(By Mayur Pahilajani - iStockAnalyst Writer)
New York, NY - Ahead of the U.S. Federal Reserve decision to slash key lending rate on funds, the stocks on Wall Street are trading higher. Investors are hopeful that the Fed's decision will ease the strain on credit market condition.
Digital River Inc (NASDAQ GS: DRIV):
The provider of global e-commerce solutions plunged to hit a new low on Wednesday a day it reported lower-than-expected third quarter results on lower consumer spending and higher dollar exchange rate. The company said its third quarter net income was $15.6 million, or $0.39 per share, and compared to net income of $15.3 million, or $0.35 per share, in the third quarter of 2007. The firm's revenue in the third quarter amounted to $96.3 million, an increase of 16.7 percent from $82.5 million during the same period in 2007. The Eden Prairie, Minnesota-based company also lowered its full-year 2008 earnings and it now expects net income to be between $1.82 per share to $1.86 per share on revenue of around $392 million to $395 million. In the fourth quarter, the firm expects earnings of $0.43 per share to $0.48 per share on revenue of around $94 million to $97 million. Shares of the firm were dropping by $2.74 or 10.89 percent at $22.42 on Wednesday, following its fall to 52-week low of $21.50 from the previous low of $22.59.
CIGNA Corporation (NYSE: CI):
The health care insurer's outlook turned weak after its rival Aetna Inc. reported lower than anticipated profit with third quarter net income dropping 44 percent. The market analysts have reduced their forecast on insurers for the year as the financial turmoil is driving down the capital markets. Philadelphia-based Cigna Corp. is expected to report earnings for the third quarter on Thursday. Cigna may report losses similar to other largest U.S. managed-care companies on failed investments. The market analysts on Wall Street expect the company to report $1.06 per share earnings for the quarter on $4.86 billion in revenue. For the full-year 2008, the analysts expect Cigna to forecast net income of $4.18 per share on $19.17 billion in revenue. Experts including Oppenheimer analyst Carl McDonald have reduced the firm's 2009 earnings outlook on declining income from the investments. Shares of the firm were dropping by $2.06 or 9.26 percent at $20.19 on Wednesday, following its fall to a new 52-week low at $19.60 from the previous low of $20.26.
Ultimate Software Group Inc (NASDAQ GM: ULTI):
Investors were not satisfied with the third quarter earnings on the firm. The company reported a net loss for the third quarter of 2008 was $3.1 million, or $0.12 per share, compared to the net income of $2.4 million, or $0.09 per share, for the third quarter of 2007.
