Spotlight Stocks: Anheuser-Busch, Citigroup, Lennar, Sony
Thursday's top stories and stocks with potential to move.
Stocks to watch for Thursday, June 26, 2008:
- Anheuser-Busch (BUD) plans to reject the $46.35 billion unsolicited acquisition offer by InBev as early as this week, reported The Wall Street Journal. The brewer says that the bid undervalues BUD and also said it will have its own strategic plan soon. The company plans to increase the level of cost savings from its existing cost-cutting plan to about $1 billion over the next four years from about $500 million, according to one person familiar with the subject.
- Citigroup (C) is expected to take a loss for the second quarter including possible write-downs of $9 billion, plus more capital raising, according to Goldman Sachs analyst William Tanona. He said he sees a loss of 75 cents a share, up from prior forecasts of 25 cents a share.
- Lennar (LEN) reported a second quarter loss of $120.9 million, or 76 cents a share, narrowing from a loss of $244.2 million, or $1.55 a share a year ago. The latest results include charges of 60 cents per share to write off land values and deposits. The homebuilder's revenue fell 61% to $1.13 billion from $2.88 billion. Deliveries of homes fell 60 percent to 3,830, new orders slipped 45 percent to 4,396 and the cancellation rate was 22 percent. The value of Lennar's backlog sank 56 percent to $1.3 billion.
- Nike (NKE) reported its fiscal 4Q net income rose to $490.5 million, or 98 cents a share, up 14% from nearly $438 million, or 86 cents a share in the same quarter last year, exceeding analyst expectations. However, the stock fell 4.5% yesterday after hours due to concerns of its growth potential in a weak US consumer market. Nike's revenue for the quarter ending May 31 grew 16 percent to $5.1 billion, up from $4.4 billion from the same quarter last year.
- Oracle (ORCL) reported fiscal 4Q earnings of $2.04 billion, or 39 cents per share, up 27% from $1.6 billion or 31 cents per share at the same time last year. Revenue totaled $7.24 billion, a 24 percent gain from last year's $5.83 billion in the same period and nearly $400 million above the average analyst projections, reported the Associated Press. Despite the impressive beat, the company's shares fell yesterday as the company lowered the forecast for its 1Q citing negative investor sentiment, a slowing economy and traditionally slow summer months.
- Research in Motion (RIMM) reported fiscal 1Q earnings of $482.5 million, or 84 cents per share, nearly doubling from $223.2 million, or 39 cents per share a year ago. Revenue jumped to $2.24 billion from $1.08 billion a year earlier. The Associated Press reported the company said it had a net gain of 2.3 million BlackBerry subscribers in the quarter, 6 percent higher than in the fourth quarter, to bring the total to subscriber base to more than 16 million. Yet, the company lowered its guidance for the 2Q to be in the range of $2.55 billion to $2.65 billion, with a profit of 84 cents to 89 cents per share. Analysts had been expecting earnings of 90 cents per share on sales of $2.44 billion.
- Sony (SNE) presented its strategy for the fiscal year ending March 2009, which will focus on regaining its TV supremacy, getting back to profitability in video games and also introducing a new movie service for the Internet. CEO Howard Stringer said Sony must now come up with better software and services in its products that match its longtime reputation for hardware gadgets and entertainment content.
Asian trading closed with the Hang Seng -0.79%, Nikkei -0.05%, Sensex +1.42%, Taiwan -0.55% and Shanghai -0.11%.
A quick check of Europe finds the CAC -1.03%, DAX -1.22%, FTSE -1.21%, ATX -2.05%, Swiss Mkt. -1.11% and Stockholm -1.72%.
In commodities, crude oil is trading higher +0.52 to 135.07 while gold is heading lower -9.2 to 880.0 this morning.
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