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US HOT STOCKS: Intel, Jackson Hewitt, Gentiva Health, Lexmark
U.S. stocks were mixed Wednesday as the Dow Jones Industrial Average rose 3 points to 10365 and the Nasdaq Composite gained 10 points to 2252, but the S&P 500 fell 1 point to 1094. Among the companies whose shares are actively trading are Intel Corp. (INTC), Jackson Hewitt Tax Service Inc. (JTX) and Gentiva Health Services Inc. (GTIV).
Intel (INTC, $21.94, +$0.93, +4.43%) blew away Wall Street estimates with its second-quarter results, but the chip giant's closely watched gross margins were even more impressive, as the company raised its 2010 outlook to 66% from 64%. Meanwhile, Intel's guidance for third-quarter revenue and gross margin was above consensus. Chief Executive Paul Otellini said this was the best quarter in the company's 42-year history. Intel's strong results boosted stocks across the tech sector. Gainers included PC maker Dell Inc. (DELL, $13.61, +$0.41, +3.11%) and fellow chip makers Advanced Micro Devices Inc. (AMD, $7.60, +$0.08, +1.06%) and Nvidia Corp. (NVDA, $11.00, +$0.08, +0.73%). Hard-drive makers Seagate Technology Inc. (STX, $15.01, +$0.55, +3.80%) and Western Digital Corp. (WDC, $32.72, +$0.68, +2.12%) also gained.
Jackson Hewitt's (JTX, $1.60, +$0.29, +22.14%) fiscal fourth-quarter earnings rose 16% on income-tax adjustments while adjusted results fell--albeit less than analysts expected--as the tax preparer saw lower revenue from fewer returns prepared.
Home health-care providers Gentiva Health Services (GTIV, $21.02, -$1.28, -5.74%) and LHC Group Inc. (LHCG, $21.74, -$1.28, -5.56%) are targets of a Securities and Exchange Commission investigation related to possible abuse of Medicare rules, both said separately after the markets closed Tuesday. Competitors Amedisys Inc. (AMED, $26.35, -$0.22, -0.83%) and Almost Family Inc. (AFAM, $25.20, -$1.16, -4.40%) had both reported they were under SEC investigation earlier this month, and all four are also facing an inquiry by the Senate Finance Committee.
Morgan Stanley downgraded Lexmark International Inc. (LXK, $31.97, -$3.02, -8.63%) to underweight from equalweight because the printer maker faces increased competition on laser printers, reduced growth as inventory stocking slows and an earnings risk thanks to the falling value of the euro.
Amtech Systems Inc. (ASYS, $9.27, +$0.66, +7.67%) said its fiscal third-quarter revenue soared to a record level, topping expectations, as orders increased for its solar products. Solar-equipment demand has rebounded strongly this year as installation of new solar panels continues to climb amid falling sales.
HSW International (HSWI, $4.23, +$2.18, +106.34%) has agreed to distribute its BoWenWang website's content via Internet portal and gaming company Netease.com Inc. (NTES, $33.31, -$0.99, -2.89%). HSW said the partnership will expose its content to "millions of Chinese" viewers. Netease runs a popular email service, an online portal and online games.
Other Stocks In Focus:
AAR Corp.'s (AIR, $17.26, -$0.65, -3.63%) fiscal fourth-quarter earnings dropped 21% as the aircraft leasing and maintenance company continues to wait for its commercial aviation business to pick up.
Adtran Inc. (ADTN, $30.69, +$1.83, +6.32%), a provider of networking and communications equipment, reported better-than-expected second-quarter results, as the company said it was boosted by "strong demand for high-speed connectivity coupled with increasing demand for Ethernet services."
Europe's antitrust regulator Wednesday cleared a business alliance between AMR Corp.'s (AMR, $7.24, +$0.11, +1.54%) American Airlines, British Airways PLC (BAIRY, $31.75, +$0.00, +0.00%) and Spain's Iberia Lineas Aereas de Espana SA (IBLA.MC) that will allow them to cooperate closely on trans-Atlantic flights. The pact allows the airlines to share revenue, combine their marketing and flight planning, and collaborate on pricing. The European Union clearance means they are immune from usual antitrust rules that forbid collusion between companies so as to allow consumers to benefit from lower prices.
Annaly Capital Management Inc. (NLY, $17.57, -$0.69, -3.78%) announced that its planned offering of at least 60 million shares has been priced at a 4-cent premium to Tuesday's close. Still, shares fell as the offering would increase the number of shares outstanding for the real-estate investment trust by about 11%.
Shares in Dutch semiconductor equipment maker ASML Holding (ASML, $31.81, +$0.54, +1.73%) gained Wednesday as the company said it will ramp up production in anticipation of a record year for sales after its second-quarter earnings beat expectations.
Benihana Inc. (BNHN, $6.80, +$0.77, +12.77%) (BNHNA, $6.31, +$0.89, +16.31%) said its board will consider several options, including a possible sale of the largest U.S. chain of Japanese theme and sushi restaurants, to maximize shareholder value and quell investor discontent.
Cabot Microelectronics Corp. (CCMP, $34.61, -$2.04, -5.57%), which makes polishing compounds and pads used in the semiconductor manufacturing process, warned that litigation expenses had significantly driven up its fiscal third-quarter costs. It also said it expects to report $101.7 million in revenue, with Wall Street looking for $102 million.
Freight forwarder Expeditors International of Washington Inc. (EXPD, $39.47, +$2.31, +6.22%) predicted its second-quarter earnings will beat expectations because of large increases in both air- and ocean-freight volume. Shares climbed 7.9% to $40.10 after hours.
IGate Corp.'s (IGTE, $15.03, +$0.86, +6.07%) second-quarter earnings climbed 84%, beating analysts' estimates, as revenue surged at the information-technology outsourcing company. The company has posted improving results since mid-2009 as businesses have resumed spending but remained reluctant to hire. The sector is also benefiting as clients revisit projects they scrapped or delayed during the downturn.
Credit Suisse cut the rating on insurer Lincoln National Corp. (LNC, $24.49, -$1.00, -3.93%) to neutral from outperform, saying it is more concerned about impairments if interest rates remain low.
Magellan Midstream Partners LP (MMP, $46.92, -$1.32, -2.74%) said its planned equity sale of at least 5 million shares was priced at a 3.3% discount to Tuesday's close as the petroleum pipeline and storage company raises capital to help fund its planned purchase of assets from BP PLC (BP, BP.LN). Beyond the $289 million deal, proceeds from the equity sale will also go toward debt repayment.
Nokia Siemens Networks is in talks to buy the telecom-equipment arm of Motorola Inc. (MOT, $7.44, +$0.23, +3.19%), people familiar with the matter told The Wall Street Journal, a deal that would hasten the dismantling of the U.S. technology company. The two companies are discussing terms, and a deal could be worth $1.1 billion to $1.3 billion, one of the people said. A deal could be reached in the next few weeks, people familiar with the matter said, though talks could still fall apart. Meanwhile, MKM Partners boosted its rating on Motorola to neutral from sell, saying the company is likely to benefit from its rivals' woes.
Northrop Grumman Corp. (NOC, $56.60, +$1.34, +2.43%) said it plans to consolidate its Gulf Coast shipbuilding operations at its Pascagoula, Miss., plant and has hired advisers to explore options for that business. The defense contractor said it will take a $113 million second-quarter charge related to the consolidation, and ship construction at its plant in Avondale, La., near New Orleans, will wind down in 2013.
Goldman Sachs downgraded its view on the entire chemical sector to neutral from attractive, specifically cutting the ratings on Sherwin-Williams Co. (SHW, $71.59, -$1.63, -2.23%) and Praxair Inc. (PX, $82.47, -$1.02, -1.22%), and saying for the whole group that "recent global economic data point to a more muted growth outlook in the near term." In putting Sherwin-Williams, the paint company, on its America's Sell List, Goldman said it would suffer from domestic residential and commercial construction remaining weak.
Texas Industries Inc. (TXI, $28.57, -$2.09, -6.82%) said it was delaying its fourth-quarter and full-year earnings report, which was scheduled for Wednesday, and would report instead next Tuesday. The cement producer didn't give a reason for the delay.
VisionChina Media Inc. (VISN, $3.36, +$0.07, +2.13%) announced a five-year renewal with the Beijing subway system that allows the Chinese advertising company to exclusively operate subway mobile-digital television and ad network.
Whitney Holding Corp. (WTNY, $8.71, -$1.26, -12.64%) said it expects to record a $57 million to $62 million provision for credit losses for its second quarter because of the ongoing weakness in Florida real estate. Sterne Agee cut its rating on the banking company to neutral from buy saying it had expected a provision between $32 million and $35 million.
Yum Brands Inc.'s (YUM, $40.36, -$1.14, -2.75%) second-quarter earnings fell 5.6% after a large prior-year gain, but core results rose above analysts' expectations and the fast-food company boosted it profit projection for the year. But the company's new view remained shy of Wall Street expectations.
-By Dow Jones Newswires; write to hotstocks@dowjones.com
Intel (INTC, $21.94, +$0.93, +4.43%) blew away Wall Street estimates with its second-quarter results, but the chip giant's closely watched gross margins were even more impressive, as the company raised its 2010 outlook to 66% from 64%. Meanwhile, Intel's guidance for third-quarter revenue and gross margin was above consensus. Chief Executive Paul Otellini said this was the best quarter in the company's 42-year history. Intel's strong results boosted stocks across the tech sector. Gainers included PC maker Dell Inc. (DELL, $13.61, +$0.41, +3.11%) and fellow chip makers Advanced Micro Devices Inc. (AMD, $7.60, +$0.08, +1.06%) and Nvidia Corp. (NVDA, $11.00, +$0.08, +0.73%). Hard-drive makers Seagate Technology Inc. (STX, $15.01, +$0.55, +3.80%) and Western Digital Corp. (WDC, $32.72, +$0.68, +2.12%) also gained.
Jackson Hewitt's (JTX, $1.60, +$0.29, +22.14%) fiscal fourth-quarter earnings rose 16% on income-tax adjustments while adjusted results fell--albeit less than analysts expected--as the tax preparer saw lower revenue from fewer returns prepared.
Home health-care providers Gentiva Health Services (GTIV, $21.02, -$1.28, -5.74%) and LHC Group Inc. (LHCG, $21.74, -$1.28, -5.56%) are targets of a Securities and Exchange Commission investigation related to possible abuse of Medicare rules, both said separately after the markets closed Tuesday. Competitors Amedisys Inc. (AMED, $26.35, -$0.22, -0.83%) and Almost Family Inc. (AFAM, $25.20, -$1.16, -4.40%) had both reported they were under SEC investigation earlier this month, and all four are also facing an inquiry by the Senate Finance Committee.
Morgan Stanley downgraded Lexmark International Inc. (LXK, $31.97, -$3.02, -8.63%) to underweight from equalweight because the printer maker faces increased competition on laser printers, reduced growth as inventory stocking slows and an earnings risk thanks to the falling value of the euro.
Amtech Systems Inc. (ASYS, $9.27, +$0.66, +7.67%) said its fiscal third-quarter revenue soared to a record level, topping expectations, as orders increased for its solar products. Solar-equipment demand has rebounded strongly this year as installation of new solar panels continues to climb amid falling sales.
HSW International (HSWI, $4.23, +$2.18, +106.34%) has agreed to distribute its BoWenWang website's content via Internet portal and gaming company Netease.com Inc. (NTES, $33.31, -$0.99, -2.89%). HSW said the partnership will expose its content to "millions of Chinese" viewers. Netease runs a popular email service, an online portal and online games.
Other Stocks In Focus:
AAR Corp.'s (AIR, $17.26, -$0.65, -3.63%) fiscal fourth-quarter earnings dropped 21% as the aircraft leasing and maintenance company continues to wait for its commercial aviation business to pick up.
Adtran Inc. (ADTN, $30.69, +$1.83, +6.32%), a provider of networking and communications equipment, reported better-than-expected second-quarter results, as the company said it was boosted by "strong demand for high-speed connectivity coupled with increasing demand for Ethernet services."
Europe's antitrust regulator Wednesday cleared a business alliance between AMR Corp.'s (AMR, $7.24, +$0.11, +1.54%) American Airlines, British Airways PLC (BAIRY, $31.75, +$0.00, +0.00%) and Spain's Iberia Lineas Aereas de Espana SA (IBLA.MC) that will allow them to cooperate closely on trans-Atlantic flights. The pact allows the airlines to share revenue, combine their marketing and flight planning, and collaborate on pricing. The European Union clearance means they are immune from usual antitrust rules that forbid collusion between companies so as to allow consumers to benefit from lower prices.
Annaly Capital Management Inc. (NLY, $17.57, -$0.69, -3.78%) announced that its planned offering of at least 60 million shares has been priced at a 4-cent premium to Tuesday's close. Still, shares fell as the offering would increase the number of shares outstanding for the real-estate investment trust by about 11%.
Shares in Dutch semiconductor equipment maker ASML Holding (ASML, $31.81, +$0.54, +1.73%) gained Wednesday as the company said it will ramp up production in anticipation of a record year for sales after its second-quarter earnings beat expectations.
Benihana Inc. (BNHN, $6.80, +$0.77, +12.77%) (BNHNA, $6.31, +$0.89, +16.31%) said its board will consider several options, including a possible sale of the largest U.S. chain of Japanese theme and sushi restaurants, to maximize shareholder value and quell investor discontent.
Cabot Microelectronics Corp. (CCMP, $34.61, -$2.04, -5.57%), which makes polishing compounds and pads used in the semiconductor manufacturing process, warned that litigation expenses had significantly driven up its fiscal third-quarter costs. It also said it expects to report $101.7 million in revenue, with Wall Street looking for $102 million.
Freight forwarder Expeditors International of Washington Inc. (EXPD, $39.47, +$2.31, +6.22%) predicted its second-quarter earnings will beat expectations because of large increases in both air- and ocean-freight volume. Shares climbed 7.9% to $40.10 after hours.
IGate Corp.'s (IGTE, $15.03, +$0.86, +6.07%) second-quarter earnings climbed 84%, beating analysts' estimates, as revenue surged at the information-technology outsourcing company. The company has posted improving results since mid-2009 as businesses have resumed spending but remained reluctant to hire. The sector is also benefiting as clients revisit projects they scrapped or delayed during the downturn.
Credit Suisse cut the rating on insurer Lincoln National Corp. (LNC, $24.49, -$1.00, -3.93%) to neutral from outperform, saying it is more concerned about impairments if interest rates remain low.
Magellan Midstream Partners LP (MMP, $46.92, -$1.32, -2.74%) said its planned equity sale of at least 5 million shares was priced at a 3.3% discount to Tuesday's close as the petroleum pipeline and storage company raises capital to help fund its planned purchase of assets from BP PLC (BP, BP.LN). Beyond the $289 million deal, proceeds from the equity sale will also go toward debt repayment.
Nokia Siemens Networks is in talks to buy the telecom-equipment arm of Motorola Inc. (MOT, $7.44, +$0.23, +3.19%), people familiar with the matter told The Wall Street Journal, a deal that would hasten the dismantling of the U.S. technology company. The two companies are discussing terms, and a deal could be worth $1.1 billion to $1.3 billion, one of the people said. A deal could be reached in the next few weeks, people familiar with the matter said, though talks could still fall apart. Meanwhile, MKM Partners boosted its rating on Motorola to neutral from sell, saying the company is likely to benefit from its rivals' woes.
Northrop Grumman Corp. (NOC, $56.60, +$1.34, +2.43%) said it plans to consolidate its Gulf Coast shipbuilding operations at its Pascagoula, Miss., plant and has hired advisers to explore options for that business. The defense contractor said it will take a $113 million second-quarter charge related to the consolidation, and ship construction at its plant in Avondale, La., near New Orleans, will wind down in 2013.
Goldman Sachs downgraded its view on the entire chemical sector to neutral from attractive, specifically cutting the ratings on Sherwin-Williams Co. (SHW, $71.59, -$1.63, -2.23%) and Praxair Inc. (PX, $82.47, -$1.02, -1.22%), and saying for the whole group that "recent global economic data point to a more muted growth outlook in the near term." In putting Sherwin-Williams, the paint company, on its America's Sell List, Goldman said it would suffer from domestic residential and commercial construction remaining weak.
Texas Industries Inc. (TXI, $28.57, -$2.09, -6.82%) said it was delaying its fourth-quarter and full-year earnings report, which was scheduled for Wednesday, and would report instead next Tuesday. The cement producer didn't give a reason for the delay.
VisionChina Media Inc. (VISN, $3.36, +$0.07, +2.13%) announced a five-year renewal with the Beijing subway system that allows the Chinese advertising company to exclusively operate subway mobile-digital television and ad network.
Whitney Holding Corp. (WTNY, $8.71, -$1.26, -12.64%) said it expects to record a $57 million to $62 million provision for credit losses for its second quarter because of the ongoing weakness in Florida real estate. Sterne Agee cut its rating on the banking company to neutral from buy saying it had expected a provision between $32 million and $35 million.
Yum Brands Inc.'s (YUM, $40.36, -$1.14, -2.75%) second-quarter earnings fell 5.6% after a large prior-year gain, but core results rose above analysts' expectations and the fast-food company boosted it profit projection for the year. But the company's new view remained shy of Wall Street expectations.
-By Dow Jones Newswires; write to hotstocks@dowjones.com
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