LargeCap Stocks to Keep an Eye on Today

Tomahawk, WI 10/4/2011 (PennyPayDay) – Acme Packet, a Bedford, Mass.-based provider of network services, gave a disappointing third-quarter forecast, citing a delay in securing a deal with a large customer in North America.

The company said it now sees non-GAAP earnings of 20 cents to 22 cents a share in the third quarter on revenue of around $70 million, well below the average estimate of analysts polled by Thomson Reuters for a profit of 30 cents a share on revenue of $82.8 million.

Shares were plunging 16.1% to $35.94 in premarket trading Wednesday.

New York Attorney General Eric Schneiderman and the city of New York are suing Bank of New York Mellon for nearly $2 billion, for allegedly defrauding clients in foreign currency exchange transactions.

Shares were tumbling 3.8% to $18.11.

Shares of Advanced Micro Devices were tumbling 2.1% to $4.62 after the chipmaker was downgraded to market perform from outperform at Sanford C. Bernstein.

Yum! Brands reiterated its full-year earnings-per-share forecast for growth of at least 12% after meeting quarterly profit expectations as continued strong performance in China drove year-over-year revenue growth of more than 14%.

The parent company of Taco Bell, KFC and Pizza Hut said it earned $383 million, or 80 cents a share, in its third quarter, up 7.3% from a year-earlier profit of $357 million, or 74 cents. Excluding one-time items, earnings came in at 83 cents a share, in line with analysts' consensus call.

Shares were down 1.9% to $48.48.

Internet services provider Akamai Technologies may finally be cheap enough to lure International Business Machines or Verizon Communications as the most speculated U.S. takeover target since 2005 approaches its lowest valuation on record, Bloomberg reported.

Akamai shares were rising 1.9% to $20.95.

Samsung, a day after Apple unveiled the new iPhone 4S , is seeking to block the sale of the new device in France and Italy. Samsung is alleging the iPhone 4S infringes its patents on wireless technology.

Apple shares were falling 1.3% to $367.52.

Internet search giant Google has been downgraded to hold from buy at Stifel Nicolaus.

Shares were down 0.8% to $498.

Bank of America could face fraud claims after its Countrywide unit submitted faulty borrower data for federally-insured mortgages, according to Bloomberg.

Shares were down 0.4% to $5.74.

Costco, the warehouse retailer, said net income in the fourth quarter rose about 10.6% as sales jumped 17%.

Net income in the fourth quarter was $478 million, or $1.08 a share, compared with $432 million, or 97 cents, a year earlier. Analysts surveyed by Thomson Reuters expected Costco to earn $1.10 a share.

Shares were trading sideways at $81.70.

Shares of Monsanto were rising 2% to $64.50 after the agricultural products company forecast mid-teens earnings growth for the new fiscal year and reported a fourth-quarter loss of 22 cents a share vs. the Wall Street consensus target of a loss of 27 cents.

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Some LargeCap Stocks to Keep an Eye on Today

Time Warner, the media giant, said fourth-quarter net income rose 22% to $769 million, or 68 cents a share, from $631 million, or 53 cents a share, a year earlier. On an adjusted basis, earnings in the quarter were 67 cents a share. Revenue rose about 8% to $7.81 billion from $7.21 billion. The Wall Street consensus called for earnings of 62 cents a share on revenue of $7.48 billion. The stock was up 3.5% to $33.45.

Hershey Foods said fourth-quarter net income increased about 7% to $135.5 million, or 59 cents a share, from $126.8 million, or 55 cents a share, a year earlier. On an adjusted basis, earnings were 61 cents a share. Net sales increased about 5% to $1.48 billion from $1.41 billion the year before. Analysts, on average, expected earnings of 61 cents a share on revenue of $1.48 billion. Shares of the company were unchanged at $47.14 in premarket trading Wednesday.

Mattel said fourth-quarter net income fell about 1% to $325.2 million, or 89 cents a share, from $328.4 million, or 89 cents, a year earlier. Net sales rose 9% to $2.12 billion from $1.96 billion. Analysts, on average, expected Mattel to report earnings of 86 cents a share on revenue of $2.09 billion. Mattel shares rose 1.5% to $24.50 in early trading.

Whirlpool, the appliance maker, said fourth-quarter earnings jumped 80% despite a dip in sales in North America. Whirlpool shares fell 4.5% to $81.61 in premarket trading Wednesday.

Borders Group could file for bankruptcy protection as soon as next week, according to Bloomberg. Shares of Borders were falling 14.9% to 40 cents in premarket trading Wednesday.

NaviSite agreed to be acquired by Time Warner Cable for $230 million. NaviSite shares surged 32.5% to $5.47 in premarket trading Wednesday. Time Warner cable finished the previous trading session at $68.73, up 1.3%.

GlaxoSmithKline said Wednesday it sold its entire stake in Quest Diagnostics for $1.7 billion. Quest Diagnostics was flat at $56.95 in premarket trading. GlaxoSmithKline was down 1% to $37 early Wednesday.

Yum! Brands is scheduled to report quarterly earnings after the markets close Wednesday. The company is expected to have a difficult conference call because of the recent Taco Bell lawsuit claiming its taco beef is only 35% beef and the rest is fillers. Yum! stock was up 0.9% to $47.83 in premarket trading.

Visa reports its quarterly results after the closing bell. The current average estimate of analysts polled by Thomson Reuters is for a profit of $1.21 a share on revenue of $2.23 billion in the December period. The credit card issuer has beat Wall Street's profit expectations in the past eight quarters. The stock was up 0.4% to $71 in premarket trading.

Amazon is working towards a film streaming service that would put it in direct competition with Netflix, according to the Financial Times. Shares of Amazon were down 0.2% to $171.80 during premarket trading, while Netflix fell 1.3% to $210.20.

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Yum Brands (NYSE:YUM): Fast Food Fire Sale

Yum Brands (NYSE:YUM) is putting its Long John Silver's and A&W restaurant chains up for sale so it can focus on its growing international business. The company, based in Louisville, Ky., said Tuesday that it is narrowing it focus to its Taco Bell, Pizza Hut and KFC business in the U.S. and abroad. Long John Silver's and A&W All-American Food restaurants do not fit into its long-term strategy.

Yum acquired the two chains in 2002 for $320 million. They account for 1,630 of the company's more than 37,000 restaurants worldwide. However, the chains have a minimal presence outside the U.S. and no sites in China, a critical market for the company. Yum's profitability has improved greatly since putting a heavier emphasis on overseas business. In 1998, when Yum! Brands was spun-off from PepsiCo, 22 percent of its profits were sourced internationally. Today, about 65 percent of the company's profit is from overseas business.
Like many consumer companies, Yum expanded aggressively in overseas markets to win the business of growing middle classes. Yum opened an average of four new restaurants every day overseas during its 2009 fiscal year.

The company reported in its last quarter that net income grew 7 percent on surging international sales despite a slight downturn U.S. sales. The company said earlier this month that it is on track to deliver 14 percent growth in earnings per share for the year based on its success overseas. The company said it doesn't expect the sale of the chains to have a material effect on its earnings or cash flow. Shares of Yum Brands rose $1.09, more than 2 percent, to $48.91 in midday trading.

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