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Stocks To Watch: Alcoa, ConAgra, Foot Locker, Hewlett-Packard, Toll Brothers

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

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Stocks to watch for Thursday, May 24:

  • Abercrombie & Fitch (ANF) reported first-quarter net earnings of $60.1 million, or 65 cents a share, up 7% from $56.2 million, or 62 cents a share, during the year-ago period. The teen retailer said revenue rose to $742.4 million from $657.3 million. Same-store sales fell 4% during the quarter. Additionally, Abercrombie & Fitch said it still expects fiscal 2007 per-share earnings of $1.47 to $1.52, and capital expenditures of $395 million to $405 million. The company also said it expects to increase gross square-footage by about 11% to 12%, through the addition of 10 new Abercrombie & Fitch stores, 29 new Abercrombie stores, 69 new Hollister stores, and nine new Ruehl stores.
  • Alcoa, (AA) said it is sticking to its offer to acquire rival aluminum producer Alcan (AL) for $58.60 in cash and 0.4108 of a share, or $73.25 as of the May 7 offer announcement, saying management has already met with a significant number of Alcan's shareholders and "are pleased to have received strong support for the combination." Late Tuesday, the board of Alcan urged shareholders to reject Alcoa's hostile offer on the grounds that it was too low and completion of the merger was too uncertain due to regulatory and other hurdles. Analysts had speculated Alcoa might respond with a higher offer.
  • Amgen (AMGN) said it received a subpoena from the New York attorney general seeking documents related to the drug maker's promotional and other activities.
  • BJ's Wholesale (BJ) said it has authorized an additional $100 million share buyback, bringing the company total stock repurchase program to $133 million.
  • Business software maker CA Inc. (CA) said that a 7% increase in fourth quarter sales was not enough to push the company to a profit for the period. CA said earnings for the period ended March 31 rose to a loss of $20 million, or 4 cents a share, from a loss of $41 million, or 7 cents a share in the period a year earlier. Meanwhile revenue rose to $1.01 billion. Excluding certain items, CA said it saw earnings of 20 cents a share. Islandia, New York-based CA said it expects fiscal 2008 earnings of between 75 cents a share and 79 cents a share, and 2008 revenue of between $4.05 billion and $4.1 billion.
  • California Pizza Kitchen (CPKI) board approved a 3-for-2 stock split in the form of a 50% stock dividend. The Los Angeles restaurant company said the split will increase its shares outstanding to 29.1 million from 19.4 million and will boost trading liquidity. The split is payable June 18 to shareholders of record June 11.
  • A former employee of Coca-Cola (KO) was sentenced to eight years in prison for conspiring to steal and sell the beverage giant's trade secrets, the Department of Justice said late Wednesday. Joya Williams, a former executive administrative assistant at Coke in Atlanta, also received three years of supervised release following the sentence, and was ordered to pay $40,000 in restitution, the DOJ said. Co-conspirator Ibrahim Dimson of the Bronx, N.Y., also was sentenced to five years in prison, followed by three years of supervised release, and fined $40,000, the government said.
  • ConAgra Foods (CAG) raised its fiscal 2007 earnings forecast due to stronger-than-expected fourth-quarter results at the company's Trading and Merchandising unit. The packaged food company expects earnings to come in above the high end of its prior estimates of $1.28 to $1.33 a share for the quarter ending May 31.
  • Express Scripts (ESRX) board approved a 2-for-1 stock split in the form of a stock dividend. The prescription services company said the split is payable on about June 22 to shareholders of record June 8.
  • Foot Locker's (FL) fiscal first-quarter net income fell 71% to $17 million, or 11 cents a share, from $59 million, or 38 cents a share, a year earlier on a same-store sales decline and a weak performance in U.S. stores. Same-store sales fell 5.1% during the quarter. The New York-based seller of athletic apparel's net sales for the quarter ended May 5 decreased 3.6% to $1.32 billion from $1.365 billion a year earlier.
  • Gap (GPS) named Patrick Robinson executive vice president of design for Gap adult and Gapbody, effective May 29. The specialty retailer said Robinson, 40, will oversee all design elements for Gap's apparel, accessories and intimates lines in North America.
  • General Motors (GM) said it plans to offer roughly $1.1 billion of convertible debt securities. The automaker said the purpose of the offering is to replace $1.1 billion in convertible securities put to the company in March of this year and to "bolster liquidity at a time when the capital markets present an attractive opportunity to do so." GM also said it has received a commitment for a supplemental revolving credit facility of roughly $4.1 billion.
  • Gymboree's (GYMB) fiscal first-quarter net income rose 17% to $20.9 million, or 67 cents a share, from $17.9 million, or 53 cents a share, a year earlier on higher retail operations sales. The specialty retailer said net sales for the quarter ended May 5 increased 13% to $209.3 million from $185.8 million a year ago. Gymboree sales from retail operations rose 13% to $206.7 million from $183 million a year earlier.
  • Hewlett-Packard (HPQ) said it has settled the Securities and Exchange Commission's investigation regarding the company's disclosure of Tom Perkins' resignation from its board of directors in May of 2006. The computer maker said it agreed, without admitting or denying the SEC's findings, to the entry of a cease-and-desist order by the SEC. In the order, the SEC said H-P should have reported that Perkins resigned because of a disagreement with the company. H-P did not offer any explanation when it announced Perkins' resignation The SEC imposed no fine or other penalty in connection with the settlement
  • Hot Topic (HOTT) reported a first-quarter net loss of $809,000, or 2 cents a share, compared with a net loss of $1.41 million, or 3 cents a share, during the year-ago period. The teen retailer said revenue for the three months ended May 5 rose to $157.3 million from $154 million in the comparable period last year, while same-store sales fell 2.3%.
  • Toll Brothers (TOL) said its second-quarter net income fell 79%, as the luxury-home builder's earnings were hurt by write-downs totaling $72.9 million
  • Zumiez (ZUMZ) fiscal first-quarter net income increased 46% to $1.62 million, or 6 cents a share, from $1.11 million, or 4 cents a share, a year earlier on higher sales and store expansion. The action sports apparel and equipment retailer's net sales for the quarter ended May 5 rose 44% to $68.8 million from $47.8 million a year ago. Analysts polled by Thomson Financial predicted first-quarter earnings of 6 cents a share and revenue of $68.4 million. Same-store sales increased 11%.


Market Update:

  • Asian trading closed with the Hang Seng -0.22%, Nikkei -0.05%, Sensex -1.01%, Taiwan -0.07% and Shanghai -0.54%.
  • A quick look across the pond finds the CAC -0.91%, DAX -0.26%, FTSE -0.30%, ATX -0.54%, Swiss Mkt. -0.44% and Stockholm -0.04%.
  • Crude oil is trading to -0.26 to 65.51 while gold is -1.3 to 661.3 this morning.
No positions in stocks mentioned.

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