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Spotlight Stocks: Costco, GE, Vodafone, Yahoo


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


Stocks to watch for Wednesday, July 23, 2008:

  • Costco (COST) projected its fiscal 4Q and full-year profits will come in below Wall Street expectations, citing rising costs of energy. Analysts are expecting 4Q profit of $1 per share, while the company said it will come in "well below" that number. Analysts expect full-year earnings of $2.99 per share, according to Thomson Financial. The company also said its board expanded its buyback plan by up to $1 billion, which is in addition to the $5.8 billion already authorized, and it declared a quarterly cash dividend of 16 cents, payable on Aug. 22 to shareholders of record on Aug. 8, reported the Associated Press.

  • General Electric (GE) agreed to an $8 billion commercial-finance partnership with Mubadala Development Co., an investment arm of Abu Dhabi's government, said The Wall Street Journal. The purpose of the venture is to expand into Middle East and African markets, while Mubadala Development also sees this as a step in taking a large stake in the company. Each company will commit $4 billion in equity to the venture, with additional money being borrowed later.

  • Pepsico (PEP) reported quarterly profit of $1.7 billion, or $1.05 a share, up 9% from $1.56 billion, or 94 cents a share a year ago. Revenue was up 14% to $10.95 billion from $9.61 billion last year. The company beat analyst expectations of $1.02 per share on revenue of $10.55 billion. It also reaffirmed its full-year profit estimate of $3.72 a share.

  • Vodafone (VOD) surprised shareholders by announcing a $2 billion stock buyback program after shares fell 14% yesterday. The drop came after the company said its full-year revenue would be at the bottom of a previously stated forecast range, reported Reuters.

  • Whirlpool (WHR) reported 2Q profit of $117 million, or $1.53 a share, down 27% from $161 million, or $2 a share a year ago citing higher material and oil-related costs and a slowdown in US demand. Revenue grew 5% to $5.1 billion from $4.9 billion a year ago. The company bested Wall Street expectations of $1.37 per share on sales of $5.03 billion.

  • Yahoo (YHOO) reported 2Q earnings of $131 million, or 9 cents a share, down 18% from $161 million, or 11 cents a share a year ago. Analysts were expecting profits of 9 cents a share. CEO Jerry Yang said "This company is doing just fine in a tough economy and a tough environment." Shares rose after the report as the company did not change its outlook for 2008.

Market Recap

  • Asian trading closed with the Hang Seng +2.69%, Nikkei +0.97%, Taiwan +3.46%, Sensex +5.94% and Shanghai -0.29%.

  • A quick check of Europe finds the CAC +1.64%, DAX +1.07%, FTSE +1.28%, ATX +1.77%, Swiss Market +1.43% and Stockholm +1.90%.

  • In commodities, crude oil is trading down -2.12 to 126.30 and gold is also being hit -16.0 to 932.5 this morning.
No positions in stocks mentioned.

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