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Stocks To Watch: Aeropostale, Chevron, Gap, General Motors, UBS


Today's big stories and some stocks with potential to move...


Stocks to watch for Friday, May 25:

  • Aeropostale's (ARO) first-quarter net income climbed 64% to $13.8 million, or 26 cents a share, from $8.36 million, or 15 cents a share, a year earlier. The New York clothing retailer said sales for the period ended May 5 grew 12% to $275.8 million from $246.3 million as same store sales rose 2.5%. Aeropostale expects second-quarter earnings of 26 cents to 28 cents a share. The company expects an accelerated back-to-school selling season to shift 4 cents to 6 cents a share of earnings to the second quarter from the third quarter.
  • Aetna (AET) said it has agreed to acquire Schaller Anderson Inc., a privately held provider of health care management services for Medicaid plans, for about $535 million. The health-care benefits company said it expects the acquisition to add to earnings during 2008.
  • Amgen (AMGN) said it has priced $1.1 billion of 5.85% senior notes due 2017, $900 million of 6.375% senior notes due 2037, and $2 billion of 18-month floating rate senior notes, for a total transaction size of $4 billion. The biotechnology company estimates net proceeds from the offering of roughly $3.98 billion, and Amgen expects to use the funds to buy back $3 billion in stock.
  • Chevron (CVX) said its subsidiaries in Belgium, the Netherlands and Luxembourg have agreed to sell their fuels marketing business to Delek Benelux B.V., a Dutch subsidiary of the Israeli company Delek Petroleum. The sale price is $460 million, exclusive of working capital adjustments estimated to be between $30 million and $95 million. Under the agreement, Delek will acquire Chevron's Benelux fuel marketing operations, which include 803 Texaco-branded service stations, two fuel terminals in Belgium and Luxembourg, interests in six joint venture retailers in the Netherlands, as well as other related assets. Delek (DK), a subsidiary of Delek Petroleum, is an operator of gas stations and attached convenience stores in the southern United States and a crude oil pipeline and refinery in Texas.
  • Frontier Airlines (FRNT) fiscal fourth-quarter loss widened to $10.4 million, or 29 cents a share, from a year-earlier loss of $7.85 million, or 22 cents a share. The Denver company's revenue for the fourth quarter ended March 31 rose to $282.4 million from $255 million.
  • Gap's (GPS) net tumbled 26%, hurt in part by a loss from the closure of the Forth & Towne chain. Same-store sales declined.
  • General Electric (GE) and BP (BP) will jointly develop technology for at least five power plants designed to reduce greenhouse gas emissions from electricity generation. The companies said the technology will be designed to capture 90% of the carbon in the fuel. The companies reached a preliminary agreement on the alliance in 2006.
  • General Motors (GM) will take a $1 billion charge to cover Delphi labor costs, but signaled progress in talks involving the former parts unit.
  • Home Depot (HD) shareholders elected the retail giant's slate of directors at its annual meeting. Holders rejected calls to give themselves more say on executive pay and to split executive duties.
  • Nasdaq Stock Market (NDAQ) is close to announcing the acquisition of Nordic exchange operator OMX Group, the Wall Street Journal reported, citing unidentified people familiar with the matter. The two exchanges were completing the final details and could announce the deal as early as Friday, the newspaper added. Nasdaq may buy OMX for around 200 kroner a share in cash and stock, the WSJ said. That would create a $7 billion company that runs stock and derivative markets in eight countries including the U.S. and Iceland, the paper added. Nasdaq Chief Executive Bob Greifeld will be chief executive, with OMX CEO Magnus Böcker his number two, the WSJ said.
  • Tribune (TRB) completed a tender offer for half its shares, but the media company had to agree to difficult borrowing terms.
  • UBS (UBS) said it will sell a stake in Julius Baer valued at roughly $3.26 billion, putting the proceeds toward a continuing share-buyback program
  • Verigy (VRGY) swung to a fiscal second-quarter profit as it incurred fewer expenses than a year ago. The semiconductor test company earned $22 million, or 36 cents a share, for the quarter ended April 30, reversing a year-ago loss of $11 million, or 22 cents a share. Excluding some restructuring charges, the latest earnings would've been $24 million, or 40 cents a share. Revenue fell to $183 million from $192 million.

Market Update:

  • Asian trading closed with the Hang Seng -1.34%, Nikkei -1.22%, Sensex +0.85%, Taiwan -0.69% and Shanghai +0.69%.
  • A quick look across the pond finds the CAC -0.16%, DAX -0.05%, FTSE -0.16%, ATX -0.58%, Swiss Mkt. -0.09% and Stockholm -0.17%.
  • Crude oil is trading to +0.55 to 64.73 while gold is +2.2 to 655.5 this morning.
No positions in stocks mentioned.

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