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Stocks To Watch: Alltel, Cisco, Disney, Mittal Steel, Thomson


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


Stocks to watch for Wednesday, May 9:

  • Alcoa, (AA) filed a notice with the Securities and Exchange Commission to offer to buy all of the shares of rival Alcan, (AL) in a cash and stock swap worth about $27 billion. On Monday, Alcoa said it planned to make the offer directly to Alcan shareholders after two years of talks with management of Montreal-based Alcan failed. Alcoa has offered to exchange $58.60 in cash and 0.4108 of its shares for each share of Alcan, representing an offer of $73.25 based on Friday closing prices.
  • Alltel (AT) is drawing interest from at least three private-equity buyout groups. The wireless firm has a market cap of $22.7 billion.
  • Bristol-Myers (BMY) agreed to collaborate with Isis Pharmaceuticals on drugs focusing on a gene thought to boost bad cholesterol.
  • Cisco (CSCO) posted a 34% profit rise as sales jumped, but it forecast a modest slowdown in revenue growth for its current quarter.
  • Disney's (DIS) net jumped 27% despite almost flat sales, boosted by strong gains at ESPN and surprise movie hits such as "Wild Hogs."
  • Gateway (GTW) reported a first-quarter loss of $8.6 million, or 2 cents a share. During the same period a year ago, the No. 3 U.S. personal-computer company lost $12.3 million, or 3 cents a share. Revenue fell almost 7% to $1 billion from last year's sales of $1.08 billion.
  • Gilead Sciences (GILD) said its board has approved a two-for-one stock split to shareholders of record as of May 24. The biopharmaceutical company said its stock will begin trading at the post-split price on June 25.
  • Leap Wireless International (LEAP) swung to a first-quarter loss of $8.12 million, or 12 cents a share, from a year-earlier profit of $17.7 million, or 29 cents a share, as expenses, including those associated with acquiring new customers, increased 56%. The mobile wireless services company said Tuesday that total revenue climbed 46% to $389.4 million from $266.7 million a year earlier.
  • Maidenform Brands (MFB) reported first-quarter net earnings of $10.6 million, or 44 cents a share, up from $6.25 million, or 26 cents a share, in the year-ago period. The apparel company said revenue in the three months ended March 31 rose to $107.2 million from $100.8 million in the same month last year.
  • A Mittal Steel (MT) takeover of AK Steel (AKS) is seen as unlikely in part because a bid would face serious antitrust concerns about the auto-steel market.
  • Papa John's International (PZZA) reported first-quarter net earnings of $13.2 million, or 43 cents a share, down 18% from $16 million, or 47 cents a share, in the year-ago period. The restaurant chain said revenue rose to $260.6 million from $242.3 million in the comparable period last year.
  • (PCLN) reported a first-quarter net loss of $14.7 million compared with $99,000, during the year-ago period. The net loss applicable to common shareholders was $16.3 million, or 44 cents a share, vs. $964,000, or 2 cents a share, in the year-ago period. The net results include the impact of litigation settlement expenses and an excise tax refund, among other items, the company said. The travel Web site said revenue in the three months ended March 31 rose to $301.4 million from $241.9 million in the comparable period last year.
  • Thomson's (TOC) plan to buy Reuters (RTRSY) for about $17.5 billion could face regulatory hurdles. The companies said Reuters CEO Tom Glocer would head a combined firm.
  • Toll Brothers (TOL) said its home-building revenue fell 19% to $1.17 billion in its fiscal second quarter and warned it won't meet the quarterly and annual guidance it provided in February.
  • Toyota (TM) posted a smaller-than-expected 8.9% increase in quarterly net profit, indicating that the challenges inherent with rapid growth have begun to weigh on the Japanese auto maker's bottom line.

Market Update

  • Asian trading closed with the Hang Seng +0.67%, Taiwan -0.53%, Shanghai +1.60, Nikkei +0.52% and Sensex +0.12%.
  • A quick look across the pond finds the CAC +0.08%, DAX +0.02%, FTSE -0.12%, ATX +0.66%, Swiss Mkt. +0.29% and Stockholm -0.46%.
  • Crude oil is +0.03 to 62.29 and gold is +0.20 to 687.6 this morning.
No positions in stocks mentioned.

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