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Stocks To Watch: Apple, Citigroup, IBM, Lehman Brothers, Time Warner


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


Stocks to watch for Tuesday, June 12:

  • American Commercial Lines (ACLI) said it now expects 2007 per-share earnings of $1.45 to $1.65, down from its previous outlook of $1.75 to $1.95. The lowered forecast is driven primarily by the further weakness in the spot grain markets over first quarter levels and lower-than-planned productivity levels in the manufacturing segment during the second quarter, the marine transportation and services company said. Analysts polled by Thomson Financial are currently estimating earnings of $1.84 a share for the year ending Dec. 31, 2007. ACL also said it has authorized the buyback of up to $200 million of its shares. The revised outlook for the year doesn't include the impact of repurchased shares, the company noted.
  • Apple (AAPL) plans to launch a new version of its Safari Web browser that runs on Microsoft's Windows operating system.
  • Aspen Technology (AZPN) said financial reports for the three years ended June 30 and periods between June 30, 2005 and March 31, 2007 shouldn't be relied upon and will be restated. The supply-chain management software company expects the restatements will result in the creation of two new balance sheet captions of a collateral asset for secured borrowing and a secured borrowing liability. The company cited errors in accounting for sales of installments receivable, adding the restated balance sheet doesn't affect its net financial position.
  • The Department of Justice's Antitrust Division said it has closed its investigation into the proposed acquisition of CBOT Holdings (BOT) by Chicago Mercantile Exchange Holdings (CME) , saying the deal is not likely to reduce competition substantially. The DOJ said in a statement that the exchanges' "products are not close substitutes and seldom compete head to head" and "they are, absent the merger, unlikely to introduce new products that compete directly with the other's entrenched products." CBOT's board has recommended that shareholders vote in favor of the company's merger agreement with CME. IntercontinentalExchange (ICE) is also bidding to acquire CBOT.
  • Citigroup (C) increased its stake in Nikko Cordial, giving it full control of Japan's third-biggest brokerage.
  • Coley Pharmaceutical Group (COLY) said it has agreed to acquire the majority of 3M's (MMM) therapeutic Toll-like receptor cancer programs. Under the agreement, 3M will receive cash payments totaling $20 million over a three-year period, including an immediate payment of $5 million, Coley said. In addition, 3M could potentially receive milestone payments, as well as royalties from the sale of any products that are developed and commercialized in association with the deal. The acquisition includes a pipeline of clinical and preclinical small molecule candidates targeting TLR7 and TLR8, as well as an extensive intellectual property estate. Coley said it expects to record a $20 million charge related to the acquisition in its second quarter. The company said it now expects a full-year net loss of $45 million to $49 million, with research and development expenses expected to be about $59 million. The cash burn outlook remains unchanged, Coley said.
  • Cyberonics (CYBX) fiscal fourth-quarter loss widened to $10.8 million, or 42 cents a share, from $4.27 million, or 17 cents a share, a year earlier, as sales fell 13%. The medical device company's revenue decreased to $31.4 million from $36 million. Analysts polled by Thomson Financial expected, on average, a loss of 35 cents a share on revenue of $33 million.
  • Energy Transfer Partners (ETP) and Energy Transfer Equity (ETE) said Ray C. Davis, co-chief executive and co-chairman of Energy Transfer Partners and co-chairman of Energy Transfer Equity, will retire. The energy companies said Kelcy L. Warren, currently Davis' co-chief executive and co-chairman, will become the sole chief executive and chairman at Energy Transfer Partners and sole chairman at Energy Transfer Equity. Davis, a co-founder of Energy Transfer Partners, will remain a director of both companies.
  • Henry Schein (HSIC) said it plans to offer to acquire Software of Excellence International Ltd. for NZ$2.70 ($2.03) a share, after the payment of a dividend of NZ$0.03 a share. If completed, the total purchase price, excluding transaction costs, will be NZ$77.2 million ($58 million) and is expected to be paid in cash, the company said. Henry Schein said it expects the proposed transaction to be neutral to 2007 earnings and to add slightly to 2008 earnings. Investors representing about 23% of the outstanding shares and mandatory convertible notes of SOE, including Chief Executive Brian Weatherly, and the company's largest shareholder, have entered into a lock-up agreement under which they have agreed to accept the offer, Henry Schein said.
  • Hilton (HLT) is planning to add more than 70 new spas to its upscale properties world-wide as part of new a partnership with luxury-goods firm LVMH and a separate spa concern
  • IBM (IBM) agreed to pay $745 million for Telelogic, a Swedish firm that makes software to help write code for embedded programs.
  • Jamba (JMBA) reported fiscal first-quarter net earnings of $11.9 million, or 20 cents a share, versus a year-ago net loss of $81.5 million, or $3.88 a share. The fiscal first quarter ended May 1 included a pre-tax gain of $15.2 million, or 26 cents a share, related to the change in the fair value of derivative liabilities. Revenue increased 22% to $89.4 million from a pro-forma $73.5 million in the prior-year period, while comparable store sales rose 4.2% for company-owned stores and 2.9% for franchise stores. Analysts polled by Thomson Financial were expecting, on average, a per-share loss of 9 cents on revenue of $68 million.
  • Lehman Brothers (LEH) is expected to post earnings of $1.88 a share for the second quarter.
  • Massey Energy (MEE) said it has completed its strategic review and determined that it is in the best interests of its shareholders if Massey remain an independent public company. The review, which was announced in October 2006, was conducted with the assistance of Goldman, Sachs & Co., the coal company said. "We will follow the same strategic principles we have in the past," said Massey Chairman and Chief Executive Don Blankenship. "We will focus on expanding our margins while continuing to consolidate the Central Appalachian region via opportunistic acquisitions."
  • Murphy Oil (MUR) said its Murphy Oil Co. Ltd. subsidiary has acquired the interests of Bear Ridge Resources Ltd. in the Tupper area, an undeveloped Montney natural gas play in British Columbia, for C$155 million ($146.2 million).
  • Rubio's Restaurants (RUBO) said it has named Frank Henigman as chief financial officer, effective immediately. Henigman has served as acting CFO since May, the restaurant operator said.
  • Source Interlink (SORC) fiscal first-quarter net income increased 10% to $3.2 million, or 6 cents a share, from a year-earlier profit of $2.9 million, or 5 cents a share. The information and management services company said that excluding amortization of acquired intangibles, income was $5.2 million, or 10 cents a share, up 6% from $4.9 million, or 9 cents a share, in the year-earlier period. Revenue grew 6% to $475.4 million for the period ended April 30 from $447.9 million a year earlier. Wall Street expected first-quarter earnings of 13 cents a share, on revenue of $514.5 million, according to the average estimate of analysts polled by Thomson Financial.
  • Standard Pacific (SPF) said new home orders for the first two months of the second quarter fell 16% from a year earlier, 20% below the company's business plan for the period. The homebuilder said its cancellation rate for April and May fell to 28% from 35% in the year-ago period. Standard Pacific's shares closed Monday down 37 cents, or 1.8%, at $19.88.
  • Sunstone Hotel Investors (SHO) said it has authorized the buyback of up to $100 million of its common stock, or about 5% of its outstanding shares based on the current market price. The repurchase program includes up to $60.2 million of common stock that Sunstone expects to buy back in connection with an offering of senior exchangeable notes, the real estate investment trust said.
  • Take-Two Interactive Software (TTWO) reported a fiscal second-quarter net loss of $51.2 million, or 71 cents a share, compared with a net loss of $50.4 million, or 71 cents a share, in the year-ago period. Excluding certain items, the company posted a loss of $29.7 million, or 41 cents a share, versus $37 million, or 52 cents a share, last year. The New York-based video game company said revenue for the three months ended April 30 fell to $205.4 million from $265.1 million in the comparable period last year. Analysts polled by Thomson Financial were expecting, on average, a per-share loss of 58 cents on revenue of $204 million. Take-Two said it still expects breakeven results on a per-share basis in fiscal 2007 and revenue of $1.2 billion to $1.25 billion. The company also forecast a fiscal third-quarter net loss of 60 cents to 65 cents a share on revenue of $195 million to $215 million, and forecast a fiscal fourth-quarter net profit of $1.35 to $1.40 a share on revenue of $520 million to $550 million. Analysts are looking for a third-quarter loss of 17 cents.
  • Take-Two Interactive Software (TTWO) announced a restructuring plan that it expects to reduce its fixed overhead costs by $25 million by the end of fiscal 2008. Under the plan, the New York-based video game company will restructure its international operations to consolidate the marketing, sales and operational functions; realign label and studio administrative functions; consolidate the management, marketing and business development operations of the 2K and 2K Sports labels on the West Coast; and consolidate third-party PC distribution into North American sales. Take-Two expects to take $15 million of charges related to the restructuring through fiscal 2008, with approximately half of the charges expected in fiscal 2007. The company also named interim Chief Financial Officer Lainie Goldstein as CFO.
  • Texas Instruments (TXN) , the world's No. 1 maker of cell phone chips, narrowed its second-quarter financial targets. The company forecast sales in the range of $3.36 billion to $3.51 billion, compared with its prior forecast of $3.32 billion to $3.6 billion.
  • Tweeter (TWTR) filed for Chapter 11 bankruptcy protection, brought down by bruising competition. The electronics retailer said it will continue to operate its stores as it tries to auction its business.
  • Warner Bros., a subsidiary of Time Warner (TWX), plans to release selected movies to video-on-demand services at the same time they come out on DVD.

Market Update:

  • Asian trading closed mostly higher with the Hang Seng +0.10%, Nikkei -0.41%, Sensex +0.34%, Taiwan +0.38% and Shanghai +1.91%.
  • A quick look across the pond is rosy red with the CAC -0.46%, DAX -0.45%, FTSE -0.26%, ATX -0.12%, Swiss Mkt. -0.31% and Stockholm -0.64%.
  • Crude oil is trading -0.27 to 65.70 and gold is also lower -3.9 to 655.1 this morning.
No positions in stocks mentioned.

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