Jim Cramer Blog

America's Car-Mart Inc. (NasdaqGS:CRMT - News) shares jumped Wednesday after the Bentonville, Ark., automotive retailer swung to a loss for the third quarter but said it still expects to be profitable in the fourth quarter. The company lost $50,000 for the three months ended Jan. 31 on revenue of $59.3 million. It added that it's seen a dramatic reduction in its accounts over 30 days due and that it's encouraged by the continuation of this trend into February.

Shares of American Axle Manufacturing (NYSE:AXL - News) surged after J.P. Morgan lifted its rating on the stock to overweight from neutral, citing the potential for the company's 2008 labor contract to include an agreement for "substantial, eventual UAW wage/benefit reductions." The firm said it believes the United Auto Workers union is likely to be sympathetic to American Axle this time around because the company will be the only UAW supplier with high cost OEM(original equipment manufacturer)-level compensation following restructurings at Delphi and Visteon. J.P. Morgan also said the company's management has leverage over the union with regard to future sourcing locations. It estimates a minimum of $1.10 per share in cost savings being secured by the company in the 2008 contract.
Avalon Pharmaceuticals (NasdaqGM:AVRX - News) shares surged after the company formed a drug discovery, development and commercialization collaboration with Merck (NYSE:MRK - News) to identify and develop inhibitors for an undisclosed target that is important in the development of cancer. The deal's terms provide for Avalon to potentially receive payments of more than $200 million as well as royalties on potential future products.
BJ's Wholesale Club Inc. (NYSE:BJ - News) said fourth-quarter earnings fell 77% to $11.9 million, or 18 cents a share, from $51.6 million, or 76 cents, a year earlier, hurt by items. The company said the latest quarter's results included charges of 44 cents a share related to its ProFoods closing expense, asset impairment, pharmacy closing expense, severance payments and a credit-card claim reserve. Excluding one-time items and stock-based compensation expense, the company said non-GAAP earnings fell to 59 cents a share from 77 cents, a year earlier. The Natick, Mass., warehouse-club operator said net sales rose 13% to $2.38 billion from $2.1 billion in the year-ago period.
British Airways Plc (NYSE:BAB - News), Europe's third-largest airline, said it expects fiscal 2008 revenue to increase 5% to 6% on traffic up 2.4% and average fares up 3.4%. The company said it sees fuel costs up by 100 million pounds from a year earlier and total costs excluding fuel up by 50 million pounds. The company said it's on track to reach its target of a 10% operating margin in 2008.
Canadian Natural Resources Ltd. (NYSE:CNQ - News) said its fourth-quarter net profit fell 72% to C$313 million ($265 million), or C$0.58 a share, from C$1.1B, or C$2.06 a share. Revenue before royalties for the quarter fell 9.1% to C$2.83 billion. The company said it booked an after-tax expense of C$99 million related to the effects of risk management activities. In the fourth quarter of 2005 it booked an after-tax gain of C$503 million. The company added that, for the full year, higher commodity prices were accompanied by significant cost inflation. North American natural gas production rose 14% to a record high and crude oil production rose 1% from a year earlier.
The Cheesecake Factory Inc. (NasdaqGS:CAKE - News) said it'll buy back 10 million shares of stock worth about $266 million based on its closing price Tuesday of $26.63 a share. The Calabasas Hills, Calif. will ink an agreement to repurchase $200 million of its shares of common stock through a broker-dealer in an accelerated share repurchase transaction. The company plans to secure a revolving credit facility in the amount of $200 million to replace a temporary credit facility.
Chico's FAS (NYSE:CHS - News) reported fourth-quarter net earnings of $18.2 million, or 10 cents a share, down from $44.5 million, or 24 cents a share, during the year-ago period. The latest results include pretax impairment expenses of about $8.6 million, or 3 cents a share, related to the planned closure of the Fitigues brand operations in the first quarter of fiscal 2007. The Fort Myers, Fla.-based retailer posted net revenue of $446.3 million, up 19% from $375.7 million. Chico's said it will no longer provide specific quarterly or annual sales and earnings outlooks. The company said it believes that if it achieves a low-single-digit same-store sales increase for fiscal 2007, the current consensus analyst estimates for the period "appear reasonable." Chico's said February sales at company-owned stores open at least one year fell 4.3%. Total sales for the four weeks ended March 3 rose 15% to $113.6 million from $98.7 million, Chico's said.
Deere & Co. (NYSE:DE - News) was upgraded to overweight from equal weight at Lehman Bros., which cited increased confidence about the durability of higher agricultural prices and the company's ability to leverage high end market demand. Analyst Joel Tiss also raised his stock price target to $135 from $95 and his 2008 earnings estimate to $8.20 a share from $7.25. Shares of the agricultural and construction equipment maker closed Tuesday up $2.84 at $107.04. They have lost 8.1% since reaching an all-time high of $116.50 on Feb. 22, but are still up 13% since the end of 2006.
First American (NYSE:FAF - News) was upgraded to overweight from equal-weight at Lehman Bros.
Friendly Ice Cream (AMEX:FRN - News) has hired Goldman Sachs as financial advisor, and Weil, Gotshal & Manges as legal advisor, to assist the board in exploring strategic options, including a possible sale of the company. The Wilbraham, Mass.-based company said that while it will review a wide range of options in consultation with its advisors, there can be no assurance of any particular outcome. Friendly, which operates restaurants and manufactures ice cream, said it does not expect to disclose further developments regarding the process until the review of strategic alternatives has been completed.
Joy Global (NasdaqGS:JOYG - News) was upgraded to overweight from equal-weight at Lehman Bros.
Shares of Movie Gallery (NasdaqGM:MOVI - News) rose after the company said it's acquired MovieBeam Inc., a private on-demand movie service. Financial terms of the transaction weren't disclosed but the company expects total incremental expenses related to MovieBeam, including the initial acquisition cost and any ongoing development expenses, to be less than $10 million in 2007. Dothan, Ala.-based Movie Gallery added that the deal includes substantially all of MovieBeam's assets, technology, network operations and customers. The company said MovieBeam content delivery network is available in 31 major metropolitan areas in the U.S.
Office Depot (NYSE:ODP - News) was upgraded to buy from hold at Deutsche Bank.
Panera Bread Co. (NasdaqGS:PNRA - News) said its total system-wide comparable bakery-cafe sales slipped 0.6% in February. For company-owned locations, same-store sales fell 1.3% for the five weeks ended Feb. 27. Panera said this performance reflects severe weather in the Midwest, where it has a high concentration of its bakery-cafes.
Payless ShoeSource Inc. (NYSE:PSS - News) said it plans to acquire privately held Collective International LP in a deal valued at roughly $91 million. Topeka, Kan.-based Payless sees the deal closing in the first half of fiscal 2007. The company expects the deal to be neutral to fiscal 2007 net earnings and to be accretive to fiscal 2008 net earnings. Payless also reported fourth-quarter net earnings of $24.6 million, or 37 cents a share. In the same quarter last year, the company posted a net loss of $5.6 million, or 8 cents a share. The Topeka, Kan.-based retailer said fourth quarter 2006 earnings benefited by the release of $14.3 million, or 22 cents a share, of income tax reserves related primarily to the closing of income tax audits in various jurisdictions. Revenue rose 13% to $692.7 million from $611 million, while comparable store sales in the quarter rose 6.8%.
Saks Inc. (NYSE:SKS - News) swung to a fourth-quarter profit, boosted by an additional week in the quarter and higher same-store sales. The Birmingham, Ala., retailer reported fourth-quarter earnings of $21.5 million, or 14 cents a share, compared with a loss of $2.24 million, or 2 cents a share, a year earlier. Saks said revenue for the quarter ended Feb. 3 rose 17% to $955 million from $817.8 million a year ago. Analysts surveyed by Thomson Financial expected, on average, earnings of 22 cents a share on revenue of $921 million. Analyst earnings forecasts typically exclude unusual items.
Take-Two Interactive (NasdaqGS:TTWO - News) shares jumped after Oppenheimer Funds and SAC Capital, a hedge fund, disclosed plans to nominate six new candidates to the company's board.
Talbots Inc.'s (NYSE:TLB - News) fiscal fourth-quarter profit fell 99% to $17,000, with earnings of less than 1 cent a share, from $19.8 million, or 37 cents a share, a year earlier, hampered by higher costs and expenses and deeper post-Christmas discounts. The most recent quarter included 14 weeks while the year-earlier quarter had only 13. Excluding items such as acquisition costs and stock-option expense, the Hingham, Mass., women's clothing retailer said Wednesday that it would have earned 19 cents a share in the quarter ended Feb. 3. Net sales rose 31% to $638 million from $486.2 million.

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