08:55 JRC prelim $0.10, ex items vs $0.14 First Call consensus; revs $115.41 mln vs $116.68 mln First Call consensus
08:55 AMD Advanced Micro to grab over 50% discrete notebook GPU market share in 2Q08 - DigiTimes (7.59 )
DigiTimes reports the discrete graphics card market for high-end notebooks is expected to see a big turn around with Hewlett-Packard (HPQ) and DELL ready to adopt AMD’s latest discrete graphics solution for their notebooks. This will increase AMD’s mkt share to over 50% in the second quarter this year, according to sources at notebook vendors.
08:53 MEDX Medarex: Upgrade details (9.99 )
As mentioned at 6:38, BofA upgraded MEDX to Neutral from Sell based on valuation. At current prices, the firm believes expectations for MDX-010, its lead compound for melanoma, are low for a timely approval and that downside is limited. Longer term, they continue to believe that MDX-010 is a drug with activity in a relatively small percentage of patients and that it will ultimately gain approval. They estimate ~$300 mln in peak sales for MDX-010 in 2012.
08:53 AUO AU Optronics supplying 13.3-inch LED-based panels to Apple; CMO volume producing same size product last year - DigiTimes (16.57 )
DigiTimes reports while sources at AUO recently indicated that it is the supplier for AAPL’s 13.3-inch MacBook Air LED-backlit widescreen panel, rival Chi Mei Optoelectronics commented that the co already began volume producing 13.3-inch LED panels last October. Sources at AUO recently indicated that the co is supplying LED-backlit panels for Apple’s latest 13.3-inch slim notebook. AUO also ships 13.3-inch notebook panels with cold cathode fluorescent lamp (CCFL) backlighting technology and a resolution of WXGA (1280*800). According to a Chinese-language Apple Daily report in late October, CMO confirmed that it received orders from international makers for its 13.3-inch notebook panel.
08:53 PEG Public Service beats by $0.18; reaffirms FY08 EPS guidance (96.00 )
Reports Q4 (Dec) earnings of $1.09 per share, excluding non-recurring items, $0.18 better than the First Call consensus of $0.91. Co reaffirms guidance for FY08, sees EPS of $5.60-6.10, excluding non-recurring items, vs. $6.09 consensus.
08:52 CBC Capitol Bancorp upgraded to Neutral from Sell at FTN Midwest (20.82 )
08:52 VRSN VeriSign tgt raised to $44 at Stifel (33.92 )
Stifel raises their tgt to $44 from $38 following soild 4Q07 results. Firm notes core businesses continue to exhibit solid growth trends. Telecom business was slightly better than expected. Firm continues to believe restructuring will result in more attractive top and bottom line growth story in 2009 and 2010.
08:51 RFMD RF Micro Device downgraded to Buy at Needham (3.23 )
Needham downgrades RFMD to Buy from Strong Buy with a $6 tgt following earnings and saying they are bullish on RFMD for the following reasons: 1) Healthy handset unit growth, 2) more than doubling of GaAs content per handset with the migration to 3G, 3) Pricing of GaAs components to stabilize as industry enters capacity constraint conditions, 4) Continued Ramp up of Polaris transceivers through C08 based on current design activity; 5) Several strategies to increase margins.
08:50 PEG sees FY08 $5.60-6.10 vs $6.09 First Call consensus
08:50 ECONX Employment report follow-up: Weak payrolls
January nonfarm payrolls fell 17,000. This was surprising in that the median forecast was for a 70,000 increase and given that the ADP payroll indication had been for a gain over 100,000. Not as surprisingly, the December increase was revised sharply higher. There has been a tendency in recent years for the preliminary report to be revised upward the very next month. December was originally reported at +18,000, but now is at +82,000. It is very possible that this preliminary January report will be revised to a gain later, much as was the case with a decline originally reported late last summer. Despite the weak payroll figure, the unemployment rate fell 0.1% to 4.9%. Average hourly earnings were up 0.2%, in-line with expectations. That series had been up 0.4% each of the prior two months. The average workweek fell 0.1 hours to 33.7 but the manufacturing workweek held steady, as did overtime hours. That suggests that industrial production for January will be near unchanged, as it was in December. The data are clearly weaker than expected, but the weakness is mitigated somewhat by the upward revision to the December data. The change is also a long way from recessionary levels in payrolls, which tend to drop 150,000 to 200,000 per month after a recession starts.
08:50 PEG prelim $1.09 vs $0.91 First Call consensus
08:49 GOOG Google tgt cut to $650 from $775 at Citigroup- following the cos first real miss, firm says Q4 was clearly a deceleration disappointment (564.30 ) -Update-
08:49 THOR Thoratec: Q4 preview; investors focus on HM II timing - Caris (16.00 )
Caris says THOR is scheduled to report 4Q07 results next Tuesday morning. But barring a major deviation relative to expectations, they believe 4Q results are largely academic and the stock’s action will be largely tied to the co’s 2008 outlook. On that front, with the HeartMate II VAD for bridge still awaiting FDA approval, they doubt mgmt will go out on a limb with aggressive targets for ‘08. Thus, firm would not be surprised to see a few ests get tempered next week. But with the stock down 12% for the year and well off its 52-week high, they suspect some of this is already reflected in the stock price.
08:47 INCY Incyte: Julian Baker discloses 14.4% stake in SC 13D/A, up from 12.4% previously on 1/14 (11.98 )
08:45 DELL Dell confirms no phone next month - Gearlog (20.04 )
Gearlog reports there’s a rumor going around on perfectly respectable blogs that Dell and GOOG are building a mobile phone, entirely based on an unsourced story in the UK’s Marketing Week that seems so spurious, Gearlog refuses to link to it. Gearlog spoke to Dell’s Anne Camden, and she says they are not going to be at this year’s Mobile World Congress (formerly known as 3GSM) conference, and they are not releasing a phone there. Now, Gearlog agrees that it wouldn’t be totally insane for Dell to put out a phone; they used to make very good PDAs. And their phone might even run Google’s Android OS. But you’re not going to see it next month, okay?
08:44 GRMN Garmin upgraded to Buy at Needham; tgt $85 (72.15 )
Needham upgrades GRMN to Buy from Hold with an $85 noting GRMN shares are down almost 30% ytd and 45% from their peak late last year. While some new concerns, such as threat of a macro slowdown and maturing of the European market have recently been added to the traditional ones, the firm believes these concerns are likely more than baked into the current share price and must be balanced against the very robust nearterm performance of Garmin’s business. Firm also says while they are impressed by the new Nuviphone and expect it will minimally be a modest success, they don’t view it as critical to the shares working from here.
08:44 NHPI Neuro-Hitech halted - news pending (2.92 )
08:43 MXIM Maxim Integrated downgraded to Underperform from Market Perform at William Blair (19.66 ) -Update-
08:42 TIVO TiVo downgraded to Underperform from Market Perform at William Blair (8.77 )
08:41 YHOO Yahoo to announce large video acquisition of Maven Networks for $150 million - Techcrunch (19.18 ) -Update-
Techcrunch reports they’ve gotten word that Yahoo will make an acquisition announcement of a video startup today or tomorrow. At first the co thought the target might be Metacafe, which was almost acquired by Yahoo just following the Google/YouTube deal in 2006. Shortly after, it made a small acquisition in Jumpcut, a Web-based video editor. But It’s not a video aggregator, they’ve heard, but a platform co. And the price is north of $100 mln. The price point limits the number of candidates. Brightcove is our top guess. If it is Brightcove, the price would have to be well north of $100 mln, given that investors have poured $86 mln into the co so far. (Briefing.com note: This story was published before the news this morning of MSFT bid’s for YHOO)
08:41 IMCL Imclone: Future EPS deflated on royalty expense; ‘08 not a year for growth - FBR (43.47 ) -Update-
Friedman Billings says yesterday IMCL reported an in-line quarter on a slight miss on U.S. Erbitux sales, in-line total revs of $151 mln, and lighter-than-expected expenses. Excluding $5 mln in stocking, U.S. Erbitux sales were $180 mln vs. the Street expectation of $186 mln. However, European sales of $186 mln grew 11% sequentially. Firm says the real hit to EPS is increased royalty expense (due to the recent settlements); this lowers operating income by roughly $20 mln/year and EPS by about $0.15 per year. The next event for Erbitux is Phase III data from FLEX in first-line lung at ASCO at the end of May. Another 1H08 event is the CAIRO-II colon cancer trial, which sounds unlikely to work.
08:39 GYI Getty Images upgraded to Outperform from Market Perform at William Blair (24.93 )
08:36 IAG IAMGOLD’s setback comes straight from Paris - Globe and Mail (7.95 )
Globe and Mail reports Joe Conway is searching for Nicolas Sarkozy. The head of the co said he intends to track down the French President to find out why his office rejected the final permits the company needs to build a gold mine in French Guiana. Iamgold claims the Camp Caiman project — which would have been the first large-scale commercial mining operation in French Guiana — has met all the environmental, legal and technical challenges that have been put in front of it. “Obviously, we want to get background on why the decision was made this way without any rationale,” Mr. Conway said.
08:36 TIER Tier Technologies initiated with an Outperform Raymond James (7.73 )
08:35 WIRES On The Wires
EMBARQ (EQ) has been awarded a multi-year contract to provide and manage inmate phone services for the Nevada Department of Corrections… Celanese (CE) announces that it has reached a definitive agreement with Southwest Research and Design Institute of Chemical Industry, based in China, that will accelerate Celanese’s research and development efforts in acetyls… Raser Technologies (RZ) announces that it has more than 100,000 acres of property in Utah for geothermal development under lease agreements.
08:34 RX IMS Health upgraded to Strong Buy from Outperform at Raymond James (23.89 )
08:33 S&P futures vs fair value: +5.9. Nasdaq futures vs fair value: +11.3.
Futures drop on a worse than expected jobs report, but still point to a higher start. The Dept. of labor said Jan. nonfarm payrolls fell by 17K, economists expected payrolls to increase by 70K. December payrolls were revised higher to a gain of 82K from 18K, which is helping to offset some disappointment. The unemployment rate fell to 4.9%, which is less than the 5.0% reading economists expected. A CNBC reported earlier this morning that a source told him that eight banks have formed a consortium to work on a rescue plan for bond insurers. In earnings news, Exxon-Mobil (XOM) beat expectations, reportedly making the largest annual profit it in U.S. company history.
08:33 CVX Chevron beats by $0.06 (83.25 )
Reports Q4 (Dec) earnings of $2.32 per share, $0.06 better than the First Call consensus of $2.26; revenues rose 28.6% year/year to $61.41 bln. CEO says “Fourth quarter earnings for our upstream business benefited from a significant increase in the price of crude oil. However, downstream profits were off sharply because of planned and unplanned refinery downtime in the United States, as well as the impact of higher crude-oil costs that were not fully recovered in the sales price of refined products.
08:33 NWL Newell Rubbermaid downgraded to Market Perform from Outperform at BMO Capital (24.06 )
08:33 GM General Motors looks at beefing up buyout deals - Detroit News (28.21 )
Detroit News reports the co, negotiating a buyout deal with the United Auto Workers to clear out thousands of veteran employees, may sweeten cash payouts to encourage the most senior to retire, sources familiar with the talks said. The move is being discussed in the face of Ford’s decision last week to increase retirement incentives by as much as $20,000 from deals offered two years ago. It also comes as pressure intensifies on GM to get a deal so it can begin moving out veteran workers and replacing them with lower-paid new hires. A landmark cost-cutting labor contract inked three months ago between GM and the UAW gave the automaker leeway to buy out workers and create a second tier of wages — major wins for GM.
08:33 Equity give up some of this morning’s gains following negative payrolls number… Dow has given up about 30 pts since the report, now +93 pts
SPX futures now +8 pts, Nas +27 pts, giving up a portion of this morning’s gains following jobs data.
08:33 RRST RRSAT Global: Strong finish to 2007 sets the stage for continued growth and strategic initiatives - Susquehanna (17.50 )
08:31 WY Weyerhaeuser considers strategic alternatives for commercial construction sales (67.64 )
Co announces that it will consider a broad range of strategic alternatives for its Commercial Construction Sales business and related assets. Alternatives range from continuing to hold and operate the assets to a possible sale or combination. “We are positioning our Wood Products business to grow in areas that present the greatest opportunities for our shareholders and employees,” said Lee Alford, senior vice president - Residential Wood Products. “The decision to proceed with a strategic alternatives review is driven by our desire and need to focus on our core strategies in the residential structural frame market. Our goal during this review is to ensure that the Commercial Business is optimized for long-term growth.”
08:31 EME EMCOR Group profiled in Inside Wall Street section in Business Week (21.90 )
Business Week reports the co’s stock has been walloped. It has fallen from 38 in mid-July to 20.54 on Jan. 30 on concerns that the housing woes will spread to commercial, nonhousing construction, a major mkt for Emcor, a global designer and provider of engineering and electrical systems for industrial and commercial buildings. Such predictions are “not true at all,” says CEO Frank MacInnis, who points out that Emcor’s yearend order backlog has reached an all-time high of $4.5 bln, a 30% increase from a year ago. “We’re very diversified,” he says. Some 45% of Emcor’s revenues comes from services to hospitals, airports, hotels, oil refineries, and pharmaceutical cos, and a further 35% from servicing various facilities, including London’s Heathrow Airport, he notes. Emcor’s business from the energy industry has been growing, says MacInnis. “So we see expanding margins and strong earnings in 2008,” he adds.
08:31 CAO CSK Auto recieves acquisition proposal from O’Reilly Automotive for $8/share in cash (5.95 )
O’Reilly Automotive (ORLY) announces that it is proposing to acquire all of the outstanding shares of CAO common stock for $8.00 per share in cash.The total transaction is valued at approximately $845 million, including the assumption of approximately $490 million of CSK debt. The acquisition is expected to be accretive to O’Reilly’s earnings in the first full year after completion of the acquisition excluding one time transaction costs.
08:30 PWAV Powerwave: 4Q07 preview; improving U.S. wireless trends - Brean Murray (3.80 )
Brean Murray reiterates their Buy/Top Pick recommendation, earnings estimates and $8 tgt on Powerwave Technologies in anticipation of a strong 4Q earnings report. PWAV is one of the few pure-plays on the theme of global wireless infrastructure demand, and poised, in their view, to benefit from an increase in demand for improved coverage, capacity and throughput over wireless networks.
08:30 ECONX Average Hourly Earnings m/m +0.2% vs +0.3% consensus
08:30 CVX prelim $2.32 vs $2.26 First Call consensus; revs $61.41 bln vs $76.09 bln First Call consensus
08:30 ECONX Average Hourly Earnings y/y 3.7% vs 3.9% consensus
08:30 ECONX Jan. Average Weekly Hours 33.7 vs. 33.8 Consensus
08:30 ECONX Unemployment Rate 4.9% vs 5.0% consensus, prior 5.0%
08:30 ECONX Jan. Change in Manufacturing Payrolls -28k vs. -20k Consensus
08:30 ECONX Nonfarm Payrolls -17K vs 70K consensus, prior revised to 82K from 18K
08:29 NATH Nathan’s Famous reports Q3 EPS of $0.14 vs $0.17 in yr ago period; revs +4.1% yr/yr to $10.28 mln (16.09 )
08:28 KFT Kraft Foods profiled in Inside Wall Street in Business Week (29.27 )
Business Week reports Kraft Foods, the largest U.S. food-and-beverage co and No. 2 in the world, whose estimated 2007 sales of $36.9 bln are expected to jump to $41 bln in 2008 and $43.7 bln in 2009. Yet Kraft, with a 3.6% dividend yield, saw its stock fall from 37.20 in June to 29.45 on Jan.30. Battipaglia sees Kraft hitting 40 this year. The co is restructuring to spur sales growth and slash costs. One big stakeholder is billionaire Nelson Peltz, with more than 2%. Kraft named two of his nominees to the board after he agreed not to seek control. Peltz’s contribution has been a “positive” in keeping Kraft on track to enhance shareholder value, says Charlie Georgas of Jackson Securities, who rates Kraft a buy.
08:27 XOM Exxon Mobil beats by $0.21 (86.40 )
Reports Q4 (Dec) earnings of $2.16 per share, $0.21 better than the First Call consensus of $1.95; revenues rose 13.8% year/year to $11.66 bln. Upstream earnings were $8,204 million, up $1,984 million from the fourth quarter of 2006 primarily reflecting higher crude oil realizations and higher gains on asset sales partly offset by tax items and lower liquid volumes. Downstream earnings of $2,267 million were $307 million higher than the fourth quarter of 2006. Corporate and financing earnings excluding special items were $77 million, down $341 million, mainly due to tax items.
08:27 BONDX Bond Watch: Leaking Pre-Payrolls
While the market is suffering an unwind of flight-to-quality on the back of better equities overnight, all eyes are on this mornings jobs report. The down move pre-market reflects the uncertainty facing trade as the stimulus provided via rate cuts & fiscal promises are giving stock sentiment a shot in the arm to gradually layer on risk despite the many arguments against such action. To say the markets are conflicted may be an understatement & trade will find reason to sell on rallies & buy on dips. The 2-10-yr yield spread is a little flatter at 147.6 as the flight comes out of the short end. Bond prices in the EuroZone are offered with assistance from a better-than expected German manufacturing report while in Japan, bonds scraped out some modest gains. Treasuries will get some labor data this morning. Yes it’s payrolls day & whether you like it or not, trade will trade on the darn thing. Expectations are embarrassingly wide which fuels the debate over how much credence markets should be affording such data. That said, bonds need a bad report, possibly negative to get back up to the positive price side today. With 125 basis points of easing under their belts the markets are discounting almost everything as rearview now so even a bad report might not be enough to add to prior gains leaving trade in no man’s land. Revisions & the hourly average earnings could tilt favor sentiment should the headline hit unceremoniously near consensus around 70K. The dollar is treading some well-worn paths with the euro still poking around 1.4900 & yen around 106.50. Spot gold is up at 933.34 (+7.35) while crude oil is at 91.95 (+0.20). Beyond the payrolls, the calendar has construction spending, ISM & revisions to UofM (10). The euro is at 1.4892 & the yen is at 106.5000 while the 10-yr is -15/32 yielding 3.650%.
08:27 SRVY Greenfield Online: GOOG comments bode well for Ciao.com; previewing 4Q07 results - Merriman (12.86 )
Merriman notes SRVY reportd 4Q07 results next week on Thurs, Feb 7, after the close. Firm expects the co to report in-line results, including $34.9 mln in rev and $0.12 in EPS, which includes nonrecurring expenses related to past mgmt changes. Firm believes that the stock should outperform its peers in the online media group due to its: 1) high international exposure (50% of rev), 2) expansion of margins as Ciao.com becomes a bigger portion of the total, 3) performance-based advertising channels should hold up better in a softer economy than brand/display advertising formats, and 4) low valuation.
08:25 AVID Avid Tech downgraded to Sell at Kaufman- tgt $15 (25.92 )
Kaufman Bros. downgrades AVID to Sell from Hold and lowers their tgt to $15 from $28, following Q407 revenue results that exceeded firm estimates with EPS slightly lower and based on management’s view of 2008 as a transition year.
08:25 PTR PetroChina to make additional shares tradable in Shanghai - Bloomberg (142.28 )
Bloomberg reports the co said 1 bln additional yuan-denominated shares will become tradable next week in Shanghai. Trading in the so-called A-shares will start Feb. 5, Beijing-based PetroChina said. Institutional investors holding the co’s stock can sell the shares three months after it was listed in Shanghai on Nov. 5, it said.
08:24 ELY Callaway Golf: FY07 results in line with pre-announcement; cautious on FY08 ests; opportunity exists for upside - Merriman (17.99 )
Merriman notes ELY reported 4Q07 sales of $174.4 mln — a decrease of 3% vs. last year, in line with its pre-announced expectations. While firm remains optimistic for ELY’s growth opportunities based on its impressive new product lineup for 2008 and expectations for continued margin improvements, given the current economic environment, they believe it is prudent to take a more conservative stance on their ests for FY08. Therefore, firm is lowering their FY08 rev est to $1.157 bln from $1.170 bln and their EPS est to $1.14 from $1.24.
08:18 SCANX Early pre-market gappers
Gapping up: YHOO +54.8%, STAR +15.5%, ISRG +15.4%, SIMO +13.6%, INFN +12.9%, RTP +11.8%, ABK +11.6%, SWIR +11.4%, MOT +10.9%, MBI +10.6%, FLS +10.2%, BHP +9.5%, ETFC +8.7%, ACH +8.6%, VCLK +7.7%, GOLD +7.5%, BIDU +6.4%, COGO +6.4%, MCRS +6.4%, EBAY +6.0%, CA +5.9%, CA +5.9%, LAVA +5.3%, TMTA +5.0%, DLB +4.8%, ONNN +4.8%, TSRA +4.7%, AFFX +4.6%, IWOV +4.4%, BRCM +4.1%, DIS +3.8%, SCA +3.5%, BZH +3.3%, ALTR +3.3%, ACS +2.6%, AMZN +2.6%, COF +2.3%, FMD +1.9%, XOM +1.7%, JCP +1.4%, HOLX +1.2%, AAPL +1.2%, AU +1.1%… Gapping down: OMCL -12.1%, ACTU -11.9%, DRIV -11.3%, ABAX -9.4%, COLM -8.6%, GOOG -7.9%, BEBE -7.1%, SXE -6.9%, MSFT -5.0%, MCK -4.5%, PFWD -4.1%, SYMM -3.9%, SLW -3.8%, TRID -3.8%, ERIC -3.7%, RFMD -3.7%, ELY -3.0%, CPSI -2.7%, ERTS -2.4%, CMI -1.9%.
08:17 ECONX Reminder: Employment data due out at 8:30AM ET
You can check out our preview here.
08:17 GOOG Google: Microsoft, Yahoo combo poses threat to Google, Citigroup says- Bloomberg (564.30 ) -Update-
Microsoft (MSFT) offer for Yahoo (YHOO) ‘makes sense’ Citigroup says
08:17 YHOO Yahoo! Board of Directors to evaluate unsolicited proposal from Microsoft (19.18 )
The co confirmed that it has received an unsolicited proposal from MSFT to acquire the co. The co said that its Board of Directors will evaluate this proposal carefully and promptly in the context of Yahoo!’s strategic plans and pursue the best course of action to maximize long-term value for shareholders.
08:16 UA Under Armour: Key issues for the stock’s performance - Credit Suisse (40.25 )
Credit Suisse says with UA mgmt’s expectations for 2008 having been thoroughly fleshed out on yesterday’s conf call, it’s much easier to pinpoint the few key issues that will be most important for the stock’s performance this year: 1) consumer response to the Performance Trainer launch; 2) the co’s ability to meaningfully moderate inventory growth; 3) the achievability of 70% EPS growth in 2H; and 4) the impact of a challenging consumer environment on the demand for the UA brand. High profile success in footwear, a category long dominated by the likes of Nike, adidas, Reebok, and Puma, could make 2008 a breakout year for this brand, especially considering that there may be few other retail success stories to speak of this year.
08:16 AIRT Air T reports Q3 EPS of $0.38 compared to $0.11 in last yr qtr; co reports revs up 22% yr/yr to $21.1 mln with no esetimates (9.59 )
08:15 MFA MFA Mortgage upgraded to Buy at Stifel- tgt $12 (10.20 )
Stifel upgrades MFA to Buy from Hold with a $12 tgt saying the recent rate cuts by the Fed are the principal driver for their ratings and estimates changes. The 125bp in cuts over the past two weeks were substantially more than they had expected, and should have a significant positive impact on 2008 earnings.
08:14 LSTR Landstar System downgraded to Hold from Buy at Stifel- based on valuation (50.03 )
08:14 ABK AMBAC Fincl: Debt protection costs plunge on AMBAC, MBIA on CNBC report, according to CMA Datavision - Reuters (11.64 )
(MBI)
08:13 LGCY Legacy Reserves resumed with a Buy at Stifel- tgt $24 (18.56 )
Stifel resumes coverage of LGCY with a Buy and a $24 tgt based on the announced $0.45/unit 4Q07 distribution, Legacy units currently yield 9.7%. This is a premium to peers at 9.0%. Based on the firms assessment of risks, they do not believe this premium is justified. Further, they have a $24/unit NAV based target price which provides an additional 29% upside, bringing the total return opportunity to nearly 40%.
08:12 ANH Anworth Mortgage upgraded to Buy at Stifel- tgt $12 (8.95 )
Stifel upgrades ANH to Buy from Hold with a $12 tgt based on an improved outlook. The firm says the recent rate cuts by the Fed are the principal driver for their ratings and estimates changes. Firm says the 125bp in cuts over the past two weeks were substantially more than they had expected, and should have a significant positive impact on 2008 earnings.
08:10 CMO Capstead Mortgage initiated with a Buy at Stifel- tgt $20 (15.00 )
Stifel initiates CMO with a Buy and a $20 tgt saying while Capstead may appear expensive on first glance, trading at nearly twice 3Q07 common book value, they believe that economics have improved materially since last published figures and project book value to reach $11.29 in 1Q08, placing the book value multiple in a more reasonable 1.33x range. The firm also expects substantial dividend growth throughout 2008 with total projected dividend payout of $1.95. They expect strong economics to continue into 2009
08:10 GOOG Google: Sloppy, but still on track with growth thesis - Susquehanna (564.30 ) -Update-
08:07 MA MasterCard: Q4 a homerun; opinion unchanged for 2008 - Calyon (207.00 )
Calyon notes MA reported 4Q07 GAAP EPS of $2.26 and operating EPS of $0.89, exceeding their est by $0.03 and the Street consensus by $0.17. Firm is maintaining their 2008e and 2009e of $7.59 and $9.64.
08:06 WIRES On The Wires
Deutsche Bank (DB) announces that on Jan 31, 2008 it acquired HedgeWorks, a hedge fund administrator with more than $10 bln in assets under administration… Dana Holding (DAN) announces it is emerging from Chapter 11 reorganization as a new company positioned to compete in the global automotive, commercial vehicle, and off-highway markets… Vital Signs (VITL) announces the award of a 3-yr supply agreement with HealthTrust Purchasing Group. The agreement is effective for the period Jan 1, 2008 through Dec 31, 2011 and covers anesthesia breathing systems, face masks, gas sampling lines, bacterial/viral filters, hygroscopic condensor humidifiers and stylettes.
08:06 ACI Arch Coal beats by $0.09, reports revs in-line; guides FY08 EPS in-line (43.95 )
Reports Q4 (Dec) earnings of $0.56 per share, $0.09 better than the First Call consensus of $0.47; revenues rose 4.2% year/year to $644.4 mln vs the $641.1 mln consensus. Co issues in-line guidance for FY08, sees EPS of $2.00-2.50 vs. $2.43 consensus.
08:05 RIO Comp Vale Do Rio battles Xstrata hurdle - FT (34.84 )
FT reports the co is fighting to overcome govt resistance to a proposed takeover of Xstrata, its Anglo-Swiss rival, for an estimated $90 bln. The Brazilian govt is concerned the deal could leave foreign investors as the biggest shareholders in Vale and that the acquisition threatened to distract the company’s attention from other investments at home, a person close to the Brazilian president’s office said. Vale has secured finance of about $50 bln for the deal from a consortium of banks, according to people close to the situation. It is unlikely to be able to raise more than that amount without putting at risk its investment grade credit rating, analysts say, which would itself undermine Vale’s ability to raise finance for the acquisition. To carry out the acquisition, Vale is now preparing to offer shares to Glencore, the Swiss commodities trading co that is Xstrata’s biggest shareholder, people close to the deal say.
08:05 BTU Peabody Energy: Calyon reducing ests and tgt to $66 (53.86 )
Calyon is lowering their 2008 EPS est to $1.65 from $3.16. Firm is also reducing their 2008 EBITDA forecast from $1.6 bln to $1.22 bln. Firm is reducing their tgt to $66 from $70 and maintaining their BUY rating. The global coal story continues to evolve, and remains a strong consideration when valuing coal names, and certainly Peabody given its global platform.
08:04 OMPI Obagi Medical announces results of four studies fror CLENZIderm; patients saw significant improvement in inflammatory and non-inflammatory lesions (14.88 )
Co announces the results of four studies of the CLENZIderm. The data show that patients of all skin types with mild-to-moderately severe acne saw significant improvement in inflammatory and non-inflammatory lesions and reported high levels of patient satisfaction, lower levels of dryness and greater comfort when using the innovative formulation of solubilized 5% benzoyl peroxide in the CLENZIderm M.D. Systems. The first study showed that when compared to twice-daily treatment with a leading BPO/clindamycin combination product, the twice-daily monotherapy with the solubilized 5% B.P.O. serum gel resulted in a greater and more rapid reduction in the number of non- inflammatory and inflammatory lesions. The second study showed that the 3-step CLENZIderm M.D. System demonstrated a moderate or greater overall improvement compared with previously used treatments and high patient satisfaction. A majority (up to 77%) of patients who participated in this multicenter observation study considered the CLENZIderm M.D. acne system more effective than prescription and over-the-counter acne medications they had used previously.
08:04 XOM prelim revs $116.64 bln vs $114.89 bln First Call consensus
08:04 MOT Motorola: Upgrade details (11.50 ) -Update-
As mentioned at 7:13 Citigroup upgraded MOT to Buy from Hold as the co is finally exploring a structural and strategic realignment of its businesses. The firm believes that this will serve as a meaningful catalyst to Motorola shares as investors will look past the drag from the underperforming handset business. Firm says their sum of the parts analysis indicates a value of $16 - $17, with fairly conservative assumptions.
08:04 AXL American Axle beats by $0.12, misses on revs (21.81 )
Reports Q4 (Dec) earnings of $0.42 per share, excluding non-recurring items, $0.12 better than the First Call consensus of $0.30; revenues fell 3.3% year/year to $755.3 mln vs the $792.7 mln consensus.
08:03 TMTA Transmeta receives unsolicited indication of interest from Riley Investment Management for $15.50/share in cash (14.13 )
Co confirms that it has become aware of a letter from Riley Investment Management expressing interest in seeking to acquire all of the outstanding shares of TMTA not already owned by Riley Investment Management or its affiliates for $15.50/share in cash. Consistent with its fiduciary duties, the Board of Directors will carefully consider and evaluate in due course the unsolicited indication of interest.
08:03 ACI sees FY08 $2.00-2.50 vs $2.43 First Call consensus
08:03 XOM prelim EPS of $2.13 vs $1.95 First Call consensus
08:02 S&P futures vs fair value: +15.5. Nasdaq futures vs fair value: +22.5.
Futures were pointing to a sluggish start after Google (GOOG) reported earnings that disappointed traders and market participants awaited the jobs report at 8:30 ET. Futures then spiked around 6:30 ET, and are now pointing to a significantly higher start, on news that Microsoft (MSFT) has proposed to buy Yahoo! (YHOO) for $44.6 billion in cash and stock. The $31 per share offer represents a 62% premium over Yahoo!’s closing price. Bloomberg.com reports it is the largest technology acquisition ever, beating KKR’s $26 billion acquisition of First Data Corp in 2007. There may be more movement in futures trade, with the jobs report roughly 30 minutes away. Economists expect a 70,000 increase in nonfarm payrolls and for the unemployment rate to hold steady at 5.0%.
08:02 GMTN Gander Mountain: Trimming Q4 ests on weak industry trends - FBR (4.82 )
Friedman Billings is proactively taking in their 4Q07 sales and EPS ests as they consider recent data points from industry competitors, as well as the looming concerns regarding the health of the consumer. As firm wrote in early December, they believe FY08 will be a very dynamic year for GMTN, and the onus is clearly on mgmt to prove to the Street that it can execute what has become an increasingly complex strategy with the addition of its direct business (via Overton’s) and the rollout of a full-scale boat offering in another 35 to 40 stores this spring.
08:02 ACI prelim $0.56 vs $0.47 First Call consensus; revs $644.4 mln vs $641.1 mln First Call consensus
08:02 AMGN Amgen and WYE announce new findings show Enbrel significantly reduced levels of C-reactive protein in patients with plaque psoriasis (46.80 )
AMGN and Wyeth Pharmaceuticals (WYE) announce findings from a retrospective analysis, which demonstrated that ENBREL reduced C-reactive protein, a marker of inflammation, in patients with moderate to severe plaque psoriasis following 12 weeks of treatment. Median reduction in C.R.P. levels was 10x greater in the ENBREL treated group compared to the placebo treated group.
08:01 MYL Mylan Labs announces final FDA approval for Granisetron hydrochloride tablets (14.84 )
Co announces that Mylan Pharmaceuticals has received final approval from the FDA for its Abbreviated New Drug Application for Granisetron Hydrochloride Tablets, 1 mg
08:01 TDW Tidewater beats by $0.14, misses on revs (52.96 )
Reports Q3 (Dec) earnings of $1.66 per share, $0.14 better than the First Call consensus of $1.52; revenues rose 9.1% year/year to $314.2 mln vs the $317.7 mln consensus.
08:01 AXL prelim $0.42, ex items vs $0.30 First Call consensus; revs $755.3 mln vs $792.74 mln First Call consensus
08:01 BVF Biovail receives letter related to 2003 Cardizem LA launch acitivites from US Attorney’s Office (13.70 )
The co announces that it has been notified by the United States Attorney’s Office in Boston, Massachusetts that the Corporation is the target of a federal grand jury investigation in connection with activities surrounding the 2003 commercial launch of Cardizem LA. In particular, the investigation relates to the Cardizem LA clinical experience program, titled P.L.A.C.E. The Corporation stated that this could lead to possible civil or criminal charges against the Corporation.
08:01 MOT Motorola: Further color - Oppenehimer (11.50 ) -Update-
Oppenheimer notes MOT is exploring strategic alternatives for its Mobile Devices unit. They believe the two most likely scenarios are either a sale of the unit (likely) or a spin-off (complicated to execute). Timing will be key as the longer the process drags on, the more likely the value assigned to the unit will deteriorate. Firm sees a complicated process ahead but some interested parties could come forward (Asian, PE or hardware players). They believe MOT’s core ‘08/’09E EPS of $0.33/$0.65 is not enough to support shares at current levels. Therefore, assuming a long process with an unknown outcome and a depreciating asset, they believe investors take advantage of the strength and trim positions.
08:01 TWIN Twin Disc announces additional stock repurchase authorization of 500K additional shares (15.14 )
08:01 BZH Beazer Homes announced the discontinuation of mortgage origination services, establishment of a new marketing services arrangement with CFC and conclusions from its review (9.00 )
Co announced the discontinuation of mortgage origination services through Beazer Mortgage Corporation, establishment of a new marketing services arrangement with Countrywide Financial (CFC) and conclusions from its previously announced comprehensive review of the co’s markets. The co also provided certain unaudited and preliminary first quarter financial and operating data… BZH will market CFC as the preferred mortgage provider to Beazer Homes’ customers. Under the agreement, Countrywide’s mortgage products and services will be made available to Beazer Homes’ homebuyers through dedicated Countrywide loan counselors serving all of Beazer Homes’ communities… As a result of the review, the co has decided that it will exit its homebuilding operations in Charlotte, NC, Cincinnati/Dayton, OH, Columbia, SC, Columbus, OH, and Lexington, KY. The Company is evaluating its current land holdings and inventory in each of these markets to determine the appropriate methods and timing for disposition… In addition, the Company has confirmed plans to enter the Northwest Florida market in cooperation with The St. Joe Company (JOE)… Preliminary First Quarter Financial and Operating Data: Net new home orders totaled 1,260, a decline of 29% from the prior fiscal year. At 46%, the cancellation rate for the quarter was comparable to the 43% rate experienced for the same period in the prior fiscal year and significantly improved from the unusually high rate of 68% in the fourth quarter of fiscal 2007. The co continues to expect that for the whole of fiscal 2008, it will generate net cash from operations… The co currently expects its results for the first quarter of fiscal 2008 to include material charges to abandon land option contracts and to recognize inventory impairments. As the Company is in the process of restating prior periods’ financial statements, it is unable to quantify the amount of these charges at this time.
08:00 TDW prelim $1.66 vs $1.52 First Call consensus; revs $314.2 mln vs $317.68 mln First Call consensus
08:00 YHOO Yahoo!: Microsoft deal for Yahoo may get regulatory approval, Yahoo investors should accept Microsoft’s offer, J.P Morgan says- Bloomberg (19.18 ) -Update-
07:59 LOW Lowe’s: Downgrade details (26.43 )
As mentioned at 6:38, Citigroup downgraded LOW to Hold from Buy, as they believe both LOW and HD 4Q07 SSS are likely tracking below guidance, as continued housing market weakness and a faltering consumer are taking its toll. The firm notes that since 2008 EPS visibility is very limited, and they anticipate HD and LOW guidance to be cautious in February, and as such, they expect additional pressure on these stocks. Firm cuts their ests for both HD and LOW.
07:58 AXP American Express downgraded to Hold from Buy at Sandler O’Neill (49.13 )
07:57 R Ryder System beats by $0.10, beats on revs; guides Q1 EPS below consensus; guides FY08 EPS above consensus, revs below consensus (52.00 )
Reports Q4 (Dec) earnings of $1.18 per share, $0.10 better than the First Call consensus of $1.08; revenues rose 4.5% year/year to $1.67 bln vs the $1.63 bln consensus. Co issues downside guidance for Q1, sees EPS of $0.84-0.87 vs. $0.91 consensus. Co issues mixed guidance for FY08, sees EPS of $4.50-4.65 vs. $4.47 consensus; sees FY08 revs of $6.18 bln vs. $6.93 bln consensus.
07:57 OMCL Omnicell: Color on quarter (25.08 )
Broadpoint Capital says they were off the mark when, in their preview note, they predicted another quarter of robust backlog growth for OMCL. Backlog declined $3.6 mln sequentially, to $137 mln, in what is typically a strong quarter for HIT-related bookings. Mgmt attributed the decline to an ever-increasing deal size (and resulting lumpiness), and two customers that encountered credit-related issues (since resolved). The competitive landscape appears stable. As investors have grown accustomed to “beat-and-raise” quarters and sequential backlog growth, 4Q07 results will be a disappointment… Thomas Weisel is slightly raising their 2008 rev est and establishing their 2009 rev and EPS ests. Given the recent earnings announcement, and mgmt’s commentary surrounding 2008, firm raises their 2008 rev est slightly from $274.0 mln to $274.5 mln, while maintaining their 2008 EPS est of $0.87. Firm is also establishing 2009 rev and EPS ests of $347.8 mln and $1.09. Given the solid 2008 bookings guidance, firm is incrementally more confident that the co will continue to perform well. They expect further market share gains from Cardinal Health, albeit at a more measured pace.
07:57 CA CA Inc upgraded to Outperform at RBC- tgt raised to $27 (22.00 )
RBC upgrades CA to Outperform from Sector Perform and raises their tgt to $27 from $25 following earnings and given the co’s relatively stable operating profile versus their coverage list in the context of a tougher macro environment.
07:56 R sees Q1 $0.84-0.87 vs $0.91 First Call consensus
07:56 R sees FY08 $4.50-4.65 vs $4.47 First Call consensus; sees revs $6.18 bln vs $6.93 bln First Call consensus
07:56 ISRG Intuitive Surgical: Color on Quarter (254.00 )
Deutsche Bank notes momentum at ISRG continues unabated as evidenced by the strength of its fourth quarter results and they raised their tgt to $360 from $330. They say more surprising than the 22% of EPS upside in the quarter was the co’s ‘08 guidance which calls for 40% revenue growth, the highest rate management has ever endorsed at the beginning of the year… Wachovia says ISRG has a monopoly on the fast-growing robot-assisted surgery market, noting it’s a win-win-win” providing benefits for the hospital (an attractive ROI), surgeon (easier surgery), and patient (better outcomes). The firm is concerned, however, that expectations have moved too high and now view ISRG shares as fully valued.
07:55 R prelim $1.18 vs $1.08 First Call consensus; revs $1.67 bln vs $1.63 bln First Call consensus
07:54 GCI Gannett beats by $0.01, misses on revs; reports December statistics (36.93 )
Reports Q4 (Dec) earnings of $1.28 per share, excluding non-recurring items, $0.01 better than the First Call consensus of $1.27; revenues fell 11.9% year/year to $1.9 bln vs the $1.98 bln consensus. Co also reports that total pro forma operating revenues for the twelfth period ended Dec 30, 2007, declined 24.1%. Newspaper advertising revenues in December were 26.4% lower compared with the same period in 2006. For the fourth quarter of 2007, total pro forma operating revenues were 11.9% lower.
07:53 Regulators urge fast action by lenders on risky loans - WSJ
WSJ reports two federal regulators urged lenders to take quick action to avoid a surge in losses tied to the weakening credit cycle, with one forecasting an increase in bank failures. Comptroller of the Currency John Dugan said the federal govt planned to ramp up its scrutiny of commercial-real-estate loans, while FDIC Chairman Sheila Bair said lenders must act to slow foreclosures on residential borrowers with interest-only and other nontraditional mortgages. Congress and others have criticized the regulators for not doing enough sooner to prevent the current credit-mkt turmoil. Mr. Dugan, whose agency is a division of the Treasury Department that regulates national banks, said in a speech to the Florida Bankers Association that lenders in stressed areas would likely have to order new appraisals on their loans, downgrade more assets, increase loan-loss reserves, and potentially hold more capital to protect against losses. Commercial-real-estate loans are extremely popular with small and medium-size banks, with many holding high concentrations of these loans. “As the result of a prolonged period of exceptionally benign credit conditions, many community bankers had become a little too complacent regarding the potential for significant stresses in these markets,” Mr. Dugan said, according to prepared text. Separately, Ms. Bair told the Senate Banking Committee that loan servicers should quickly formulate a plan to deal with the 1.7 mln outstanding nontraditional mortgages, such as interest-only loans, many of which are expected to reset into new interest rates next year. These mortgages aren’t included in the industry-led plan to modify the terms of subprime adjustable-rate loans, which frequently reset into higher monthly requirements after the first two or three years. “Waiting to confront the next reset problem will once again create the risk of falling behind a fast-moving trend,” she said.
07:53 DRIV Digital River: Color on quarter (37.50 )
Friedman Billings notes DRIV posted a good quarter on both the top and bottom line. While the company posted an in-line quarter, the weaker-than- expected guidance will weigh on shares this morning. On a positive note, the transition of Symantec’s larger global subscription sites is now completed, as more than 80% of the anticipated subscription business is running on the company’s platform. While we applaud the progress that DRIV has made on this lengthy process, as indicated by the company’s soft guidance, this revenue stream will continue to face difficulties in 2008. Firm believes DRIV will remain in the “investor penalty box” in the near term, given that 2008 could prove to be a transitional year, as the company invests back in its business, coupled by headwinds on the Symantec front… Thomas Weisel says the rev outlook, which was below consensus ests for $405.9 mln, reflects a cautious outlook with respect to the economy and consumer spending, continued transition of the Symantec business, and the loss of two European clients.The EPS outlook, which was below consensus ests for $2.19, reflects $20 mln in incremental investing ($0.30/share) and lower interest rates on investment income ($0.04/share). While the co expects the expenses to occur throughout the year, it expects operating margins to decline 700bp y/y in 1H08 and increase 150bp y/y in 2H08, for a full year impact of negative 250bp. Firm notes that $20 mln equates to roughly 500bp, so excluding the investment, it appears that margins would have increased about 250bp. In addition to the $20 mln in investment expenses, the co also plans to increase its capital spending by $10 mln, bringing the expected capital expenditures in 2008 to $25 mln. Firm cuts tgt to $42 from $48… Deutsche believes its customer concentration remains a key risk at the co, especially if they are seeing increased pressure in transaction economics. After reporting in-line 4Q results, with a lower outlook due to increased investments and pressure from Symantec, firm believes the stock will likely stay range-bound until they see evidence of business reacceleration. Firm cuts tgt to $32 from $42.
07:51 GCI prelim $1.28, ex items vs $1.27 First Call consensus; revs $1.9 bln vs $1.98 bln First Call consensus
07:51 BMY Bristol-Myers upgraded to Outperform from Neutral at Cowen (23.02 )
07:51 FCFC FirstCity Financial names Jim Moore Chief Operating Officer (8.39 )
07:50 TRID Trident Microsystems downgraded to Sell at Roth Capital (5.03 )
Roth Capital downgrades TRID to Sell from Hold and lowers their tgt to $3.50 from $7.50, following Q208 revenue and EPS that exceeded firm and consensus estimates and based on a GM decline, a weak outlook for 2H08 and lack of visibility into the CY09 design cycle.
07:50 SM St. Mary Lnd/Expl downgraded to Hold at Keybanc (35.22 )
Keybanc downgrades SM to Hold from Buy noting last night, St. Mary Land & Exploration increased its 4Q07 production guidance and reaffirmed its 2008 production guidance. The firm says they would characterize the co’s releases as a “mixed bag.” Firm says taking into consideration recent announcement’s by the co, including last night’s release of proved reserves and its capital spending budget conference call in late December, firm has come to the conclusion that SM will likely remain in a transition mode for the next two years to more of a resource-play story and it will take some time for the co to post improved organic production growth and reserve adds at competitive costs.
07:48 PPS Post Properties may face proxy fight - WSJ (42.27 )
WSJ reports a Chicago-based hedge fund plans to launch a proxy fight Friday designed to force apartment real-estate investment trust Post Properties to consider offers to sell itself. Pentwater Capital Management, a $1.25 bln hedge fund, plans to submit a slate of five directors to Post’s nine-member board, the fund said Thursday. Pentwater founder and chief executive Matt Halbower said that his bid was designed to force Post’s board to consider offers from the co’s founder John Williams or other potential bidders. He said he was concerned that once the Feb. 24 deadline has passed for shareholders to propose alternate directors Post’s board would halt the process.
07:48 MXIM Maxim Integrated downgraded to Sell from Buy at Citigroup (19.66 ) -Update-
07:46 RTP Rio Tinto: Chinalco Pres says its Rio Tinto stake not meant to foil BHP bid - DJ (406.95 ) -Update-
Chinalco Pres says purchase primarily a business decision and currently happy with 12% stake - DJ (BHP)
07:46 MXIM Maxim Integrated upgraded to Outperform from Peer Perform at Bear Stearns (19.66 ) -Update-
07:42 FLS Flowserve upgraded to Outperform from Peer Perform at Bear Stearns (82.11 )
07:42 ATHN AthenaHealth withdraws registration statement for proposed public offering (31.40 )
Co announces that it has filed an application with the SEC to withdraw its registration statement for a proposed public offering, on behalf of itself and certain selling stockholders, due to market conditions. The registration statement was originally filed on Jan 7, 2008. No securities were sold pursuant to the registration statement.
07:42 Refining Sector upgraded to Overweight from Market Weight at Soleil
Soleil upgrades the Refining sector to Overweight from Market weight saying refining stocks have declined significantly over the past few months due to weak refining margins and earnings, and concerns that a potential recession could reduce demand for gasoline and other refined products. However, they expect this negative share price trend to reverse in February as falling supply and seasonally rising demand reduce refined product inventories, which they believe is the key leading indicator for refining margin and stock price changes. The firm also upgrades Valero (VLO) to Buy from Hold with a $77 tgt. The firm also upgrades Frontier (FTO) to Buy from Hold, and says Holly Corp (HOC) remains their top recommendation.
07:41 CELG Celgene: Strong Q4 on good Revlimid sales growth; PHRM acquisition set to drive top line - FBR (56.11 )
Friedman Billings notes CELG reported a strong quarter with EPS of $0.31 on total revs of $415 mln; the Street was at $0.31 and $391 mln, respectively. Revlimid sales of $247 mln were slightly higher than preannounced sales earlier this month. Demand for the drug in the U.S. grew 9% sequentially, and Revlimid is continuing its strong rollout with a 20% share in front line and 30%-40% share in refractory patients. firm made no product sale changes to their model and just tweaked expenses. They are at $1.27 bln in Revlimid sales for the year (the Street is at $1.28 bln) and EPS of $1.59 (the Street is at $1.54). Celgene’s acquisition of PHRM is expected to close in March; the acquisition will add significant value to CELG’s top line, positioning the co as one of biotech’s best growers, particularly if Vidaza gets Europe to itself.
07:41 CMI Cummins misses by $0.05, beats on revs; guides FY08 revs in-line (48.35 )
Reports Q4 (Dec) earnings of $1.00 per share, $0.05 worse than the First Call consensus of $1.05; revenues rose 15.4% year/year to $3.5 bln vs the $3.46 bln consensus. Sales are forecast to increase 12% from 2007 levels (which calculates to roughly $14.61 mln vs. $14.63 bln consensus), and the co expects to generate EBIT of 10% of sales in 2008.
07:40 ADP Automatic Data beats by $0.02, beats on revs; reaffirms FY08 EPS guidance, revs guidance (40.28 )
Reports Q2 (Dec) earnings of $0.55 per share, includes $0.02 tax benefit from reduction in provision for income taxes, $0.02 better than the First Call consensus of $0.53; revenues rose 14.7% year/year to $2.15 bln vs the $2.1 bln consensus. ADP reaffirms Y08 revs up 12+13%. Co reaffirms guidance for FY08, sees EPS of high end of guidance of 18-21% growth, which equates to approx $2.12-2.18, excluding non-recurring items, vs. $2.16 consensus; sees FY08 revs up 12-13% yr/yr, which equates to approx $8.74-8.81 bln vs. $8.7 bln consensus.
07:40 IMCL Imclone: Erbitux keeps chugging, 2008 full of value drivers - Rodman & Renshaw (43.47 )
Rodman & Renshaw says IMCL reported a strong quarter with EPS of $0.31 on total revs of $415 mln; the Street was at $0.31 and $391 mln, respectively. Revlimid sales of $247 mln were slightly higher than preannounced sales earlier this month. Demand for the drug in the U.S. grew 9% sequentially, and Revlimid is continuing its strong rollout with a 20% share in front line and 30%-40% share in refractory patients. CELG reiterated 2008 guidance; firm made no product sales changes to their model and just tweaked expenses. Firm is at $1.27 bln in Revlimid sales for the year (the Street is at $1.28 bln) and EPS of $1.59 (the Street is at $1.54). CELG’s acquisition of PHRM is expected to close in March; the acquisition will add significant value to CELG’s top line, positioning the co as one of biotech’s best growers, particularly if Vidaza gets Europe to itself.
07:40 MOT Motorola: Color on Restructuring
Deutsche Bank notes while it’s disappointing that MOT has come to this, they think this move could unlock much of the co’s value meriting a Buy rating. The firm thinks there are many potential buyers who could leverage the co’s brands, expertise and distribution. That list could include Asian telecom vendors and US consumer electronics vendors… Lehman believes a MOT split would offer few operating benefits, they do believe the move will force the shares to assign the phone unit a valuation - recently it has traded with a zero or even arguably negative enterprise value.
07:40 ONNN ON Semiconductor: Clearing the decks - FBR (6.48 )
Friedman Billings notes ONNN reported largely in-line 4Q results yesterday, but guided 1Q08 revs that were meaningfully worse than those they anticipated even three weeks ago. Management cited deteriorating fundamentals in late January and decided to be conservative and clear the decks regarding expectations for 1Q and FY2008. The “recession scenario” of $0.70-$0.75 that they outlined previously is now likely to become consensus, as mgmt attempts to preempt further EPS est cuts. Firm still believes ON Semi’s announced AMI Semiconductor acquisition will be meaningfully accretive to 2009 earnings and that investor fears about integration risks and ON Semi’s debt position are driving the stock down to very cheap valuation levels. Firm cuts tgt from $14 to $11.
07:39 BEBE bebe stores: 2Q08 slight beat, but guidance for 3Q08 below consensus - FBR (11.52 )
Friedman Billings says BEBE reported 2Q08 EPS of $0.26, slightly better than Street est of $0.25. Firm notes that $0.01 of this came from a reduced tax rate. However, the co guided 3Q08 EPS to a range of $0.08 to $0.12 on a negative mid-single-digit comp vs the Street est of $0.15. BEBE is one of the least leverageable names in their space, and the co has repurchased 4 mln shares in the last year, so this guide down represents a large decline in net income dollars, even after adjusting for the impact of last year’s 53rd retail week. Firm is lowering their 3Q08 est from $0.12 to $0.10, their FY08 est from $0.75 to $0.73, and their FY09 est from $0.89 to $0.84. Firm does not see a visible catalyst to propel the stock higher. They continue to recommend investors remain on the sidelines until there is greater visibility on merchandising changes.
07:39 CVC Cablevision upgraded to Equal Weight from Underweight at Morgan Stanley (23.43 )
07:38 SOMX Somaxon Pharma: Files new drug application for Silenor for treatment of Insomnia - Merriman (4.13 )
Merriman notes SOMX announced that it submitted a New Drug Application for Silenor for the treatment of insomnia. With demonstrated efficacy and safety from Somaxon’s six placebo-controlled clinical trials in insomnia, as well as ample data from the literature on doxepin, they expect a favorable FDA decision by early Dec. As a result, firm encourages investors to aggressively accumulate SOMX shares ahead of a likely commercialization deal or other potential “strategic transaction” in 2008.
07:38 Life and Annuity sector downgraded to In Line from Attractive at Morgan Stanley
07:38 MWV MeadWestvaco reports EPS in-line, beats on revs (28.03 )
Reports Q4 (Dec) earnings of $0.42 per share, excluding non-recurring items, in-line with the First Call consensus of $0.42; revenues rose 4.3% year/year to $1.85 bln vs the $1.81 bln consensus.
07:38 SMTL Semitool: 1Q08 results a little light; 2Q08 guidance above consensus ests - Broadpoint Capital (8.78 )
Broadpoint Capital notes SMTL posted 1Q:FY08 results that were a bit light on the top and bottom lines but the guidance for the current March quarter more than made up for the shortfall in December. Firm believes that SMTL will outperform the overall semi equipment industry in 2008 as its increasing exposure to memory customers will actually be a positive trend versus the majority of tool vendors that will struggle from reductions in memory capacity expansion plans this year.
07:38 MAN Manpower misses by $0.04, beats on revs; guides Q1 EPS in-line (55.80 )
Reports Q4 (Dec) earnings of $1.49 per share, excluding non-recurring items, $0.04 worse than the First Call consensus of $1.53; revenues rose 19.6% year/year to $5.63 bln vs the $5.46 bln consensus. Co issues in-line guidance for Q1, sees EPS of $0.72-0.82, includes items, vs. $0.82 consensus. Guidance includes an estimated favorable currency impact of 8 cents per diluted share.
07:37 ROG Rogers: Expect in-line results; valuation looks attractive - Broadpoint Capital (31.30 )
Broadpoint Capital expects ROG to report an in-line Dec. While firm expects the March Q to be lackluster, their numbers already account for that. Because ROG has more than 50% exposure to portable communication and consumer-related applications, they expect a lackluster March quarter. Firm points out that they have been calling for a weak March quarter for a while now and their sequentially down EPS expectation of $0.39 in March (vs. $0.45 in Dec.) already reflects that. Overall, they do not see much risk to their CY08 EPS est of $2.10.
07:37 MBI MBIA Inc: Dodging bullets but not in the clear; tgt cut to $13 - FBR (15.50 )
Friedman Billings is maintaining their Market Perform on MBI but lowering their tgt from $15 to $13 to reflect an increased possibility of unfavorable rating agency and regulatory actions. MBI defended its capital and liquidity position on its conf call yesterday. The co mounted an especially strong defense of its liquidity position at the holding co level, stating that liquidity is not a significant risk. However, that defense did not appear to be enough to placate at least one rating agency that placed MBI on CreditWatch negative. As a result, they believe downside risk remains to the shares, as valuation will be determined in the near term by the actions of the rating agencies and regulators, moreso than fundamental performance.
07:37 Hynix swings to loss amid drop in chip prices; Posts 467 bln Korean won loss vs. ests of a 53.5 bln loss - WSJ
WSJ reports South Korea’s Hynix Semiconductor posted its worst quarterly performance in four years due to a sharp fall in chip prices in an oversupplied industry. The co said it swung to a net loss of 467 bln Korean won ($495 million) in the three months ended Dec. 31, reversing from a net profit of 1.02 trillion won a year earlier. Reflecting a gloomy outlook for the industry, the world’s second-largest memory chip maker by revenue cut its 2008 capital expenditure plan by 25% to 3.6 trillion won from 4.8 trillion won for 2007. This is the co’s worst quarterly net loss since the fourth quarter of 2003, and far worse than the 53.5 bln won loss forecast by analysts.
07:36 FMD First Marblehead: Pursuing alternatives while SLABS market still shut - FBR (16.44 )
Friedman Billings reiterates their Underperform and $10 tgt on FMD as they believe the operating environment for the company remains challenged. Specifically, significantly higher funding costs and lack of liquidity continue to keep the private student loan asset backed securities (SLABS) market–FMD’s current primary funding source–closed. While at some point the market should reopen and/or the co works towards funding source alternatives, they expect the economics and FMD’s ability to extract cash from such transactions to be materially different.
07:36 CMI sees FY08 rev growth of 12% or roughly $14.61 bln vs $14.63 bln First Call consensus
07:35 EXAR Exar downgraded to Neutral from Buy at Piper Jaffray (8.21 )
07:35 GOOG Google: Color on quarter (564.30 ) -Update-
Lehman says a combination of higher TAC, UK seasonality, and limited monetization improvements drove 4Q shortfall for GOOG. Rev growth is decelerating, but GOOG model is not fundamentally broken. Firm views the current weakness as an attractive long-term buying opportunity. Firm cuts tgt to $644 from $714… ThinkEquity believes the sell-off of GOOG following missed Q4 earnings is an overreaction and recommend buying shares on weakness. Firm is lowering their ests and reducing their tgt from $800 to $700, but that still represents 35% upside from current levels. Looking forward, the good news was that GOOG added 889 employees in the quarter, representing the lowest number of employee adds since the fourth quarter of 2005. GAAP EPS was $3.79, 3% below their est of $3.92. EPS was positively impacted by a lower-than-expected 25% tax rate. Had Google recognized a 28% tax rate, as firm expected, EPS would have been $3.64, 7% below their est… Thomas Weisel notes GOOG reported lower-than-expected 4Q07 net revenue, as a result of lower than expected growth at Google’s owned sites as well as higher traffic acquisition costs. The co continues to take share of search dollars and has a number of relatively unmonetized initiatives including: YouTube, mobile and display advertising. Firm is decreasing their 2008 rev, EBITDA and EPS ests, and initiating 2009 ests.
07:35 CMI prelim $1.00 vs $1.05 First Call consensus; revs $3.5 bln vs $3.46 bln First Call consensus
07:35 DTV DIRECTV upgraded to Outperform from Market Perform at Bernstein (22.58 )
07:35 PRICE Filings, Offerings, Pricings and IPOs
Filings: Meruelo Maddux (MMPI) files for a 42.94 mln share common stock offering by selling shareholders… Zion Oil & Gas (ZN) files for a 2.5 mln unit offering on a best efforts basis… Applied Digital (DIGA) fiels for a 23.15 mln share common stock offering by selling shareholders… Pricings: Rigel Pharms (RIGL 27.53) prices a 5 mln share common stock offering at $27/share.
07:34 SPG Simon Properties beats by $0.10, beats on revs; guides FY08 FFO in-line (89.38 )
Reports Q4 (Dec) funds from operations of $1.76 per share, $0.10 better than the First Call consensus of $1.66; revenues rose 11.7% year/year to $1.04 bln vs the $0.97 bln consensus. Co issues in-line guidance for FY08, sees FFO of $6.25-6.45 vs. $6.46 consensus.
07:34 MF MF Global beats by $0.03 (30.00 )
Reports Q3 (Dec) earnings of $0.37 per share, excluding non-recurring items, $0.03 better than the First Call consensus of $0.34; net revenues rose 29.4% year/year to $418.4 mln — there is no net rev consensus. “Global market volatility caused by economic and financial uncertainty continues to benefit MF Global across all of our asset classes including interest rates, equities, commodities, fixed income and foreign exchange. We experienced a strong January and expect to continue to produce significant growth in our business this year.”
07:34 MAN sees Q1 $0.72-0.82, includes items, may not be comparable to vs $0.82 First Call consensus; sees revs ${REV} vs $5.08 bln First Call consensus
07:34 AAPL Apple: Garmin is looking to become the first credible rival to Apple - AppleInsider (135.36 ) -Update-
AppleInsider reports known best for its GPS mapping units, GRMN held a press event on Wed night for a product that signals its plunge into the world of cellphones. Called the nuvifone, the device at first blush is more than slightly familiar to iPhone users… Garmin pins its hopes, however, on one key element: a true GPS unit. Unlike the iPhone and iPod touch, which only use triangulation to provide a rough estimate of the owner’s whereabouts, the nuvifone has a true GPS receiver that pinpoint a near-exact location in North America or Europe. The tracking device supplies local Google searches for fuel prices, restaurants, and other nearby data. It will also automatically geotag (position-locate) any photos or videos captured with its camera and includes a cradle mount that switches the phone into GPS mode for use in a car. More importantly, Garmin’s first phone also appears to be an answer to common complaints about AAPL. Besides being able to capture video, the nuvifone runs a faster 3G cellular Internet connection and supports MMS messaging — a means of sending photos and video clips between cellphones which has been conspicuously absent from the iPhone.
07:34 NBG Natl Bank of Greece: Hearing downgraded to neutral from buy at tier 1 firm (12.32 )
07:33 EL Estee Lauder reports EPS in-line, beats on revs; guides FY08 EPS in-line (42.22 )
Reports Q2 (Dec) earnings of $1.14 per share, in-line with the First Call consensus of $1.14; revenues rose 16.0% year/year to $2.31 bln vs the $2.24 bln consensus. Co issues in-line guidance for FY08, sees EPS of $2.28-2.40 vs. $2.38 consensus.
07:33 PPS Post Properties: Hearing upgraded to neutral from sell at tier 1 firm (42.27 )
07:32 MAN prelim $1.49 vs $1.53 First Call consensus; revs $5.63 bln vs $5.46 bln First Call consensus
07:32 SPG sees FY08 funds from operations of $6.25-6.45 vs $6.46 First Call consensus
07:32 CPT Camden Property: Hearing downgraded to sell from neutral at tier 1 firm (49.26 )
07:32 ADP reaffirms Y08 revs up 12+13%
07:32 WIRES On The Wires
TASER International (TASR) announces it will debut the new TASER X12 LLS Mossberg shotgun during the 2008 SHOT Show in Las Vegas to be held February 2-5, 2008… EMCOR Group (EME) announces that its subsidiary Design Air has been awarded a contract to upgrade the mechanical and electrical systems for Seattle Metro Transit’s Central Base Facility and Revenue Processing Center, a 22-acre complex that maintains and houses a fleet of nearly 400 buses.
07:31 Select Financial stocks downgraded at tier 1 firm
Hearing Cohen & Steers (CNS) downgraded to Sell from Neutral, also hearing iStar Financial (SFI) and Morgan Stanley (MS) downgraded to Neutral from Buy.
07:31 SPG prelim funds from operations of $1.76 vs $1.66 First Call consensus; revs $1.04 bln vs $970.36 mln First Call consensus
07:31 MF prelim $0.37 vs $0.34 First Call consensus
07:31 ADP prelim $0.55 vs $0.53 First Call consensus; revs $2.15 bln vs $2.10 bln First Call consensus
07:31 EL sees FY08 $2.28-2.40 vs $2.38 First Call consensus
07:30 MWV prelim $0.42 vs $0.42 First Call consensus; revs $1.85 bln vs $1.81 bln First Call consensus
07:30 EL prelim $1.14 vs $1.14 First Call consensus; revs $2.31 bln vs $2.24 bln First Call consensus
07:30 TESS TESSCO Tech adopts stockholder rights plan (18.41 )
Co announces that its Board of Directors unanimously adopted a stockholder rights plan in which one preferred stock purchase right will be distributed as a dividend on each common share held of record as of the close of business on February 11, 2008. The plan is designed to deter a potential acquirer from gaining control of the Company through coercive takeover tactics.
07:30 NSANY Nissan Reports First Profit Rise in Five Quarters - Bloomberg.com (19.16 ) -Update-
According to Bloomberg.com, Nissan said profit rose for the first time in five quarters after new models lured buyers in the U.S. and Europe. Net income climbed 27 percent to 132.2 billion yen ($1.2 billion), or 32.27 yen a share, in the three months ended Dec. 31 from 104.5 billion yen, or 25.29, a year earlier, Nissan said in a release today. Sales rose 18 percent to 2.77 trillion yen. Both were in line with analyst estimates. Nissan, based in Tokyo, expects full-year net income to rise 4.2 percent to 480 billion yen, it reiterated today. Sales may fall 1.6 percent to 10.3 trillion yen in the year ending March 31 because of accounting changes.
07:27 CCO Clear Channel Outdoor upgraded to Outperform from Peer Perform at Bear Stearns (22.23 )
07:27 Sharp profit up 5.5 percent on LCD panel demand - Reuters
According to Reuters, Sharp Corp reported a 5.5 percent rise in quarterly operating profit to a record high, as rivals delayed opening new plants, slowing price declines for the big LCD panels it specializes in. That more than offset steep TV price falls for Sharp — the world’s third-largest LCD TV maker behind Samsung Electronics Co Ltd and Sony Corp (SNE) — and higher silicon raw material prices that hurt profits at its solar cell unit.
07:27 OPEC holds production steady - DJ
DJ reports the Organization of Petroleum Exporting Countries left its current output levels unchanged, with the group set to meet again in March to take stock of mkt conditions and gauge second quarter demand… Text from the press release “OPEC observed that OPEC production decisions had ensured that the market remained well supplied throughout 2007. It also noted that the first half of 2008 was likely to witness a crude inventory build, and supply/demand forecasts indicate that commercial oil stocks are in line with the seasonal trend and are expected to remain within their five-year average during the traditionally lower-demand season in 2008. In view of the current situation, coupled with the projected economic slow-down, the (ministers) agreed that current OPEC production is sufficient to meet expected demand for the first quarter of the year. At the same time, however, ministers noted that the significant uncertainties associated with the projected downturn in the global economy called for vigilant attention to their impact on key market fundamentals until the next meeting on March 5 2008.”
07:25 CNBC commentator reports that a source has told him that 8 banks have formed a consortium to seek rescue plan for bond insurers
Source says that the consortium of banks includes: RBS, SocGen, Wachovia, BNP Paribas, Barclays, Dresnder, UBS and Citigroup. (ABK, MBI)
07:25 ERTS Electronic Arts upgraded to Buy at Broadpoint- tgt $35 (47.37 )
Broadpoint upgrades ERTS to Buy from Neutral and sets a $35 tgt, following Q308 results that were in line with consensus and ahead of firm estimates along with lowered Q408 guidance.
07:24 CLS Celestica upgraded to Neutral at Credit Suisse- tgt $6.40 (5.63 )
Credit Suisse upgrades CLS to Neutral from Underperform based on valuation. The firm says restructuring appears to be working for CLS. Following 3 qtrs of margin expansion and beating expectations, the firm says CLS has earned their buy-in to model OpMgn growing to the low end of mgmt’s guidance in 2H08.
07:23 MXIM Maxim Integrated downgraded to Hold at Jefferies- tgt $22 (19.66 )
Jefferies downgrades MXIM to Hold from Buy and cuts their tgt to $22 from $35 saying although Maxim offers a good combination of average growth at an attractive valuation in the Analog semiconductor sector, they believe weak Mar qtr guidance is a combination of seasonal slowdown, market share losses, and limited visibility.
07:19 CNH CNH Global profiled in New America section of IBD (49.30 )
IBD reports the co is cashing in on the farming boom. Like many of its peers in agricultural-related sectors, CNH is reaping the benefit of high crop prices. The prices of many key crops — corn, wheat and soybeans — are at or near all-time highs. Judging from CNH’s strong performance, many farmers have been resupplying with its offerings. CNH is a subsidiary of Fiat, which owns about 90% of the co. CNH makes a full line of agricultural equipment used in growing and harvesting crops under the Case IH and New Holland brand names… CFO Rubin McDougal says CNH ran into a snag during the last quarter, incurring about $60 mln in higher operating costs due to manufacturing inefficiencies. “Our manufacturing operations struggled to deliver at the volume levels we were asking them to,” McDougal said. At times, CNH had trouble meeting required demand. “That meant we had to adapt production schedules, and to keep them intact we had to pay higher expediting costs,” McDougal said… Meanwhile, followers expect the co to see healthy gains. Analysts polled by Thomson Financial expect 2008 earnings to rise 34% to $3.49 a share, then another 20% in 2009. “The farm equipment industry should have a robust year in 2008,” says analyst Charlie Rentschler, a vice president at Wall Street Access. “The fundamentals are the best they’ve ever been.” CNH expects U.S. net farm income in 2008 to be near record levels, bolstered by high crop prices.
07:18 GOOG Google downgraded to Hold at Jefferies- tgt cut to $600 (564.30 )
Jefferies downgrades GOOG to Hold from Buy and lowers their tgt to $600 from $725, following Q407 revenues that were in line with consensus and firm estimates and EPS below firm and consensus. The firm says despite in-line revenues, higher TAC and opex put pressure on margins and caused an EPS miss. Given the rising guaranteed payments to MySpace, Ask and others and the absence of operating leverage, they believe that the risk profile of Google has increased and recommend that investors step to the sidelines.
07:16 BCE BCE Inc upgraded to Overweight from Equal Weight at Morgan Stanley (34.84 )
07:13 MOT Motorola upgraded to Buy from Hold at Citigroup (11.50 )
07:08 IR Ingersoll-Rand to postpone release of 2007 Q4 and full-year earnings (39.55 )
Co announces that it will postpone the release of its 2007 Q4 and full-year results until February 14, 2008. This delay is primarily caused by year-end closing activity associated with the November 30, 2007, divestiture of the co’s Compact Equipment business.
07:07 CALLS Early Research Calls III
Upgrades: Bear Stearns upgrades PepsAmericas (PAS 24.64) to Peer Perform from Underperform… Morgan Stanely upgrades Noble Corp (NE 43.6 
to Overweight from Underweight… ThinkEquity upgrades Interwoven (IWOV 12.67) to Buy from Accumulate and raises their tgt to $17 from $16 following earnings. The firm says with the co’s voluntary stock option review finally complete, Interwoven can now focus exclusively on driving revenue growth and continued operating margin expansion… RBC upgrades Affiliated Computer (ACS 48.75) to Outperform from Sector Perform. Downgrades: Keefe Bruyette downgrades UDR Inc (UDR 22.83) to Market Perform from Outperform… Keefe Bruyette downgrades FNB United (FNBN 11.79) to Market Perform from Outperform… Merrill downgrades KB Home (KBH 27.50) and Lennar (LEN 20.54) to Neutral from Buy… Merrill downgrades Centex (CTX 27.75) and Pulte Homes (PHM 16.35) to Sell from Neutral… Morgan Stanley downgrades Wells Fargo (WFC 34.0 to Underweight from Equal-weight… Morgan Stanley downgrades Wachovia (WB 38.47) to Underweight from Equal-weight… Thomas Weisel downgrades Monolithic Power (MPWR 15.64) to Market Weight from Overweight based on slowing global consumer spending, which they believe will have an impact on the growth rates of the company’s key end-market in 2008. Miscellaneous: Merrill initiates PharMerica (PMC 14.84) and Omnicare (OCR 22.10) with Neutrals… Morgan Keegan initiates GMX Resources (GMXR 26.96) with an Outperform… Thomas Weisel initiates Fuel Tech (FTEK 19.04) with an Overweight… Wachovia initiates R.H Donnelley (RHD 30.07) with a Market Perform… Wachovia initiates Idearc (IAR 16.24) with an Underperform… UBS initiates Kennametal (KMT 30.62) with a Neutral.
07:02 WIRES On The Wires
Beijing Med-Pharma (BJGP) announces that the Ministry of Commerce of the People’s Republic of China has approved its acquisition of 63.3% of Shanghai Rongheng Pharmaceuticals. Beijing Med-Pharm expects to close the transaction in the first quarter of 2008… Labopharm (DDSS) announces that its Canadian licensing and distribution partner for its once-daily tramadol product, Paladin Labs, has entered into a co-promotion agreement for Tridural with Nycomed Canada Inc. The agreement will double the number of primary care sales representatives promoting Tridural(TM) in Canada.
07:02 NMX NYMEX beats by $0.01, reports revs in-line (114.11 )
Reports Q4 (Dec) earnings of $0.67 per share, $0.01 better than the First Call consensus of $0.66; revenues rose 38.3% year/year to $172.6 mln vs the $171.9 mln consensus.
07:02 ACPW Active Power misses by $0.04, beats on revs; guides Q1 EPS in-line, revs below consensus (2.18 )
Reports Q4 (Dec) loss of $0.10 per share, $0.04 worse than the First Call consensus of ($0.06); revenues rose 23.5% year/year to $10.2 mln vs the $9.7 mln consensus. Co guides for Q1, sees EPS of ($0.05)-($0.07) vs. ($0.06) consensus; sees Q1 revs of $8-10 bln vs. $10.49 mln consensus.
07:00 ACPW sees Q1 ($0.05)-($0.07) vs ($0.06) First Call consensus; sees revs $8-10 mln vs $10.49 mln First Call consensus
07:00 NMX prelim $0.67 vs $0.66 First Call consensus; revs $172.6 mln vs $171.89 mln First Call consensus
07:00 ACPW prelim ($0.10) vs ($0.06) First Call consensus; revs $10.2 mln vs $9.67 mln First Call consensus
07:00 Rio deal buoys European shares ahead of US jobs data
European share prices rose on Friday, led by mining shares after a Chinese group bought a stake in bid target Rio Tinto (RTP) and by banks ahead of key U.S. jobs data due later in the session. By 0910 GMT the FTSEurofirst 300 index of top European shares was up 1.3% at 1,346.1 points. Advancing issues outnumbered decliners by 14 to one… The surge in mining stocks helped push up London’s FTSE 100 index by 1.6%, while Frankfurt’s DAX rose 1.4% and Paris’ CAC 40 gained 1.7%. (Reuters)
06:59 Japan shares down on Sony, banks, U.S. job worries; Sensex closed higher by 594 points
Japanese shares edged lower on Friday, hurt by worries about the U.S. economy ahead of key jobs data and a slide in Sony shares to a 14-month low after the maker of PlayStation game gear cut its profit forecast. The benchmark Nikkei was down 0.7% at 13,497.16, a loss of 95.31 points. The broader TOPIX lost 0.7% to 1,336.86. Hong Kong stocks leapt on Friday as investors bought Chinese shares dented by a two-day sell-off, and aluminium producer Chalco surged in late trade after its parent firm said it bought a stake in Australian miner Rio Tinto. The benchmark Hang Seng Index closed up 2.9%, or 667.84 points, to end at 24,123.58. The index was down 4% in the week… The Sensex opened with a huge positive gap of 172 points at 17,821, but dropped to a low of 17,535 in morning deals. Buying at lower levels saw the index zoom to a high of 18,312 towards the closing bell - an intra-day swing of 777 points. The Sensex finally closed with a gain of 594 points at 18242. The NSE Nifty finished with a gain of 180 points at 5,317.
06:55 NJ NIDEC announces share repurchase of up to 1 mln shares or 0.69% of total number of shares (16.36 )
06:51 MSFT Microsoft: Cramer, on CNBC, says that he would take MSFT stock; calls co ‘unbelievably’ undervalued (32.60 ) -Update-
(YHOO)
06:41 EME Emcor profiled in Inside Wall Street - BusinessWeek Online (21.90 )
BusinessWeek Online reports Emcor’s (EME) chief executive Frank MacInnis notes the co’s yearend order backlog has reached an all-time high of $4.5 bln, a 30% increase from a year ago. “We’re very diversified,” he says. Some 45% of Emcor’s revenues comes from services to hospitals, airports, hotels, oil refineries, and pharmaceutical companies, including Bristol-Myers Squibb (BMY), and a further 35% from servicing various facilities, including London’s Heathrow Airport, he notes. Emcor’s business from the energy industry has been growing, says MacInnis. “So we see expanding margins and strong earnings in 2008,” he adds. Richard Paget of Morgan Joseph, who pegs the stock a buy, with a target of 44, says the sharp drop doesn’t reflect Emcor’s fundamentals. It has yet to experience a slowdown, he adds. Alex Rygiel of FBR says Emcor’s robust backlog should bolster its earnings. He sees profits bolting to $2.13 a share in 2008, up from 2007’s $1.77. He rates Emcor “outperform.”
06:38 CALLS Early Research Calls II
Upgrades: Oppenheimer upgrades Disney (DIS 29.84) to Outperform from Perform and lowers their tgt to $36 from $40, based on valuation and expect Q1 EBITA growth of 5% y/y, above consensus of -6%, along with double-digit growth in Cable and strong Parks performance that should offset weakness at the Studio… Jefferies upgrades Infinera (INFN 10.19) to Buy from Hold and lowers their tgt to $15 from $22.50, following Q407 EPS that exceeded firm and consensus estimates with in line Q108 EPS guidance… BofA upgrades Medarex (MEDX 9.99) to Neutral from Sell… HSBC upgrades GlaxoSmithKline (GSK 47.3 to Neutral from Underweight… Deutsche Bank upgrades Owens-Illinois (OI 50.60) to Buy from Hold… Deutsche Bank upgrades Autoliv (ALV 50.21) to Buy from Hold. Downgrades: Friedman Billings downgrades TiVo (TIVO 8.77) to Underperform from Market Perform and maintains their $6 tgt, based on valuation following the co’s patent infringement suit victory against DISH… Merriman downgrades Mentor (MNT 34.3 to Neutral from Buy, following Q308 in-line revenue and EPS results and based on a combination of the co’s bleak outlook on the state of the surgical procedure market and evidence that leads them to believe Allergan’s more comprehensive product lineup and marketing capacity continues to weigh on MNT’s efforts… HSBC downgrades AstraZeneca (AZN 42.10) to Neutral from Overweight… Citigroup downgrades Lowe’s (LOW 26.43) to Hold from Buy… UBS downgrades Syngenta (SYT 52.74) to Sell from Neutral… Citigroup downgrades Audible (ADBL 11.42) to Hold from Buy.
06:37 YHOO Follow Up: Further details on Microsofts proposed acquisition of Yahoo! at $31/share (19.18 ) -Update-
MSFT is ‘committed to working closely with YHOO management and its Board of Directors as they, along with YHOO shareholders, evaluate this compelling proposal’. This is the text of the letter that MSFT sent to YHOO’s Board of Directors: “…Under our proposal, MSFT would acquire all of the outstanding shares of YHOO common stock for per share consideration of $31 based on MSFT’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of MSFT common stock. MSFT would provide each YHOO shareholder with the ability to choose whether to receive the consideration in cash or MSFT common stock, subject to pro-ration so that in the aggregate one-half of the YHOO common shares will be exchanged for shares of MSFT common stock and one-half of the YHOO common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition. Our proposal represents a 62% premium above the closing price of YHOO common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders… MSFT’s consistent belief has been that the combination of MSFT and YHOO clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers…. We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines… Due to the importance of these discussions and the value represented by our proposal, we expect the YHOO Board to engage in a full review of our proposal.” MSFT will host an analyst/investor conference call at 8:30 a.m. Eastern Time/5:30 a.m. Pacific Time to discuss today’s announcement.
06:35 HPOL Harris Interactive misses by $0.02, misses on revs (3.17 )
Reports Q2 (Dec) earnings of $0.04 per share, $0.02 worse than the First Call consensus of $0.06; revenues rose 12.6% year/year to $62.7 mln vs the $68.2 mln consensus. Co said, “Based on our results for the first half, we continue to drive toward the low end of revenue guidance; however the volatile and rapidly changing macro-economic outlook could continue to negatively impact our results.”
06:33 OSK Oshkosh Truck beats by $0.01, misses on revs; guides Q2 EPS below consensus; reaffirms FY08 EPS guidance (45.76 )
Reports Q1 (Dec) earnings of $0.50 per share, $0.01 better than the First Call consensus of $0.49; revenues rose 49.0% year/year to $1.5 bln vs the $1.55 bln consensus. Co issues downside guidance for Q2, sees EPS of $0.85-0.90 vs. $1.03 consensus. Co reaffirms guidance for FY08, sees EPS of $4.15-4.35 vs. $4.53 consensus.
06:30 MSFT Microsoft for Yahoo (YHOO) transaction valued at $44.6 billion in cash and stock
06:30 YHOO Yahoo!: Microsoft proposes acquisition of Yahoo! for $31/share (19.18 ) -Update-
Microsoft (MSFT) announces that it has made a proposal to the YHOO Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 bln. MSFT’s proposal would allow the YHOO shareholders to elect to receive cash or a fixed number of shares of MSFT common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half MSFT common stock. The offer represents a 62% premium above the closing price of YHOO common stock on Jan. 31, 2008. Microsoft believes this proposed combination would receive all necessary regulatory approvals and expects that the proposed transaction would be completed in the second half of calendar year 2008. Microsoft is also committed to working closely with Yahoo! management and its Board of Directors as they, along with Yahoo! shareholders, evaluate this compelling proposal.
06:21 CALLS Early Research Calls I
Miscellaneous: GARP Research initiates Luminex (LMNX 14.97) with a Buy, based on the co’s position as sole supplier of the reagents and readout instruments required for all xMAP tests with over half of revenues that are recurring and expect the co to reach profitability in ‘08 which could serve as a catalyst for shares… Morgan Keegan initiates GMX Resources (GMXR 26.96) with an Outperform, based on a robust reserve and production growth profile and significant inventory of unbooked upside potential, thanks to positive initial results from 20-acre spacing… Oppenheimer initiates PAREXEL International (PRXL 54.41) with an Outperform and sets a $70 tgt, based on the CRO industry benefiting from a number of secular trends, including continued growth in pharma R&D spending; cost containment pressure within pharma; trends towards greater levels of outsourcing; and the emergence of virtual companies that lack the necessary R&D infrastructure to develop their own drug candidates… BMO Capital Markets initiates K12 (LRN 23.00) with an Outperform and sets a $27 tgt, based on LRN’s strong position as an industry leader that should allow it to grow through increasing enrollment at current schools, enhancing its curriculum and via geographical expansion.
06:17 PDC Pioneer Drilling to acquire WEDGE Well Services, WEDGE Wireline, and WEDGE Fishing & Rental Services (10.63 )
Co announces that it has entered into a definitive purchase agreement to acquire WEDGE Well Services, LLC, WEDGE Wireline and WEDGE Fishing and Rental Services, LLC from affiliates of WEDGE Group for $303 mln in cash. The acquisition is expected to be significantly accretive to CY08 earnings and cash flow per share.
06:14 WIRES On The Wires -Update-
RadNet (RDNT) reports that it acquired the Rolling Oaks Radiology imaging centers in Thousand Oaks, CA; purchase price consists of approx $5.9 mln in cash and the assumption fo approx $5.9 mln of debt and will add approx $9.0 mln of revenue on an annualized basis.
06:10 S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: -4.0.
06:10 VVI Viad Corp beats by $0.13, beats on revs; guides FY08 EPS in-line (27.27 )
Reports Q4 (Dec) earnings of $0.02 per share, excluding non-recurring items, $0.13 better than the First Call consensus of ($0.11); revenues rose 39.7% year/year to $215.5 mln vs the $196.7 mln consensus. Co issues in-line guidance for FY08, sees EPS of $2.17-2.32 vs. $2.27 consensus. Co expects FY08 revenue to increase at a low double digit rate and operating income is expected to increase by 18-26% from ‘07 revenue of $1.0 bln adn operating income of $68.7 mln.
06:10 European Markets
FTSE…5957.70…+77.90…+1.3%. DAX…6925.51…+73.62…+1.1%.
06:10 Asian Markets
Nikkei…13497.16…-95.31…-0.7%. Hang Seng…24123.58…+667.84…+2.9%.
05:50 NYX Amex’s angry revolt: Merger is targeted - NY Post (78.60 )
The NY Post reports a group of Amex members including a deep-pocketed hedge fund, is trying to block the $260 mln takeover of the institution by the rival NYSE (NYX), The Post has learned. The members, which own more than 100 of 834 membership interests, are furious at the exchange’s board - including chief Neal Wolkoff - for accepting what they call a “low ball” offer. People familiar with the matter said the group sent a letter yesterday to Amex’s board of directors outlining the reasons they believe the NYSE is getting the exchange on the cheap. Members’ reps also have been in contact with other Amex seat owners who collectively hold more than 50 seats and may add their names to the letter, sources said. In the letter, the membership group compared the NYSE deal to similar deals, citing Nasdaq Stock Market’s (NDAQ) recent buyout of the Philadelphia Stock Exchange for $652 mln, which was done at roughly 5.2x annual revenue. Amex, by comparison, is being sold for only 1.5x annual revenue, according to the letter. The dissidents also said the exchange has not been forthcoming about the amount of cash it has on its books, which may further their case. The group also takes issue with Amex’s 20% stake in the Options Clearing Corp. Some members of the group said they had approached Amex financial adviser Morgan Stanley about acquiring the exchange but were shut out of the process. Also interested in Amex were Nasdaq, the Toronto Stock Exchange and a consortium of investors including Knight Capital, Citadel and Goldman Sachs (GS), sources said.
05:45 NSANY Nissan quarterly profit soars on year - Reuters (19.16 )
Reuters reports Nissan (NSANY) reported a 26.6% jump in October-December profit Friday and kept its full year forecasts as strong sales appeared to quell looming worries about a U.S. slowdown and an unfavorably strong yen. Profit at Nissan rose to 132.22 bln yen ($1.24 bln) for Q308 from 104.46 bln yen the same period the previous year. Quarterly sales climbed 18.2% to 2.770 trln yen ($26.03 bln). Earnings at Nissan were in line with forecasts, but its bottom line could be endangered in coming months amid worries about slower American consumer spending, the co said. Nissan kept unchanged its profit forecast for the full fiscal year through March at 480 bln yen ($4.5 bln).
05:41 SocGen shares jump as bidder field widens - Reuters
Reuters reports shares in Societe Generale jumped on Friday after a report that fellow French bank Credit Agricole had hired advisers to study a possible approach. Les Echos newspaper said Credit Agricole, France’s third-largest bank by market value but the biggest in terms of retail branches, had hired Lazard and its own investment bank, Calyon, to study SocGen. Credit Agricole declined to comment.
05:36 MRK Federal grand jury probes Merck’s handling of Vioxx - WSJ (46.10 )
The Wall Street Journal reports Merck (MRK) is the subject of a federal grand-jury probe into its sales and marketing practices for Vioxx, the painkiller it pulled from the market in 2004, according to a person familiar with the matter. The health-care-fraud unit of the U.S. Attorney’s Office for the District of Massachusetts is investigating whether Merck promoted Vioxx to health-care professionals for uses other than those approved by government regulators, a practice known as off-label marketing, this person said. Merck declined to comment, said Kent Jarrell, a legal spokesman for MRK.
05:34 BUD Anheuser-Busch dances with InBev - WSJ (46.50 )
The Wall Street Journal reports InBev and Anheuser (BUD) already have held discussions, say people in the industry familiar with both brewers’ thinking. Although reports of the talks surfaced as long as a year ago, they have become more serious, and a deal is possible this year, people in the industry say. Yesterday, Anheuser declined to discuss speculation of a deal with InBev. But the co reported Q4 financial results that underscored why some analysts believe it may want a merger. The prospect of a deal between InBev and Anheuser is only slightly reflected in their share prices. There are reasons for caution, including weak credit markets, high commodity prices and the pitfalls of merging two headstrong management teams, analysts say. And Anheuser is hardly desperate to be bought — because the co controls nearly half the U.S. beer market, the world’s most profitable. If the brewers combined, their shares would gain but not more than 10%, analysts say. “Beer mergers are very expensive, so shareholders would have to be patient before they saw a real payoff,” says Karel Zoete, an analyst with Amsterdam-based Rabo Securities.
05:29 RTP Chinalco, Alcoa buy Rio Tinto stake - WSJ (406.95 )
The Wall Street Journal reports Aluminum Corp. of China (ACH) said it has teamed up with Alcoa (AA) to purchase an approx 12% stake in Rio Tinto (RTP) for $14.05 bln. Chinalco said it had acquired the roughly 12% stake in Rio Tinto through a wholly owned, Singapore-based subsidiary called Shining Prospect Ptd. Ltd. It said Alcoa had committed $1.2 bln to Shining Prospect through a convertible instrument. The move by Chinese government-owned Chinalco could complicate BHP Billiton’s (BHP) nearly $100 bln proposal to acquire fellow Anglo-Australian miner Rio Tinto. Rio Tinto Nov. 8 rejected the bid from BHP as too cheap, and BHP now faces a Feb. 6 deadline, set by the U.K. Takeover Panel, to formalize or walk away from the offer. A BHP spokesman in London said the co was aware of the announcement but had no further comment.
05:24 Morning Newspaper Headlines: AA/ACH/RTP - BUD - MRK - NSANY - NYX
WSJ: Chinalco (ACH), Alcoa (AA) buy Rio Tinto (RTP) stake… Anheuser-Busch (BUD) dances with InBev… Federal grand jury probes Merck’s (MRK) handling of Vioxx. Reuters: SocGen shares jump as bidder field widens… Nissan (NSANY) profit up on sales gain. NY Post: Amex’s angry revolt: Merger is targeted (NYX).
05:04 WIRES On The Wires -Update-
GFI Group (GFIG) announces that it has acquired Trayport, a provider of real-time electronic trading software for brokers, exchanges and traders in the commodities, fixed income, currencies and equities markets; transaction is valued at approx $146 mln and anticipates it will be neutral to non-GAAP EPS and accretive thereafter.
04:22 RTP Alcoa partners with Chinalco to acquire a 12% stak in Rio Tinto (406.95 )
Alcoa (AA) announces that it is partnering with Aluminum Corp of China (ACH) to acquire 12% of the UK common stock of Rio Tinto. Alcoa will contribute up to $1.2 bln to the total investment.
04:19 MNOV MediciNova’s MN-166 reduces persistent black hole formation in MS patients (3.58 )
Co announces additional data from a double-blind analysis of the first year of treatment from its two-year Phase II clinical trial of MN-166 in multiple sclerosis. The second year of the Phase II clinical trial is on-going with results expected in April 2008. The analysis showed that MN-166 decreased the formation of black holes (permanent brain lesions believed to indicate the death of nerves in the brain) on magnetic resonance imaging in MS patients, adding support to MediciNova’s belief that MN-166 may provide neuroprotection in relapsing MS. Data demonstrated that a 60 mg/day dosing regimen of MN-166 significantly reduced the proportion of new T1 gadolinium-enhancing or new T2 lesions identified at month two of the study that evolved into persistent black holes at month 10 compared to placebo. Treatment with a 30 mg/day dosing regimen of MN-166 showed a trend toward reduced risk of new lesion evolution to persistent black holes compared to placebo.
03:41 GFI Eskom reinstates authority for mines to increase power load from 80% to 90% (15.00 )
Co reports that Eskom last night reinstated the authorization for mines to increase their power load from 80% to 90%. This follows after authorization was withdrawn late yesterday morning.
03:38 WHQ W-H Energy Services beats by $0.08, issues upside Q108 EPS guidance (48.87 )
Reports Q4 (Dec) earnings of $1.18 per share, $0.08 better than the First Call consensus of $1.10; revenues rose 23.0% y/y to $293.38 mln vs the $282.36 mln consensus. Co issues upside guidance for Q108, sees EPS of $1.17-$1.22 vs $1.15 consensus.
02:14 ERIC LM Ericsson misses by SEK 0.04, beats on revs (22.72 )
Reports Q4 (Dec) earnings of SEK 0.35 per share, excluding non-recurring items, SEK 0.04 worse than the First Call consensus of SEK 0.39; revenues rose 0.6% year/year to SEK 54.5 bln vs the SEK 53.815 bln consensus. Gross margin increased to 32% y/y vs. GM of 29% in Q406. Operating margin remained flat at 13%. Co plans to eliminate approx 1000 jobs in Sweden.
01:49 TTI Tetra Technologies mentioned positively in Weekday Trader - Barron’s Online (15.65 )
Barron’s Online reports Tetra Technologies (TTI) has restructured its decommissioning strategy to better allocate equipment resources. The co has also taken write-downs for unpaid insurance claims and expedited a contract on better-priced ingredients for its fluid line. “We think it’s a hidden value play,” says Mark Madsen, an analyst with Wasatch Advisors. He thinks Tetra shares could fetch $25 to $26 by the end of the year. Of the 118 GofM platforms destroyed in 2005 by Hurricanes Katrina and Rita, only 20% have been removed to date, according to the U.S. Dept. of the Interior’s Minerals Management Service. Each of the remaining downed platforms represents a lucrative opportunity. Earlier this month, Tetra rival Superior Energy Services (SPN) signed contracts worth $750 mln with BP (BP), Chevron (CVX) and Apache (APA) to decommission seven downed platforms in the Gulf over the next three years. Lehman Bros. analyst James West says Superior’s deal locks up much of the co’s assets, leaving Tetra better positioned to grab new deals. Madsen says the co has been quiet about its compressor line known as Compressco, as it seeks to spin off the assets into a MLP. Such a move would provide tax advantages for the business and its predictable source of cash flow, according to Joe Gibney, an analyst with Capital One Southcoast.
01:47 ‘Mad Money’ Recap: Lightning Round cont. - TheStreet.com
Cramer was bearish on Excel Maritime (EXM), Rubicon Technology (RBCN), Martha Stewart Living (MSO), Tootsie Roll (TR), Silicon Laboratories (SLAB), Danaher (DHR) and China Mobile (CHL).
01:46 ‘Mad Money’ Recap: Lightning Round - TheStreet.com
Cramer was bullish on Goodrich (GR), Corning (GLW), Caterpillar (CAT), ING Group (ING) and Mosaic (MOS).
01:45 Cramer’s ‘Mad Money’ Recap - TheStreet.com
On Thursday’s edition, Jim favors J.C. Penney (JCP) and Polo Ralph Lauren (RL) and cites the new venture called “American Living” that is set to open on Feb. 19. At current levels, Disney (DIS) trades at just 15x this year’s earnings but maintains a 13% long-term growth rate. “This makes Disney historically cheap,” Cramer said. He called Disney “a great long-term buy.” Finally, the chief executive of Hologic (HOLX) sees opportunity for strong overseas growth in the coming years. He also said the co made exceptional strides in integrating its recent acquisition of Cytek.
01:43 WIRES On The Wires
Central Pacific Financial (CPF) announces its Board authorized a new stock repurchase authorization to repurchase up to 1.2 mln shares (approx 4.2% of outstanding common)… Wavecom S.A. (WVCM) announces that it signed a definitive agreement to acquire Anyware Technologies, a provider of client-server software solutions located in Toulouse, France.
01:40 NETC Net Servicos de Comunicacao announces Q407 results (11.76 )
Co announces its pay TV subscriber base reached 2.475 mln at the end of 2007, expanding by 16% from 2.142 mln subscribers in the previous year; the broadband subscriber base increased to 1.424 mln, growing by 65% from 864,000; and the voice subscriber base totaled 567,000, expanding by 212%. Net Revenue increased by 28.0% to R$ 2,901.9 mln, compared with R$ 2,266.7 mln in 2006. Average Revenue per User grew 9% in the year to R$ 131.34, from R$ 120.51 in 2006. Consolidated EBITDA was R$ 804.3 mln in 2007, up 25.9% in relation to the R$ 638.7 mln reported in 2006. EBITDA margin remained stable at 28%.
01:32 OHB Orleans Homebuilders misses by $0.02, misses on revs (4.99 )
Reports Q2 (Dec) loss of $2.09 per share, includes charges related to inventory impairments, land sale impairments, write-offs of abandoned projects and other pre-acquisition costs and severance charges of $36.6 mln, net of tax, $0.02 worse than the First Call consensus of ($2.07); revenues fell 1.4% year/year to $154.9 mln vs the $171.9 mln consensus.
01:23 RIGL Rigel Pharmaceutical announces the pricing of its offering of 5.0 mln shares at $27.00/share (27.53 )
01:21 YHOO Terry Semel to step down from Yahoo! Board of Directors (19.18 )
Co announces that Terry Semel, non-executive Chairman, will step down from the Board of Directors, effective January 31, 2008. Yahoo! also announced today that Roy Bostock, who has been a member of the Board since May 2003, was unanimously elected by the Board to serve as Yahoo!’s non-executive Chairman.
01:20 CPNLQ Calpine emerges from Chapter 11 (0.19 )
Co announces that it has successfully emerged from Chapter 11 bankruptcy protection. Calpine officially concluded its Chapter 11 reorganization after meeting all statutory requirements of the co’s Sixth Amended Joint Plan of Reorganization. Calpine’s Plan was confirmed by the U.S. Bankruptcy Court for the Southern District of NY in an order entered on December 19, 2007. “CPN” will begin trading on NYSE on or about February 5, 2008.
