(Source: Business Week)
Lehman Brothers (LEH) shares drop S&P's Ratings Services places its ratings on LEH and all related entities on CreditWatch with negative implications, and now believes LEH incurred a "substantial net loss" in the third quarter. Earlier, Dow Jones reported that South Korea's Financial Services Commission Chairman Jun Kwang-woo said Tuesday that talks between state-run Korea Development Bank and LEH have ended. He declined to say what conclusions, if any, had been reached, the report said. Separately, Ladenburg says LEH's failure to get a deal done is hurting stock; it lowers estimates.
Wachovia (WB) falls 2.40 to 16.59 after names David Zwiener as CFO. S&P maintains sell. Separately, Merrill downgrades to underperform.
Washington Mutual (WM) falls after S&P Equity Research slashes target price by $2 to $4 as it expects continued volatility in the shares until new management can improve its capital ratios, and some stability in the housing market is realized. Yesterday WM announced that Alan H. Fishman has been appointed CEO to succeed Kerry Killinger who is leaving WM.
TW Telecom (TWTC) says it is continuing to experience strong sales, but that pressure on revenue growth is also ongoing due to economic conditions. S&P maintains hold. Citigroup downgrades to hold from buy. Merriman Curhan downgrades to neutral from buy.
Google (GOOG) rise 4.35 to 424.30. Stifel Nicolaus sees anti-trust challenge to Google-Yahoo (YHOO) search deal as likely; it reiterates buy on GOOG.
Avery Dennison (AVY) says unaudited preliminary internal reports for July and August show consolidated net EPS about $0.15-$0.20 below the company's internal forecast for those months. Cites further economic weakness in markets which AVY serves.
H.B. Fuller (FUL) lowers fiscal year 2008 EPS from continuing operations guidance to $1.55-$1.60 from $1.76-$1.86. Cites rapidly rising raw material costs. Sees third quarter EPS of about $0.44 on revenue of $362 million. For fourth quarter, it sees EPS of $0.40-$0.45 on revenue of $380-$390 million. S&P downgrades to sell from hold.
McDonald's (MCD) posts 4.5% higher August US same-store sales [SSS], 12% higher Europe SSS, 8.5% higher global SSS. Also reports 14% [10% in constant currencies] higher system-wide sales for its worldwide restaurants.
Korn/Ferry International (KFY) posts $0.36, vs. $0.36 a year ago, first quarter EPS as higher operating expenses offset 11% higher total revenue. Sees $0.26-$0.33 second quarter EPS on $185-$200 million fee revenue. Baird maintains outperform.
Hewlett-Packard (HPQ) - Bernstein reportedly upgrades HPQ to outperform from market perform.
Credit Suisse reportedly downgrades U.S. homebuilders industry to market weight from overweight. Specifically, it cuts Toll Brothers (TOL), D.R. Horton (DHI), KB Home (KBH), and Pulte (PHM) to neutral from outperform.
Pep Boys-Manny, Moe & Jack (PBY) posts $0.11, vs. $0.07, second quarter EPS from continuing operations despite 7.5% lower same-store sales, 9.4% lower total sales. Says results reflect disciplined spending control, reduced interest expense as a result of paying down debt, a $4.1 million gain from the disposition of assets and improved product margin rates. These benefits were largely offset by gross profit pressure associated with reduction in sales.
