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Stocks to Watch: General Motors, Harrah's, Safeway, Yahoo!

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Stocks to watch for Thursday, October 12

  • Adobe Systems (ADBE) has concluded its voluntary review of stock-option grant practices, and found no improper grants to its executive officers. A broader review found certain instances where adjustments were made to grants after the grant date without a corresponding change to the measurement date.
  • Apogee Enterprises (APOG) board said it has raised the quarterly cash dividend 4% to 6.75 cents per share from 6.5 cents per share. The dividend is payable Nov. 15 to shareholders as of Oct. 31.
  • Asbury Automotive Group (ABG) increased its outlook for 2006 per-share income from continuing operations by 3 cents for a range of $1.85 to $1.90. Chief Executive Kenneth Gilman cited continued strength in higher margin businesses, such as used vehicles and parts and service.
  • Buckeye Technologies (BKI) said it sees per-share earnings of about 10 cents for the July-September quarter. The maker of cellulose-based products added that net sales for the period rose 16% from last year due to higher prices, among other factors.
  • CKE Restaurants (CKR) said it has increased its share buyback program by $50 million to $100 million.
  • Costco (COST) is expected to report earnings per share for the fourth quarter of $0.73.
  • Cypress Semiconductor (CY) said it has sold its PC clock assets and intellectual property rights to Spectra Linear for an undisclosed amount.
  • Cytogen (CYTO) said it has bought exclusive North American rights to Caphosol from Norway's InPharma AS. Cytogen will pay $5 million in upfront fees, and an additional $1 million after six months.
  • Discovery Laboratories (DSCO) reported "encouraging" results from its Phase II clinical trial of Surfaxin for the prevention and treatment of bronchopulmonary dysplasia, a chronic lung disease affecting premature infants.
  • Domino's Pizza (DPZ) is expected to post per-share income of $0.35 for the third quarter.
  • Ford (F) is looking for a buyer for its extended-warranty contract business. Separately, Nissan-Renault CEO Ghosn said his company isn't taking the initiative on another U.S. alliance after failed GM talks.
  • Genentech (DNA) said the Food and Drug Administration has approved its colorectal cancer treatment Avastin for use in combination with chemotherapy as a first-line treatment for patients with advanced non-small cell lung cancer.
  • General Motor's (GM) and Delphi are nearing an agreement that would specify portions of Delphi's supply contracts with the auto maker and include a GM subsidy for Delphi labor costs.
  • H-3C is being courted by three U.S. private-equity firms offering between $1 billion and $1.5 billion for the 3Com-Huawei joint venture
  • Private-equity bidders sweetened their offer for Harrah's (HET), but the new bid of $83.50 per share may not be rich enough to clinch a deal.
  • IBM is moving the headquarters of its global procurement arm, one of its biggest divisions, to China from Somers, N.Y.
  • Lam Research (LRCX) said its quarterly net income jumped nearly fourfold as sales of its chip-equipment soared.
  • Multi-Fineline Electronix (MFLX) said it has filed a lawsuit against hedge fund managers Michael Roth and Brian Stark, as well as various Stark funds. Multi-Fineline alleges that the hedge funds and their managers have provided "false and misleading" regulatory filings, and haven't adequately informed M-Flex shareholders "as to the true nature" of their positions and intentions for the company.
  • Palm Harbor Homes (PHHM) said it expects to report a second-quarter net loss of 23 cents a share. Excluding charges, the home builder said it sees breakeven results on a per-share basis.
  • PepsiCo (PEP) is expected to report third-quarter per-share income of $0.86.
  • Rambus (RMBS) said it will focus primarily on revenue during its Oct. 19 quarterly conference call, and will not be in a position to finalize other financial results. The company added that it won't finalize other results until its audit committee has completed investigating the timing of past option grants.
  • Richardson Electronics (RELL) swung to a first-quarter net loss of $1.1 million, or 6 cents a share, as expenses rose. In the same period last year, the company posted net earnings of $1.82 million, or 10 cents a share.
  • Roche (RHHDY) and Trimeris (TRMS) said a supplemental new drug application for anti-HIV drug Fuzeon will be delayed until at least the first half of 2007. The Food and Drug Administration has requested additional safety information on the nature and occurrence of injection site reactions. Also, Trimeris said it now sees 2006 Fuzeon sales in the U.S. and Canada of $126 million to $134 million, compared with its prior view of $140 million to $150 million.
  • Rockwell Collins (COL) and Avcom Avionics & Instruments Inc. said they have settled all claims filed by Rockwell against Avcom. Avcom has acknowledged that it violated Rockwell Collins' copyrights and trademarks, and agreed to pay Rockwell Collins $3.4 million.
  • Ruby Tuesday (RI) reported fiscal first-quarter net earnings of $21.55 million, or 37 cents a share, vs. $21.64 million, or 34 cents a share, last year. Revenue at the restaurant chain operator rose to $338.7 million from $308.2 million.
  • Sabre Holdings (TSG) increased its quarterly cash dividend 30% to 13 cents from 10 cents a share. The dividend is payable Nov. 10 to shareholders as of Oct. 23.
  • Safeway (SWY) is expected to post earnings per share of $0.39 for the third quarter.
  • Scania said it expects its third-quarter operating income to exceed market expectations by close to 25%. The Swedish truck maker cited higher deliveries and improved capacity utilization for its outlook.
  • Sealy (ZZ) said third-quarter net income rose, as revenue gained, to $29.4 million, or 30 cents a share, from $26.3 million, or 35 cents a share, during the same period in the prior year. Analysts had expected per-share income of 30 cents.
  • Simclar (SIMC) said it expects second-quarter net earnings of $790,000, or 12 cents a share, on revenue of $30.5 million. The maker of electronic and electro-mechanical products also said it will restate its results for 2005 and the first quarter of 2006 due to accounting errors in its Mexican operations.
  • Spartan Stores (SPTN) said second-quarter net earnings rose to $9.33 million, or 44 cents a share, compared with $6.85 million, or 32 cents a share, in the same period last year, on the back of strong sales and a higher gross margin. Analysts had expected per-share earnings of 39 cents.
  • Transmeta (TMTA) said it has filed a lawsuit against Intel (INTC), alleging infringement of 10 Transmeta U.S. patents covering computer architecture and power efficiency technologies. The complaint seeks monetary damages, and requests an injunction against Intel's continuing sales of microprocessor products, such as Intel's Pentium III, Pentium 4, Pentium M, Core and Core 2 product lines.
  • Urologix (ULGX) said it sees first-quarter revenue of $5.4 million, compared to $6.2 million in the same period in the prior year. The medical products developer said the lower revenue is expected to have a negative impact on the company's net operating results.
  • UTStarcom (UTSI) said it is exploring strategic options to enhance stockholder value. The networking services company said its board has established a special committee and hired Merrill Lynch as a financial adviser.
  • Visa's planned IPO is likely to quicken innovation in the electronic-payments sector and intensify its rivalry with MasterCard.
  • Yahoo (YHOO) remains in talks with Facebook, but hasn't reached a deal, illustrating its slower pace of expansion compared with Google
  • Yum Brands (YUM) said third-quarter earnings jumped 20% thanks to strong growth in Chinese and other international markets. Yum said net income was $230 million, or 83 cents a share, compared with $205 million, or 69 cents a share, for the same period a year ago.


Market Update

  • Asian trading closed with the Hang Seng +0.06%, Nikkei -0.19%, Sensex +1.49%, Shanghai -0.36% and Taiwan -0.32%.
  • A quick check towards Europe finds markets in the red with CAC +0.26%, DAX +0.18%, FTSE +0.30%, and Swiss -0.25%.
  • Gold is trading lower +2.8 to 579.3 and crude oil is also down -0.28 to 57.31.
No positions in stocks mentioned.

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