Earning Trends: EA Disappoints, Hasbro Above Estimates

Electronic Arts’ fiscal third-quarter loss narrowed following large prior-year charges. But shares fell 9% to $15.96 in after-hours trading as the videogame publisher projected fourth-quarter and fiscal 2011 results below Street estimates.

Harman reported better-than-expected fiscal second-quarter results, sending shares of the maker of audio equipment and GPS devices up 6.2% to $37.69 in late trading.

Qiagen’s fourth-quarter profit surged 80%, beating expectations, as the Dutch diagnostic-products maker saw growth both organically and through recent acquisitions. But shares slid 2.2% to $20.20 in after-hours trading as the 2010 earnings forecast fell slightly short of analysts’ projections, though revenue estimates were in line.

Hasbro Inc.’s (HAS, $34.71, +$3.91, +12.69%) fourth-quarter earnings rose 77%, smashing analysts’ estimates, as the company’s revenue jumped, helped by particular strength in sales of boys’ items and games and puzzles. Hasbro “should be able to grow revenues and earnings per share” this year, including impacts from the company’s television investments “and absent a deterioration in consumer spending, global economic conditions or the value of foreign currencies,” said Chairman and Chief Executive Brian Goldner.

CVS Caremark Corp.’s (CVS, $32.72, +$1.65, +5.31%) fourth-quarter earnings rose 10% amid stronger sales at its pharmacy businesses while the hybrid drug-store pharmacy benefit manager’s chief executive expressed optimism about the 2011 pharmacy benefits management selling season.

The Food and Drug Administration said there was limited clinical evidence involving a proposed Cell Therapeutics Inc. (CTIC, $0.64, -$0.42, -39.62%) drug that would treat non-Hodgkin’s lymphoma. The agency said the main clinical study involving the drug, pixantrone, was stopped early because doctors had a hard time recruiting patients into the trial. The agency also said deaths and serious adverse events “were all more common on the pixantrone” portion of the study.

Littelfuse Inc.’s (LFUS, $31.96, +$2.77, +9.49%) fourth-quarter earnings beat expectations and the maker of fuses and other circuit protection devices for electronics, power equipment and automotive uses projected current-quarter results well above expectations.

China Fire & Security Group Inc. (CFSG, $14.47, +$2.41, +19.98%) said it won a $92 million contract with “huge potential” in retrofitting projects. In conjunction, the maker and seller of products for the industrial fire-safety market gave an upbeat 2010 forecast.

Novavax Inc. (NVAX, $2.09, -$0.13, -5.86%) said it has ended negotiations for a collaboration with ROVI Pharmaceuticals to develop Novavax’s virus-like-particle-based vaccines against influenza in Spain. The biopharmaceutical company said the two companies couldn’t agree on acceptable terms for a collaboration and to obtain necessary funding. Novavax is free to seek a new partner for its vaccine-development efforts in Europe in the future.

Shares of athenahealth Inc. (ATHN, $38.98, -$1.63, -4.01%) fell after Barron’s said in its latest issue that investors would be wise to pay attention to the backstory leading to the health-care IT company’s recent accounting restatement and the way it was handled by athenahealth’s management.

BreitBurn Energy Partners L.P. (BBEP, $14.93, +$1.58, +11.84%) said it settled its litigations with Quicksilver Resources Inc. (KWK, $13.61, +$0.10, +0.74%) for $13 million. The energy company expects the payment to be paid by its insurance. BreitBurn Energy will also reinstate its quarterly cash dividend for 37.5 cents.

Boardwalk Pipeline Partners LP’s (BWP, $30.07, +$1.08, +3.73%) fourth-quarter earnings rose 6% as the natural-gas transportation and storage company saw higher revenue thanks to expansion efforts, but interest costs tripled. Earnings and revenue were both better than expected.

After falling more than 12% on Friday, semiconductor-equipment maker Brooks Automation Inc. (BRKS, $8.07, +$0.58, +7.74%) shares climbed back somewhat Monday. The Friday slide was blamed on slimmer-than-expected gross margins, though revenue was stronger-than-expected and said customer demand had increased.

Shares of Cadence Pharmaceuticals Inc. (CADX, $9.89, -$0.61, -5.81%) fell Monday after a research note called the risk/reward scenario on the stock “unappealing” heading into a potential approval for the drug company’s pain and fever drug, Acetavance.

The Food and Drug Administration said the response rate seen in a study of a proposed ChemGenex Pharmaceuticals Ltd. (CXSPY, $11.00, +$0.25, +2.33%) drug to treat certain type of patients with chronic myeloid leukemia was “low.” The drug, omacetaxine, faces a review by an outside panel of experts on Wednesday. But shares of the biopharmaceutical development company rose Monday, perhaps because the agency didn’t make a statement about whether it thinks the drug should or shouldn’t be approved, as it sometimes does ahead of the panel meeting.

Chindex International Inc. (CHDX, $10.51, -$2.06, -16.39%) reported fiscal third-quarter profit rose as revenue increased 12% from a year-ago period. Still, the healthcare-company results came in below analysts’ estimates. Following the news, BWS Financial downgraded the stock to hold from buy.

Cimarex Energy Co. (XEC, $52.29, +$1.73, +3.42%) shares got a boost after the independent oil and natural-gas company reported rising production rates in its fourth quarter and delivered a strong forecast for 2010 production.

Goldman Sachs started CyberSource Corp. (CYBS, $16.82, -$0.66, -3.78%) at sell, saying the provider of Internet transaction services has an appealing model but its valuation is a stretch. The firm said it sees a “mix shift away from the higher-margin gateway business, exposure to the challenged SMB segment and rich current valuation as negatives.”

Greenbrier Cos. (GBX, $8.21, +$0.28, +3.53%) was raised to buy from neutral by D.A. Davidson based on the decline in the railcar maker and refurbisher’s shares and modest improvements in macro data.

Shares of home builders surged Monday with no builder showing a loss as recent quarterly results generally were positive and as an analyst resumed coverage on one of the weaker home builders with a buy rating. The movement also comes as Dimensional Fund Advisors LP reported in a Securities and Exchange Commission filing that it holds shares of Meritage Homes Corp. (MTH, $21.59, +$0.47, +2.23%) and Standard Pacific Corp. (SPF, $3.80, +$0.16, +4.40%). Shares of Lennar Corp. (LEN, $15.39, +$0.68, +4.62%), Beazer Homes USA Inc. (BZH, $4.32, +$0.16, +3.85%) and Hovnanian Enterprises Inc. (HOV, $3.64, +$0.09, +2.54%) also climbed.

A housing-bullish Morgan Stanley upgraded Home Depot Inc. (HD, $28.59, +$0.61, +2.18%) to overweight from equal-weight. “We believe that the turn in housing is real,” the firm wrote, citing increases in year-on-year existing home sales and three straight monthly gains for its internal Home Improvement Lead Indicator. Big-ticket items “will not be the same drag in 2010,” the firm predicted, despite “stagnant” home prices and tight credit.

Industrial Services of America Inc. (IDSA, $10.00, +$0.39, +4.06%) said it will report improved fourth-quarter results as the company has benefited from operating in higher-margin segments of the metals-recycling business.

Motorola Inc.’s (MOT, $6.57, +$0.17, +2.66%) revival is again being questioned on Wall Street after the maker of cellphones, cable-TV set-top boxes and telecom-networking equipment issued disappointing guidance for the current quarter, Barron’s wrote. But while the company faces challenges in its major businesses, especially cellphones, its shares look increasingly attractive on a sum-of-the-parts basis, Barron’s said. Motorola shares could rise 40% if the company can spin off a profitable cellphone division. Its most valuable unit sells communications gear to police and fire departments.

National Bank of Greece SA (NBG, $3.42, -$0.52, -13.20%) shares declined as the European financial markets and the euro came under renewed pressure Monday, when investors were looking to possible plans coming later in the week to staunch a growing government debt crisis.

Nasdaq OMX Group Inc.’s (NDAQ, $18.05, -$0.75, -3.99%) fourth-quarter earnings fell 28% amid one-time items as revenue declined. The exchange operator’s market-services segment, its biggest by revenue, saw a 14% decline on that basis but increased 4% from the third quarter. Transaction-services revenue dropped 17% on year but climbed 8% sequentially.

American depositary shares of Netease.com Inc. (NTES, $33.93, +$1.43, +4.40%) rose Monday after the company said on the World of Warcraft Web site warcraftchina.com that it will postpone new user registration and reapply for a license for the international game, a move seen as a positive step toward resolving regulatory overhang.

Rentrak Corp. (RENT, $17.37, +$1.61, +10.22%), a media-viewership data and research company, has reached a deal to integrate its audience-measurement service with Dish Network Corp. (DISH, $17.75, +$0.00, +0.00%), a deal that will make Rentrak the only one in its field offering data in all 210 television markets in the U.S.

Sidoti raised its rating on Simpson Manufacturing Co. (SSD, $23.06, +$0.78, +3.50%) to buy from neutral, saying the price-to-book valuation represents an attractive entry point as the housing recovery unfolds. The company makes construction materials such as devices for connecting wood to wood as well as venting systems for gas and wood-burning appliances. Sidoti said it favors companies with dominant global competitive positions, adding share gains, growth of new products and international expansion will fuel sales growth by the third quarter.

Sirona Dental Systems Inc. (SIRO, $33.68, +$2.11, +6.68%) reported fiscal first-quarter results that significantly beat analysts’ expectations. The dental-technology company also updated its 2010 guidance, calling for constant-currency revenue to come in near the top of the previously given growth-rate range.

Shares of Sonic Solutions (SNIC, $8.48, +$0.54, +6.80%) climbed Monday as investors showed excitement about the accelerating rollout of CinemaNow connected devices. Sonic has traditionally provided software used to format, press and distribute about 90% of conventional DVD and Blu-ray format video discs. Now, Sonic is also the company behind the digital transition, with its technology turning movies into a digital format transmitted through its Roxio CinemaNow platform.

Baird raised its rating on Winnebago Industries Inc. (WGO, $12.00, +$0.67, +5.91%) to neutral from underperform, saying the recreational-vehicle maker’s stock is approaching its price target. “We remain concerned that profitability may remain elusive given breakeven levels near 3x F2009 volume, but note the robust wholesale recovery, strong backlog and signs of better retail demand,” the firm said.

Source: WSJ

  • Anonymous

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    some misnomers I’ve seen