Stocks to watch: Toyota, Priceline
The automaker reports a weaker-than-expected quarterly profit, while the online travel site tops earnings forecasts.
By Joseph Woelfel, TheStreet
Updated at 9 a.m. ET
Toyota (TM) said its fiscal-second-quarter earnings fell 18.5% to 80.4 billion yen ($1 billion) as sales fell almost 5% because of parts shortages the company incurred after Japan's devastating earthquake and tsunami in March. Its operating profit fell to 75.4 billion yen, short of the 101.3 billion yen analysts had expected. The company didn't give a forecast for the full year because of recent flooding in Thailand, which has hurt production.
Priceline (PCLN) reported third-quarter results that beat Wall Street expectations. The online travel booking company posted a profit of $512.6 million, or $9.95 a share, excluding some items. Revenue rose 45% to $1.45 billion. The average analyst estimate was for a profit of $9.30 on revenue of $1.42 billion.
Hewlett-Packard (HPQ) is looking to sell Palm's webOS mobile software platform, according to Reuters, which cited four sources close to the matter. The unit could sell for hundreds of millions of dollars but probably less than the $1.2 billion HP paid last year, Reuters said. Several technology companies -- including Amazon (AMZN) and Research In Motion (RIMM) -- have expressed an interest in buying the division, which is seen as attractive for its patents, the sources said.
Dynegy's (DYN) holding company filed for Chapter 11 bankruptcy protection. Dynegy filed for bankruptcy protection for Dynegy Holdings on Monday. Other Dynegy Holdings units also filed for bankruptcy protection. The parent company wasn't part of the filing. The filing would lead to losses for bondholders but wouldn't involve shareholders, because the parent company isn't part of the filing, according to The Wall Street Journal.
McCormick & Schmick's Seafood Restaurants (MSSR) said on Tuesday its board agreed to a sale of the company to Landry's Restaurants (LNY) for $8.75 a share in cash, for a total equity value of $131.6 million. The deal to buy McCormick's represents a premium of about 29% to McCormick & Schmick's closing stock price on Monday. On Monday, the company had reported weak earnings and suspended its guidance for the year.
Activision Blizzard (ATVI) will report third-quarter results after the market closes Tuesday. Analysts expect the game developer to have earned 2 cents a share in the September-ended period on revenue of $558.4 million. Activision is also set to release the latest "Call of Duty" video game, "Modern Warfare 3," on Tuesday.
Amlyin Pharmaceuticals (AMLN) announced the end of a long partnership with Eli Lilly (LLY) for the diabetes drug Byetta. Amlyin will pay $250 million up front and as much as $1.2 billion in the future for rights to their diabetes products, ending litigation between the companies that began after Lilly struck another diabetes partnership with Germany's Boehringer Ingelheim.
Retailer Fossil (FOSL) reported higher than expected earnings in the third quarter but a reduced outlook for the last quarter of 2011 is weighing on shares in Tuesday’s pre-market. Fossil guided to earnings of $1.75-$1.78 a share for the fourth quarter, down from its prior outlook of $1.78-$1.82 a share, and potentially below the analyst consensus of $1.78. Net income for the third quarter was $69.6 million, or $1.09 a share, beating the analyst consensus estimate of $1.03.
Targacept (TRGT) and AstraZeneca (AZN) announced the failure of the experimental pill TC-5214 in a phase III clinical trial in depression. Both stocks have been falling but Targacept's market value will likely suffer more on the negative study results.
Urban Outfitters (URBN) pre-released third quarter results that disappointed analysts on Monday night, as sales at Anthropologie remained weak. The company said David McCreight will take over as CEO of the struggling retail affiliate, effective Nov. 15 and that Charles Kessler had joined as chief merchandising officer for the Urban Outfitters brand. Urban Outfitters said third-quarter sales rose 6% to $610 million, short of the Wall Street consensus of $629.2 million. Same-store sales for the quarter fell 7%.
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These companies won't soar like other plays in the sector, but they make for great income sources.
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