morgan and TransCanada have held back Enbridge stock in recent years. Yet Enbridge has emerged with the majority of pipeline growth, while preserving superior returns on capital. Downgrades: CIBC downgrades Micrus Engovascular (MEND 23.57) to Sector Perform from Outperform saying they still favor MEND in the long term they see too many near-term issues to keep their Outperform. The firm says these include unknown competitive impact from JNJ, lower U.S. procedure volumes, higher than expected inventory levels in Japan, and delayed product approvals. Miscellaneous: Calyon initiates Goodrich (GR 65.08) with an Add and sets a $74 tgt… Calyon initiates TransDigm (TDG 38.87) with an Add and sets a $45 tgt… Calyon initiates Triumph Group (TGI 80.86) with an Add and sets a $90 tgt… SunTrust initiates Petroleum Development (PETD 40.52) with a Buy and sets a $60 tgt, based on its position as a low-risk gas resource play in the Colorado Piceance and Denver-Julesburg Basins, several-year drilling inventory in core areas and the expectation of 65% production growth in ‘07… JMP Securities initiates Annaly Capital Management (NLY 15.52) with a Strong Buy and sets an $18 tgt, as they view the current interest rate scenario as highly favorable to NLY’s portfolio returns.

AXP American Express agrees to sell American Express Bank to Standard Chartered (58.20 )
Co announces that it has entered into an agreement to sell its international banking subsidiary, American Express Bank, to Standard Chartered. The approximate value of the transaction is $1.1 bln. In the aggregate, the transaction is expected to have an approximate break-even impact on the earnings of AXP, although separate components will be recognized in different periods.

Upgrades: Wachovia upgrades ON Semiconductor (ONNN 11.51) to Outperform from Market Perform, as they expect ON to benefit from solid seasonal growth in computing and consumer in 2H08. Downgrades: Rodman & Renshaw downgrades Neurobiological Technologies (NTIID 4.21) to Market Perform from Outperform, based on the potential for FDA approval of Viprinix in 2011 rather than the firm’s projected approval in 2009… JP Morgan downgrades Harte-Hanks (HHS 23.00) to Underweight from Neutral… Credit Suisse downgrades Wimm-Bill-Dann Foods (WBD 111.92) to Neutral from Outperform… Broadpoint Capital downgrades Kellwood (KWD 15.96) to Neutral from Buy, following Q207 results and based on additional restructuring charges in 2H07 and FY08 and reduced FY07 revenue and EPS guidance… Wachovia downgrades FMC Technologies (FTI 55.74) to Underperform from Market Perform, based on valuation and believe there may be too much expectation regarding subsea margin improvement… Wachovia downgrades Cameron International (CAM 88.48) to Market Perform from Outperform, based on valuation.

Sensex ends up 147pts at 15,651 – The Business Standard
The Business Standard reports the Sensex opened with a positive gap of 43 points at 15,547, but soon slipped to a low of 15,469 -down 78 points from the day’s open. However, fresh buying at lower levels helped the index rebound into the positive zone. Buying gained momentum towards the end and the index rallied to a high of 15,692 -up 223 points from the day’s low. The Sensex finally ended (provisional) with a smart gain of 147 points at 15,651.

Asian stocks fall on credit crisis woes; Mitsubishi UFJ drops – Bloomberg.com
Bloomberg.com reports Asian stocks fell the most in a week, led by Mitsubishi UFJ Financial Group, after Bank of America said fallout from U.S. subprime-mortgage losses will hurt earnings… The Nikkei 225 Stock Average lost 2% to 15,801.80 in Japan, where markets were closed yesterday for a holiday… Taiwan’s market is shut because of Supertyphoon Wipha.

European stocks gain; Northern Rock, Alliance & Leicester rally – Bloomberg.com
Bloomberg.com reports European stocks rose, led by banks after the U.K. government said it will guarantee all customer deposits at Northern Rock and the Bank of England made emergency loans to lenders to boost confidence… National benchmarks gained in 13 of the 17 western European markets that were open. The U.K.’s FTSE 100 increased 0.4%. France’s CAC 40 added 0.1%. Germany’s DAX declined 0.2%.

VZ Rivals say Verizon seeks monopoly – NY Post (42.59 )
The NY Post reports telecom start-ups are worried that a possible ruling by the feds will return Verizon Communications (VZ) to its monopoly status. Verizon has asked the FCC to drop a requirement that forces the telephone company to let new rivals rent the “last mile” of its copper wire infrastructure at a discount. Many competitors in the six markets where Verizon is seeking the exemption say a ruling in the co’s favor could ruin their business because it could jack up the prices they pay. Such a move, they argue, would result in fewer choices for consumers and ultimately lead to pricier phone bills. “Verizon is seeking a massively anticompetitive rollback of one of the last few rules that allows competitors to offer choices to consumers,” said one telecom lobbyist. “Duopoly competition” – with the incumbent telecom giants and cable companies dominating the phone market – “is clearly not enough to keep prices down and ensure consumers have a robust number of choices,” he added. But Verizon counters that competition has heated up considerably since the 1996 Telecommunications Act, which forced AT&T and its Baby Bell descendants to offer new entrants cheap access to the multibillion dollar networks they’d built while operating as monopolies.

NFI Novastar Fin will not distribute REIT dividend after market changes make new issue of preferred securities not possible (8.20 +0.10)
Co announces it will not proceed with declaring a dividend dividend on its common stock, as previously planned. NovaStar announced on July 16 that it intended to declare a dividend on its common stock, in the form of convertible preferred securities, to satisfy requirements to distribute approximately $157 million in 2006 taxable income to preserve its status as a Real Estate Investment Trust under the Internal Revenue Code of 1986. NovaStar said the decision not to declare a dividend related to 2006 taxable income will cause the Company’s REIT status to be terminated, retroactive to January 1, 2006. As a result, NovaStar said it will file a consolidated tax return for the 2006 tax year today, in a timely manner, as a general C Corporation rather than as a REIT. The Company also will file a request for extension of time to pay its 2006 C Corporation tax liability, which is statutorily allowed under the Code. NovaStar said it expects that the termination of its REIT status for the 2006 tax year will have a significant adverse impact on its financial statements for the third quarter of 2007, which will include a period expense in the third quarter for the 2006 tax provision. As a result of NovaStar’s change in corporate structure, the Company is currently reviewing the applicable New York Stock Exchange listing requirements and is engaged in continuing discussions with the NYSE.

ETFC E*TRADE announces strategic plan, exits wholesale mortgage business, guides lower (14.21 -0.18) -Update-
Co announces plans to realign its balance sheet and streamline business operations to focus on its retail growth opportunity. The co is exiting or restructuring non-core businesses that lack a direct and strategic connection with its retail customers. The Company is also accelerating plans to shift the composition of its balance sheet toward retail assets and liabilities and to synchronize balance sheet growth with customer engagement. In addition, the Company is increasing the provision for loan losses due to charge-offs expected as a result of the disturbance in the credit markets. As a result of the actions outlined above, the Company is revising its earnings outlook for 2007 to account for 1) higher provision for loan losses; 2) potential securities impairments; 3) slower balance sheet growth and composition expectations; and 4) exit and other restructuring charges. For FY07, co expects EPS of $1.05-1.15 vs prior guidance of $1.53-1.67 and consensus of $1.63

After Hours Summary: ADBE up 4.2% on earnings/guidance; ETFC down 5.1% (announces strategic plan, exits wholesale mortgage business, guides lower)
Companies moving in after hours trading in reaction to earnings: Trading Up: ADBE +4.2%; FREE +1.3%… Trading Up: TLG +28.4% (agrees to be acquired by Mainfreight Limited); MOVE +13.6% (authorizes $50 mln stock repurchase program); NGEN +8.6% (undertakes evaluation of strategic alternatives for microarray business); GMTC +2.9% (announces European wireless gaming); UTSI +2.6% (provides update on independent investigation of sales contracts in China); RTI +2.0% (announces additional long-term Airbus contract valued in excess of $1.1 bln over eleven-year term); TGEN +1.6% (reports on recombinant DNA advisory committee review of its phase 1/2 trial of tgAAC94 for rheumatoid arthritis); MSSR +1.4% (announces entrance into Cleveland market); PRX +1.3% (Wockhardt, Lupin in race for US firm- The Times of India.com)… Trading Down: NFI -18.5% (will not distribute REIT dividend after market changes make new issue of preferred securities not possible); MEND -14.1% (lowers FY08 revs below consensus); ETFC -5.1% (announces strategic plan, exits wholesale mortgage business, guides lower); HF -1.2% (secures $200 mln credit facility for Abacus Capital Group).

‘Mad Money’ Recap: Lightning Round cont. – TheStreet.com
Cramer was bearish on Delta Air Lines (DAL), Alpha Natural Resources (ANR) and Peru Copper (CUP).

‘Mad Money’ Recap: Lightning Round – TheStreet.com
was bullish on CME Group (CME), EMC (EMC), Parker-Hannifin (PH), Union Pacific (UNP), Burlington Northern Santa Fe (BNI), Texas Instruments (TXN), Nokia (NOK), Freeport-McMoRan (FCX), Goodyear Tire (GT) and Rosetta Resources (ROSE).

Cramer’s ‘Mad Money’ Recap – TheStreet.com
On Monday’s edition, Jim says oil services cos should continue to work in this environment and named Grant Prideco (GRP) as a laggard that deserves to go higher. Next, he suggests RRSat Global Communications Network (RRST), an Israeli satellite co that provides uplinks for 295 TV shows and 80 radio stations worldwide. RRST has the unique ability to transmit content in a single satellite hop, which keeps its costs down, Cramer said. It is because of these low costs he believes RRST has the ability to maintain its market share and gain more share. RRST has 40% growth and is a great play on the growth of satellite TV. During the “Sudden Death” round, Cramer was bullish on Crocs (CROX) and Sirius (SIRI). He was bearish on Time Warner (TWX), Comcast (CMCSA) and Charter Communications (CHTR).