JANUARY 24, 2012, 1:46 P.M. ET
Article from The Wall Street Journal
U.S. stocks traded lower Tuesday as the Dow Jones Industrial Average recently fell 57 points to 12651, the Standard & Poor's 500-stock index declined 4.6 points to 1311, and the Nasdaq Composite index slipped 3.3 points to 2781. Among the companies whose shares are actively trading in the session are Zions Bancorporation (ZION), CSX Corp. (CSX) and Coach Inc. (COH).
Zions ($17.07, -$1.48, -7.98%) swung to a fourth-quarter profit as the Utah regional bank's continually improving credit quality erased any negative effects from loan-loss provision. The latest period marks a full year of profitability for the company after two and a half years of losses, but shares were down as the bottom line fell short of expectations. Stifel Nicolaus downgraded Zions to hold and pulled its $23 price target while cutting earnings targets through 2013 on reduced revenue expectations.
CSX Corp.'s ($21.92, -$0.78, -3.42%) volume slid in the fourth quarter despite the railroad company posting higher revenue and a 6.3% rise in earnings. The U.S. transportation sector is broadly expected to post improved results for the fourth quarter, coming off a better-than-expected, though subdued, peak shipping season.
Coach's ($68.62, +$4.38, +6.82%) fiscal second-quarter earnings rose 15% as strong North America sales helped offset flat indirect sales. The luxury handbag, accessories and leather-goods maker has seen its profit grow for over two years on the strength of its North American direct-to-consumer businesses and global expansion.
TCF Financial Corp.'s (TCB, $10.45, -$1.17, -10.05%) fourth-quarter revenue and earnings both missed analysts' consensus view as credit quality remains a challenge for the regional bank.
Polycom Inc.'s (PLCM, $21.79, +$3.37, +18.30%) fourth-quarter earnings rose a greater-than-expected 50% as the videoconferencing company's emerging-market sales continued to outperform its American business. Revenue also topped expectations.
Other Stocks in Focus:
Acura Pharmaceuticals Inc. (ACUR, $4.05, +$0.33, +8.87%) said the new formulation of Pfizer Inc.'s (PFE, $21.62, -$0.09, -0.41%) pain drug Oxecta that uses its tamper-resistant technology is now available for sale.
UBS raised its price target for Agilent Technologies Inc. (A, $42.79, +$1.79, +4.37%) to $47 from $43, noting that the maker of testing and measurement equipment's recent shareholder-friendly dividend initiation justifies a higher valuation.
Air Products & Chemicals Inc.'s (APD, $87.20, -$2.72, -3.02%) fiscal first-quarter earnings fell 7.6% as the industrial-gas company saw continued weakness in its equipment and energy segment and slower growth in its three other major segments. The company forecast second-quarter earnings below analysts' estimates, and said it expects slow economic activity in the period, but predicted Asia and North America growth would accelerate in the second half of the year.
Albemarle Corp. (ALB, $62.53, +$2.44, +4.06%) reported record fourth-quarter and full-year results, beating analysts' estimates, as each of the specialty chemicals maker's business segments recorded the highest revenue and profitability in the company's history.
Ashland Inc.'s (ASH, $63.41, +$2.87, +4.74%) fiscal first-quarter profit slumped 38% due to a pair of heavy charges, but the chemical company's core earnings gained with help from a key acquisition.
Barrick Gold Corp. (ABX, $45.84, -$1.11, -2.36%) is exposed to the risk of delays and cost escalations at three major new mines under construction, RBC Capital says in downgrading the company to sector perform. Though the new mines in the Dominican Republic, Chile and Saudi Arabia will help the company in its strategy to grow free cash flow and dividends, J.P. Morgan says it's lowering its rating due to the risk of setbacks at the new projects over the next 12 months, as well as the company's high relative valuation. Barrick shares are down amid a broader pullback in precious metals.
Shares of BioLineRx Ltd. (BLRX, $6.38, +$3.09, +93.92%) surged after the Israel-based company licensed Hepatitis C treatment BL-8020 from Genoscience, a French biotechnology company, giving it entry into the field of Hepatitis C therapeutics.
Bon-Ton Stores Inc. (BONT, $3.92, +$0.69, +21.31%) has appointed Lord & Taylor LLC Chief Executive Brendan L. Hoffman as the department-store operator's new president and chief executive, effective Feb. 7. The appointment comes as Hudson's Bay Co., a Canadian department-store operator, said late Monday it had completed its acquisition of Lord & Taylor.
Brinker International Inc.'s (EAT, $25.65, -$1.96, -7.10%) disappointing fiscal second-quarter same-store sales have put into question whether momentum at its Chili's Grill & Bar chain can live up to the company's continued confidence in sales expectations for the full year. Earnings fell 4.8% as charges masked the casual-dining company's improved revenue and margins.
Cathay General Bancorp's (CATY, $15.92, -$0.45, -2.75%) fourth-quarter earnings came in slightly above analysts' expectations, but revenue fell short of the Street's consensus view.
Natural-gas producers received a boost Monday after Chesapeake Energy Corp. (CHK, $22.10, -$0.19, -0.83%) said it will slash drilling activity and curtail production this year in response to low natural gas prices. But a spokesman for Cabot Oil & Gas Corp. (COG, $63.48, -$1.60, -2.46%) said it doesn't have plans to curtail gas-drilling, which it says is profitable thanks largely to its contracts to sell gas at above-market prices, The Wall Street Journal reported.
Stronger-than-expected revenue growth at beleaguered wireless-network operator Clearwire Corp. (CLWR, $1.82, +$0.07, +3.70%) is giving investors something to cheer about amid an 11% growth in wholesale subscribership in the fourth-quarter alone. Revenue and subscribership more than doubled from a year ago.
Cooper Industries PLC's (CBE, $60.01, +$2.28, +3.95%) fourth-quarter earnings rose 13% as the electrical products maker's revenue improved with a boost from acquisitions and its tools joint venture. Cooper, which makes electrical products such as lighting fixtures, fire-detection systems and fuses, benefited last year from an industrial rebound, as well as growth in utility markets and demand for energy-efficient technologies even though the construction market has remained soft. However, like many manufacturers, Cooper has faced margin pressures from raw materials costs.
Johnson & Johnson's (JNJ, $65.05, +$0.05, +0.07%) fourth-quarter results have "mixed implications" for fellow medical-product companies, says Mizuho. The pharmaceutical and health-care products giant reported improved growth in its endosurgery business but a slowdown in orthopedics, which Mizuho thinks will be viewed as positive for suppliers like C.R. Bard Inc. (BCR, $92.26, +$2.23, +2.48%) and Covidien PLC (COV, $48.82, +$0.59, +1.22%) and negative for spinal-implant purveyors such as NuVasive Inc. (NUVA, $13.67, -$0.34, -2.43%).
Crane Co. (CR, $47.87, -$2.16, -4.32%) swung to a loss in the fourth quarter as the diversified manufacturer extended its provision for asbestos and environment liabilities, but its adjusted profit rose.
Specialty pharmaceutical company Depomed Inc. (DEPO, $6.09, -$0.23, -3.64%) said it received notice from the U.S. unit of Actavis Group that the generic drug maker has filed for Food and Drug Administration approval to market its version of Gralise.
EMC Corp. (EMC, $24.83, +$1.39, +5.93%) eased fears of slowing business spending on technology by reporting its best-ever fourth quarter and issuing an optimistic view for 2012, saying demand for its storage products remains high.
InterDigital Inc. (IDCC, $36.15, -$8.30, -18.67%) said it will abandon a strategic review it began in July and instead continue as a standalone company. InterDigital issued slightly better-than-expected preliminary fourth-quarter results.
J&J Snack Foods Corp. (JJSF, $49.18, -$3.01, -5.77%) posted fiscal first-quarter earnings that came in well beneath analysts' estimates as weak volume, inability to offset ingredient and packaging cost increases and other increases in operating costs weighed on the results.
Jarden Corp. (JAH, $33.19, +$2.48, +8.08%) forecast fourth-quarter revenue above Wall Street's estimates and unveiled plans to buy back $500 million of stock through a modified Dutch auction tender offer. The diverse consumer-products company, whose brands include Coleman, Crock-Pot and First Alert, estimates fourth-quarter and full-year revenue to beat analysts' expectations.
Kansas City Southern's (KSU, $67.64, -$4.68, -6.47%) fourth-quarter earnings rose 75% as the regional railroad operator reported double-digit revenue growth in its automotive, intermodal and coal businesses. However, revenue missed analysts' expectations. For the broader U.S. transportation industry, many companies were expected to post higher earnings for the fourth quarter.
Citigroup's bullish outlook on Lam Research Corp. (LRCX, $43.00, +$0.86, +2.04%) extrapolates a buy rating for Novellus Systems Inc. (NVLS, $47.55, +$1.03, +2.20%). The firm, which also raised its price target to $60 from $44, said it sees a high probability that the Lam Research-Novellus stock merger will go through sometime next mid-year. The firm also expects the two companies to trade in sync.
McDonald's Corp.'s (MCD, $98.67, -$2.28, -2.26%) fourth-quarter earnings rose 11% as the fast-food company's new product offerings continued to drive same-store sales and revenue growth. However, its shares recently fell as investors questioned whether there is much upside to the stock, given its significant outperformance in 2011 when McDonald's was the strongest component of the Dow Jones Industrial Average.
MGIC Investment Corp.'s (MTG, $4.16, +$0.10, +2.46%) fourth-quarter loss narrowed as the private-mortgage insurer posted bigger gains and increased revenue. The period marked the sixth straight quarterly loss for MGIC, the largest mortgage insurer for both Fannie Mae (FNMA, $0.23, -$0.01, -2.56%) and Freddie Mac (FMCC, $0.24, -$0.01, -3.04%).
Shares of Nokia Corp. (NOK, $5.33, -$0.40, -6.96%) fell after comments were made by Texas Instruments Inc. (TXN, $32.70, -$0.49, -1.48%) and STMicroelectronics N.V. (STM, $6.87, -$0.35, -4.85%) (STM.MI), says FIM analyst Michael Schroder. The chipmakers said their weakened business with Nokia indicates that Symbian-based feature phones are "probably losing a lot of momentum right now," says Schroder. "With Nokia's Windows Phones only coming up gradually, not compensating all the losses in Symbian handsets, it looks quite bad."
OSI Systems Inc.'s (OSIS, $54.95, +$1.84, +3.46%) fiscal second-quarter earnings rose 33% as the specialized-electronics maker reported revenue growth, particularly at its security business. The company, whose products include full-body scanners and X-ray screening machines at airports, also raised its EPS estimate.
Packaging Corp. of America's (PKG, $28.25, +$1.61, +6.04%) fourth-quarter earnings fell 28% as higher costs offset improved revenue. But shares still climbed as the results bettered analysts' estimates.
Peabody Energy Corp.'s (BTU, $36.23, -$1.28, -3.41%) fourth-quarter earnings improved 5.9% as global sales climbed, helped by U.S. mining revenue. But shares fell as results missed market expectations and the company was saddled with acquisition costs. Brean Murray Carret says it's the coal producer's downbeat outlook for 2012 that's really taking a bite out of the stock. U.S. coal producers had seen their stocks plummet recently due to rising costs, increased environmental oversight and stiffer competition from cleaner-burning and sometimes cheaper natural gas. Shares of Alpha Natural Resources Inc. (ANR, $19.84, -$0.92, -4.43%), Arch Coal Inc. (ACI, $13.65, -$0.47, -3.33%) and L&L Energy Inc. (LLEN, $2.68, -$0.07, -2.55%) also declined.
Goldman Sachs slashes its 2012 earnings projections for several fertilizer companies, including Potash Corp. (POT, $44.33, -$1.23, -2.70%), CF Industries Holdings Inc. (CF, $170.68, -$2.80, -1.61%) and Agrium Inc. (AGU, $78.67, -$1.83, -2.27%), noting that a "more tepid international demand backdrop sets a more subdued tone for fertilizer prices once the U.S. spring is behind us." Potash was also cut to neutral from overweight by J.P. Morgan, which says that high global potash inventories, slowing markets in North America and Europe, and push-back on price increases from Asia point to diminished strength for the key fertilizer ingredient. Shares of Intrepid Potash Inc. (IPI, $24.52, -$0.61, -2.43%) also fell.
Investment firm PennantPark Investment Corp.'s (PNNT, $10.46, -$0.32, -2.97%) public offering of 9 million shares priced at $10.55, a 2.1% discount to Monday's close of $10.78.
Activist hedge fund Starboard Value LP said it took a large stake in Progress Software Corp. (PRGS, $21.49, +$1.06, +5.19%) and contacted its chief executive in an effort to boost the value of the business-software company's stock.
Quest Diagnostics Inc.'s (DGX, $59.29, +$2.79, +4.93%) fourth-quarter earnings rose 14% as the company saw higher testing revenue and improved margins, while unveiling a $1 billion increase to its stock buyback program. Results easily beat expectations, although the company predicted downbeat adjusted per-share earnings on revenue growth for the new year.
Rayonier Inc. REIT's (RYN, $46.00, -$1.10, -2.34%) fourth-quarter earnings slipped 5.1% as a one-time boost a year earlier masked the timber real-estate investment trust's better-than-expected sales growth.
Regions Financial Corp. (RF, $5.11, +$0.19, +3.76%) swung to a fourth-quarter loss as the regional lender booked a hefty write-down following a long-planned deal to sell its brokerage unit. But adjusted earnings beat Wall Street's consensus view.
Research In Motion Ltd. (RIMM, $15.12, -$0.45, -2.86%) (RIM.T) needs "to step up their game a bit" under new CEO Thorsten Heins, to catch up to other handset makers, said Verizon Communications Inc. (VZ, $37.73, -$0.67, -1.74%) CFO Fran Shammo. "They need to come out with more competitive devices," Shammo said, noting the successes of handsets from Apple Inc. (AAPL, $423.55, -$3.86, -0.90%) and those using Google Inc.'s (GOOG, $579.60, -$5.92, -1.01%) Android operating software.
Kaufman Bros. lowered its stock-investment rating on Rubicon Technology Inc. (RBCN, $12.02, -$1.19, -9.01%) to hold from buy with a $13 price target, down from $16, noting a lack of near-term catalysts. A slower-than-anticipated pick-up in end-market demand combined with pricing declines for sapphire wafers, fueled by overcapacity and softening demand, will likely result in lower earnings in 2012, the firm says.
Semtech Corp. (SMTC, $28.93, +$2.04, +7.59%) agreed to acquire Canada's Gennum Corp. for about C$500 million ($494 million) in cash, the latest bid by a chip maker to expand its portfolio of network-focused products.
J.P. Morgan said aggressive promotion of the iPhone by rivals AT&T Inc. (T, $29.98, -$0.42, -1.38%) and Verizon Wireless in the fourth quarter likely resulted in lower net postpaid additions at Sprint Nextel Corp. (S, $2.19, -$0.06, -2.67%) than the investment bank had projected. As such, it cuts its growth forecast and has turned bearish on 2012, now anticipating no postpaid subscriber growth.
SPX Corp. (SPW, $68.48, +$2.06, +3.10%) struck a deal to sell its service solutions business to German auto parts maker and engineering firm Robert Bosch GmbH for $1.15 billion in cash, part of continued reshaping of the diversified-industrial company. SPX's service solutions business manufactures and sells diagnostic and service tools, workshop equipment and software for the global automotive aftermarket.
Georgia lender Synovus Financial Corp. (SNV, $1.70, +$0.07, +4.29%) swung to a profit in the fourth quarter after sharply reduced funds held for risky loans helped the regional lender report its second straight quarter in the black.
Travelers Cos. (TRV, $58.48, -$1.81, -3.00%), one of the largest property-casualty companies in the U.S., said fourth-quarter net income fell 31% to $618 million on declining investment income and a smaller benefit from its insurance reserves.
VMware Inc.'s (VMW, $92.87, +$6.87, +7.99%) fourth-quarter earnings rose 67% as the software maker posted double-digit-percentage increases in services and license revenues as well as stronger margins. Adjusted earnings topped analysts' expectations.
Waters Corp.'s (WAT, $85.02, +$6.26, +7.95%) fourth-quarter earnings rose 8.3% as the laboratory-equipment maker continued its sales growth streak, but margins edged lower.
Higher average selling prices helped boost Western Digital Corp.'s (WDC, $36.96, +$2.25, +6.48%) second-quarter results, Morgan Stanley says. The firm notes pricing for hard-disk drives was up about 72% since the Thailand flooding, which lifted the company's gross margin despite higher manufacturing and component costs, and it also offset weaker units. But Morgan Stanley adds average selling prices will normalize earlier than expected.
Wilshire Bancorp Inc.'s (WIBC, $3.67, -$0.13, -3.42%) fourth-quarter earnings fell short of analysts' expectations as its effective tax rate rose.
-Edited by Ian Thomson and Maya Pope-Chappell; write to ian.thomson@dowjones.com and maya.pope-chappell@dowjones.com
Article from The Wall Street Journal