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Stocks To Watch: Avaya, Ciena, Google, Intel, Tribune


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


Stocks to watch for Tuesday, June 5:

  • AMR (AMR), the parent company of American Airlines, said that traffic in May fell 2.9% compared with the year-ago period, as capacity decreased 4%. Load factor, or the percentage of the plane filled with passengers, rose 1 percentage point to 81.7%, the carrier said.
  • TPG and Silver Lake were in the lead to acquire Avaya (AV) for about $17 a share, reflecting private equity's continued power.
  • Bob Evans (BOBE) fiscal fourth-quarter net income fell to $15.3 million, or 42 cents a share, from a year-earlier profit of $20.5 million, or 56 cents a share. Excluding items, income was 42 cents a share, compared with 47 cents a share a year earlier. The restaurant chain's revenue grew 5% to $418.4 million for the period ended April 30, from $397.3 million a year earlier. Same-store sales at Bob Evans restaurants were up 1% in the quarter, with average menu prices up 2.2%. At Mimi's Cafe, same-store sales increased 1.2%, with average menu prices up 4.9%.
  • Ciena (CIEN) said it plans to sell up to $450 million of convertible senior notes due 2017. The networking company also said it expects to grant the underwriter an option to purchase up to an additional $50 million of notes to cover over-allotments.
  • Coca-Cola (KO) said it will boost its water recycling and environmental programs in an attempt to recover the 290 billion liters of water it used world-wide last year.
  • Credence Systems (CMOS) reported a fiscal second-quarter net loss of $3.45 million, or 3 cents a share, vs. a net loss of $14.2 million, or 14 cents a share, in the year-ago period. The chip-equipment maker said revenue for the three months ended May 5 fell 6.9% to $118.8 million from $129.9 million in the comparable period last year. The company expects breakeven results on a per-share basis in its fiscal third quarter on revenue of roughly $120 million to $123 million. Analysts are looking for a profit of 3 cents a share on revenue of $118.6 million.
  • Equifax (EFX) expects second-quarter per-share earnings of 48 cents to 50 cents, on revenue of $453 million to $458 million, including the effect of its acquisition of Talx Corp. The business information company expects full year per-share earnings of $1.96 to $2.04 on revenue growth of 19% to 22%.
  • Google (GOOG) and (CRM) plan to announce that they are collaborating to target small businesses. By teaming up, both companies could be better equipped to contend with mutual rival Microsoft (MSFT).
  • Intel (INTC) said it is working with Asustek Computer to develop low-cost portable computers -- some for less than $200 -- that are designed for users in developing economies.
  • Kimco Realty (KIM) said it has acquired 12 shopping centers in California and Nevada for $342.9 million. The properties are 98.7% occupied, the real estate investment trust said.
  • Openwave Systems (OPWV) said its board is rejecting the unsolicited partial tender offer from Harbinger Capital Partners to purchase 49% of the company's outstanding stock for $8.30 per share in cash. Openwave called the offer "inadequate," and recommended that the company's shareholders not tender their shares. The company also declared a $100 million, or $1.20 per share, special cash dividend, and said it plans to cut 20% of its workforce, generating annual cost savings of $50 million a year. Openwave expects to record $20 million in restructuring charges in the fourth quarter related to the layoffs. The company, which announced in March that it was exploring a possible sale, said no party has emerged from the strategic process with a binding proposal to acquire the company, and that it believes its stand-alone plan will generate greater value for shareholders than Harbinger's offer.
  • Tribune (TRB) directors Jeffrey Chandler, Roger Goodan and William Stinehart Jr. resigned, decreasing the number of board members to nine. The directors and Chandler Trust representatives had agreed to step down upon the completion of the media company's tender offer May 24. Following the tender offer, Chandler Trusts held about 20.4 million shares, or 17%, compared with 48.1 million, or 20%, of Tribune shares outstanding beforehand. Chandler Trust No. 1 and Chandler Trust No. 2 have agreed to sell the remaining Tribune shares, which will be offered pursuant to the shelf registration statement that Tribune filed with the Securities and Exchange Commission, the company said.
  • XTO Energy (XTO) said it will offer 15 million shares in a public offering. The natural gas producer said it plans to use the proceeds of the offering to fund a portion of its $2.5 billion acquisition of Dominion Resources Inc.'s natural-gas and oil operations in the Rocky Mountains, Gulf Coast, San Juan Basin and southern Louisiana. XTO is granting underwriters an option to purchase an additional 2.25 million shares to cover any over-allotments.

Market Update:

  • Asian trading closed with the Hang Seng +0.54%, Nikkei +0.45%, Sensex +0.27%, Taiwan +0.11% and Shanghai +2.63%.
  • A quick look across the pond finds the CAC -0.38%, DAX -0.09%, FTSE -0.06%, ATX -0.15%, Swiss Mkt. -0.24% and Stockholm +0.10%.
  • Crude oil is trading -0.35 to 65.86 while gold is +0.7 to 677.0 this morning.
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No positions in stocks mentioned.

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