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Stocks to Watch: Ford Motor Credit, IBM, New York Times, Target and Verizon


Full steam ahead


Stocks to Watch for Tuesday, June 20

  • American Commercial Lines (ACLI) said it now expects 2006 per-share earnings of $2 to $2.20, and earnings before interest, taxes, depreciation and amortization of $170 million to $180 million. The company had previously forecast per-share earnings of $1.70 to $1.90 and EBITDA of $155 million to $165 million for the year.
  • Avocent (AVCT) said it has approved an expanded buyback program of up to three million additional shares. The company also said it has closed on a five-year, $250 million unsecured revolving bank line of credit. Avocent said it expects to close its LANDesk acquisition in the third quarter. The $400 million acquisition will be funded with $200 million in cash and $200 million in Avocent common stock.
  • Australia's Brambles agreed to sell two businesses to private-equity firm KKR for $1.35 billion, in a restructuring move
  • Delta (DALRQ) said it was beginning the legal process aimed at terminating its pilot pension plan, a move the airline says is necessary in order for it to emerge from bankruptcy-court protection.
  • Delta Petroleum (DPTR) said it has received a subpoena from the U.S. Attorney for the Southern District of New York requesting records dating back to 1996 related to the company's granting of stock options.
  • DynCorp International (DCP) reported fourth-quarter net earnings of $5.76 million. During the same period a year ago, the government services contractor reported a pro forma loss of $7.3 million. DynCorp, which had its initial public offering May 4, posted revenue of $548.7 million vs. $520.9 million. For fiscal 2007, the company said it expects per-share earnings of 51 cents, or 71 cents on a pro forma basis, on revenue of $2.4 billion.
  • Ford Motor Credit (FCZ) has provided additional investor safeguards on its coming $2 billion securitization of loans to auto dealerships.
  • IBM and Georgia Tech researchers demonstrated 500-gigahertz chips, the fastest yet shown that can be built with typical semiconductor technology.
  • Lam Research (LRCX) plans to repatriate $350 million in foreign earnings in the quarter ending June, the chip-equipment maker said in a Securities and Exchange Commission filing. Lam said it will book a tax expense of $16 million as a result. It said it borrowed $350 million from ABN Amro Bank N.V. to facilitate the transaction. It has five years to repay the loan.
  • Nestle plans to buy weight-management company Jenny Craig for $600 million, as the Swiss food and beverages maker continues to strengthen its focus on health products.
  • New York Times (NYT) said it expects to post second-quarter earnings in a range basically unchanged from its results in the same period last year.
  • Patterson (PDCO) said it has acquired Dale Professional Surgical Supply Co. Terms of the all-cash transaction weren't disclosed. Long Island, N.Y.-based Dale is a dealer/distributor of rehabilitation equipment and related supplies that will become a branch office of the Patterson Medical rehabilitation unit. With sales of about $6 million, Dale is expected to have a neutral impact on Patterson's consolidated earnings during its first year as part of the company, the company said.
  • Progress Software (PRGS) said it was voluntarily reviewing all of grants of stock options since the beginning of fiscal 1996. The business-software firm said the review was in response to recent attention from media and analysts on stock-option grant practices at numerous companies, and investor inquiries. Progress Software also said second-quarter revenue rose 9.4% to $109.6 million, though the company wasn't able to provide bottom-line results due to its review of stock-option grants.
  • Target (TGT) said it sees same-store sales for the five-week period from May 28 through July 1 trending toward the upper half its forecast of a 3% to 5% rise. The discount retailer's June comp sales rose 9% in 2005. Target issued the updated forecast via a recorded phone message.
  • Trinity Industries (TRN) raised its second-quarter earnings forecast to a range of 60 cents to 65 cents a share. The Dallas-based provider of products and services for the transportation, industrial, construction, and energy sectors had previously forecast earnings of 52 cents to 57 cents a share. Analysts polled by Thomson First Call are currently expecting a per-share profit of 56 cents.
  • Verizon (VZ) is suing Vonage (VG) for patent infringement, based on the description of Vonage technology contained in IPO filings.

Market Update

  • Asian trading closed with the Hang Seng -1.01%, Nikkei -1.43%, the Sensex +1.75% and Taiwan -3.33%.
  • A quick check across the pond finds the CAC -.20%, DAX -0.39%, FTSE -0.29%, ATX -0.83% and Stockholm -0.93%
  • Crude oil is trading +0.85 69.83 while gold is +2.7 to 575.1 so far today. For their part, stateside futes are below their fair value.
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