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Cisco (Nasdaq: CSCO)
Cisco earnings in line
But stock sinks as No. 1 maker of Internet gear reports sales just barely below forecasts.
November 9, 2004: 5:40 PM EST
NEW YORK (CNN/Money) - Cisco Systems Inc. reported higher earnings Tuesday that met Wall Street forecasts but sales came in just a shade short of expectations -- news that sent its stock skidding.
The San Jose-based company, the world's No. 1 maker of Internet gear, said first-quarter net income rose to $1.4 billion, or 21 cents a share, from $1.1 billion, or 15 cents a share, a year earlier.
Excluding one-time charges, Cisco's profits were also 21 cents a share, up from 17 cents a share in the year-ago quarter and in line with analysts' estimates.
And while sales rose 17 percent to just under $6 billion, that fell a tad shy of analysts' estimates of $6.02 billion.
"We were comfortable with first-quarter results," CEO John Chambers said on a conference call.
But Wall Street reacted negatively, and Cisco (Research) shares sank more than 2 percent in after-hours trading after falling 1 percent during the regular session.
Cisco also said it would expand its stock buyback program by $10 billion.
"On the face of the numbers, Cisco had a pretty good quarter -- not a blowout -- but it's all going to depend on the guidance," CIBC World Markets analyst Steve Kamman told Reuters before the call started.
Kamman added that he was not at all concerned about inventories at Cisco, which were up slightly, adding that they rose "for the right reasons."
That guidance wasn't exactly bullish, however.
Looking ahead, CFO Dennis Powell said during the conference call that revenues in the second-quarter would grow 1 to 3 percent from the first quarter and 12 to 14 percent from the year-ago quarter.
Analysts were forecasting year-over-year sales growth of 20 percent.
Cisco's earnings are considered a bellwether for the health of the tech sector as well as a key indicator of corporate sentiment, since its results depend on how aggressively companies are spending to upgrade technology.
Chambers reminded analysts during the call that Cisco's fortunes continue to be closely linked to the health of the global economy.
Gross domestic product growth in countries around the world "will continue to be the best indicator of what you should expect from Cisco," he said.
Cisco stock, down about 30 percent for the year, has been trading near its 52-week low as cautious corporate spending on information technology has dampened the outlook for Cisco's growth prospects.
Links referenced within this article
Cisco
http://money.cnn.com/quote/quote.html?s ... &symb=CSCO
Research
http://cnnfn.multexinvestor.com/Reports ... icker=CSCO
Find this article at:
http://money.cnn.com/2004/11/09/technol ... /index.htm
But stock sinks as No. 1 maker of Internet gear reports sales just barely below forecasts.
November 9, 2004: 5:40 PM EST
NEW YORK (CNN/Money) - Cisco Systems Inc. reported higher earnings Tuesday that met Wall Street forecasts but sales came in just a shade short of expectations -- news that sent its stock skidding.
The San Jose-based company, the world's No. 1 maker of Internet gear, said first-quarter net income rose to $1.4 billion, or 21 cents a share, from $1.1 billion, or 15 cents a share, a year earlier.
Excluding one-time charges, Cisco's profits were also 21 cents a share, up from 17 cents a share in the year-ago quarter and in line with analysts' estimates.
And while sales rose 17 percent to just under $6 billion, that fell a tad shy of analysts' estimates of $6.02 billion.
"We were comfortable with first-quarter results," CEO John Chambers said on a conference call.
But Wall Street reacted negatively, and Cisco (Research) shares sank more than 2 percent in after-hours trading after falling 1 percent during the regular session.
Cisco also said it would expand its stock buyback program by $10 billion.
"On the face of the numbers, Cisco had a pretty good quarter -- not a blowout -- but it's all going to depend on the guidance," CIBC World Markets analyst Steve Kamman told Reuters before the call started.
Kamman added that he was not at all concerned about inventories at Cisco, which were up slightly, adding that they rose "for the right reasons."
That guidance wasn't exactly bullish, however.
Looking ahead, CFO Dennis Powell said during the conference call that revenues in the second-quarter would grow 1 to 3 percent from the first quarter and 12 to 14 percent from the year-ago quarter.
Analysts were forecasting year-over-year sales growth of 20 percent.
Cisco's earnings are considered a bellwether for the health of the tech sector as well as a key indicator of corporate sentiment, since its results depend on how aggressively companies are spending to upgrade technology.
Chambers reminded analysts during the call that Cisco's fortunes continue to be closely linked to the health of the global economy.
Gross domestic product growth in countries around the world "will continue to be the best indicator of what you should expect from Cisco," he said.
Cisco stock, down about 30 percent for the year, has been trading near its 52-week low as cautious corporate spending on information technology has dampened the outlook for Cisco's growth prospects.
Links referenced within this article
Cisco
http://money.cnn.com/quote/quote.html?s ... &symb=CSCO
Research
http://cnnfn.multexinvestor.com/Reports ... icker=CSCO
Find this article at:
http://money.cnn.com/2004/11/09/technol ... /index.htm
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- Mensagens: 596
- Registado: 11/8/2004 10:39
Six Flags (NYSE: PKS)
Six Flag's 3Q Net Fell 60% as Revenue, Attendance Slid
November 8, 2004: 18:24 p.m. EST
NEW YORK -- Six Flags Inc.'s (PKS) third-quarter net income fell 60%, as cool weather hurt attendance at its amusement parks.
Six Flags late Monday reported net income of $56.4 million, or 53 cents a share, down from $140.2 million, or $1.32 a share, in the year-earlier period.
Revenue slid 3.3% to $527.4 million from $545.2 million, as attendance slid 4.8%, the company said.
Six Flags last month lowered its full-year outlook for adjusted earnings before interest, taxes, depreciation and amortization to $250 million to $255 million, blaming unseasonably cool and wet weather in several of its markets. In August, the company had forecasted full-year adjusted Ebitda of $265 million to $275 million.
Washington Redskins owner Daniel Snyder has been accumulating shares of Six Flags since mid-August. In filings with the Securities and Exchange Commission, Mr. Snyder has said he hoped to "influence management" to better maximize the company's value. Mr. Snyder said he may encourage Six Flags to explore a possible merger, sale of its assets, consolidation, business combination or a recapitalization or refinancing.
In addition, Cascade Investment LLC, the investment vehicle of Microsoft Corp. (MSFT) Chairman Bill Gates, has said it intends to discuss with Six Flag's management or board ways to improve performance.
Six Flags said Monday it has a "comprehensive plan in place to deliver meaningfully improved performance in 2005 and beyond."
It also said it secured a modification to the financial covenants in its credit agreement.
Six Flags reported results after the close of trading. As of 4 p.m. EST in New York Stock Exchange composite trading, its shares were down two cents at $4.98.
-Diana Rosenberg; Dow Jones Newswires; 609-520-7817
Dow Jones Newswires 11-08-04 1824ET Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved.
November 8, 2004: 18:24 p.m. EST
NEW YORK -- Six Flags Inc.'s (PKS) third-quarter net income fell 60%, as cool weather hurt attendance at its amusement parks.
Six Flags late Monday reported net income of $56.4 million, or 53 cents a share, down from $140.2 million, or $1.32 a share, in the year-earlier period.
Revenue slid 3.3% to $527.4 million from $545.2 million, as attendance slid 4.8%, the company said.
Six Flags last month lowered its full-year outlook for adjusted earnings before interest, taxes, depreciation and amortization to $250 million to $255 million, blaming unseasonably cool and wet weather in several of its markets. In August, the company had forecasted full-year adjusted Ebitda of $265 million to $275 million.
Washington Redskins owner Daniel Snyder has been accumulating shares of Six Flags since mid-August. In filings with the Securities and Exchange Commission, Mr. Snyder has said he hoped to "influence management" to better maximize the company's value. Mr. Snyder said he may encourage Six Flags to explore a possible merger, sale of its assets, consolidation, business combination or a recapitalization or refinancing.
In addition, Cascade Investment LLC, the investment vehicle of Microsoft Corp. (MSFT) Chairman Bill Gates, has said it intends to discuss with Six Flag's management or board ways to improve performance.
Six Flags said Monday it has a "comprehensive plan in place to deliver meaningfully improved performance in 2005 and beyond."
It also said it secured a modification to the financial covenants in its credit agreement.
Six Flags reported results after the close of trading. As of 4 p.m. EST in New York Stock Exchange composite trading, its shares were down two cents at $4.98.
-Diana Rosenberg; Dow Jones Newswires; 609-520-7817
Dow Jones Newswires 11-08-04 1824ET Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved.
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- Mensagens: 596
- Registado: 11/8/2004 10:39
Cisco, FedEx, Sun Microsystems
By CBS MarketWatch
Last Update: 3:28 PM ET Nov. 7, 2004
Big names headline a light week for earnings reports.
Technology bellwether Cisco Systems (CSCO: news, chart, profile) will report on Tuesday, as will insurer Marsh & McLennan (MMC: news, chart, profile), May Department Stores (MAY: news, chart, profile) and Abercrombie & Fitch (ANF: news, chart, profile). Wednesday's reports are led by Federated Department Stores (FD: news, chart, profile) and Starbucks Corp. (SBUX: news, chart, profile). Dell (DELL: news, chart, profile), Target Corp. (TGT: news, chart, profile) and Kohl's Corp. (KSS: news, chart, profile) are on tap Thursday.
See latest Earnings Outlooks:
Abbott (ABT: news, chart, profile), a drug developer, said late Friday it has received U.S. Food and Drug Administration approval to market a new formulation of its TriCor tablets to treat unusual levels of cholesterol and triglycerides in the blood.. The new tablets can be taken with or without food. Taking the previous version of TriCor with food as opposed to without it could result in an approximate 35 percent difference in the body's absorption of the medicine, the drugmaker said.
AirNet Systems (ANS: news, chart, profile), an air cargo carrier, said late Friday it will take a third-quarter noncash impairment charge of $47 million, or $3.07 a share, because changes in the banking industry are affecting its business. The company, which transports canceled checks and other bank documents, said the start of the Check 21 Act will reduce demand from its banking clients. Check 21 allows banks the option to convert checks into electronic images during the last half of processing and discard the original. "It is clear from market data and other disclosures by the Federal Reserve that canceled check volume declines are accelerating. As a result of these factors, we are planning for a significant decrease in canceled check volume and related bank services revenues beginning in 2006 or 2007," said Airnet CEO Joe Biggerstaff.
Altria Group (MO: news, chart, profile), the tobacco and food giant that said Thursday it hopes to split into several parts, has a much higher share value but is hard to evaluate because of its legal challenges, says Barron's. Shares gained about 8 percent Thursday past $54, yet Barron's notes several analysts who say the total value of its Kraft and Philip Morris holdings could range from $70 to $83 per share. "The only question is who owns the company: shareholders or litigants or taxing authorities," Tom Russo of Gardner Russo & Gardner tells Barron's.
American Electric Power (AEP: news, chart, profile), a Midwest electric utility holding company, said late Friday that it completed the purchase of natural gas pipelines, a reservoir and other assets from Enron (ENRNQ: news, chart, profile) for $115 million. AEP added that the assets were part of a 2001 lease accord that has been mired in bankruptcy court when Enron filed for Chapter 11 status shortly after its accord with AEP. A federal suit by AEP will continue against Bank of America (BAC: news, chart, profile) over what AEP said is the bank's attempt to claim 55 billion cubic feet of natural gas in the transaction's reservoir.
Arch Wireless (AWIN: news, chart, profile) said late Friday that a Justice Department staff review recommended approving the company's merger with Metrocell Holdings (MTOH: news, chart, profile). The merger is still subject to approval by the Federal Communications Commission and the shareholders of both companies. Upon completion of the merger, the company will be called USA Mobility. Arch also said that in connection with the deal, its CEO C. Edward Baker, COO Lyndon Daniels and CFO J. Roy Pottle have left the company.
Beverly Enterprises (BEV: news, chart, profile), a nursing-home operator, is seen posting a third-quarter profit Monday of 16 cents a share.
CNA Financial (CNA: news, chart, profile), an insurance holding company, said late Friday it has named D. Craig Mense as chief financial officer as of Nov. 29. The insurer said Mense will succeed Robert Deutsch. The company said in April that Deutsch planned to step down when a replacement was found. Mense previously was the president and chief executive of St. Paul Travelers' (STA: news, chart, profile) global run-off operations, overseeing discontinued businesses.
Boeing (BA: news, chart, profile), the aerospace giant, was ordered Friday to pay $3.6 million in punitive damages and compensatory costs by a jury in Georgia, according to the Atlanta Journal-Constitution. See full story.
Chalone Wine Group (CHLN: news, chart, profile) late Friday reported a third-quarter loss of $272,000, or 2 cents a share. Last year, it earned $379 million, or 3 cents a share. Sales slipped to $16.5 million from $16.9 million a year ago. The company said it would have reported a profit of $725,000, but it spent $939,000 to evaluate an acquisition proposal by Domaines Barons de Rothschild. Chalone agreed to the proposal on Oct. 30.
Coeur D'Alene (CDE: news, chart, profile), a silver and gold miner, is expected Monday to report earnings of 2 cents a share for the third quarter.
Conseco (CNO: news, chart, profile), an insurer that took a big stake in mobile-home loans, is expected Monday to report a third quarter profit of 34 cents a share.
Coors (RKY: news, chart, profile), the beermaker that is merging with Canada's Molson, could see shares rise from the present $70 level if the malted marriage achieves expected savings, says Barron's. One analyst says Coors could rise to $80, back where it stood before the July merger announcement. A messed-up merger could make the combined company a takeover target, says Barron's.
CPI Corp. (CPY: news, chart, profile), a portrait photo chain that has operations in Sears stores, said late Friday it plans to take a pretax, noncash charge of about $1.3 million to $1.6 million in the third quarter to upgrade equipment and increase marketing efforts. The company said sales in the first half of 2004 were down about 12 percent, and sales through the first 14 weeks of the third quarter were down about 4 percent compared with last year. CPI's board has approved a buyback of up to 1 million shares through a Dutch auction tender offer. The company expects the tender offer price for the shares to range from $11 to $14 a share. CPI expects the tender offer to start in the next week.
Emeritus Assisted Living (ESC: news, chart, profile), which provides housing and medical aid for seniors, said late Friday that it will restate results for 2003 and 2004. Net income will decline $470,000 for 2003, $310,000 in the first quarter of 2004 and $10,000 in the second quarter. The changes relate to accounting for the 2003 sale and leaseback of four properties with a real-estate investment trust.
FedEx Corp. (FDX: news, chart, profile), the package shipping giant, said late Friday that it will raise its shipping rates 2.6 percent for 2005. The rate increase includes a 4.6 percent hike in its package and freight shipment costs, and a 2 percent decrease in its fuel surcharge. The rate increase will take effect Jan. 3, 2005. See full story.
First United Corp., (FUNC: news, chart, profile), a bank holding company based in Maryland, reported late Friday that third-quarter earnings fell 50 percent to $1.1 million, or 18 cents a share, from $2.2 million, or 36 cents a share, a year ago. Net interest income for the quarter was $9 million vs. $8.8 million a year earlier.
GenCorp (GY: news, chart, profile), an aerospace manufacturer, had its credit rating downgraded late Friday by Moody's, affecting about $704 million in debt securities. The rating agency said GenCorp would have a difficult time servicing its debt based on earnings and cash flow from its Aerojet division and would have to sell parts of its real-estate portfolio to cut debt significantly.
Great Lakes Chemical (GLK: news, chart, profile), which makes specialty chemicals for such uses as water treatment and flame retardants, said late Friday that Mark P. Bulriss resigned as chairman and chief executive. Nigel Andrews was elected chairman by the board and John Gallagher III was named acting CEO. Jeffrey Potrzebowski was named acting chief financial officer.
Hubbell Inc. (HUBA: news, chart, profile) (HUBB: news, chart, profile), an electrical manufacturer, late Friday named Gregory Covino as interim chief financial officer. He has been serving as corporate controller and chief accounting officer. The company said the move comes after a division of the U.S. Securities and Exchange Commission recommended a civil injunction against Hubbell CFO William Tolley. Hubbell said the SEC probe is not connected to Tolley's work at Hubbell. It said the agency is looking into alleged federal securities laws violations by Tolley at his prior workplace. Hubbell said Tolley previously was assistant controller at Otis Elevator Co., a unit of United Technologies Corp. (UTX: news, chart, profile).
Innovex (INVX: news, chart, profile), which makes connectors used in computers, is seen posting a fourth-quarter loss Monday of 9 cents a share.
Level 3 Communications (LVLT: news, chart, profile), operator of a data transmission network, said late Friday that it has ended a deal to lease a fiber-optic network to McLeodUSA (MCLD: news, chart, profile). Level 3 will give McLeodUSA a cash payment and other consideration, in exchange for McLeodUSA transferring the fiber back to Level 3, according to a statement. As already announced on Oct. 27, Level 3 will also record $100 million in fourth-quarter noncash revenue
Luby's Inc. (LUB: news, chart, profile), a cafeteria chain, said late Friday that it swung to a profit in the fourth quarter, boosted by a rise in sales. Luby's said it made $2.7 million, or 12 cents a share, on sales of $96 million. In the same period last year, Luby's lost $1.6 million, or 7 cents a share, on revenue of $92.5 million.
Merisel (MSEL: news, chart, profile), a software licensing distributor and reseller, late Friday reported it swung to a third-quarter loss $1.1 million, or 15 cents a share. Last year, it earned $683,000, or 9 cents a share. The company reported no ongoing revenue, expect for net interest income of $151,000, because its Merisel Americas subsidiary sold its software licensing business and other assets in August.
MGP Ingredients (MGPI: news, chart, profile), a wheat processor, is expected to report a first-quarter profit Monday of a penny a share.
Midway Games (MWY: news, chart, profile), a video game maker, is seen posting a third-quarter loss Monday of 24 cents a share.
Nitromed (NTMD: news, chart, profile), a medical researcher, is expected to report a loss Monday of 28 cents a share for the third quarter.
Owens Corning (OWENQ: news, chart, profile), the insulation maker that's in bankruptcy court as a shelter from asbestos claims, late Friday reported third quarter net income that rose 71 percent to $94 million, up from $55 million in the year-earlier period. Sales total $1.54 billion, up from $1.35 billion in the 2003 quarter.
Pacific Sunwear (PSUN: news, chart, profile), a leisure-wear retailer, is seen posting a third-quarter profit Monday of 40 cents a share.
Par Capital Management reported Friday it has acquired an 8.5 percent stake in fledging low-fare carrier FLYi (FLYI: news, chart, profile), parent of Independence Air. The holding amounts to 3.87 million common shares, according to an SEC filing. That values the stake at $22.5 million based on Friday closing price of $1.82. Dulles, Va.-based Independence Air launched service this past June and faces serious liquidity problems if it cannot delay or reduce an aircraft lease payment in January.
Pilgrim's Pride Corp (PPC: news, chart, profile), a poultry producer, is seen reporting a fourth-quarter profit of 83 cents a share Monday.
Prime Group Realty Trust (PGE: news, chart, profile), a real estate investment trust, reported a third-quarter loss Friday of $5.1 million, or 22 cents per share, narrower than its loss of $6.1 million, or 26 cents per share, a year earlier. Funds from operations were $3.8 million, or 14 cents per share, compared with $4 million, or 15 cents per share, in 2003. Revenue for the quarter was $28.9 million, compared with $40.2 million last year.
Quicksilver Resources (KWK: news, chart, profile), an energy exploration company, is expected Monday to report third-quarter earnings of 17 cents a share.
Richardson Electronics Ltd. (RELL: news, chart, profile), which makes electronic parts, said late Friday it had negotiated a new $109 million secured revolving credit facility with its lending group. The new five year credit replaces existing credit lines, can be increased by up to $25 million and features lowered interest rate spreads, relaxed leverage and coverage ratios and increased borrowing base advance rates, the company said. The company can apply up to $38 million of the credit line toward the redemption or repayment of existing convertible debentures.
SBC Communications (SBC: news, chart, profile) said late Friday that it will shed than 10,000 workers by the end of next year through attrition or layoffs. See full story.
Sea Containers Ltd. (SCRA: news, chart, profile), which operates European ferries and leases ship containers, late Friday reported third-quarter earnings of $18.4 million, or 76 cents per share, down 82 percent from $101 million, or $4.68 per share, a year ago. Revenue for the quarter was $492 million, compared with $465 million in 2003.
Semco Energy (SEN: news, chart, profile), a natural-gas distributor, late Friday reported a third-quarter loss of $9.6 million, or 34 cents per share, narrower than its loss of $24.8 million, or $1.07 per share, a year earlier. Operating revenue for the quarter was $54 million, compared with $51.5 million in 2003. The company forecast a loss of 5 cents to 10 cents per share for 2004, including a loss from discontinued operations of 29 cents per share.
Six Flags (PKS: news, chart, profile), the amusement park chain, is seen posting earnings of 99 cents a share for the third quarter. Monday
Stratos International (STLW: news, chart, profile), a network equipment maker, late Friday lowered its second-quarter revenue outlook to $18 million from its previous range of $19.5 million to $21.5 million. Stratos cited quality problems that led to customers returning products for repairs.
Sun Microsystems (SUNW: news, chart, profile), the network computer maker, said Friday that its first-quarter loss would be smaller than expected after it finalized the accounting for its $92 million patent settlement with Eastman Kodak (EK: news, chart, profile). Sun said in a regulatory filing that its loss would be cut by $27 million, or a penny a share, to $147 million, or 4 cents a share. Sun and Kodak reached the original settlement in October.
Symbol Technologies (SBL: news, chart, profile), which makes bar-code equipment, said late Friday that it has filed a lawsuit against Mobile Knowledge Group for trademark, copyright and design patent violations. The suit, filed in the United States District Court for the Eastern District of New York, alleges that Mobile Knowledge is offering for sale counterfeit Symbol spare parts and misusing copyrighted material on its Web site to market those items.
United PanAm Financial (UPFC: news, chart, profile), a subprime lender specializing in auto loans, said it will restate financial results for 2001, 2002, 2003 and later quarters after discovering that its computer-based accounting system erroneously calculated accrued interest on certain accounts since 1998. The company said it expects to reduce its net income as follows: $389,000 in 2001, $690,000 in 2002, $1.1 million in 2003 and $650,000 for the first two quarters of 2004. The total reduction in net income for years before 2001 is estimated at $271,000. A number of disclaimers said the company's earnings releases should not be relied upon and that any restatements are subject to further audits. See full story.
U.S. Steel (X: news, chart, profile), the legendary metal company, looks like a good buy at Friday's $40.41 close, says Barron's. Shares are at six times 2004 earnings and six times projected 2005 results, says Barron's. Alan Fournier of Pennant Capital Management, tells Barron's the shares are worth 50 percent more than the present price.
By CBS MarketWatch
Last Update: 3:28 PM ET Nov. 7, 2004
Big names headline a light week for earnings reports.
Technology bellwether Cisco Systems (CSCO: news, chart, profile) will report on Tuesday, as will insurer Marsh & McLennan (MMC: news, chart, profile), May Department Stores (MAY: news, chart, profile) and Abercrombie & Fitch (ANF: news, chart, profile). Wednesday's reports are led by Federated Department Stores (FD: news, chart, profile) and Starbucks Corp. (SBUX: news, chart, profile). Dell (DELL: news, chart, profile), Target Corp. (TGT: news, chart, profile) and Kohl's Corp. (KSS: news, chart, profile) are on tap Thursday.
See latest Earnings Outlooks:
Abbott (ABT: news, chart, profile), a drug developer, said late Friday it has received U.S. Food and Drug Administration approval to market a new formulation of its TriCor tablets to treat unusual levels of cholesterol and triglycerides in the blood.. The new tablets can be taken with or without food. Taking the previous version of TriCor with food as opposed to without it could result in an approximate 35 percent difference in the body's absorption of the medicine, the drugmaker said.
AirNet Systems (ANS: news, chart, profile), an air cargo carrier, said late Friday it will take a third-quarter noncash impairment charge of $47 million, or $3.07 a share, because changes in the banking industry are affecting its business. The company, which transports canceled checks and other bank documents, said the start of the Check 21 Act will reduce demand from its banking clients. Check 21 allows banks the option to convert checks into electronic images during the last half of processing and discard the original. "It is clear from market data and other disclosures by the Federal Reserve that canceled check volume declines are accelerating. As a result of these factors, we are planning for a significant decrease in canceled check volume and related bank services revenues beginning in 2006 or 2007," said Airnet CEO Joe Biggerstaff.
Altria Group (MO: news, chart, profile), the tobacco and food giant that said Thursday it hopes to split into several parts, has a much higher share value but is hard to evaluate because of its legal challenges, says Barron's. Shares gained about 8 percent Thursday past $54, yet Barron's notes several analysts who say the total value of its Kraft and Philip Morris holdings could range from $70 to $83 per share. "The only question is who owns the company: shareholders or litigants or taxing authorities," Tom Russo of Gardner Russo & Gardner tells Barron's.
American Electric Power (AEP: news, chart, profile), a Midwest electric utility holding company, said late Friday that it completed the purchase of natural gas pipelines, a reservoir and other assets from Enron (ENRNQ: news, chart, profile) for $115 million. AEP added that the assets were part of a 2001 lease accord that has been mired in bankruptcy court when Enron filed for Chapter 11 status shortly after its accord with AEP. A federal suit by AEP will continue against Bank of America (BAC: news, chart, profile) over what AEP said is the bank's attempt to claim 55 billion cubic feet of natural gas in the transaction's reservoir.
Arch Wireless (AWIN: news, chart, profile) said late Friday that a Justice Department staff review recommended approving the company's merger with Metrocell Holdings (MTOH: news, chart, profile). The merger is still subject to approval by the Federal Communications Commission and the shareholders of both companies. Upon completion of the merger, the company will be called USA Mobility. Arch also said that in connection with the deal, its CEO C. Edward Baker, COO Lyndon Daniels and CFO J. Roy Pottle have left the company.
Beverly Enterprises (BEV: news, chart, profile), a nursing-home operator, is seen posting a third-quarter profit Monday of 16 cents a share.
CNA Financial (CNA: news, chart, profile), an insurance holding company, said late Friday it has named D. Craig Mense as chief financial officer as of Nov. 29. The insurer said Mense will succeed Robert Deutsch. The company said in April that Deutsch planned to step down when a replacement was found. Mense previously was the president and chief executive of St. Paul Travelers' (STA: news, chart, profile) global run-off operations, overseeing discontinued businesses.
Boeing (BA: news, chart, profile), the aerospace giant, was ordered Friday to pay $3.6 million in punitive damages and compensatory costs by a jury in Georgia, according to the Atlanta Journal-Constitution. See full story.
Chalone Wine Group (CHLN: news, chart, profile) late Friday reported a third-quarter loss of $272,000, or 2 cents a share. Last year, it earned $379 million, or 3 cents a share. Sales slipped to $16.5 million from $16.9 million a year ago. The company said it would have reported a profit of $725,000, but it spent $939,000 to evaluate an acquisition proposal by Domaines Barons de Rothschild. Chalone agreed to the proposal on Oct. 30.
Coeur D'Alene (CDE: news, chart, profile), a silver and gold miner, is expected Monday to report earnings of 2 cents a share for the third quarter.
Conseco (CNO: news, chart, profile), an insurer that took a big stake in mobile-home loans, is expected Monday to report a third quarter profit of 34 cents a share.
Coors (RKY: news, chart, profile), the beermaker that is merging with Canada's Molson, could see shares rise from the present $70 level if the malted marriage achieves expected savings, says Barron's. One analyst says Coors could rise to $80, back where it stood before the July merger announcement. A messed-up merger could make the combined company a takeover target, says Barron's.
CPI Corp. (CPY: news, chart, profile), a portrait photo chain that has operations in Sears stores, said late Friday it plans to take a pretax, noncash charge of about $1.3 million to $1.6 million in the third quarter to upgrade equipment and increase marketing efforts. The company said sales in the first half of 2004 were down about 12 percent, and sales through the first 14 weeks of the third quarter were down about 4 percent compared with last year. CPI's board has approved a buyback of up to 1 million shares through a Dutch auction tender offer. The company expects the tender offer price for the shares to range from $11 to $14 a share. CPI expects the tender offer to start in the next week.
Emeritus Assisted Living (ESC: news, chart, profile), which provides housing and medical aid for seniors, said late Friday that it will restate results for 2003 and 2004. Net income will decline $470,000 for 2003, $310,000 in the first quarter of 2004 and $10,000 in the second quarter. The changes relate to accounting for the 2003 sale and leaseback of four properties with a real-estate investment trust.
FedEx Corp. (FDX: news, chart, profile), the package shipping giant, said late Friday that it will raise its shipping rates 2.6 percent for 2005. The rate increase includes a 4.6 percent hike in its package and freight shipment costs, and a 2 percent decrease in its fuel surcharge. The rate increase will take effect Jan. 3, 2005. See full story.
First United Corp., (FUNC: news, chart, profile), a bank holding company based in Maryland, reported late Friday that third-quarter earnings fell 50 percent to $1.1 million, or 18 cents a share, from $2.2 million, or 36 cents a share, a year ago. Net interest income for the quarter was $9 million vs. $8.8 million a year earlier.
GenCorp (GY: news, chart, profile), an aerospace manufacturer, had its credit rating downgraded late Friday by Moody's, affecting about $704 million in debt securities. The rating agency said GenCorp would have a difficult time servicing its debt based on earnings and cash flow from its Aerojet division and would have to sell parts of its real-estate portfolio to cut debt significantly.
Great Lakes Chemical (GLK: news, chart, profile), which makes specialty chemicals for such uses as water treatment and flame retardants, said late Friday that Mark P. Bulriss resigned as chairman and chief executive. Nigel Andrews was elected chairman by the board and John Gallagher III was named acting CEO. Jeffrey Potrzebowski was named acting chief financial officer.
Hubbell Inc. (HUBA: news, chart, profile) (HUBB: news, chart, profile), an electrical manufacturer, late Friday named Gregory Covino as interim chief financial officer. He has been serving as corporate controller and chief accounting officer. The company said the move comes after a division of the U.S. Securities and Exchange Commission recommended a civil injunction against Hubbell CFO William Tolley. Hubbell said the SEC probe is not connected to Tolley's work at Hubbell. It said the agency is looking into alleged federal securities laws violations by Tolley at his prior workplace. Hubbell said Tolley previously was assistant controller at Otis Elevator Co., a unit of United Technologies Corp. (UTX: news, chart, profile).
Innovex (INVX: news, chart, profile), which makes connectors used in computers, is seen posting a fourth-quarter loss Monday of 9 cents a share.
Level 3 Communications (LVLT: news, chart, profile), operator of a data transmission network, said late Friday that it has ended a deal to lease a fiber-optic network to McLeodUSA (MCLD: news, chart, profile). Level 3 will give McLeodUSA a cash payment and other consideration, in exchange for McLeodUSA transferring the fiber back to Level 3, according to a statement. As already announced on Oct. 27, Level 3 will also record $100 million in fourth-quarter noncash revenue
Luby's Inc. (LUB: news, chart, profile), a cafeteria chain, said late Friday that it swung to a profit in the fourth quarter, boosted by a rise in sales. Luby's said it made $2.7 million, or 12 cents a share, on sales of $96 million. In the same period last year, Luby's lost $1.6 million, or 7 cents a share, on revenue of $92.5 million.
Merisel (MSEL: news, chart, profile), a software licensing distributor and reseller, late Friday reported it swung to a third-quarter loss $1.1 million, or 15 cents a share. Last year, it earned $683,000, or 9 cents a share. The company reported no ongoing revenue, expect for net interest income of $151,000, because its Merisel Americas subsidiary sold its software licensing business and other assets in August.
MGP Ingredients (MGPI: news, chart, profile), a wheat processor, is expected to report a first-quarter profit Monday of a penny a share.
Midway Games (MWY: news, chart, profile), a video game maker, is seen posting a third-quarter loss Monday of 24 cents a share.
Nitromed (NTMD: news, chart, profile), a medical researcher, is expected to report a loss Monday of 28 cents a share for the third quarter.
Owens Corning (OWENQ: news, chart, profile), the insulation maker that's in bankruptcy court as a shelter from asbestos claims, late Friday reported third quarter net income that rose 71 percent to $94 million, up from $55 million in the year-earlier period. Sales total $1.54 billion, up from $1.35 billion in the 2003 quarter.
Pacific Sunwear (PSUN: news, chart, profile), a leisure-wear retailer, is seen posting a third-quarter profit Monday of 40 cents a share.
Par Capital Management reported Friday it has acquired an 8.5 percent stake in fledging low-fare carrier FLYi (FLYI: news, chart, profile), parent of Independence Air. The holding amounts to 3.87 million common shares, according to an SEC filing. That values the stake at $22.5 million based on Friday closing price of $1.82. Dulles, Va.-based Independence Air launched service this past June and faces serious liquidity problems if it cannot delay or reduce an aircraft lease payment in January.
Pilgrim's Pride Corp (PPC: news, chart, profile), a poultry producer, is seen reporting a fourth-quarter profit of 83 cents a share Monday.
Prime Group Realty Trust (PGE: news, chart, profile), a real estate investment trust, reported a third-quarter loss Friday of $5.1 million, or 22 cents per share, narrower than its loss of $6.1 million, or 26 cents per share, a year earlier. Funds from operations were $3.8 million, or 14 cents per share, compared with $4 million, or 15 cents per share, in 2003. Revenue for the quarter was $28.9 million, compared with $40.2 million last year.
Quicksilver Resources (KWK: news, chart, profile), an energy exploration company, is expected Monday to report third-quarter earnings of 17 cents a share.
Richardson Electronics Ltd. (RELL: news, chart, profile), which makes electronic parts, said late Friday it had negotiated a new $109 million secured revolving credit facility with its lending group. The new five year credit replaces existing credit lines, can be increased by up to $25 million and features lowered interest rate spreads, relaxed leverage and coverage ratios and increased borrowing base advance rates, the company said. The company can apply up to $38 million of the credit line toward the redemption or repayment of existing convertible debentures.
SBC Communications (SBC: news, chart, profile) said late Friday that it will shed than 10,000 workers by the end of next year through attrition or layoffs. See full story.
Sea Containers Ltd. (SCRA: news, chart, profile), which operates European ferries and leases ship containers, late Friday reported third-quarter earnings of $18.4 million, or 76 cents per share, down 82 percent from $101 million, or $4.68 per share, a year ago. Revenue for the quarter was $492 million, compared with $465 million in 2003.
Semco Energy (SEN: news, chart, profile), a natural-gas distributor, late Friday reported a third-quarter loss of $9.6 million, or 34 cents per share, narrower than its loss of $24.8 million, or $1.07 per share, a year earlier. Operating revenue for the quarter was $54 million, compared with $51.5 million in 2003. The company forecast a loss of 5 cents to 10 cents per share for 2004, including a loss from discontinued operations of 29 cents per share.
Six Flags (PKS: news, chart, profile), the amusement park chain, is seen posting earnings of 99 cents a share for the third quarter. Monday
Stratos International (STLW: news, chart, profile), a network equipment maker, late Friday lowered its second-quarter revenue outlook to $18 million from its previous range of $19.5 million to $21.5 million. Stratos cited quality problems that led to customers returning products for repairs.
Sun Microsystems (SUNW: news, chart, profile), the network computer maker, said Friday that its first-quarter loss would be smaller than expected after it finalized the accounting for its $92 million patent settlement with Eastman Kodak (EK: news, chart, profile). Sun said in a regulatory filing that its loss would be cut by $27 million, or a penny a share, to $147 million, or 4 cents a share. Sun and Kodak reached the original settlement in October.
Symbol Technologies (SBL: news, chart, profile), which makes bar-code equipment, said late Friday that it has filed a lawsuit against Mobile Knowledge Group for trademark, copyright and design patent violations. The suit, filed in the United States District Court for the Eastern District of New York, alleges that Mobile Knowledge is offering for sale counterfeit Symbol spare parts and misusing copyrighted material on its Web site to market those items.
United PanAm Financial (UPFC: news, chart, profile), a subprime lender specializing in auto loans, said it will restate financial results for 2001, 2002, 2003 and later quarters after discovering that its computer-based accounting system erroneously calculated accrued interest on certain accounts since 1998. The company said it expects to reduce its net income as follows: $389,000 in 2001, $690,000 in 2002, $1.1 million in 2003 and $650,000 for the first two quarters of 2004. The total reduction in net income for years before 2001 is estimated at $271,000. A number of disclaimers said the company's earnings releases should not be relied upon and that any restatements are subject to further audits. See full story.
U.S. Steel (X: news, chart, profile), the legendary metal company, looks like a good buy at Friday's $40.41 close, says Barron's. Shares are at six times 2004 earnings and six times projected 2005 results, says Barron's. Alan Fournier of Pennant Capital Management, tells Barron's the shares are worth 50 percent more than the present price.
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The Fool's Look Ahead
By Rick Aristotle Munarriz (TMF Edible)
November 5, 2004
Wild rides, a snow-hugging choo-choo, and a box will factor greatly into the week that is on the way.
Monday
Doesn't George Ross, Donald Trump's seasoned yet savvy assistant on The Apprentice, bear a striking resemblance to Mr. Six from the catchy Six Flags (NYSE: PKS) campaign? Don't answer until you've seen George bust a move, folks. Six Flags will be posting its seasonally potent third-quarter results come Monday. This is the one time of year when the struggling theme park operator can be counted on to post a quarterly profit from its summer-intensive operations. While the company's debt and operational shortcomings have prompted some of us cynical types to wonder whether the signature six flags are flying at half-mast or whether they are a surrender-ready shade of white, the potential is clearly there. Even billionaires who may or may not be coaster fanatics such as Bill Gates and Dan Snyder have financial interests in the regional amusement park operator.
Tuesday
Ready for some Cisco (Nasdaq: CSCO) action? No, I'm not talking about thong-loving, flash-in-the-pan Sisqo or foodstuffs-heaping Sysco (NYSE: SYY). I'm talking about the tech bellwether. Fans of Cisco -- or router rooters as I like to call them -- will be ready for the company's fiscal first-quarter report.
While the company closed out fiscal 2004 on a high note with sales rising for the first time since 2001, more than a few Fools are concerned with the company's disproportionate spike in inventory levels and accounts receivable. Look for the company to show some improvement on Tuesday, or watch the router rooters boo the home team if the trend continues and Cisco is at a loss to explain why it is having to extend more liberal credit terms to grow sales -- and why so many more items aren't moving at all.
Wednesday
The holidays seem to start earlier with each passing year -- if you're in Hollywood, that is. Time Warner (NYSE: TWX) releases The Polar Express this morning to a multiplex wedged between a Starbucks (Nasdaq: SBUX) and a McDonald's (NYSE: MCD) near you. The computer-rendered, full-length feature based on the popular book is bound to be a big hit this season.
And speaking of Starbucks, the java haven is wrapping up fiscal 2004 by announcing its fourth-quarter results on Wednesday as well. While its CEO announced his retirement last month, no one is expecting the company to come up short in its quest to create a caffeinated world. Analysts expect the company to earn $0.25 a share. A quarter for the quarter? You'll have to round up about a dozen of those quarters to buy yourself a cup of joe at Starbucks these days, right?
Thursday
Dude, you're getting a Dell (Nasdaq: DELL) earnings report! Consistency has been the computer maker's trademark. Back in August it posted another stellar quarter, and the efficient Motley Fool Stock Advisor recommendation has given little reason to expect anything out of the ordinary with Thursday's numbers. In short, all's well that doesn't end Dell.
Friday
If you're torn over which holiday flick to catch first, do Carmike Cinemas (Nasdaq: CKEC) a favor and catch them all. The theater operator has come a long way since joining other struggling outfits in filing for bankruptcy four years ago. The world is kinder to the multiplex masters these days as a steady diet of blockbusters and new revenue streams have helped improve the operator's chances. Carmike is on sturdy enough footing that it started paying out a dividend earlier this year. Now if only it would pay it in Junior Mints and popcorn tubs.
Until next week I remain,
Rick Munarriz
By Rick Aristotle Munarriz (TMF Edible)
November 5, 2004
Wild rides, a snow-hugging choo-choo, and a box will factor greatly into the week that is on the way.
Monday
Doesn't George Ross, Donald Trump's seasoned yet savvy assistant on The Apprentice, bear a striking resemblance to Mr. Six from the catchy Six Flags (NYSE: PKS) campaign? Don't answer until you've seen George bust a move, folks. Six Flags will be posting its seasonally potent third-quarter results come Monday. This is the one time of year when the struggling theme park operator can be counted on to post a quarterly profit from its summer-intensive operations. While the company's debt and operational shortcomings have prompted some of us cynical types to wonder whether the signature six flags are flying at half-mast or whether they are a surrender-ready shade of white, the potential is clearly there. Even billionaires who may or may not be coaster fanatics such as Bill Gates and Dan Snyder have financial interests in the regional amusement park operator.
Tuesday
Ready for some Cisco (Nasdaq: CSCO) action? No, I'm not talking about thong-loving, flash-in-the-pan Sisqo or foodstuffs-heaping Sysco (NYSE: SYY). I'm talking about the tech bellwether. Fans of Cisco -- or router rooters as I like to call them -- will be ready for the company's fiscal first-quarter report.
While the company closed out fiscal 2004 on a high note with sales rising for the first time since 2001, more than a few Fools are concerned with the company's disproportionate spike in inventory levels and accounts receivable. Look for the company to show some improvement on Tuesday, or watch the router rooters boo the home team if the trend continues and Cisco is at a loss to explain why it is having to extend more liberal credit terms to grow sales -- and why so many more items aren't moving at all.
Wednesday
The holidays seem to start earlier with each passing year -- if you're in Hollywood, that is. Time Warner (NYSE: TWX) releases The Polar Express this morning to a multiplex wedged between a Starbucks (Nasdaq: SBUX) and a McDonald's (NYSE: MCD) near you. The computer-rendered, full-length feature based on the popular book is bound to be a big hit this season.
And speaking of Starbucks, the java haven is wrapping up fiscal 2004 by announcing its fourth-quarter results on Wednesday as well. While its CEO announced his retirement last month, no one is expecting the company to come up short in its quest to create a caffeinated world. Analysts expect the company to earn $0.25 a share. A quarter for the quarter? You'll have to round up about a dozen of those quarters to buy yourself a cup of joe at Starbucks these days, right?
Thursday
Dude, you're getting a Dell (Nasdaq: DELL) earnings report! Consistency has been the computer maker's trademark. Back in August it posted another stellar quarter, and the efficient Motley Fool Stock Advisor recommendation has given little reason to expect anything out of the ordinary with Thursday's numbers. In short, all's well that doesn't end Dell.
Friday
If you're torn over which holiday flick to catch first, do Carmike Cinemas (Nasdaq: CKEC) a favor and catch them all. The theater operator has come a long way since joining other struggling outfits in filing for bankruptcy four years ago. The world is kinder to the multiplex masters these days as a steady diet of blockbusters and new revenue streams have helped improve the operator's chances. Carmike is on sturdy enough footing that it started paying out a dividend earlier this year. Now if only it would pay it in Junior Mints and popcorn tubs.
Until next week I remain,
Rick Munarriz
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- Registado: 11/8/2004 10:39
Inflation Fear Likely to Boost Key Rate
Inflation Fear Likely to Boost Key Rate
11/7/2004 7:25:00 PM
NEW YORK, Nov 07, 2004 (AP Online via COMTEX) -- Stocks are surging, businesses appear to be hiring again, and a pro-business administration is about to start a second term in the White House. What could Wall Street possibly be worried about? Inflation. The Federal Reserve meets this week to discuss the economy and likely raise its benchmark interest rate by a quarter percentage point to 2 percent.
The move is designed to make capital harder to come by, thus reducing prices and keeping inflation in check. Analysts added that even with the key interest rate rising, rates remain historically low and should not present too much difficulty for growing businesses.
But inflation itself is another matter. This summer's economic "soft patch" - slow job growth, high energy prices and lackluster consumer spending - may be over, and some analysts believe the economy is ripe for inflation to take hold.
As businesses hire new workers, productivity decreases and corporations must spend more to train new employees. That means their profit margins contract - unless those costs are passed along to consumers.
Add to that an increased demand for goods due to fresh wages from those new jobs, and inflation is a real possibility. Either that, or fourth quarter profits could come under pressure.
While this unease is in its early stages, and the markets will likely continue to enjoy a postelection rally through the end of the year, the Fed's statement following its Wednesday meeting will need to reassure Wall Street that monetary policy makers have the situation well in hand.
Last week, the major indexes rose every day as President Bush won a second term, oil prices fell below $50 per barrel and the Labor Department announced the creation of 337,000 jobs in October. The Dow Jones industrials have been up eight of the last nine sessions, while the Standard & Poor's 500 and Nasdaq Composite Index have climbed for nine straight sessions.
For the week, the Dow gained 3.59 percent, the S&P rose 3.18 percent and the Nasdaq climbed 3.24 percent. It was the Dow's best weekly showing since March 25, 2003.
ECONOMIC NEWS:
With inflation foremost in mind, Wall Street will look closely at the Labor Department's report on October import and export prices, due out Tuesday before the session along with a report on the nation's trade balance. Export prices rose 0.2 percent in September, while import prices rose 0.1 percent. A sharp rise in import prices, in particular, could be troublesome.
Friday's retail sales report will also be a strong indicator of pricing power, and could be problematic no matter which way the figures go. If October retail sales rose beyond the 0.1 percent increase expected, then inflation worries may increase. If the number comes in below that, then retailers' earnings could be harmed if sales don't improve for the holiday season. Sales rose 1.5 percent in September.
EARNINGS:
A pair of technology bellwethers could set the tone for the market once the Fed's decision has been digested. Networking giant Cisco Systems Inc. reports on Tuesday after the session, and is expected to bring in 56 cents per share for the quarter, up from 51 cents a year ago. The stock has fallen 31.5 percent from its Jan. 16 high of $29.13, closing Friday at $19.97.
Dell Inc. has managed to avoid a similar fate, and is up 10.3 percent year-to-date. The stock fell to a low of $31.20 on March 8, but has gained steadily to close at $37.49 on Friday. Dell, which reports after Thursday's session, is expected to earn 33 cents per share, up from 26 cents per share in the year-ago period.
Retail stocks will be closely watched as Target Corp. reports its earnings on Thursday before the session. The discount retailer is expected to earn 37 cents per share for the quarter, up from 33 cents per share a year ago. Target has risen 38.6 percent from its 2004 low of $37.40 on Jan. 5, closing Friday at $51.83.
Other notable companies reporting earnings in the week ahead include:
- Embattled insurance company Marsh & McLennan Cos., reeling from investigations into its business practices. It is expected to earn 68 cents per share for the quarter, up from 65 cents per share from a year ago.
- Coffee retailer Starbucks Corp., expected to earn 25 cents per share when it reports on Wednesday after the session, up from 17 cents a year ago.
- Luxury retailer Tiffany & Co., reporting before Thursday's session, forecast to earn 19 cents per share, on par with last year.
- Pixar Animation Inc., which could have another blockbuster on its hands with "The Incredibles," expected to earn 24 cents per share, up from 23 cents per share a year ago, when it reports after Thursday's session.
EVENTS:
The Fed will hold a one-day meeting of its Open Market Committee on Wednesday, where it is all but certain to raise interest rates from 1.75 percent to 2 percent. The Fed's decision and its accompanying statement usually come in after 2 p.m.
Bond markets will be closed on Thursday, Veteran's Day, though the stock markets will remain open.
Copyright 2004 Associated Press, All rights reserved
11/7/2004 7:25:00 PM
NEW YORK, Nov 07, 2004 (AP Online via COMTEX) -- Stocks are surging, businesses appear to be hiring again, and a pro-business administration is about to start a second term in the White House. What could Wall Street possibly be worried about? Inflation. The Federal Reserve meets this week to discuss the economy and likely raise its benchmark interest rate by a quarter percentage point to 2 percent.
The move is designed to make capital harder to come by, thus reducing prices and keeping inflation in check. Analysts added that even with the key interest rate rising, rates remain historically low and should not present too much difficulty for growing businesses.
But inflation itself is another matter. This summer's economic "soft patch" - slow job growth, high energy prices and lackluster consumer spending - may be over, and some analysts believe the economy is ripe for inflation to take hold.
As businesses hire new workers, productivity decreases and corporations must spend more to train new employees. That means their profit margins contract - unless those costs are passed along to consumers.
Add to that an increased demand for goods due to fresh wages from those new jobs, and inflation is a real possibility. Either that, or fourth quarter profits could come under pressure.
While this unease is in its early stages, and the markets will likely continue to enjoy a postelection rally through the end of the year, the Fed's statement following its Wednesday meeting will need to reassure Wall Street that monetary policy makers have the situation well in hand.
Last week, the major indexes rose every day as President Bush won a second term, oil prices fell below $50 per barrel and the Labor Department announced the creation of 337,000 jobs in October. The Dow Jones industrials have been up eight of the last nine sessions, while the Standard & Poor's 500 and Nasdaq Composite Index have climbed for nine straight sessions.
For the week, the Dow gained 3.59 percent, the S&P rose 3.18 percent and the Nasdaq climbed 3.24 percent. It was the Dow's best weekly showing since March 25, 2003.
ECONOMIC NEWS:
With inflation foremost in mind, Wall Street will look closely at the Labor Department's report on October import and export prices, due out Tuesday before the session along with a report on the nation's trade balance. Export prices rose 0.2 percent in September, while import prices rose 0.1 percent. A sharp rise in import prices, in particular, could be troublesome.
Friday's retail sales report will also be a strong indicator of pricing power, and could be problematic no matter which way the figures go. If October retail sales rose beyond the 0.1 percent increase expected, then inflation worries may increase. If the number comes in below that, then retailers' earnings could be harmed if sales don't improve for the holiday season. Sales rose 1.5 percent in September.
EARNINGS:
A pair of technology bellwethers could set the tone for the market once the Fed's decision has been digested. Networking giant Cisco Systems Inc. reports on Tuesday after the session, and is expected to bring in 56 cents per share for the quarter, up from 51 cents a year ago. The stock has fallen 31.5 percent from its Jan. 16 high of $29.13, closing Friday at $19.97.
Dell Inc. has managed to avoid a similar fate, and is up 10.3 percent year-to-date. The stock fell to a low of $31.20 on March 8, but has gained steadily to close at $37.49 on Friday. Dell, which reports after Thursday's session, is expected to earn 33 cents per share, up from 26 cents per share in the year-ago period.
Retail stocks will be closely watched as Target Corp. reports its earnings on Thursday before the session. The discount retailer is expected to earn 37 cents per share for the quarter, up from 33 cents per share a year ago. Target has risen 38.6 percent from its 2004 low of $37.40 on Jan. 5, closing Friday at $51.83.
Other notable companies reporting earnings in the week ahead include:
- Embattled insurance company Marsh & McLennan Cos., reeling from investigations into its business practices. It is expected to earn 68 cents per share for the quarter, up from 65 cents per share from a year ago.
- Coffee retailer Starbucks Corp., expected to earn 25 cents per share when it reports on Wednesday after the session, up from 17 cents a year ago.
- Luxury retailer Tiffany & Co., reporting before Thursday's session, forecast to earn 19 cents per share, on par with last year.
- Pixar Animation Inc., which could have another blockbuster on its hands with "The Incredibles," expected to earn 24 cents per share, up from 23 cents per share a year ago, when it reports after Thursday's session.
EVENTS:
The Fed will hold a one-day meeting of its Open Market Committee on Wednesday, where it is all but certain to raise interest rates from 1.75 percent to 2 percent. The Fed's decision and its accompanying statement usually come in after 2 p.m.
Bond markets will be closed on Thursday, Veteran's Day, though the stock markets will remain open.
Copyright 2004 Associated Press, All rights reserved
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