Stocks to watch Friday: AIG, AAR, Royal Gold
WASHINGTON (MarketWatch) -- Among the stocks that could see active trade in Friday's session are
Marking another milestone, AIG (AIG) said it's now reduced U.S. government-authorized support in the company by more than $152 billion as a result of the repayment of the Federal Reserve's so-called Maiden Lane III LLC loan. The Federal Reserve Bank of New York recently completed auctions of Maiden Lane III assets, meaning AIG has fully repaid the non-recourse loan using cash flows from interest and principal payments as well as liquidation of assets. The New York-based company, which received billions in federal support at the height of the 2008-2009 financial crisis, noted the Fed earned nearly $3 billion from the previous sale of the Maiden Lane II portfolio and said the central bank "could earn as much" when the Maiden Lane III portfolio has been fully liquidated. The U.S. Treasury still owns about $30 billion in AIG common stock as the government's remaining investment. Maximum support for AIG authorized by the government reached $182 billion in 2008, of which $21 billion was unused or expired, the company said.
AAR (AIR) isn't scheduled to formally report until July 17 its financial results for the fourth quarter ended May 31, but the Wood Dale, Ill.-based company disclosed preliminary results late Thursday -- including the highest quarterly sales in company history -- and set forth its outlook for fiscal 2013. Net earnings for the May quarter are pegged at 30 cents to 32 cents a share, with profit on an adjusted basis seen in a range of 44 cents and 46 cents a share. Quarterly sales are expected to range between $560 million and $565 million. Special charges taken against results for the latest quarter are expected to total about $13.5 million, AAR said. For fiscal 2013, the company projected earnings of $1.55 to $1.65 a share on consolidated sales of $2.1 billion to $2.2 billion. Separately, AAR's board authorized the company to buy back up to $50 million in common stock. Repurchases will be made from time to time in open-market or private transactions using available cash and cash generated from operations, the company said. The new authorization replaces a stock-buyback program in effect since 2006.
Also late Thursday, Royal Gold (RGLD) priced a $325 million public offering of convertible senior notes. The offering of the 7-year notes is scheduled to close June 20, the Denver-based company said. Royal Gold granted underwriters a 30-day option to buy up to an additional $45 million of the notes if needed to satisfy investor demand. Net proceeds will be used to pay down and terminate Royal Gold's term-loan facility as well as for general corporate purposes, including future acquisitions. The notes will pay interest twice a year, at a rate of 2.875%, starting Dec. 15. Effective March 15, 2019, or earlier if certain events take place, the notes can be converted into Royal Gold common stock at an initial rate of 9.4955 shares per $1,000 principal amount. The initial conversion price of about $105.31 a share represents a 35% premium over the closing price on Royal Gold's Nasdaq-listed common stock on Thursday. Royal Gold said it may redeem some or all of the notes for cash under certain circumstances on or after June 15, 2015.
The board of Oil-Dri Corp. of America (ODC) authorized the further repurchase of common stock. An additional 250,000 shares can be repurchased, on top of 89,229 shares still available under previous authorizations, the company said. Oil-Dri said it's bought back 277,648 shares during the fiscal year ending in July, at an average price of $21.08 each. The company had more than 7.1 million average shares outstanding on a diluted basis in the third quarter ended April 30. Chicago-based Oil-Dri's board also declared a quarterly cash dividend on common stock of 18 cents a share, representing an increase of nearly 6%. It's payable Aug. 31 to stockholders of record as of Aug. 17.
The board of
Wabtec Corp. (WAB) said it paid about $88 million to acquire Mors Smitt Holding, a manufacturer of electronic components for rail and industrial markets that has annual sales of about $60 million. The deal's expected to contribute to earnings in its first year, Wilmerding, Pa.-based Wabtec said. With about 350 employees, Mors Smitt has operations in the Netherlands, the United Kingdom, the U.S., France, China and Hong Kong.
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