Ticker Shock: Walgreen's Tightens Belt; Toyota Hits Brakes
Monday's top stories and stocks with potential to move.
Was it me, or did the weekend go way too fast?
Anyway, Asian stocks came in mixed. The Hang Seng was off more than 3% while the Nikkei was up more then 1%. European stocks are slightly lower. And here in the US, we're currently trading lower.
The well-known drugstore chain disseminated its first-quarter numbers before the bell this morning.
Here's the scoop: The company put up $0.41 per share in the period ended November 30th. That was a nickel shy of what it earned in the comparable period last year, and a nickel shy of what analysts were expecting, as well. Meanwhile, the company's revenue line came in at about $14.95 billion, which was a bit disappointing because the Street was apparently expecting just over $15 billion.
The good news is that it isn't just sitting there twiddling its thumbs; it plans to tighten the old belt a little bit. Per the release:
"The company is also announcing plans to further reduce its organic store openings to a rate between 4 and 4.5% in 2010 and between 2.5 and 3% in 2011. This is a further reduction from plans announced last July to slow organic store openings to 5% by 2011. "
"The new target growth rate will reduce capital expenditures through 2011 by approximately an additional $500 million beyond the $500 million capital expenditure savings announced last July."
With all of that in mind, it looks like the stock is gonna get a smackdown in early trading today. However, I continue to think the company has solid longer term prospects.
Will this turn out to be an opportunity to pick up the shares on the cheap?
Manpowerless? The Wisconsin-based staffing company withdrew its fourth-quarter guidance prior to the opening bell. According to the release:
"In connection with its third-quarter earnings release on October 21, 2008, the Company estimated a fourth quarter revenue decline of 9 to 11%, or 5 to 7% in constant currency. During the two months ended November 30, 2008, the Company experienced a revenue decline of 20%, or 11% in constant currency, compared to the prior year period. On an average daily basis revenues declined 17%, or 8% in constant currency."
Not exactly encouraging, right?
Long story short, I think the shares take a pummeling in today's session and rightfully so. Can the company right its ship? I think so, but I'm not plunking down my dough on the shares absent a much clearer outlook for what lies ahead in 2009 and beyond.
That being said, a quick gander at the insider-activity data located on Yahoo Finance reveals a purchase of 10,000 shares not all that long ago by its CFO. I can't speak for him, obviously, but I doubt he would have dropped that kind of money unless he thought he was ultimately going to put some jingle in his jeans.
Again, for now, I'm punting - but I'll keep my eyes peeled and revisit the story again in the New Year.
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