5:22PM Potash lowers FY08 EPS below consensus (POT) 74.22 -5.88 : Co lowers FY08 EPS to ~$10.75 vs. $11.56 First Call consensus, down from prior $12.00-13.00. Co says Q4 earnings are expected to be the third-highest in our history (behind only Q2 and Q3 of 2008) and full-year 2008 earnings will be our fifth consecutive record year and should be more than triple the $3.40 per share earned in 2007. This revision was precipitated by weaker Q4 sales volumes in all three nutrients, lower potash volumes to higher netback spot markets and lower prices and margins in our nitrogen and phosphate segments.These impacts have been partially offset by a 1% reduction in our consolidated reported corporate income tax rate. We anticipate total potash sales volumes for 2008 will be below 9 mln tonnes with potash gross margin more than triple that of 2007. Consistent with our long-held strategy of matching production to meet market demand, we recently announced a 2-mln-tonne curtailment of production beginning in January. We currently anticipate 2009 potash volumes could be similar to slightly above 2008 levels with a strong final three quarters next year. Annualizing expected Q4 2008 per-tonne potash prices alone could push 2009 realizations to almost $200 per tonne higher than those for full-year 2008, without considering price increases already achieved by Canpotex(2) for first-half 2009 shipments to Korea and Japan or upcoming contract settlements with China and India for 2009. Given difficult global credit conditions and increased geopolitical risk in certain regions where prospective potash capacity might have been added over the next decade, we believe that the 8 mln tonnes of brownfield capacity we are adding over the next five years is even more valuable today than it was when we announced the projects. While we anticipate a slow start to 2009 for all three nutrients, we believe global production curtailments - the logical economic response to supply/demand imbalances when buyers step away from the market - will significantly tighten these markets when demand returns, which we expect to be during the second-quarter of 2009.
4:32PM Darden Restaurants beats by $0.14, beats on revs (DRI) 23.98 -0.15 : Reports Q2 (Nov) earnings of $0.44 per share, $0.14 better than the First Call consensus of $0.30; revenues rose 9.9% year/year to $1.67 bln vs the $1.65 bln consensus. Darden stated that it now expects combined U.S. same-restaurant sales declines in fiscal 2009 of approximately -1.25% to -2.25% for Red Lobster, Olive Garden and LongHorn Steakhouse (which reflects anticipated declines of approximately -2% to -4% in the second half of the fiscal year), and that it now expects to open approximately 70 net new restaurants in fiscal 2009. The Company also stated that it now anticipates reported diluted net earnings per share declines from continuing operations of -1% to -6% in fiscal 2009, which includes the impact of the 53rd week.
4:13PM Research In Motion reports EPS in-line; guides Q4 EPS above consensus, revs above consensus (RIMM) 38.44 -2.23 : Reports Q3 (Nov) earnings of $0.83 per share, excluding non-recurring items, in-line with the First Call consensus of $0.83; revenues rose 7.9% year/year to $2.78 bln vs the $2.81 bln consensus. Co issues upside guidancefor Q4, sees EPS of $0.83-0.91 vs. $0.83 consensus; sees Q4 revs of $3.3-3.5 vs. $2.98 bln consensus. Sees gross margins of between 40-41% in Q4. Based on RIMM's current expectations for product mix and device average selling prices, RIMM expects gross margins in fiscal 2010 to be similar to or slightly better than Q4. The revenue breakdown for the quarter was approximately 81% for devices, 13% for service, 2% for software and 4% for other revenue. During the quarter, RIM shipped approximately 6.7 mln devices. Approximately 2.6 mln net new BlackBerry subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base increased from the prior quarter by approximately 14% to approximately 21 mln. Net subscriber account additions in the fourth quarter are expected to be approximately 2.9 mln.
4:09PM Teekay Shipping says it expects its Q3 results to exceed the current consensus estimate of $1.01 per share (TK) 15.42 -1.38 : Co announces that it expects Q3 EPS results to exceed the current consensus estimate of $1.01 per share. The co also announced that it expects to publish its complete Q3 results in January 2009, upon finalization of the regular quarterly review by the co's independent auditor, Ernst & Young LLP. The delay is due to a later than normal start to the co's Q3 earnings review process as a result of committing resources to finalize the previously announced restatement of historical results. The Company's estimated earnings for the third quarter of 2008 reflect the strong spot tanker freight rates prevalent during the quarter. As a result, the Company realized an average Suezmax spot rate of approximately $67,000 per day and an average Aframax spot rate of approximately $46,000 per day. This counter-seasonal strength in tanker freight rates was primarily due to higher volumes of oil production from ton-mile intensive OPEC producers, rising crude oil import volumes into the United States, China and India, as well as other factors, including port delays in the United States and Japan and stockpiling of oil ahead of the Olympics in China. Tanker rates have also been supported in the second half of 2008 by a dampening of tanker supply growth due to the removal of tankers from the global fleet for conversion purposes and an increase in scrapping compared to previous years. During the first nine months of 2008, the world tanker fleet grew by three percent, a decrease from the annual fleet supply growth rate of approximately six percent experienced for the same period in 2006 and 2007.
4:08PM Teekay Tankers reports Q3 EPS of $0.84, excluding $0.06 unrealized loss relating to the change in fair value of an interest rate swap, vs $0.79 First Call consensus; revs of $41.5 mln vs $38.96 mln First Call consensus (TNK) 11.30 -1.48 : Average spot tanker freight rates during the third quarter of 2008 were the highest on record for a third quarter. This counter-seasonal strength in tanker freight rates was primarily due to higher volumes of oil production from ton-mile intensive OPEC producers, rising crude oil import volumes into the United States, China and India, as well as other factors, including port delays in the United States and Japan and stockpiling of oil ahead of the Olympics in China.
4:05PM Accenture beats by $0.06, beats on revs; guides Q2 revs below consensus; guides FY09 EPS in-line (ACN) 30.36 +0.12 : Reports Q1 (Nov) earnings of $0.74 per share, $0.06 better than the First Call consensus of $0.68; revenues rose 6.0% year/year to $6.47 bln vs the $5.97 bln consensus. Co issues Q2 guidance below consensus, sees Q2 revs of $5.45-5.65 bln vs. $5.71 bln consensus. Co issues in-line guidance for FY09, sees EPS of $2.78-2.85 from previous guidance of $2.85-2.93 vs. $2.78 consensus. Accenture now expects operating cash flow to be $2.8 bln to $3.0 bln; property and equipment additions to be $370 mln; and free cash flow to be in the range of $2.4 bln to $2.6 bln. The co's previous outlook was $3.0 bln to $3.2 bln for operating cash flow; $425 mln for property and equipment additions; and $2.6 bln to $2.8 bln for free cash flow.
4:04PM Oracle reports EPS in-line, misses on revs (ORCL) : Reports Q2 (Nov) earnings of $0.34 per share, excluding non-recurring items, in-line with the First Call consensus of $0.34; revenues rose 5.5% year/year to $5.61 bln vs the $5.84 bln consensus.
4:01PM Intrepid Potash expects sales levels for the Q4 to be less than half of the levels seen in Q3; consensus calls for a decline of ~2% sequentially (IPI) 20.21 -0.56 : Co announced that, consistent with public announcements from other fertilizer producers, the co has seen the reduction and deferral of sales of potash and langbeinite, which normally would occur in the fourth quarter, into early 2009. Due to these reductions and deferrals, the co expects sales levels for 4Q08 to be less than half of the levels seen in the third quarter of this year (consensus calls for a decline of ~2%). In addition, the co anticipates producing potash and langbeinite volumes for the full year that are below the previous guidance range and anticipates that its corresponding annual cost of goods sold for both potash and langbeinite will be higher than previous guidance. The higher cost per ton numbers are a function of the co strengthening its workforce and continuing infrastructure improvements while at the same time producing fewer tons. In order to manage some variable cost elements, the co has recently elected to reduce its contract labor in Carlsbad, New Mexico through the end of 2008 and into 2009 as long as the current market conditions exist. As a result of entering 2009 with relatively higher than historical inventory levels, and in an effort to manage the supply demand balance, the Company currently anticipates that 2009 potash production will be below 800,000 tons. "We are evaluating the market in a real-time fashion and taking the appropriate actions to navigate the Company through this period of general market uncertainty. We will continue to actively monitor sales and production rates to manage inventory levels against the near-term market demand profile while at the same time being thoughtful about long-term fundamentals. We firmly believe that the macro potash trends of world population growth, improved diets and farmers investing for yield remain unchanged. The strength of our debt-free balance sheet allows us to make these proactive, real-time, operating and marketing decisions that are in the best long-term interests of our stockholders."
8:43AM Discover Financial Services reports Q4 (Nov) of $0.92, may not be comparable to consensus of $0.13 (DFS) : Reports Q4 (Nov) earnings of $0.92 per share, including settlement, may not be comparable to the First Call consensus of $0.13. On October 27, 2008 Discover reached a $2.75 bln settlement of its antitrust lawsuit with Visa and MasterCard. Discover received an $863 mln payment in November 2008, and expects to receive the remaining proceeds in equal $472 mln installments over the four quarters of 2009. The proceeds will be reflected as revenue in Discover's U.S. Card segment in the period earned. Fourth quarter income from continuing operations was $444 mln, up from $210 mln in the fourth quarter of 2007. The fourth-quarter managed net charge-off rate was 5.48% and the managed over 30 days delinquency rate was 4.56%. Provision for loan losses increased $521 mln, or 89%, due to higher net charge-offs and an increase in loan loss reserves in excess of charge-offs in the quarter. The reserve increase in excess of charge-offs of $415 mln resulted from a higher reserve rate as well as higher on-balance sheet loans due to maturing securitizations. The company continues to maintain liquidity and capital positions that it believes are appropriate for the current environment. Cash liquidity was $9.4 bln and tangible equity was $5.5 bln, or 11.0% of net managed receivables, at November 30, 2008. The co applied to the U.S. Treasury to participate in the Capital Purchase Program and to the Federal Reserve to become a bank holding co.
7:47AM Covance lowers FY08 guidance (CVD) 42.78 : Co revised its financial expectations for 2008 and provided financial guidance for 2009. Covance now expects 2008 full-year earnings per share to be $3.02 on low double-digit revenue growth versus the previous expectation of earnings per share of $3.18 on low-teens revenue growth (both EPS targets exclude the gain from the sale of centralized ECG services) vs $3.14 First Call consensus. Co expects full-year 2009 revenue growth to be in the range of approximately 5-10% over 2008 and EPS to be in the range of $3.00 to $3.20 vs $3.44 First Call consensus. These results assume foreign exchange rates remain at budgeted levels throughout 2009, which would negatively impact year-on-year growth in revenue by approximately $100 mln and earnings per share by $0.27 versus the average 2008 exchange rates. Excluding the impact of foreign exchange, revenue growth is expected to be in the range of approximately 10-15% and earnings growth is expected to be in the range of approximately 8-15%. Looking to the first quarter of 2009, co expects a modest sequential decline in earnings per share from the fourth quarter of 2008, relating largely to new operations coming online.
7:15AM Wimm-Bill-Dann Foods reports Q3 op income of $67.6 mln vs $59.9 mln; revs $702.1 mln vs $749.99 mln First Call consensus (WBD) 26.30 :
7:04AM Ingersoll-Rand lowers Fourth-Quarter and Full-Year 2008 Revenue and Earnings Estimates (IR) 16.35 : Co issues downside guidance for Q4 (Dec), sees EPS of $0.20-0.30 down from $0.55-0.75 vs. $0.60 First Call consensus; sees Q4 (Dec) revs of $3.7 bln down from $4.1 bln vs. $4.03 bln consensus. Co says "Our initial forecast for the fourth quarter of 2008 was based on sharply lower growth expectations compared with the first half of the year as we anticipated weaker results in many of our key end markets... The rate of decline accelerated compared with prior expectations. We had lower than expected revenues in all of our business segments, primarily due to softer North American and sharply declining Western European markets. The rate of deterioration in European economic activity was especially severe over the last six weeks. The strengthening of the U.S. dollar against the Euro also amplified the year-over-year revenue decline... "We have accelerated our previously announced productivity actions for the balance of the year and for 2009 to deal with the slowing environment, while continuing to build a strong business for the future. We are realizing the synergies from the recent acquisition of Trane and from our initiatives in purchasing and Lean Six Sigma, which will produce even greater benefits in 2009. We expect the Trane acquisition synergies to exceed $75 mln in 2008 and we are on track to realize an additional $125 mln in 2009. We are also targeting to capture significant material cost reductions in 2009 from the recent sharp declines in key commodities.
6:40AM Apogee Enterpr beats by $0.17, beats on revs; reaffirms FY09 guidance of $1.65-$1.82 (APOG) 8.95 : Reports Q3 (Nov) earnings of $0.58 per share, excluding gain of $0.04 per share on the sale of its 34-percent interest in the PPG Auto Glass LLC joint venture,$0.17 better than the First Call consensus of $0.41; revenues rose 13.9% year/year to $240.4 mln vs the $235 mln consensus. Co reaffirms FY09 guidance of $1.65-$1.82. Co says "Delays, cancellations and slower conversion of bid projects into awards have impacted the size of our backlog and have led to uncertainty regarding our outlook for fiscal 2010. At this time, we estimate that our fiscal 2010 revenues are likely to be down at least 10 percent.
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