Alcoa (AA) posts $0.66, vs. $0.81 a year ago, second quarter GAAP EPS on 5.6% lower sales. Notes that, while second quarter results were down year over year, its profitability compared with the first quarter 2008 rose 80%, as higher input costs impacting the entire aluminum industry were offset by higher volume and stronger pricing. S&P reiterates buy. Friedman Billings upgrades to outperform.
Cisco Systems (CSCO) falls 1.30 to 21.58 after CEO Chambers tells Reuters many of his customers see the economy picking up early next year rather than later this year. UBS Financial cuts target price on CSCO, maintains neutral.
Merrill Lynch (MER) is down 3.03 to 29.74 after CNBC's Charlie Gasparino reports MER and BlackRock (BLK) have scheduled talks about MER's possible sale of all or part of its 49% stock in BlackRock. Earlier, Fitch Ratings Services placed the 'A+' long-term Issuer Default Ratings and its units on Rating Watch Negative for MER.
Freddie Mac (FRE) and Fannie Mae (FNM) shares are seen weaker today on fears the companies will need to raise capital by selling billions of dollars worth of stock.
QLogic (QLGC) sees $0.31-$0.31 first quarter non-GAAP EPS on revenues in the range of $166-$168 million, vs. previous forecast for $0.26-$0.28 non-GAAP EPS, $154-$158 million revenue. Says revenue performance was driven by sequential growth of about 9% for its Host Products, about 8% for its Network Products from Q4 fiscal year 2008.
Steel Dynamics (STLD) and Nucor (NUE) rise after UBS Financial upgrades STLD and NUE to buy from neutral, as it believes upcoming earnings will remind investors of that group's attractiveness.
Cleveland-Cliffs (CLF) rises 17.84 to 109.78 after the company raises its outlook for iron ore revenue from its Asia-Pacific segment to $102 per tonn and its North American segment to $85 per short ton for 2008. Notes recent iron ore pricing settlements in Australia of an 80% increase for fines and a 97% increase for lump, and now expects an approximate 34% increase in adjustment factors related to steel pricing, using an annual average hot band steel price of $750 per ton at certain customer's steelmaking facilities.
Sealy (ZZ) posts $0.13, vs. $0.17, second quarter EPS on 6.6% sales decline. Expects second-half performance to be challenging as industry trends weakened further in June and retail traffic remains soft; also expects to incur significantly higher material costs due to rapidly growing inflation on core materials, along with additional promotional expenses associated with new product launches. S&P maintains hold.
Mohawk Industries (MHK) cuts $1.36-$1.45 second quarter EPS guidance to $1.23-$1.26. Cites continuing decline in the U.S. residential market, slowing European demand and rapidly increasing raw material and energy costs. S&P maintains hold.
