Ultimate Market Recap: Cereal Companies Rise, Abercrombie Plummets 11%

Thursday Morning’s Top Stories

Shares of Kellogg Co. (NYSE:K) jumped more than 3 percent in early trading.  The company reported that fourth quarter earnings increased to $232 million (64 cents per share), compared to $189 million (51 cents per share) a year earlier.  Shares of General Mills (NYSE:GIS) also edged higher.

Merck & Co. Inc. (NYSE:MRK) shares increased .88 percent after announcing fourth quarter results.  The drug company earned $1.5 billion (49 cents per share), compared to a $531 million loss a year earlier.  Eli Lilly (NYSE:LLY) shares decreased in early trading.

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Sara Lee Corp. (NYSE:SLE) shares edged slightly higher Thursday morning.  The company reported a fiscal second quarter profit of $469 million (79 cents per share), compared to $833 million ($1.30 per share) in the previous year.

Goodrich (NYSE:GR) shares increased .50 percent after reporting a 60.4 percent increase in net income for the fourth quarter.  Marshall Larsen, Chairman, President and Chief Executive Officer said, “Goodrich’s fourth quarter results provided us with an excellent finish to a very eventful 2011. Thanks to the diligent efforts of all of our employees, we significantly exceeded expectations for earnings and cash flow for the fourth quarter and for the full year of 2011 and reached record levels of sales and profitability.”

Shares of Cigna Corp. (NYSE:CI) dropped nearly 7 percent after reporting a decrease in fourth quarter profits.  The company reported a net income of $290 million ($1.04 per share), compared to $461 million ($1.69 per share) last year.

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Abercrombie & Fitch (NYSE:ANF) plummeted 11 percent after saying its fourth quarter adjusted earnings and revenue will likely disappoint Wall Street.  The clothing retailer was forced to slash prices to attract customers in the previous holiday season.  Shares of Gap Inc. (NYSE:GPS) jumped 11 percent after reporting better-than-expected results.

Thursday Morning Hot Stocks

The Dow Chemical Company (NYSE:DOW): The company comments “We will continue to closely monitor global economic trends and expect challenges in Western Europe to persist in the near term. We do not anticipate material improvements in market conditions for the first quarter of the year, but do project economic recovery will gain momentum as we move through the second quarter and the remainder of the year. Regardless, we will continue to intervene to ensure we deliver against our short- and long-term targets. ” Shares of The Dow Chemical Company are trading 0.5% lower today.

QUALCOMM, Inc. (NASDAQ:QCOM): Qualcomm (NASDAQ:QCOM) announced that the company, working with Ericsson (NASDAQ:ERIC), has successfully completed the first voice call handover from an LTE mobile network to a WCDMA network using Single Radio Voice Call Continuity, or SRVCC. An important technology required for voice-over-LTE, or VoLTE, support, SRVCC is a 3GPP specified feature that enables continuity of service by seamlessly switching to a WCDMA network when a consumer on a VoLTE call leaves the LTE network’s coverage area. This milestone occurred on Dec. 23, 2011 with an Ericsson network using a handset which incorporated Qualcomm’s Snapdragon S4 MSM8960 3G/LTE multimode processor. A demonstration will be available at Qualcomm’s booth at Mobile World Congress in Barcelona, Spain Feb. 27 March 1. Shares of QUALCOMM, Inc. are trading 2.97% higher today.

Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT): Reports revenue $1.53B vs. consensus $1.42B. Shares of Starwood Hotels & Resorts Worldwide, Inc. are trading 4.07% lower today.

Viacom, Inc. (NASDAQ:VIAB): Says committed to returning substantial capital to shareholders in the form of dividends and buybacks. Shares of Viacom, Inc. are trading 3.79% lower today.

Core Laboratories N.V. (NYSE:CLB): Sees FY12 revenue $1.005B-$1.045B vs. consensus $1.05B. Shares of Core Laboratories N.V. are trading 9.26% higher today.

Thursday’s Trending Stocks

CIGNA Corporation (NYSE:CI): Effective January 1, 2012, Cigna is required to adopt new accounting rules for costs related to the acquisition or renewal of insurance contracts. This adoption will reduce full year 2011 earnings by approximately $70M on a retrospective basis and is expected to have a similar impact in 2012. Shares of CIGNA Corporation are trading 6% lower today.

BioScrip Inc. (NASDAQ:BIOS): Walgreen (NYSE:WAG) and BioScrip (NASDAQ:BIOS) announced that they have entered into a definitive agreement under which Walgreens would acquire certain assets of BioScrip’s community specialty pharmacies and centralized specialty and mail service pharmacy businesses and BioScrip would receive a total deal value of approximately $225M. This includes approximately $170M in cash at closing and retention by BioScrip of associated accounts receivable and working capital liabilities of approximately $55M, based on BioScrip’s balance sheet values at Dec. 31. Up to an additional $60M in purchase price may be payable based on events related directly or indirectly to Walgreens retention of certain business included in the transferred businesses. Shares of BioScrip Inc. are trading 10.93%higher today.

Abercrombie & Fitch Co. (NYSE:ANF): In its fiscal fourth quarter results, the Company expects to record material charges, including charges for impairments and write-downs of store-related long-lived assets, other charges related to store closures and lease terminations, and charges associated with legal settlements and the reclassification of the Company’s auction rate securities to trading securities. Excluding these charges, the Company expects to report non-GAAP earnings per share for the quarter of approximately $1.10 to $1.15 Pending finalization of the material charges mentioned above, the comparable U.S. GAAP earnings per share number is not available at this time but will be available when earnings are released on February 15, 2012. Shares of Abercrombie & Fitch Co. are trading 11.85% lower today.

MasterCard Incorporated (NYSE:MA): U.S. auto sales in January jumped 11% over a year ago to their fastest pace in almost four years. A number of auto makers, showing new confidence in the U.S. economy, revealed billion-dollar expansions of their American factories, reports the Wall Street Journal. Shares of MasterCard Incorporated are trading 6.51% highertoday.

Market Recap

Markets closed mixed on Wall Street today: Dow -0.09%, S&P+0.11%, Nasdaq +0.40%, Oil -1.07%, Gold +0.74%.

On the commodities front, Oil (NYSE:USO) fell to $96.57 a barrel. Precious metals were up, with Gold (NYSE:GLD) climbing to $1,762.40 an ounce while Silver (NYSE:SLV) rose 1.53% to settle at $34.33.

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Today’s markets were mixed because:

1) BernankeFederal Reserve Chairman Ben Bernanke testified before the Congressional Budget Committee today, saying that, though the economy has recently shown signs of improvement, the pace of the recovery is “frustratingly slow,” thus leaving the economy “vulnerable to shocks,” including the debt crisis in Europe. However, his testimony spurred speculation that the Fed would be willing to begin another quantitative easing program — in which it would purchase Treasury bonds and other assets — should the economy take a turn for the worse.

2) Greece. The debt-ridden nation is said to be nearing a deal with private creditors that could see them accepting a writedown of up to 70 percent on the value of their Greek debt holdings, and is soon expected to enact the necessary measures to receive its second, 130 billion-euro bailout from its troika of lenders. That bailout will ensure that Greece is able to make a 14.5 billion-euro debt payment on March 20. However, a European Union official speaking on condition of anonymity has come out and said that Greece will need another 15 billion euros if it is to reduce its debt to a manageable level.

3) Retail. Twenty retailers tracked by Thomson Reuters released January same-store sales figures today, together notching a 4.2 percent sales gain when economists had projected 2 percent growth. Costc0 (NASDAQ:COST), Target (NYSE:TGT), Kohl’s (NYSE:KSS), and Saks (NYSE:SKS) were among the retailers whose January sales beat expectations, but roughly a third of the retailers reporting today fell short, including Nordstrom (NYSE:JWN), Macy’s (NYSE:M), Dillard’s (NYSE:DDS), and the Bon-Ton Stores (NASDAQ:BONT).

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After Hours Radar Stocks

Take Two Interactive Software Inc. (NASDAQ:TTWO) bounced almost 2 percent in late trading, despite reporting a drop in earnings.  In the fiscal third quarter, the video game company reported a net income of $14.1 million (16 cents per share), compared to net income of $40.9 million (45 cents per share).  Shares of Electronic Arts (NASDAQ:EA) edged slightly lower on the results.

Shares of NetSuite Inc. (NYSE:N) jumped 3.13 percent after reporting an increase in fourth quarter revenues.  The company brought in revenue of $64.1 million, compared to $52.1 million in the previous year.

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Despite posting a 53 percent decrease in earnings, shares of Novellus Systems Inc. (NASDAQ:NVLS) gained 1.2 percent after the closing bell.  The company reported a fourth quarter profit of $38.5 million (56 cents per share), compared to $81.5 million (89 cents per share) in the previous year.

Genworth Financial Inc. (NYSE:GNW) shares popped 7.3 percent in extended trading hours.  The company reported a fourth quarter profit of $107 million (22 cents per share), compared to a loss of $161 million a year earlier.

Gilead Sciences Inc. (NASDAQ:GILD) fell .63 percent in late trading.  The bio-pharmaceutical company reported an increase of 5.7 percent in fourth quarter earnings.  Product sales also increased 11 percent.  Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 1.7 percentage points to 73.4% from the year earlier quarter.

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Wynn Resorts Ltd. (NASDAQ:WYNN) shares broke 3 percent lower after announcing fourth quarter results.  Net income for the resort and casino company rose to $190.5 million ($1.52 per share), compared to $114.2 million (91 cents per share) in the same quarter a year earlier.  Shares of Las Vegas Sands Corp. (NYSE:LVS) and MGM Resorts (NYSE:MGM) also headed lower.

To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com