U.S. stocks closed lower Monday, as the Dow Jones Industrial
Average lost 130 points to 13880, the Standard & Poor's 500
Index fell 17 points to 1496, and the Nasdaq Composite slipped 1.5%
to 3131. Among the companies with shares actively trading after
hours are Idenix Pharmaceuticals Inc. (IDIX), Yum Brands Inc. (YUM)
and Hologic Inc. (HOLX).
Idenix said it will discontinue its clinical development program
for two of its investigational treatments for hepatitis C, after
the U.S. Food and Drug Administration said the treatments would
remain on clinical hold. Shares fell 3% to $4.59 after hours
Monday.
Yum Brands' fourth-quarter earnings slipped 5.3% as the
fast-food chain's same-store sales in China were hurt by negative
publicity from a government review of poultry supplies there,
though same-store sales in its U.S. business improved. Shares
slipped 5.9% to $60.18 after hours as the company said it no longer
expects earnings-per-share growth this year due to continued
negative same-store sales and its expectation that it will take
time to recover consumer confidence.
Hologic's fiscal first-quarter earnings plunged as the
health-products company posted higher acquisition-related charges
and other items that masked strong revenue growth. Shares were down
4.1% at $22.30 in recent after-hours trading as the company
projected fiscal second-quarter earnings that missed
expectations.
Rudolph Technologies Inc.'s (RTEC) fourth-quarter income surged
on tax-related adjustments and higher revenue. But shares fell 6.4%
to $12.50 after hours as the results missed Street
expectations.
Thor Industries Inc. (THO) expects fiscal second-quarter sales
that handily topped top expectations, amid strong growth in sales
of its recreational vehicles. Shares were up 4.3% at $41.50 in
recent after-hours trading.
Regular Session Gainers:
Oracle Corp. (ORCL) agreed to buy Acme Packet Inc. (APKT) for
roughly $1.98 billion in cash, a deal the technology heavyweight
said will accelerate the deployment of all-IP networks. Oracle will
pay Acme's shareholders a per-share cash price of $29.25, a premium
of 22% over Friday's close. Word of the deal lit a fire under
networking names, namely fellow-broadband equipment maker Sonus
Networks Inc. (SONS), BroadSoft Inc. (BSFT) and Procera Networks
Inc. (PKT). Acme shares jumped 24%, while Oracle was off 3%.
Brown & Brown Inc.'s (BRO) fourth-quarter earnings rose 17%
as the insurance agency and brokerage firm continued to report
top-line growth from commissions and fees. Results beat Wall Street
expectations.
Medical-device maker Cyberonics Inc. (CYBX) said a former
employee voluntarily dismissed without prejudice a lawsuit he filed
against the medical-device maker in a Massachusetts federal court.
The lawsuit had raised "the potential for this case broadening to
something larger" like a qui tam, or "whistleblower" suit,
Jefferies analyst Raj Denhoy said in a note to clients.
Humana Inc. (HUM) kept an upbeat outlook for 2014 at its
investor day Monday, as 2014 will be an important year for health
insurers as major changes under the health-care law click into
place.
MWI Veterinary Supply Inc.'s (MWIV) sizeable fiscal
first-quarter beat-and-raise, coupled with cash flow more than
doubling, shows why the company's stock has been an investor
favorite, surging nearly six-fold the past four years. A strong IPO
Friday for Pfizer Inc.'s (PFE) animal-health business Zoetis Inc.
(ZTS) further highlights the big money and investor optimism for
the space.
Regular Session Decliners:
Cabela's Inc. (CAB) shares fell after being downgraded to hold
from buy by Feltl & Co. primarily on valuation. The firm is
also concerned about credit-card-interchange income that last week
came in significantly lower than expectations, a shortcoming noted
by other investment firms. Interchange fees are paid by merchants
to card issuers when a consumer swipes a card. Feltl feels the
credit card-business is healthy with low charge-offs and
delinquencies and rising receivables, but lower-than-expected
interchange income "leads us to be more hesitant in our rating
until we have more visibility into future trends."
Comfort Systems USA Inc.'s (FIX) 20% run over the last three
months led BB&T to cut its rating to hold from buy, noting the
valuation feels "full" and its sees tough times in the near future
for the HVAC installation and maintenance provider. "While we
continue to believe that nonresidential construction spending could
recover more fully late this year or early next, we doubt that
Comfort's [first half] outlook has improved since November," the
firm said.
Gannett (GCI) shares started 2013 with a 10% jump after a
second-half surge, so perhaps it should be no surprise that there's
some sell-on-the-news activity after the media company's modest 4Q
beat. "Results were slightly better [than expected], but no
blowout," Evercore's Doug Arthur told Dow Jones. Meanwhile,
print-ad demand remains in the doldrums, with that revenue down
6.5% once an extra week of activity is stripped out. Still, that
decline was GCI's least of 2012, showing how the company has yet to
see the bottom on that front after not seeing any print-ad growth
since 2006.
Harris Teeter Supermarkets Inc.'s (HTSI) shares continued to
slide after the supermarket chain reported fiscal first-quarter
earnings below analysts' estimates as the supermarket chain
responded to "aggressive pricing by competitors as well as low
inflation and sluggish holiday sales (particularly Thanksgiving),"
said BB&T in a Friday note to clients, as it cut its rating to
hold.
Mercury General Corp. (MCY) swung to a surprise fourth-quarter
loss as the insurance company recorded lower revenue driven by
investment losses, while its catastrophe losses nearly tripled due
to Hurricane Sandy. Results missed Wall Street estimates.
Royal Caribbean Cruises Ltd. (RCL) swung to a fourth-quarter
loss as the cruise-ship company recorded a massive impairment
charge, although net yields--a key industry metric measuring
revenue per available cruise day--beat expectations. For the year
ahead, the company projected earnings well below Wall Street
forecasts.
After jumping more than 15% since late-December, Tiffany &
Co. (TIF) retreated Monday after Monness Crespi Hardt cuts the
jeweler to neutral, due to the rally and an "uncertain retail
environment." The investment bank expects shares to be at current
levels later this year.
Ultratech Inc. (UTEK) shares fell, following a Friday note by
D.A. Davidson, downgrading the company to underperform. Davidson
says "based on the revised 2013 outlook for 5%-10% EPS growth,
combined with rising competition in the back end advanced packaging
market, we believe UTEK no longer deserves a significant valuation
premium over its peer group." The firm notes that it believes
per-share earnings growth will be limited based on a combination of
reduced advanced packaging sales--the company's highest margin
produce line--and increased spending to try to seed the market with
new products.
Yahoo Inc.'s (YHOO) biggest shareholder has sold 11 million
shares, as it seeks to maintain a consistent percentage holding in
the Internet firm amid Yahoo's aggressive stock buyback
program.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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