Jim Cramer Blog

New economic data offered a relatively stable level of inflation, but investors took a pessimistic view of the numbers and sent stocks lower on the day. The disappointment stemmed in part from the fact that, while recent data has been pointing to a softening economy, inflation pressure is still being felt. All three major indexes closed moderately lower on the day
Looking at the numbers, the Labor Department's Consumer Price Index (CPI) rose 0.4% in February, ahead of the 0.3% expected by Wall Street. The closely watched core rate, which excludes volatile food and energy prices, was up 0.2%, matching expectations. Coming on the heels of yesterday's Producer Price Index (PPI) numbers, which pointed to some inflationary pressure, the CPI numbers left investors on edge.
In corporate news, several subprime mortgage stocks once again posted outsized gains as the crisis in that sector continues to shake out. Accredited Home Lenders (Nasdaq: LEND - News) added another 16% on top of yesterday's big gains after announcing that it would sell some of its loans at a discount, enabling it to meet looming margin calls. Fremont General (NYSE: FMT - News) tacked on 20% after its credit line with Credit Suisse was boosted by $1 billion.
Elsewhere, in the wake of the January announcement from the Federal Deposit Insurance Corp. delaying its review of bank charter applications from Wal-Mart (NYSE: WMT - News), the retailer has scrapped long-held plans to establish a bank. Wal-Mart's plans had come under fire because, among other arguments, some believe a Wal-Mart bank would have an unfair advantage over traditional banks. Wal-Mart has argued all along that it never intended to open its own bank, but that it sought to be classified as one in order to reduce credit and debit card transaction costs. Home Depot (NYSE: HD - News), which also has a pending application, has not abandoned its efforts.
In other news, CVS (NYSE: CVS - News) moved one step closer to completing its marathon effort to acquire pharmacy benefits manager Caremark Rx (NYSE: CMX - News) after Caremark shareholders approved CVS' $26.5 billion offer. CVS had been engaged in a long-running bidding war with Express Scripts (Nasdaq: ESRX - News) over Caremark.
Elsewhere in M&A, crude oil tanker company OMI Corp (NYSE: OMM - News) jumped 14.5% after management said it was considering putting the firm up for sale. Newmont Mining (NYSE: NEM - News), meanwhile, posted a modest gain after a BusinessWeek report suggested it might be a target of Barrick Gold (NYSE: ABX - News), the world's biggest gold producer. Barrick, however, dismissed the speculation.
Finally, tech giant Hewlett-Packard (NYSE: HPQ - News) announced the biggest stock buyback in its history, authorizing the repurchase of $8.0 billion in shares. The new authorization comes on top of the $3.3 billion HP had remaining, as of January 31st, under its prior $6.0 billion repurchase plan, which was approved in August 2006. The tech leader finished the session only slightly higher on the news.

Labels: ABX, CMX, CVS, ESRX, FMT, HD, HPQ, LEND, NEM, OMM, WMT

Sliding oil prices and a spate of M&A deals spurred investors to resume buying stocks. In doing so, they looked past the struggle that one of the nation's leading subprime lenders faces in a bid to survive. After a lackluster start to the week, buying picked up in the mid-afternoon as the major stock averages pushed sharply higher before easing somewhat in the final 30 minutes of trading. The 10-year Treasury note also attracted buyers, which cut the yield -4 basis points to 4.55%. Crude oil futures dipped near $59 a barrel.
Early in the day, the market was focused on the travails of New Century Financial (NYSE: NEW - News), which appears to be teetering on the brink of insolvency. The company disclosed in a filing with the Securities and Exchange Commission that all of its lenders have either cut financing or will cease to finance New Century's short-term borrowings. New Century said last Thursday it would no longer accept new loan applications due to liquidity problems. The company hinted it does not have the funds to meet current obligations, which may exceed $8 billion. Subscribers can read further analysis on the fallout from this latest development in today's issue.
Merger activity helped shake off the cloud created by New Century's woes. Ford Motor (NYSE: F - News) took a step toward funding its own recovery plan by announcing it has sold its Aston Martin unit to a consortium of investors for $848 million. The U.K.-based unit is best known for the exotic, pricey sports cars used in the James Bond movie series. The car now retails for between $110,000 and $270,000 each.
Schering-Plough (NYSE: SGP - News), meanwhile, announced it plans to buy the pharmaceuticals division of Akzo Nobel (Nasdaq: AKZOY - News) for $14.5 billion in cash. U.S.-traded shares of Akzo, a Dutch company, jumped 16% on the news. The deal will given Schering the Akzo Organon Biosciences unit, which makes a range of fertility, birth control, and women's health products. That addition should lessen Schering's dependence on its Vytorin and Zetia cholesterol-lowering drugs. Organon also has a treatment for schizophrenia and bipolar disorder in late-stage development, but Pfizer (NYSE: PFE - News), its partner in the development of the drug asenapine, dropped out after the treatment achieved mixed results in clinical trials.
In the health insurance sector, UnitedHealth Group (NYSE: UNH - News) agreed to buy Sierra Health Services (NYSE: SIE - News) for about $2.6 billion in cash. Sierra services about 310,000 employer-sponsored health plan members in Nevada and another 320,000 members enrolled in senior and government programs nationwide. UnitedHealth offered $43.50 a share for Sierra, or roughly a 21% premium over Friday's close. Sierra added 16% today. Separately, Express Scripts (Nasdaq: ESRX - News) ended 5% higher on the day after announcing it would not raise its bid for rival Caremark Rx (NYSE: CMX - News). Express Scripts has been battling drug-store retailer CVS (NYSE: CVS - News) to acquire Caremark. Both Caremark and CVS ended down -2%.
In the final major deal of the day, the management of discount retailer Dollar General (NYSE: DG - News) agreed to a $6.9 billion buyout bid from Kohlberg Kravis Roberts. KKR offered $22 a share, a 31% premium over Friday's close, for the operator of more than 8,200 discount stores nationwide. Dollar General jumped 26% higher on the news.
By the BullMarket.com Staff

Labels: AKZOY, CMX, CVS, DG, ESRX, F, NEW, pfe, SGP, SIE, UNH

Here are 7 options to watch for today. This list comes directly from the TradingMarkets Options Indicators page. The list is created using OptionVue options analysis software.
Most Under Priced Calls: These are the most under priced calls of all stocks in our database. While the Equities Explosion List finds groups of calls for individual equities that are under priced, this list finds the most under priced individual calls. Thus, the options listed here will tend to be more severely under priced.
Goldman Sachs Apr 230 Calls (NYSE:GS - News). GS' PowerRating is 5.
Most Under Priced Puts: These are the most under priced puts of all stocks in our database. While the Equities Explosion List finds groups of puts for individual equities that are under priced, this list finds the most under priced individual puts. Thus, the options listed here will tend to be more severely under priced.
Caremark RX Apr 60 Puts (NYSE:CMX - News). CMX's PowerRating is 5.
Most Overpriced Calls: These are the most overpriced calls of all stocks in our database. While the Equities Implosion List finds groups of calls for individual equities that are overpriced, this list finds the most overpriced individual calls. Thus, the options listed here will tend to be more severely overpriced.
Accredited Home Lenders Apr 10 Calls (NasdaqGS:LEND - News). LEND's PowerRating is 6.
Most Overpriced Puts: These are the most overpriced puts of all stocks in our database. While the Equities Implosion List finds groups of puts for individual equities that are overpriced, this list finds the most overpriced individual puts. Thus, the options listed here will tend to be more severely overpriced.
Mastercard Inc. Apr 90 Puts (NYSE:MA - News). PowerRating not available due to less than 200-day trading history. Google Apr 420 Puts (NasdaqGS:GOOG - News). GOOG's PowerRating is 5.
Stocks with Abnormal Call Volume: These are stocks which showed unusual call option volume not easily explained by arbitrage operations. The appearance of a stock on the Call Volume Alerts list suggests a possible takeover, extraordinarily good earnings report, or other news which may favorably affect the stock.
None Today.
Stocks with Abnormal Put Volume: These are stocks which showed unusual put option volume not easily explained by arbitrage operations. The appearance of a stock on the Put Volume Alerts list suggests an extraordinarily negative earnings report, or other news which may negatively affect the stock.
Fremont General (NYSE:FMT - News). FMT's PowerRating is 3.
Abnormal Put/Call $ Volume: These stocks have the highest dollar put volume in relation to their call volume. These high ratios are indicative of extreme bearish sentiment in the underlying stock.
Fannie Mae (NYSE:FNM - News). FNM's PowerRating is 5.
PowerRatings are courtesy of TradingMarkets.com

Labels: CMX, FMT, FNM, GOOG, GS, LEND, MA, stock options

Labels: CMX, ESRX, FSLR, GT, Jim Cramer, Mad Money, MHS, PAY

Express Scripts Inc. announced Wednesday it has increased its bid to acquire Caremark Rx Inc., but company officials said they expect closer scrutiny from federal regulators over the proposed deal. Express Scripts' offer is to acquire all outstanding shares of Caremark for $29.25 in cash and 0.426 shares of Express Scripts stock for each share of stock in Nashville-based Caremark.

The St. Louis-based pharmacy benefits manager said Wednesday it will now pay additional cash consideration of nearly 6 percent per annum, or 0.481 cents per share per day, on the $29.25 cash portion of its offer.
George Paz, Express Scripts president, chief executive officer and chairman, said the offer "demonstrates our commitment to this transaction and confidence in our ability to consummate it in a timely manner."

Labels: Caremark Rx Inc., CMX, ESRX, Express Scripts Inc.

Labels: AA, APPB, BHP, CMX, CVS, CVS Corp., ESRX, Express Scripts Inc., KBH, MMC, RTP

Published By MarketWatch

Labels: AA, APPB, BHP, CCE, CEN, CEPH, CMX, CVS, CYNO, FADV, FWRD, GM, GWR, HIMX, ICLR, ILMN, KBH, MMM, NDN, RTP

Labels: Caremark Rx Inc., CMX, CVS, CVS Corp., ESRX, Express Scripts Inc.

Bullish calls:
Disney (NYSE: DIS - News): ' a good quarter... it will be trapped by the strike next week because it's expiration ... I'm staying bullish on DIS. Iger's doing a great job ... Do not be perturbed that the stock did not go up after that great quarter.'Nike (NYSE: NKE - News): ' ....There are unbelievable stocks like NKE at $103.'Under Armour (NYSE: UA - News): ' ... maybe a little UA wouldn't be so bad either.'Safeway (NYSE: SWY - News): 'I like SWY in that department because its got that division that makes gift cards.'Express Scripts (NasdaqGS: ESRX)RBC Bearings (NasdaqGS: ROLL): ' That's pin action off of almost every piece of machinery that built in this country.'Amerisafe Inc. (NasdaqGS: AMSF): ' This is an insurance company, and most people don't understand it... the stock is going higher.'Avis Budget Group (NYSE: CAR - News): ' I felt so bad because I told people not to buy it and it worked ... I still think that CAR is good. I think you've got a good situation.'Autonation (NYSE: AN - News)IAC/InteractiveCorp (NasdaqGS: IACI): 'Man, what a great quarter. Wall Street hated that quarter. I don't know why... Doug Lebda [CEO] and Barry Diller....they're buying back stock hand over fist. I don't know how they're going to get the respect of Wall Street but they got it in Main Street. The stock is headed to the mid-40s.'Harley Davidson (NYSE: HOG - News): 'The bears are all over it ... I think at $65, we pull the trigger again ... It's not expensive. I am not worried.'Intercontinental Exchange (NYSE: ICE - News): 'Iceman's darn good ... I was too negative ... Ilike all the exchange stocks, but ICE - I'm blessing it right here, right now.'
Bearish calls:
Finish Line (NasdaqGS: FINL): 'I cannot let that Bar Mitzvah money stay idle in FINL when there are unbelievable stocks like NKE at $103 .... I need you to make the change right now."Whole Foods Market (NasdaqGS: WFMI): ' I think WFMI is too risky ahead of its quarter. I say ixnay.'Caremark Rx (NYSE: CMX - News): 'If you own CMX, you will get a higher bid from CVS next week. Then you will ring the register, because ESRX will not pay more. You swap out of CMX and go right into ESRX.'Home Inns & Hotels Management Inc. (NasdaqGM: HMIN): ' ... bulls make money, bears make money, hogs get slaughtered.... I want you to cut that position right now.'
Published By SeekingAlpha

Labels: AMSF, AN, CAR, CMX, DIS, ESRX, FINL, HMIN, HOG, IACI, ICE, Jim Cramer, Lightning Round, Mad Money, NKE, ROLL, SWY, UA

Stocks reversed course in the afternoon session as earnings season wound towards a conclusion. Earlier in the day, the market appeared poised for a rally until Federal Reserve governors William Poole of St. Louis and Richard Fisher of Dallas each said in separate speeches that interest rates could go higher if inflation doesn't taper off. Those comments proved to be the catalyst for the afternoon's selling pressure. Oil prices hovered in the vicinity of $60 a barrel, while bond prices also slipped with the yield on the 10-year Treasury note moving to 4.78%.
MasterCard (NYSE: MA - News) reported results that beat expectations, but the stock dropped -10% after the company warned that margins could come under pressure in 2007 and that it did not plan any price increases. The credit card company said it earned $41 million, or 30 cents a share, compared with a loss of -$53 million, or -39 cents per share, a year earlier. The company's revenue increased 17% to $839 million. The company also upped its quarterly cash dividend to 15 cents a share from 9 cents. MasterCard's shares have more than doubled since its IPO last year.
Automotive stocks were one of the day's stronger performers following upgrades by Deutsche Bank, which raised its rating on both General Motors (NYSE: GM - News) and Ford Motor (NYSE: F - News) to "buy." GM rose 7% and Ford gained 2%. DaimlerChrysler (NYSE: DCX - News), meanwhile, was upgraded to a "buy" by Citigroup and subsequently rose 2%. In the automotive parts sector, Lear (LEA, $xxxxx) agreed to be taken private by an affiliate of investor Carl Icahn for $2.8 billion, though the company left itself open to other bidders. One major investor criticized the price as too low. Lear finished down -2%.
Upgrades to the semiconductor sector by Deutsche Bank and J.P. Morgan failed to keep most stocks in that sector from succumbing to the day's negative tone. Deutsche Bank raised its rating on chip stocks to "overweight," highlighting market leader Intel (Nasdaq: INTC - News) and Broadcom (Nasdaq: BRCM - News). Broadcom last night reported that net income in the most recent quarter fell -76% due to a change in the way it accounts for stock options. Were it not for the one-time charges, the company would have earned $185 million, or 31 cents a share, compared to $197 million, or 34 cents per share. J.P. Morgan raised its rating for the semiconductor sector to "bullish," but the Semiconductor Sector Index (Philadelphia: ^SOXX) nonetheless closed down -1%.
Telecom equipment maker Alcatel-Lucent (NYSE: ALU - News) declined -3% after posting a Q4 loss and warning that it expects revenue to decline in the current quarter. The company also said it plans to cut 3,500 more jobs than originally planned, or 12,500 in total. In other news, a proxy advisory firm suggested shareholders of Caremark RX (NYSE: CMX - News) reject the merger offer from drug-store operator CVS (NYSE: CVS - News). The advisor, Glass Lewis, said that while the deal made strategic sense, Caremark's board should have allowed shareholders to consider a competing offer from Express Scripts (Nasdaq: ESRX - News).
In other earnings news, lumber and paper products company Weyerhaeuser (NYSE: WY - News) reversed a year-earlier Q4 loss. For the most-recent quarter, the company earned $450 million, or $1.88 per share, against a loss of -$211 million, or -86 cents a share, in Q405, which included costs associated with plant closings.
By Bullmarket.com Staff

Labels: ALU, BRCM, CMX, CVS, DCX, ESRX, F, GM, INTC, LEA, MA, WY

Rackable Systems (NASDAQ: RACK - News), Intel (NASDAQ: INTC - News), Hewlett-Packard (NYSE: HPQ - News), Microsoft (NASDAQ: MSFT - News), Cisco (NASDAQ: CSCO - News), Apple (NASDAQ: AAPL - News)
Cramer says that investors should be selling tech because seasonality is working against the sector, and that RACK's problem has more to do with the time of year than its component shortage and competition. Concerning Intel, Cramer explains its new chip will not reach a 90% to 95% acceptance rate this year, and since gross margins will not rise until then, Intel "cannot be owned" right now. However, the problems with RACK and Intel do not alter Cramer's prediction that tech will outperform in 2007. Cramer would buy HPQ because it will benefit from Microsoft's Vista. Cramer would also pick up Cisco down at $26 or $25 because of the incredible ramp in cable; "If you have a product cycle, I think you can ride out the seasonable weakness," Cramer said. Apple transcends seasonality because it is a "secular growth story and and a product cycle story." He would take advantage of any decline to buy Apple.
JP Morgan (NYSE: JPM - News), Capital One Financial (NYSE: COF - News)
Cramer is bullish on JP Morgan because of its credit card growth and added that COF is one of the most hated stocks, noting that there is a tremendous January $75 put to buy COF. If the company reports a lackluster quarter, the puts will act as a trampoline. Cramer says that it is worth investing in airlines again, and would take profits and buy them again.
UPS (NYSE: UPS - News), Procter & Gamble (NYSE: PG - News), Colgate (NYSE: CL - News), Kellogg (NYSE: K - News), General Mills (NYSE: GIS - News), Oil Service HOLDRs (AMEX: OIH - News), Caremark (NYSE: CMX - News), Rite Aid (NYSE: RAD - News), Comcast (NASDAQ: CMCSA - News), Time Warner (NYSE: TWX - News)
Cramer is bullish on UPS and likes rails, which are a buy on any decline because the trucking sector is suffering. He added that Goldman Sach's upgrade of PG was worth noting and, if it weren't for a strike, the stock could reach $67 or $69. He attributes the success of PG and CL to investor's desire to look for other soft goods that are not dependent on corn prices. However, since cereal is only 3% to 4% corn, Cramer thinks selling Kellogg and General Mills is premature. Concerning oil, Cramer thinks that OIH has been a reliable barometer for oil prices and is heading toward a bottom, but he hesitates to recommend it because it is an "easily manipulated index." Cramer would ring the register on Caremark, and of all the drugstores, he would own only RAD. Finally, Cramer predicted that Comcast is "headed dramatically higher" and said that, at $22, Time Warner is undervalued.

Published By SeekingAlpha

Labels: AAPL, CL, CMCSA, CMX, COF, CSCO, GIS, HPQ, INTC, Jim Cramer, JPM, K, MSFT, OIH, PG, RACK, RAD, TWX, UPS, Wall Street Confidential

One of the nation's largest banks reported strong earnings results, but mixed economic numbers that suggested it is unlikely the Federal Reserve will cut interest rates in the foreseeable future put a damper on the market. Stocks traded unevenly for most of the day and ultimately closed lower. Technology stocks were particularly weak in today's action. After hitting a 20-month low early in the trading session, crude oil futures prices mounted a modest rally to close above $52 a barrel, while the 10-year Treasury note slipped.
The Federal Reserve said that industrial production rose by 0.4% in December after two-consecutive months of -0.1% declines. The Labor Department, meanwhile, reported that wholesale prices rose 0.9% in December, which was a stronger gain than the 0.6% increase Wall Street was expecting. Core producer prices, excluding food and energy, rose 0.2%, which was in line with expectations. The government's reports on consumer prices, housing starts, building permits, and leading economic indicators are all scheduled for release tomorrow.
The Fed also announced that its latest survey of economic activity around the country, known as the "beige book," revealed that most regions of the country are experiencing modest economic growth despite the weak housing market. The central bank's report, which reflects survey data collected from the regional Federal Reserve banks about business activity, is one of the tools the bank uses to formulate interest rate policy. The next Fed meeting on rates is set for January 30th and 31st.
On the earnings front, J.P. Morgan Chase (NYSE: JPM - News) reported a 68% surge in net income. The nation's #3 bank said its Q4 net income rose to $4.5 billion, or $1.26 a share, from $2.7 billion, or 76 cents a share, a year earlier. The results included a $622 million after-tax gain on the sale of its corporate trust business along with another 10 cents a share from a tax-related gain. Strong results from investment banking activities offset a decline in retail banking. Despite the generally strong results, J.P. Morgan ended little changed, reflecting weakness in the banking sector as a whole.
The tech-heavy Nasdaq was weighed down by a -6% decline in Intel (Nasdaq: INTC - News), which reported results after yesterday's close. The semiconductor maker reported a -39% drop-off in its Q4 earnings on a -5% decline in revenue. The revenue results were better than analysts expected, but news that its ongoing price war with Advanced Micro Devices (NYSE: AMD - News) has yet to cease rattled investors. Also weighing on the stock was the company's projection that its closely watched gross profit margin would be lower in the current quarter than in Q4, which surprised investors.
In merger-related news, shares of Cablevision Systems (NYSE: CVC - News) added 3% after its board firmly rejected the latest bid from its controlling shareholders, the Dolan family. James Dolan is the company's CEO, while his father Charles serves as chairman. A two-person committee of outside directors, appointed to evaluate the Dolan's bid on behalf of non-family shareholders, said the family's latest $30-a-share offer still undervalues the company. The Dolans control 70% of the voting stock through a two-tier share system, so they can block any competing bid.
Caremark Rx (NYSE: CMX - News) added 4% after CVS (NYSE: CVS - News) sweetened its bid for the company. The drug store operator is adding a one-time cash dividend of $2 a share after the deal closes, and plans to retire about 10% of the combined company's outstanding stock, which amounts to a $5 billion buyback. CVS is trying fight off a challenge to its merger plan from Express Scripts (Nasdaq: ESRX - News), which shows no signs of backing away from the fight.
After the bell, Apple (Nasdaq: AAPL - News) reported that earnings for the quarter ended December 31st grew 78% to $1.0 billion, or $1.14 a share, soaring past estimates of 78 cents a share. Revenue rose 25% to $7.1 billion. iPod sales also easily surpassed expectations. Earnings and revenue guidance for the current quarter, however, were below Wall Street expectations. Soft guidance in prior quarters didn't hurt the stock, and with the stock up after hours, it appears that could be the case again this time around.

Labels: AAPL, AMD, CMX, CVC, CVS, ESRX, INTC, JPM

Allegiant Travel Co. (NasdaqGM:ALGT - News) was initiated with a buy rating at Merrill Lynch. The firm set a 12-month price target on the stock of $36. Bear Stearns also began coverage of the company, starting with a peer perform rating.
Amphenol Corp. (NYSE:APH - News) reported fourth-quarter earnings of $78.4 million, or 85 cents a share, up from a year-ago profit of $55.8 million, or 61 cents a share. The latest results reflect a benefit of 2 cents a share related to a reduction in the company's effective tax rate as well as stock option expense of 2 cents a share. Sales rose in the three months ended Dec. 31 to $659.4 million from $508.1 million in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of 81 cents a share in the December period on revenue of $649.3 million. Looking ahead, the Wallingford, Conn., maker of electrical and optical connector products forecast earnings of 80 to 82 cents a share for the first quarter on revenue of between $635 million and $645 million. It sees a profit of $3.45 to $3.55 a share for the full year on revenue of between $2.65 billion and $2.71 billion. The company also said it's planning a two-for-one stock split, payable on March 30 to shareholders of record on March 16.
ASML Holdings (NasdaqGS:ASML - News) was upgraded to buy from sell at ABN-Amro following a strong fourth-quarter financial report. The company was also upgraded to hold from reduce at Fortis Bank. The microchip equipment maker posted a profit of 205.5 million euros for the quarter, up from 51.6 million euros a year earlier.
Bill Barrett Corp. (NYSE:BBG - News) was initiated with a buy rating at A.G. Edwards. The firm set a price target of $35.
Bridgford Foods (NasdaqGM:BRID - News) shares jumped after the Anaheim, Calif.-based company reported fourth-quarter net earnings of $1.08 million, or 11 cents a share. In the comparable period last year, the company posted a net loss of $340,000, or 3 cents a share. Revenue in the 17 weeks ended Nov. 3 rose to $43.2 million from $41.9 million. The comparable period last year had 16 weeks, the company said.
CVS Corp. (NYSE:CVS - News) and Caremark Rx Inc. (NYSE:CMX - News) said qualified Caremark Rx Inc. shareholders will receive a one-time cash dividend of $2 per share after the proposed merger between the companies closes. The companies will also retire 150 million shares of the new company after the deal closes.
Flow International (NasdaqGM:FLOW - News) closed its previously disclosed audit committee probe of allegations that certain members of Flow Asia intentionally and inappropriately recognized certain revenues in fiscal 2007 that should have been recorded in fiscal 2006. As a result, the company said it expects its restated fiscal 2006 results to show an increase to revenue of about $2 million, with a net after tax increase to net income of about $2 million.
HealthSpring (NYSE:HS - News) said it expects earnings of $1.55 to $1.65 a share for fiscal 2007 on revenue of between $1.5 billion and $1.6 billion. The current average estimate of analysts polled by Thomson First Call is for a profit of 34 cents a share in the December period. The Nashville, Tenn., managed care company anticipates its Medicare Advantage membership to be in the range of 130,000 to 135,000 by the end of 2007, up from 115,000 at the close of 2006.
Investors Financial Services (NasdaqGS:IFIN - News) was upgraded to market perform from underperform at Ryan Beck & Co.
Lennar Corp. (NYSE:LEN - News), the Miami homebuilder, swung to a fourth-quarter loss from a year-earlier profit on 15% lower revenue. For the quarter ended Nov. 30, Lennar posted a loss of $195.6 million, or $1.24 a share, compared with net income of $581.2 million, or $3.54, in the year-earlier period. Revenue fell to $4.27 billion from $5.03 billion. A survey of analysts by Thomson First Call produced consensus estimates of a loss of $1.11 on revenue of $4.17 billion.
National Financial Partners Corp. (NYSE:NFP - News) said it expects its fourth-quarter per-share earnings "will be broadly consistent" with the consensus analyst estimate. "This view is consistent with the growth of NFP's firms, acquisition activity, and the challenging life insurance underwriting environment," the company said in a statement.
Neurocrine Biosciences Inc. (NasdaqGS:NBIX - News) was upgraded to overweight from equal weight at Lehman Bros. The firm also boosted its price target on the stock to $18 from $8.
Parker-Hannifin Corp. (NYSE:PH - News) reported fiscal second-quarter earnings of $193 million, or $1.64 a share, up from a year-ago profit of $129 million, or $1.07 a share. The latest results reflect a benefit of 9 cents a share from renewal of a federal tax credit for increasing research activities. Sales rose in the three months ended Dec. 31 to $2.51 billion from $2.16 billion in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of $1.40 a share on sales of $2.45 billion in the December period. The Cleveland-based maker of motion and control technology products attributed its profit increase in the second quarter to the strong performance of its Industrial International and Aerospace business segments. Looking ahead, Parker-Hannifin lifted its outlook for the full year to earnings from continuing operations of $6.35 to $6.75 per share from its prior projection of $6.05 to $6.45 a share. Wall Street's current consensus estimate for the year is for a profit of $6.38 a share.
Progressive Corp. (NYSE:PGR - News) reported net income of $138.9 million, or 18 cents a share, for the month of December, up from a year-ago equivalent profit of $122.9 million, or 15 cents a share. For the quarter ended Dec. 31, the Mayfield Village, Ohio-based insurance provider said it earned $400.9 million, or 53 cents a share, up from last year's earnings of $281.6 million, or 35 cents a share. The average estimate of analysts polled by Thomson First Call was for a profit of 50 cents a share in the December quarter.
SPX Corp. (NYSE:SPW - News) said it expects earnings from continuing operations of $3.80 to $3.95 a share for fiscal 2007 on revenue of about $4.7 billion. The Charlotte, N.C., maker of flow technology, test and measurement products said it expects the primary drivers for its profit growth in 2007, estimated at between 26% and 31% from 2006's target, to be continued strength across all of its business segments and a reduced tax rate. The current average estimate of analysts polled by Thomson First Call is for a profit of $3.59 a share in fiscal 2007 on revenue of $4.59 billion. SPX sees free cash flow from continuing operations of between $240 million and $280 million for fiscal 2007.
Shares of Star Scientific (NasdaqGM:STSI - News) soared after the company said decisions on three pending summary-judgment motions in its patent-infringement lawsuit against R.J. Reynolds Tobacco Co., a unit of Reynolds American (NYSE:RAI - News), will be available on the court's Web site on Friday. The Chester, Va., developer of technologies designed to reduce tobacco toxins said in a filing with the Securities and Exchange Commission that Judge Marvin J. Garbis of the U.S. District Court for the District of Maryland provided notice of his rulings on the motions last week. Star Scientific filed a patent-infringement suit in 2001 alleging that Reynolds had violated the company's process to reduce the level of nitrosamines - a carcinogenic toxin - in tobacco.
State Street Corp. (NYSE:STT - News) said fourth-quarter net income for the three months ended Dec. 31 rose 17% to $291 million, or 86 cents a share, from $249 million, or 74 cents a share in the year-ago period. The Boston-based lender said revenue increased 15% to $1.62 billion. Analysts surveyed by Thomson First Call forecast earnings of 84 cents a share and revenue of $1.56 billion, on average. Expenses rose 13% to $1.18 billion from $1.04 billion. Return on shareholders' equity was flat at 15.9%. For 2007, State Street said it plans to target the upper end of its long-term financial goals of revenue growth of 8% to 12%, earnings per share growth of 10% to 15%, and return on equity of 14% to 17%.
Sterling Construction Co. (NasdaqGS:STRL - News) was upgraded to buy from hold at Morgan Joseph & Co.
Stewart Enterprises (NasdaqGS:STEI - News) reported fourth-quarter earnings from continuing operations of $10.7 million, or 10 cents a share, up from a year-ago loss of $2 million, or 2 cents a share. Excluding items, the New Orleans funeral and cemetery services provider posted a profit from continuing operations of $9.2 million, or 9 cents a share in the latest quarter. Revenue rose in the three-month period to $131.2 million from $114.1 million last year. The average estimate of analysts polled by Thomson First Call was for a profit of 6 cents a share in the October period.
TSYS (NYSE:TSS - News) said fourth-quarter net earnings rose to $87.1 million, or 44 cents a share, from $49.7 million, or 25 cents a share, in the same period last year, on the back of higher revenue. The company now sees 2007 net income growth falling between 3% and 5% vs. 2006, down from its prior outlook of a 9% to 7%.
Xoma Ltd. (NasdaqGM:XOMA - News) and Schering-Plough (NYSE:SGP - News) expanded their collaboration agreement, with Schering-Plough exercising its right to initiate additional development programs. Xoma said it would receive upfront payments for each additional program, as well as research funding and royalties on any sales of the products.
Published By Michael Baron

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AMR Corp. (NYSE:AMR - News) shares rose after Citigroup lifted its price target on the stock to $46 from $34 as part of a larger bullish call on the airline industry. The firm also boosted targets for JetBlue (NASDAQ:JBLU - News) and Southwest Airlines (NYSE:LUV - News).
Bio-Reference Laboratories (NASDAQ:BRLI - News) was upgraded to buy from hold at Jefferies & Co. The firm also boosted its price target on the stock to $30 from $26.
CDC Corp. (NASDAQ:CHINA - News) said it expects fourth-quarter software license revenue to rise a