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Spotlight Stocks: Ambac, Cisco, Freddie Mac, Whole Foods

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Wednesday's top stories and stocks with potential to move.

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Stocks to watch for Wednesday, August 6, 2008:

  • Ambac Financial (ABK) reported 2Q net income of $823.1 million, or $2.80 a share, rising from $173 million, or $1.67 a share a year ago citing market-to-market gains on credit derivatives. The company posted revenue of $1.33 billion, up from $412.6 million a year ago. Yet the company reported an operating loss of $1.53 a share after adjusting for $961.6 million of gains from credit derivatives as well as an estimated $1.06 billion of impairment losses due to credit deterioration, reported MarketWatch.

  • Cisco (CSCO) posted fiscal 4Q profit of $2 billion, or 33 cents a share, up from $1.9 billion, or 31 cents a share a year ago. Earnings excluding items was 40 cents per share. Revenue was up year over year by 9.9% to $10.4 billion, beating analyst expectations of 10.3 billion. The company expects the weak economic environment to be relatively short term.

  • Freddie Mac (FRE), amid a spiraling mortgage market, reported a 2Q loss including preferred dividends of $821 million, or $1.63 a share, down from a profit of $729 million, or 96 cents a share a year ago. Revenue dipped to $1.69 billion from $2.34 billion. Analysts had expected a loss of 53 cents a share on $2.18 billion in revenue. FRE had set aside $2.5 billion for credit losses in the quarter. It also plans to cut its dividend to 5 cents or less, down from 25 cents a share.

  • Whole Foods (WFMI) reported fiscal 3Q net income of $33.9 million, or 24 cents a share, down 31% from $49.1 million, or 35 cents a share a year ago. Revenue rose 22% to $1.84 billion. Analysts had been expecting earnings of 31 cents a share and revenue of $1.9 billion. The results sent shares tumbling 17% in after hours trading. The company also said that it will cut back on planned store openings and has suspended its quarterly dividend to shareholders, reported The Wall Street Journal.

  • Xstrata, the Anglo-Swiss mining company, will reportedly make a $10 billion cash offer for platinum producer Lonmin PLC, whose shares rose 47.3% on the London Stock Exchange. The $33 a share offer represents a 42% premium over Tuesday's closing price. The Associated Press said expectations of growing demand in China for platinum led prices to surge from about $1,225 per troy ounce a year ago to $2,250 per ounce in February, yet have since fallen to $1,600.


Market Recap

  • Asian trading closed with the Nikkei +2.63%, Sensex +0.75%, Taiwan +3.12% and Shanghai +1.06%.

  • Quickly glancing towards Europe, we see the CAC +0.52%, DAX -0.17%, FTSE -0.06%, ATX +1.29%, Swiss Market -0.05% and Stockholm +1.06%.

  • In commodities, crude oil is trading up +0.27 to 119.44 and gold is also higher +4.3 to 882.9 this morning.
No positions in stocks mentioned.

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