Stocks to watch Thursday: Trinity, Hill-Rom, Visa
7/26/12 7:04 AM ET (MarketWatch)
WASHINGTON (MarketWatch) -- Among the stocks that could see active trade in Thursday's session are Trinity Industries Inc., Hill-Rom Holdings Inc. and Western Digital Corp.
It's another heavy-duty day for corporate earnings, with United Technologies Corp. (UTX) , 3M Co.(MMM) and Exxon Mobil Corp. (XOM) heading up Thursday's roster. Also on deck are Amazon.Com Inc. (AMZN) , Facebook Inc. (FB) , Hershey Co. (HSY) , Starbucks Corp. (SBUX) , Waste Management Inc. (WM) , Raytheon Co. (RTN) , BorgWarner Inc. (BWA) , Precision Castparts Corp. (PCP) , Tenneco Inc. (TEN) , International Paper Co. (IP) , Kimberly-Clark Corp. (KMB) , Dow Chemical Co. (DOW) , Occidental Petroleum Corp. (OXY) , McGraw-Hill Cos. (MHP) , Moody's Corp. (MCO) , AmerisourceBergen Corp. (ABC) , McKesson Corp. (MCK) , Amgen Inc. (AMGN) , Celgene Corp. (CELG) , Gilead Sciences Inc. (GILD) , Mylan Inc. (MYL) and Watson Pharmaceuticals Inc. (WPI) , among others.
On the eve of reporting results, United Technologies reached a deal to sell its Hamilton Sundstrand industrial businesses -- Milton Roy Co., Sullair Corp. and Sundyne Corp. -- for $3.46 billion. The transaction with Carlyle Group LP(CG) and BC Partners is expected to close in the fourth quarter, pending regulatory approval. Proceeds will be used to repay part of the short-term debt that United Technologies took on to finance the pending acquisition of Goodrich Corp. (GR) , the Hartford, Conn.-based company said. "This represents another significant step forward in our ongoing portfolio transformation," said Louis Chenevert, chairman and chief executive of United Technologies, in a statement.
Also late Wednesday, Standard & Poor's said it will make a pair of changes in the composition of its S&P MidCap 400 and S&P SmallCap 600 indexex, both effective after the close of trading on July 31. SolarWinds Inc. (SWI) will take the place in the S&P MidCap 400 of Gen-Probe Inc. (GPRO) , which fellow MidCap 400 component Hologix Inc. (HOLX) is about to acquire. And HealthStream Inc. (HSTM) will replace GeoResources Inc. (GEOI) in the S&P SmallCap 600, as the acquisition of GeoResources by Halcon Resources Corp. (HK) nears completion.
Along with reporting second-quarter results, Trinity Industries (TRN) revised higher its profit outlook for 2012. The Dallas-based company now sees full-year earnings in a range of $2.95 to $3.10 a share, up from management's prior forecast of between $2.55 and $2.70 a share. For the second half, Trinity said it's aiming for a profit of $1.45 to $1.60 a share, a range that would include about 8 cents to 10 cents a share of costs expected to be incurred as the company makes changes in part of its production capacity.
Along with reporting results for the third quarter ended June 30, Visa Inc. (V) said its board authorized a new $1 billion buyback program covering Class A common shares, running through July 2013. In the latest quarter, the Foster City, Calif.-based company bought back about 4 million Class A shares at an average price of $115.51 each, for a total cost of $461 million, Visa's results showed. Read more on Visa's quarterly results.
Continuing a recent pattern of increases, the board of ONEOK Inc. (OKE) declared a quarterly dividend of 33 cents a share, an 8% increase over the energy company's previous payout. It's payable Aug. 15 to stockholders of record as of Aug. 6, the Tulsa-based company said. The dividend's adjusted to reflect Oneok's recent two-for-one stock split.
Along with reporting results for the third quarter ended June 30, Hill-Rom Holdings (HRC) lowered its outlook for fiscal 2012. "We have experienced further deterioration in our North American capital business and have updated our outlook accordingly," said John Greisch, Hill-Rom's President and CEO, in a statement. As revised, the Batesville, Ind.-based company expects to generate earnings of 53 cents to 55 cents a share on an adjusted basis for the fourth quarter, with revenue pegged at $413 million to $421 million. This would yield an adjusted profit of $2.21 to $2.23 a share for fiscal 2012, on revenue ranging around $1.62 billion. Hill-Rom's management previously had been looking for earnings of $2.45 to $2.50 a share for fiscal 2012. Separately, Hill-Rom said it agreed to buy Michigan-based Aspen Surgical Products, a privately held supplier of surgical consumable and specialty medical products, in a deal valued at $400 million.
Along with reporting a consensus-beating profit for the second quarter, Crocs Inc. (CROX) projected third-quarter earnings would be between 42 cents and 44 cents a share on revenue of $300 million. Analysts surveyed by FactSet Research, on average, have been looking for the Niwot, Colo.-based footwear maker to post earnings of 42 cents on revenue of $321 million. And for the year, Crocs is shooting for earnings in a range of $1.50 to $1.54 a share. Recapping the company's performance for the second quarter, President and CEO John McCarvel said: "Conditions in Europe, including currency headwinds, and slower-than-expected retail sales in the Americas resulted in slightly lower growth than expected." However, management is "very encouraged by continued strong growth of Asia, sell-through of our products in key wholesale accounts, our international retail performance, all driven by customer enthusiasm for our new products," McCarvel said in the Crocs earnings release.
Providence Service Corp. (PRSC) lowered its financial forecast for the second quarter, pegging earnings in a range of 10 cents to 11 cents a share on revenue of about $279 million. Previously, the Tucson, Ariz.-based company had been aiming for a quarterly profit of 17 cents a share on revenue of about $275 million. Providence Service cited, among other factors, higher-than-forecast expenses for claims under its self-funded employee health plan as well as costs incurred as the company weighed strategic alternatives. Providence Service will formally report financial results for the June quarter after the close of trading on Aug. 8.
Continuing a recent pattern of secondary offerings, Newcastle Investment Corp. (NCT) will put up for sale another 20 million common shares. The New York-based company plans to use net proceeds for investments in excess mortgage-servicing rights, non-agency residential mortgage-backed securities, senior living facilities and other real estate-related assets. Underwriters will have a 30-day option to buy up to 3 million additional shares if investor demand warrants. In the three months ended March 31, Newcastle had nearly 105.7 million weighted average common shares outstanding on a fully diluted basis.
Texas Capital Bancshares Inc. (TCBI) commenced a public offering of nearly 1.8 million common shares, filing a registration statement and prospectus with the Securities and Exchange Commission, with underwriters having a 30-day option to buy up to an additional 15% of common stock if needed to satisfy investor demand. The Dallas-based company said it plans to put net proceeds to use in funding Texas Capital Bank's growth. Word of the secondary offering came as Texas Capital Bancshares reported higher net income for the second quarter late Wednesday.
Wednesday earnings recap
Western Digital (WDC) posted a net profit of $745 million, or $2.87 a share, for the fourth quarter ended June 29, up sharply from $158 million, or 67 cents, earned in the final three months of fiscal 2011. The Irvine, Calif.-based company likewise showed a big jump in quarterly revenue -- to $4.75 billion from the prior year's $2.4 billion. On an adjusted basis, Western Digital would have earned $3.35 a share for the latest quarter. Analysts surveyed by FactSet had forecast, on average, a profit of $2.47 a share and revenue of $4.25 billion. The company shipped 71 million hard-disk drives during the latest quarter, with CEO John Coyne saying that "demand was in line with our forecast."
Akamai Technologies Inc. (AKAM) reported a second-quarter profit of $44 million, or 24 cents a share, off from $48 million, or 25 cents, earned in the comparable period during 2011. Quarterly revenue improved to $331.3 million from the prior year's $319.4 million. On an adjusted basis, the Cambridge, Mass.-based company said it would have earned 43 cents a share for the latest quarter. The FactSet-derived consensus forecast had been for earnings of 37 cents a share on $326.2 million in revenue.