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Stocks To Watch: Bed Bath & Beyond, Capital One Financial, eBay, Paychex, Red Hat

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

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Stocks to watch for Thursday, June 28:

  • Bed Bath & Beyond (BBBY) posted a small rise in its fiscal first-quarter profit, including a same-store sales increase that was in line with the home accessories and furnishings retailer's recently lowered forecast.
  • Atmel's (ATML) first-quarter net income rose sharply to $28.9 million, or 6 cents a share, from $4.7 million, or 1 cent a share, a year earlier as the company recorded a $15.2 million tax benefit. The radio-frequency chip maker's revenue fell 2.4% to $391.3 million from $400.8 million in the year-ago period. On average, analysts expected revenue of $391 million, according to a poll by Thomson Financial.
  • Business Objects (BOBJ) said that the U.S. Court of Appeals for the Federal Circuit on confirmed the decision by a lower court that Business Objects didn't infringe on three MicroStrategy (MSTR) patents.
  • CACI International (CAI) said it expects fiscal 2008 earnings of $2.50 to $2.80 a share. The information technology company estimates 2008 net income of $76.5 million to $85.7 million on revenue of $2.05 billion to $2.15 billion. The forecasted revenue includes about $125 million from the company's recent acquisitions of IQM Inc. and Wexford International Group, CACI said. On average, analysts polled by Thomson Financial projects fiscal 2008 earnings of $2.80 a share and revenue of $2.01 billion.
  • Capital One Financial (COF) began a restructuring initiative that will cut about 2,000 jobs across the company and reduce operating expenses by an estimated $700 million. The company said the initiative will focus on structural changes and consolidation of operations and platforms. About half of the job cuts have already happened, and the company expects to achieve additional saving from attrition and the elimination of selected vacant positions. The financial holding company said it will realize $400 million in cost reductions in 2008 and about $300 million in 2009.
  • CKE Restaurants (CKR) reported fiscal first-quarter net earnings of $15.4 million, or 23 cents a share, down from $16.2 million, or 23 cents a share, in the year-ago period. The company said revenue in the three months ended May 21 rose 1.6% to $481.8 million from $474 million in the comparable period a year ago. First-quarter same-restaurant sales were flat at Carl's Jr. and increased 1.8% at Hardee's. Analysts polled by Thomson Financial were expecting, on average, a per-share profit of 28 cents on revenue of $489 million. Separately, CKE said same-restaurant sales at Carl's Jr. rose 2.8% in the four-week period ended June 18, while Hardee's same-restaurant sales rose 2.6%.
  • Crown Castle International (CCI) reaffirmed its forecast for a second-quarter loss of 10 cents to 23 cents a share and a 2007 loss of 36 cents to 76 cents a share. Separately, the operator of wireless infrastructure said its shareholders began a secondary offering of 36.4 million shares. Crown Castle won't receive any proceeds from the sale, the company said. Crown Castle shares were trading down after-hours at $34.52, after closing the regular session trading at $35.
  • CryoCor (CRYO) said a Food and Drug Administration advisory panel recommended that its application for pre-market approval for a medical device to treat atrial flutter be approved. A decision from the FDA on CryoCor's PMA is expected in August 2007.
  • Digital River (DRIV) now expects to record second-quarter net income of 31 cents to 32 cents on revenue of $78 million, compared with its previous estimate of 39 cents. The e-commerce company expects to post adjusted per-share earnings, excluding certain items, of 38 cents to 39 cents, compared with its previous guidance of 46 cents. The company called the second-quarter a "seasonally soft quarter." On average, analysts expect adjusted per-share earnings of 46 cents on revenue of $85.3 million, according to a poll by Thomson Financial. The now expects 2007 per-share earnings of $1.58 to $1.62, or $1.85 to $1.89 on an adjusted basis, on revenue of $345 million, down from previous estimates.
  • eBay's (EBAY) CEO sold $20 mln worth of her company's shares Thursday. This marked the first time in almost four years that an eBay CEO had sold any of the company's stock.
  • General Mills (GIS) is expected to report a per-share profit of 63 cents for its fiscal fourth quarter.
  • Hartmax (HMX) reported second-quarter net earnings of $5.38 million, or 15 cents a share, up 39% from $3.88 million, or 10 cents a share, in the year-ago period. The apparel company said revenue in the quarter ended May 31 rose to $156.5 million from $153 million in the comparable period last year. Analysts polled by Thomson Financial were expecting, on average, a per-share profit of 12 cents on revenue of $153 million. Hartmax still expects fiscal 2007 earnings of 50 cents to 56 cents a share on revenue of $585 million to $600 million.
  • Intervoice (INTV) reported fiscal first-quarter net loss of $873,000, or 2 cents a share, versus a net loss $405,000, or a penny a share, in the year-ago period. Excluding items, the company posted a profit of 4 cents a share, versus breakeven results last year. The provider of voice automation and data management products said revenue in the three months ended May 31 rose to $47.7 million from $45.7 million in the comparable period last year. Analysts polled by Thomson Financial were expecting, on average, a per-share loss of 2 cents on revenue of $48 million.
  • LSI (LSI) said it will cut 900 jobs, or 13% of its non-production work force, across all of its operations to reduce operating costs. The computer chips and boards maker also said it entered a definitive agreement to sell its consumer products unit to Magnum Semiconductor Inc. for an undisclosed amount. The company said the moves will lower adjusted operating expenses by $255 million to $265 million in the third quarter and $275 million to $295 million in the fourth quarter. For the second quarter, the company cut its forecasts. It now expects a per-share loss of 52 cents to 43 cents, or between 3 cents and break-even adjusted, on revenue of $650 million to $670 million.
  • Paychex's (PAYX) fiscal fourth-quarter net income rose 12% to $137.2 million, or 36 cents a share, from $122.7 million, or 32 cents a share, a year earlier. Revenue for the period ended May 31 increased 11% to $487.3 million from $440.5 million, as the company recorded payroll service and human resource services revenue of $343.8 million and $106.7 million, respectively. On average, analysts polled by Thomson Financial expected earnings of 36 cents a share on revenue of $496 million. Additionally, Paychex said it recorded a $13 million expense for a licensing dispute related to its Rapid Payroll Inc.
  • Red Hat (RHT) reported a first-quarter profit of $16.2 million, or 8 cents a share, on revenue of $118.9 million, up from $13.2 million, or 7 cents a share, on $84 million in revenue during the same period a year ago. Excluding one-time items, Red Hat would have earned $33.7 million, or 16 cents a share. By that measure, Red Hat beat the estimates of analysts surveyed by Thomson Financial, who forecast a profit of 15 cents a share on $117 million in revenue. Red Hat also said its revenue from software subscriptions rose 44% from the year-ago quarter to $103 million.
  • Smart Modular Technologies (SMOD) reported fiscal third-quarter net income of $14.2 million, or 22 cents a share, versus $6.46 million, or 10 cents a share, a year earlier. The memory modules manufacturer said revenue for the quarter ended May 7 fell 1% to $186.5 million from $188.5 million in the comparable period last year. Analysts polled by Thomson Financial were expecting, on average, per-share earnings of 22 cents on revenue of $234.6 million. The company forecast fourth-quarter earnings of 23 cents to 24 cents a share on revenue of $200 million to $220 million.
  • Whiting Petroleum priced a public offering of 5 million shares at $40.50 each, and expects to receive net proceeds of to $193.9 million.


Market Update:

  • Asian trading closed mostly higher with the Hang Seng +1.07%, Nikkei +0.46%, Sensex +0.51%, Taiwan +0.55% and Shanghai -4.03%.
  • A quick look across the pond finds the CAC +0.74%, DAX +1.09%, FTSE +0.54%, ATX +1.01%, Swiss Mkt. +1.00% and Stockholm +0.79%.
  • Crude oil is trading higher +0.45 to 69.42 and gold is also up +3.5 to 648.3 this morning.
No positions in stocks mentioned.

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