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Stocks to Watch: Bearing Point, Boston Scientific, Delphi, Paychex, Red Hat


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Stocks to watch for Wednesday, September 27

  • Actuant (ATU) is expected to report earnings per share for the fourth quarter of 78 cents.
  • Aehr Test Systems (AEHR) said it swung to first-quarter net profit of $557,000, or 7 cents a share, on the back of strong sales. In the same period last year, the Fremont, Calif.-based maker of semiconductor testing equipment posted a net loss of $244,000, or 3 cents a share.
  • A Barr Pharmaceuticals (BRL) unit confirmed it's challenging the patents protecting Savient Pharmaceuticals (SVNT) Oxandrin tablets. Earlier, Savient said it filed suit in U.S. District Court of New Jersey to prevent Barr from proceeding with the commercialization of its product.
  • BearingPoint (BE) said that on Sept. 19 an order was entered by a New York state court as a result of the company's failure to file its financial reports on time. The order finds the company in default under the indenture governing its 2.75% Series B convertible subordinated debentures due 2024. The court plans to determine the amount of damages due to the holders of the debentures at trial at a later date, BearingPoint said. Additionally, the company said it will be "significantly below" the low end of its operating income and cash forecast for fiscal 2006, adding that it cannot affirm its 2006 revenue forecast and that its "previous financial guidance should be considered withdrawn."
  • BISYS Fund Services (BSG) settled federal charges it aided more than 24 mutual fund advisers in defrauding fund investors, the Securities and Exchange Commission said Tuesday. The subsidiary of the BISYS Group will pay $21.4 million in fines and interest, the SEC said.
  • Boston Scientific BSX) said 6-month results from a Below-The-Knee CHILL trial were "excellent." The study evaluated the PolarCath Peripheral Dilatation System for restoring blood flow and reducing amputation in patients with critical limb ischemia, or severe blockages in the arteries below the knee. The results included a 93% rate of freedom from amputation, and a 97% rate of procedural success, resulting in improved blood flow.
  • Brinker International (EAT) said it is raising the price and decreasing the amount of shares sought in its modified Dutch auction tender offer. The restaurant operator said it is now offering to purchase up to 11.25 million shares for $35.25 to $40 each, while the prior offer was for up to 11.7 million shares with a purchase price of $35.25 to $38.50 each.
  • Conexant Systems (CNXT) said it expects to receive $100 million in cash from the acquisition of Jazz Semiconductor Inc. by Acquicor Technology Inc. Conexant owns about 42% of Jazz.
  • Cooper Industries (CBE) said it expects third-quarter earnings from continuing operations to come in at the high end of its previously forecast range of $1.28 to $1.35 a share. The forecast reflects "continued strong demand in utility markets and favorable sales mix during the third quarter."
  • Bankrupt auto supplier Delphi (DPHIQ) said that 1,400 additional workers accepted buyout packages under the company's attrition program that ended about two weeks ago. Delphi said that 12,400 union workers agreed to early retirement instead of the 12,600 previously announced.
  • Dress Barn (DBRN) reported fourth-quarter earnings below 2005 levels due to a one-time gain a year ago, but the company reported higher sales and reaffirmed its forecast for 2007 profits. The company reported net income of $24.4 million, or 35 cents a share, vs. the $33.6 million, or 54 cents a share, in the same period last year.
  • First BanCorp (FBP) said it has filed its amended annual report on Form 10-K for the year ended Dec. 31, 2004, which includes restated results for the years 2000 through 2004. The company said the cumulative adjustments for the period decreased its retained earnings and legal surplus by about $17.1 million, or 3.4% from previously reported amounts.
  • First Marblehead (FMD) estimated additional structural advisory fees and residual revenue in connection with a previously announced securitization involving the National Collegiate Student Loan Trust 2006-3. The Trust expects to raise about $1.84 billion from the sale of asset-backed securities, and expects to acquire private student loans with a principal and accrued interest balance of $1.39 billion.
  • General Motors (GM) Chief Rick Wagoner plans to ask for an "equalizing contribution" as a condition for any deal with Nissan and Renault, a demand that could sink the talks.
  • Glenayre Technologies (GEMS) said it has revised its outlook for the second half of 2006 due to softness in the U.S. market. The Atlanta-based communications and entertainment company now sees revenue for its messaging business 10% below revenue in the first half of 2006 and a third-quarter operating loss
  • H.B. Fuller (FUL) said third-quarter net earnings rose 56% from last year due to increased productivity and a favorable tax rate adjustment, among other factors. Revenue rose 9% to $388.9 million from $358.1 million.
  • A Hewlett-Packard (HPQ) spokesman said senior counsel Kevin Hunsaker has left the company as part of the fallout from the tech giant's pretexting scandal. Hunsaker has been subpoenaed to appear before the House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations on Thursday.
  • Intel (INTC) CEO Otellini said new powerful chips with four computing cores will reach the market in November. A judge threw out major portions of Advanced Micro Devices' (AMD) high-profile antitrust suit against Intel.
  • Jabil Circuit (JBL) reported fiscal fourth-quarter revenue of $3 billion, but said it would delay delivering full results for the period as it evaluated its stock-option accounting. The company expects to deliver its full fourth-quarter results by a Nov. 14 deadline.
  • Landec (LNDC) said it swung to net income for the first-quarter as revenue rose and selling, general and administrative expenses fell. The company said net income was $14,000, or breakeven on a per-share basis. During the same period in the prior year, the net loss was $521,000, or 2 cents a share.
  • Marvel Entertainment (MVL) said it has named David Maisel and John Turitzin to the new position of executive vice president of the chief executive's office. Together they will make up the office, with Maisel focusing on media activities, and Turitzin overseeing licensing.
  • McCormick (MKC) is expected to post third-quarter per-share income of 36 cents.
  • Merck (MRK) said a federal jury in New Orleans cleared the company of responsibility of a man's heart attack in the 10th Vioxx-related case to go to trial. The jury reportedly decided that Merck had adequately warned of the Vioxx's risks and that the pain killer was not responsible for the man's heart attack.
  • Owens Corning (OWENQ) said a bankruptcy court judge in Delaware approved its reorganization plan, paving the way for the maker of home insulation, asphalt shingles and other buildings materials to emerge from bankruptcy by the end of October.
  • Par Pharmaceutical (PRX) said its board has named Patrick LePore president and chief executive, effective immediately. The board also named John Abernathy non-executive chairman, effective immediately.
  • Paychex (PAYX) said first-quarter net income rose, as revenue gained, to $135.1 million, or 35 cents a share, from $115 million, or 30 cents a share, during the same period in the prior year. For fiscal 2007, Paychex sees net income growth of 13% to 15%, and revenue growth of 12% to 14%.
  • Red Hat (RHAT), a provider of open-source software, said its quarterly profit fell by one-third even after a 52% leap in revenue, reflecting expenses for options-based compensation and mergers.
  • Resources Connection (RECN) is expected to report income of 24 cents per share for the first quarter.
  • NaviSite (NAVI) said the fourth-quarter net loss widened to $3.05 million, or 11 cents a share, from a net loss of $1.84 million, or 6 cents a share, during the same period last year, as the non-cash compensation charge rose. NaviSite said quarterly revenue rose to $29.4 million from $25.8 million in the prior year.
  • Sharper Image (SHRP) said founder Richard Thalheimer resigned as chairman and CEO and will be replaced by a member of a dissident investor group that has agitated for change at the ailing gadget retailer.
  • Visteon (VC) warned it may miss financial targets for 2006 as production cuts by U.S. auto makers continue to hurt suppliers.
  • Wells Fargo (WFC) named Sybase's (SY) Chairman and Chief Executive John Chen to its board.
  • Worthington Industries (WOR) reported first-quarter net earnings of $43.2 million, or 48 cents a share, up 52% from $28.4 million, or 32 cents a share, during the year-ago period. The metal processing company posted revenue of $778.7 million vs. $694.1 million.

Market Update

  • Asian trading closed with the Hang Seng +1.23%, Sensex +0.37%, Nikkei +2.51%, Shanghai +0.72% and Taiwan +0.65%.
  • A check of the European bourses finds the CAC +0.35%, DAX +0.43%, FTSE +0.94% and Swiss Market +0.22%.
  • Crude oil is trading +0.60 to 61.62 while gold is +3.4 to 600.5. For their part, stateside futes are slightly above fair value.
No positions in stocks mentioned.

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