MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Wednesday, May 22, 2013
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8:54 AM More on Zale's (ZLC) FQ3: As in FQ2, the company reiterates its expectation of a profitable full year. Same-store sales rise 2.6% (constant currency basis and adjusting for February 29) while gross margin and operating margin expand 130 and 80 basis points respectively. YTD earnings are essentially double what they were after two quarters in 2012. The company realizes a $4M reduction in interest rate expense thanks to last year's refinancing. Additionally, ZLC appoints Terry Burman chairman of the board. Shares +26.3% premarket. (PR) Comment!
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8:36 AM Cleantech Solutions (CLNT) +22.2% premarket on news it has become a certified supplier of components to Sinopec (SNP) and China National Petroleum (PTR). As a certified supplier, CLNT is able to market its components to the subsidiary companies of Sinopec and CNPC throughout China, CEO Jianhua Wu says. Comment!
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8:24 AM Kindred Healthcare (KND) +2.25% premarket after getting an upgrade to Positive from Neutral at Susquehanna. The shares are up ~20% so far this month after the company beat earnings on May 1. Comment!
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8:21 AM Chesapeake Energy (CHK) +1.7% premarket as Susquehanna upgrades the stock to Positive from Neutral, believing CHK should get a boost from both higher oil and gas prices and its new CEO. The firm boosts its valuations for CHK's oil and gas reserves, saying investors have become more comfortable with higher prices; asset sales so far have been of "mixed quality." Comment!
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8:18 AM Pfizer (PFE) plans to spin off its remaining stake in Zoetis (ZTS) through a tax-free exchange offer in which Pfizer owners can exchange their Pfizer shares for stock in Zoetis owned by Pfizer (got that?). Pfizer has received a waiver of the 180-day lock-up from the book runners of the Zoetis IPO. PFE +2.1%, ZTS -1.2% premarket. (PR) 1 Comment
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8:13 AM Dycom Industries (DY) looks set to be one of today's big winners after its FQ3 earnings and sales beat expectations Tuesday evening. Contract revenues rose 47.7% Y/Y during the quarter although net income was down from the year ago period. The company guided ahead of the Street's estimates for FQ4 saying it sees EPS of $0.40-0.47 on revenue of $455-475M against consensus of $0.38/share on sales of $441M. Shares +22.5% premarket. (PR) Comment!
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8:08 AM Apple (AAPL) gains 1.1% premarket as Morgan Stanley's Katy Huberty says iPhone sales are tracking at about 31M units in the June quarter, well ahead of her team's expectation of 26M and Street consensus of 27M. 1 Comment
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7:57 AM CREE +3.5% premarket after an upgrade to Buy with $72 price target at Sterne Agee, the analysts saying their previous estimate cuts were too aggressive. "We overestimated the potential impact from Phillips flexing its muscles at lighting agents." Earlier, Digitimes estimated global LED lighting shipments to increase to 220M units in 2013 to account for 5.5% of the entire lighting market. Comment!
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7:13 AM Saks (SKS) could draw bids from sovereign-wealth funds in the Middle East and Asia along with P-E interest, according to The New York Post. Analysts think a deal price could fall in the $18 to $20 range to give the 41-store chain a valuation of over $2.6B and give 17% stakeholder Carlos Slim a tidy profit on his investment. SKS +17.7% premarket to $16.08. Comment!
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Tuesday, May 21, 2013
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7:40 PM Baltic Trading (BALT) announces a public offering of common stock. Size and terms weren't disclosed. The company intends to use the net proceeds from the offering for future vessel acquisitions or, to the extent it does not so use them, for working capital and general corporate purposes. Shares +1.8% AH. 2 Comments
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5:23 PM Avid (AVID) -12.7% AH to $6 after announcing it has received a NASDAQ non-compliance warning due to its failure to file its 2012 10-K on time, that it expects to restate its 2009-2012 results due to its (previously-announced) accounting review, and that its review now extends to "accounting for certain restructuring expenses related to lease obligations and other exit activities" for Q2 and Q3 2012 - Avid thinks restructuring expenses may have been overstated by ~$3.5M on a pre-tax basis. Shares are close to a multi-year low of $5.85. 1 Comment
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4:18 PM Herbalife's (HLF +2.7%) naming of PricewaterhouseCoopers as its new outside auditor puts an end to a six-week search, which turned out to be an unusually difficult and drawn out process - the company actually had to seek counsel from the SEC to avoid conflict of interest issues - and was intensely scrutinized because of the bitter public battle between Ackman and Icahn over HLF's business model. The news is a positive for the shares today, if only because the company has been blocked temporarily from raising money in the markets because of its lack of an auditor. 2 Comments
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4:13 PM Saks (SKS +11.1%) has hired Goldman to explore strategic alternatives, "including a possible sale of the company," the NY Post reports. P-E firms, including KKR and Leonard Green, are seen as likely bidders. Shares +15.8% AH, adding to today's big post-earnings gains. 2 Comments
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4:08 PM NetApp (NTAP): FQ4 EPS of $0.69 beats by $0.01. Revenue of $1.72B (+1% Y/Y) misses by $40M. Expects FQ1 revenue of $1.475B-$1.575B and EPS of $0.45-$0.50, below consensus of $1.6B and $0.53. Initiates $0.15/share quarterly dividend (1.6% yield) with intention to increase over time. Increases buyback authorization by $1.6B to $3B. Shares +3.3% AH. CC at 5:30PM ET (webcast). (PR) Comment!
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3:57 PM SinoCoking Coal and Coke (SCOK +27.8%) shares skyrocket after Fenwei Energy Consulting says China's proposed ban on imports of lower-quality coal could boost domestic benchmark prices by as much as 8%. 2 Comments
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3:52 PM Accuray (ARAY +4.5%) pops today after presenting study results at UBS' Global Life Sciences Conference showing that 97% of low risk-prostate cancer patients remained cancer free when treated with its CyberKnife Robotic Radiosurgery System. 90.7% of intermediate-risk patients remained cancer-free after 5+ years. (Presentation Transcript) Comment!
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