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Cintas Sees Third-Quarter Earnings Drop 32 Percent
After the closing bell Thursday, Cincinnati-based Cintas (CTAS) announced that its third-quarter net income dropped to 32 cents per share from 47 cents per share a year ago.
The firm blamed the drop on weak demand for work uniforms, which Cintas produces. Quarterly revenue totaled $861.8 million, down 5.2% from the prior year. Expectations called for Cintas to earn 30 cents per share. Looking ahead, the company reiterated its fourth-quarter earnings outlook of 30 to 34 cents per share.
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Toyota Wants Apology from ABC News
Bright and early Friday morning, The Wall Street Journal (subscription required) reported that Toyota Motor (TM) has asked ABC News, a division of Disney (DIS), to issue a public retraction and formal apology for last month's "irresponsible broadcast" that reportedly showed how electronic problems led to unintended acceleration for Toyota vehicles.
Toyota believes ABC used footage that created "the false and misleading impression with viewers of a dangerous and uncontrolled acceleration" when dealing with a Toyota Avalon sedan. According to the article, Toyota contends that "ABC News chose fear-mongering over public service." ABC stated that it has received the letter and that its lawyers are reviewing it and preparing a response.
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Ready for a $2.50 Blueberry Waffle at Starbucks?
Just a couple of days ago I was singing the praises of Starbucks's (SBUX) technical performance. In fact, I may still be on the verge of turning a bullish corner when it comes to the stock, but then I hear reports the company is test-marketing a blueberry waffle that costs $2.50. For the record, this price is not for a plate of waffles, but for one waffle. A single, blueberry waffle (perhaps looking quite a bit like this waffle, which is labeled as caramel, for $2.50. Yes, $2.50. Call me cheap (it won't be the first time, or the last), but that seems like a lot of money for one waffle -- especially considering that a box of 10 frozen waffles is roughly $5. Consider this, McDonald's (MCD) charges a dollar for a sausage McMuffin (sausage and cheese on an English muffin). My guess is that the MCD's offering is a bit more filling than what appears to be a cookie masquerading as a waffle.
Continue reading Ready for a $2.50 Blueberry Waffle at Starbucks?
$75 Million in Drugs Stolen from Eli Lilly Warehouse
Eli Lilly (LLY) announced Wednesday that burglars broke into a Connecticut-based warehouse over the weekend and stole roughly $75 million in prescription drugs. According to police, the break-in happened either late Saturday or early Sunday. According to LLY, "dozens of pallets" of antidepressants were stolen, including Prozac, Cymbalta, Zyprexa (an anti-psychotic), and other medicines. The police called the theft a "well-planned event."The company stated that it is working with the U.S. FDA Office of Criminal Investigations and other law enforcement officials. LLY's senior vice president of global equity noted that the company has "taken quick and appropriate actions to ensure the safety of our medicines." The company added that the "U.S. pharmaceutical distribution system is tightly controlled and monitored, making it extremely difficult for stolen product to make it to patients through legitimate channels."
Continue reading $75 Million in Drugs Stolen from Eli Lilly Warehouse
Nissan to Sell Electric Car for Less Than $44,300 -- a Bargain?
Nissan (NSANY) is jumping in on the electric car revolution, producing a car called the Leaf. It's an all-electric car that seats five. The good news for Nissan is that this car will face little in the way of competition; no other electric car seats as many passengers. Nissan is planning to make 500,000 of the Leaf in North America, Japan, and Europe by 2012. The company also announced that 56,000 of the Leaf are on order in the United States; but, this could be the number of dealers ordering the car, not individuals. The company also expects this electric car to be a popular choice for a no-emission fleet vehicle (like a taxi). Continue reading Nissan to Sell Electric Car for Less Than $44,300 -- a Bargain?
Is Blockbuster on the Verge of Bankruptcy?
TheStreet.com ran an article stating that Blockbuster (BBI) may be forced into bankruptcy if its cash flow doesn't improve and it can't restructure debt. According to the article, BBI's debt has been as high as $1 billion. In a filing with the SEC, BBI stated: "These factors raise substantial doubt about our ability to continue as a going concern." The company currently faces $855.9 million in debt and is in talks with Hollywood studios in hopes of reducing BBI's DVD costs. The company also stated that increased competition from the likes of Netflix (NFLX) and Redbox has severely hurt its market share.
Continue reading Is Blockbuster on the Verge of Bankruptcy?
Harley Davidson Accelerates on Takeover Talk
At midday this afternoon Harley-Davidson (HOG) was more than 5% higher, trading above $28 thanks to rumors of a potential leveraged buyout. Reportedly, private-equity firm Kohlberg Kravis Roberts (KKR) was named as the potential purchaser. That said, both HOG and KKR have declined to comment on the rumor. Thanks to the rumor, trading has been brisk across both the stock and options markets.
Continue reading Harley Davidson Accelerates on Takeover Talk
Starbucks Receives an Upgrade
Starbucks (SBUX) is set to have a good morning, as the company received an upgrade from UBS to buy from neutral. The brokerage also upped its earnings forecast for Starbucks to $1.14 per share in fiscal 2010, up from $1.09 per share. For 2011, UBS expects Starbucks to pull in $1.34 per share, seven cents better than the brokerage's earlier forecast. UBS believes that benign costs and Starbucks' ongoing productivity programs are key to the company's success. That said, UBS feels that McDonald's (MCD) foray into the world of frappes and smoothies could "cannibalize frappuccino consumers from Starbucks." Such a move could hurt Starbucks' bottom line.
Continue reading Starbucks Receives an Upgrade
Boston Scientific to Pull Defibrillators
Boston Scientific (BSX) announced Monday it is recalling of all of its implantable heart defibrillators as it didn't notify regulators of manufacturing changes. The company stated that the safety of patients was never in question and it doesn't believe that doctors need to remove the defibrillators from patients. The manufacturing changes are being described as a "documentation problem," and the company said it is working with the Food and Drug Administration to get the problem fixed. Following the news, the stock fell 12.6% to close at $6.80. According to the report, defibrillators made up 15% of BSX's U.S. revenue a year ago. Furthermore, the company stated that this news could have a "material impact" on 2010 earnings.
Continue reading Boston Scientific to Pull Defibrillators
Pfizer Sees Some Disappointing Study Results
Late Thursday, Pfizer (PFE) announced that two of its late-stage studies of an approved kidney cancer drug failed to treat breast cancer significantly. Reportedly, two studies of kidney cancer drug Sutent did not show a significant benefit to advanced breast cancer patients when combined with chemotherapy. This news is definitely a setback for PFE, as it was hoped that Sutent could demonstrate a significant benefit when combined with chemotherapy as opposed to treatment by chemotherapy alone.
Continue reading Pfizer Sees Some Disappointing Study Results
Aeropostale Sees Fourth-Quarter Earnings Increase
Late Thursday, Aeropostale (ARO) announced that its fourth-quarter net income came in at 99 cents per share -- far better than last year's same-quarter results (66 cents) and the consensus estimate (87 cents). Quarterly sales increased 16% to $801.2 million, outpacing the consensus estimate of $795 million. Looking ahead, ARO forecast first-quarter earnings of 39 to 40 cents per share. The Street expected ARO to forecast earnings of 34 cents per share for the first quarter. This news prompted Piper Jaffray to upgrade the teen retailer to "neutral" from "underweight," assigning a new price target of $31 for the stock.
Continue reading Aeropostale Sees Fourth-Quarter Earnings Increase
BP Purchases $7 Billion in Assets from Devon Energy
Thursday morning, it was announced that British petroleum firm BP (BP) will pay $7 billion for a group of Brazilian assets held by American firm Devon Energy (DVN). In exchange, Devon will receive half of BP's Kirby assets in Alberta, Canada for $500 million.
BP believes the its entry into Brazil will "add a major position in another attractive deep-water basin." BP will dish out $7 billion for interests in 10 exploration blocks in Brazil, 240 leases in the U.S. Gulf of Mexico deep water, and a nearly 6% stake in an Azerbaijan development. As a result of the deal, BP will have complete control of the Kaskida field in the Gulf of Mexico.
Continue reading BP Purchases $7 Billion in Assets from Devon Energy
ArcelorMittal Downgraded to Hold from Buy
ArcelorMittal (MT) was downgraded to hold from buy at ING, which noted that "major price increases imminent for iron ore and coking coal, we believe the steel industry may suffer from cost increases on the order of 35%, as new contract prices are set." ING believes steel prices will rise 10% to 20%, which would then put the industry under pressure. If this scenario were to come to fruition, MT's costs could increase by roughly 15%. Although these increases are less than MT's peers, ING prefers putting money in "diversified mining shares."
Continue reading ArcelorMittal Downgraded to Hold from Buy
Chevron Downgraded by Bank of America
Bank of America downgraded oil firm Chevron (CVX) Wednesday to neutral from buy, setting a target price of $90 per share for the stock. This downgrade comes a day after the company announced plans to "improve returns" and streamline the company's organization and portfolio. Among the actions in this undertaking is staff reductions that will take place through 2011, with 2,000 positions on the chopping block for this year. The downgrade comes after Tuesday's meetings, which prompted Bank of America to say that CVX "had little new to influence an investment case that has been reassuringly consistent in recent years." The brokerage recommended Exxon Mobil (XOM) as a "better value" over the near term.
Continue reading Chevron Downgraded by Bank of America
Abbott Labs to Acquire Facet Biotech
After the closing bell Tuesday, Abbott Laboratories (ABT) announced that it will acquire Facet Biotech (FACT) for $27 per share. The transaction carries a total price tag of $722 million. Including $272 million of FACT's cash and securities, the net cost turns out to be roughly $450 million. Back in December, FACT turned down Biogen Idec's (BIIB) unsolicited takeover offer of $17.50 per share. The deal is expected to close in the second quarter, as both boards of directors have approved the deal.
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