Stock Market Predictions

Coal shares down on lowered price targets

Stock Market Predictions

In afternoon trading on the New York Stock Exchange, declines ranged from 5.6 percent for Arch Coal (ACI.N) to 2.5 percent for Cliffs Natural Resources (CLF.N). The Dow Jones coal index .DJUSCL was down 3.23 percent.

In a research note, Dahlman Rose analyst Daniel Scott lowered his price targets for Arch, Alpha Natural Resources (ANR.N), Peabody Energy (BTU.N) and Consol Energy (CNX.N), citing lower prices, especially for thermal coal sold to utilities by companies operating in Central Appalachian fields.

FBR also cut its price targets for Peabody, Arch and Consol.

Peabody shares fell 3.5 percent, Consol was off 2.8 percent and Alpha lost 2.9 percent.

Thermal coal prices have slumped as natural gas prices have hit historic lows; low gas prices make it economical for coal-fired power plants to switch to gas.

"This earnings season will be marked by widespread sales-guidance lowering and cost pressures, as ... sales come under pressure from weak gas prices, weak demand and mild weather," Scott wrote.

But he said he was encouraged by signs that global seaborne exports of steel-making metallurgical coal may be firming.

On Thursday U.S. coal mining shares rose on hopes the companies would benefit from pricing and export opportunities following the closure of a mine in Australia that shipped steel-making coal to Asian markets.

(Reporting By Steve James; editing by John Wallace)

Spill fear spooks Shell investors but stock rebounds

Stock Market Predictions

If you ask the investors of Royal Dutch Shell (RDSa.L), the figure could be nearly $2 billion per barrel.

Investors in London lopped off roughly $12 billion in Shell's market value on Thursday morning after reports of oil in the water around Shell's Gulf of Mexico operations. Later Shell said the oily sheen spotted on Wednesday totaled about 6 barrels.

Shell shares quickly rebounded in London from their 5.4 percent slide - roughly $11.6 billion of the company's $220 billion market value - as fears of a major oil spill abated. The U.S.-listed shares (RDSa.N) closed about 0.2 percent higher.

The oil sheen appeared to be dissipating by Thursday afternoon, Shell said, and the company was "very confident" that its operations were not to blame.

But reaction to the sheen, which spread over a 10 mile by 1 mile area, showed how nervous oil investors become over reports of possible oil spills.

"They're certainly very jittery, to say the least," said analyst Phil Weiss of Argus Research.

Oil company investors have grown increasingly sensitive to production accidents since BP Plc's (BP.L) Macondo disaster two years ago in the Gulf of Mexico, which erased more than 50 percent of the company's value in the weeks after the spill.

"Clearly it gives every investor pause. Everyone reacts to what burned them last," said Mark Coffelt, president of Empiric Advisors and portfolio manager of the Empiric Core Equity Fund (EMCAX.O), which owns shares in Exxon Mobil (XOM.N)

That spill, the worst offshore oil accident in U.S. history, prompted a temporary moratorium on new drilling in the deepwaters of the Gulf, and the industry is only now returning to pre-spill activity levels there. BP's total costs for that disaster could reach $40 billion.

"I think the scrutiny is certainly greater in the post-Macondo world. And with greater scrutiny comes a greater reaction," said Weiss.

Shell's U.S. peer Chevron Corp (CVX.N) saw its shares decline 12.5 percent in the weeks after a more modest 3,000 barrel oil slick was discovered in November near its well off Brazil's coast.

Its shares have largely recouped those losses, despite a lawsuit brought by a Brazilian prosecutor seeking as much as $11 billion in damages and criminal penalties for some Chevron workers.

For Shell, the pullback in its share price seems to have had a silver lining. The company announced that it had repurchased and canceled 980,000 "B" shares bought through an independent third party at 2121.32 pence, a price not seen in more than six months.

(Reporting By Matt Daily. Editing by Patricia Kranz and M.D. Golan)

iGate 1st-quarter profit beats estimates, shares rise

Stock Market Predictions

First-quarter revenue at the company, which offers business process outsourcing and software to handle offshore development and now operates under the brand name iGATE Patni, missed estimates, but it said it expects revenue growth to get back on track over the next couple of quarters.

IGate agreed to pay 520 rupees ($10.18) per share on Monday to buy the part of Indian outsourcing company Patni Computer Systems (PTNI.NS) (PTI.N) it did not already own - a price higher than it paid for a controlling stake last year.

IGate, which delisted from Indian stock exchanges in 2007, acquired a majority stake in Patni for 503 rupees per share, in January 2011.

First-quarter net income attributable to common shareholders rose to about $17 million, or 22 cents a share, from $15.2 million, or 22 cents a share, a year ago.

Excluding one-time items, the company earned 38 cents a share. Revenue jumped more than three-fold to $263.3 million.

Analysts expected an adjusted profit of 32 cents a share, on revenue of $270.3 million, according to Thomson Global Markets I/B/E/S.

Larger rival Infosys (INFY.NS) (INFY.O) disappointed investors on Friday with a weaker-than-expected revenue growth outlook.

Shares of the company, which have gained 84 percent in value since touching a year-low of $9.32 in August 2011, rose to $18.95 on Friday morning on the Nasdaq. (Reporting by Sayantani Ghosh in Bangalore; Editing by Roshni Menon)

Talbots shares fall on weak 1st-quarter sales forecast

Stock Market Predictions

The company's shares fell to a low of $2.77, making it the biggest percentage loser on New York Stock Exchange on Friday. The stock was later trading at $2.82.

The women's clothing retailer, once a popular destination for its classic fashions, has been consistently lagging peers Ann Inc (ANN.N) and Chico's FAS Inc (CHS.N) and has been clearing out excess inventory by offering heavy discounts and higher promotions.

On Thursday, Talbots said it planned to close 110 stores this fiscal year.

"I think they've lost some of their core customers, so yes, I think these sales trends will continue in the future," analyst Margaret Whitfield of Sterne, Agee & Leach told Global Markets.

Talbots has put itself up for sale and is also currently looking for a replacement for Chief Executive Trudy Sullivan who has unsuccessfully tried to shed the chain's stodgy pearls-and-classics image and boost sagging sales with new store formats, cost cuts and by chasing younger shoppers.

The women's retailer, currently exploring strategic options opened its books to Sycamore Partners in January in an effort to get the private equity firm to raise its original buyout offer, which the retailer had snubbed.

"They are in a very tough spot if you look at the balance sheet. I'm expecting that an offer will come in and they will be bought out," Whitfield added.

(Reporting by Juhi Arora in Bangalore; Editing by Sreejiraj Eluvangal)

Dow Chemical raises dividend 28 percent

Stock Market Predictions

The quarterly payout from the largest U.S. chemical maker by sales will rise to 32 cents from 25 cents but has yet to return to a pre-recession level of 42 cents.

Still, the hike shows Dow's confidence that many of its core businesses are stabilizing.

The dividend increase comes nearly a year after Dow last boosted its dividend.

That increase, to 25 cents from 15 cents, was the first since Dow cut its dividend in 2009.

Before 2009, Dow had never cut its dividend. It either raised it or held it steady ever since the company's 1897 founding.

The company's cash reserve jumped sharply in the fourth quarter of 2011 to $5.44 billion from $2.21 billion in the third quarter.

"We are confident in our ability to continue to achieve higher and more sustainable earnings, and today's announcement demonstrates our commitment to increasingly reward shareholders as we grow," Dow Chief Executive Andrew Liveris said in a statement on Thursday.

The dividend will be payable on July 30 to shareholders of record as of June 29.

Shares of Dow rose 1.9 percent to $33.25 in after-hours trading.

Dow is set to post first-quarter results on Thursday, April 26.

(Reporting By Ernest Scheyder; Editing by David Gregorio)

Jaguar Mining shares regain ground after deal drama

Stock Market Predictions

Jaguar's stock climbed more than 20 percent on Tuesday to C$4.95 on the Toronto Stock Exchange after shares of Shandong, owned by the Shandong Gold Group, were halted pending news on April 6.

But no deal was announced, and on Wednesday, Jaguar's shares fell more than 24 percent in heavy trade. Shortly before the market close the company issued a statement saying it was "not aware of any developments that would merit such trading activity".

Shandong shares were still halted on Thursday.

In November, Global Markets reported that Shandong Gold had made an unsolicited C$9.30 a share cash offer for Jaguar, valuing the company, which owns gold projects in Brazil, at close to C$1 billion ($1 billion). The miner confirmed it had received offers and was undergoing a strategic review.

In March, the company adopted a shareholder rights plan, commonly called a poison pill, "to discourage potentially disruptive or predatory actions".

Analysts are not convinced a deal is imminent. After the company reported dismal fourth quarter results and a lackluster 2012 outlook in March, a number of them downgraded the stock.

"We maintain our view that a premium takeover bid remains a low probability event," wrote RBC Capital Markets analyst Michael Curran in a note to clients on April 4.

He added that while the development-stage Gurupi project in northern Brazil is a promising asset, the company's existing mines would be too small to be of interest to Jaguar's peers or to larger producers.

Shares of Jaguar closed up 4.53 percent at C$3.69 on Thursday on the Toronto Stock Exchange amid a broad rally in gold stocks. The stock has lost more than 43 percent of its value since the start of the year.

($1=$0.99 Canadian)

(Reporting by Julie Gordon; Editing by Peter Galloway)

Coinstar ups first-quarter revenue forecast, shares jump

Stock Market Predictions

The company raised its revenue outlook range to $567 million to $569.2 million, from its previous forecast of $530 million to $555 million.

The company also expects diluted earnings from continuing operations of $1.62 to $1.66 per share.

Analysts, on an average, were expecting first-quarter revenue of $537.7 million, according to Thomson Global Markets I/B/E/S.

The raised outlook reflects higher sales of titles like Moneyball, Puss in Boots, 50/50, In Time, Abduction and Mr. Popper's Penguins, the company said in a statement.

Coinstar also raised its full-year revenue outlook range to $2.15 billion to $2.28 billion, helped partly by the extension of its content license agreement with Universal.

It had earlier forecast revenue of $2.08 billion to $2.25 billion.

Shares of the company closed at $61.31 on Thursday on the Nasdaq

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Roshni Menon)

Elektra shares fall further; market cap loss $6 billion

Stock Market Predictions

On Wednesday the local stock exchange said it would change the way it picks shares in its IPC index, cutting Elektra's weighting, starting in September.

The change sparked selling of Elektra shares by investors who seek to match the index returns.

The company, owned by one of Mexico's richest men, Ricardo Salinas, has seen its market value drop by more than 80 billion pesos ($6.08 billion) in the past two days, to 222.5 billion pesos.

Elektra shares (ELEKTRA.MX) sank more than 11 percent to 920 pesos in morning trading Friday, extending a slide that started with a 17 percent slump on Thursday.

The losses have helped drag down the IPC index, which was off 0.7 percent on Friday, also hurt by concerns over Chinese growth data and the euro zone debt crisis.

Elektra is largely owned by Salinas and his family. Salinas enjoyed the largest increase in wealth in this year's list of world millionaires by Forbes magazine, driven by Elektra's jump in value.

The large proportion of stock tied up by the family and an equity swap used by Elektra mean there has been a squeeze on the scarce freely floated shares since Elektra's weighting increased in the IPC index last year.

Elektra shares rose nearly threefold in 2011 to make it Mexico's third-biggest company by market capitalization. On Friday, Elektra had fallen to No. 6.

The company currently has a weighting of just over 3 percent in the 35-company IPC index. But it has the second-fewest shares outstanding of any index constituent - just 241.86 million shares.

A spokesman for Elektra said the company does not comment on share price movements. ($1 = 13.1528 Mexican pesos)

(Reporting by Elinor Comlay; editing by M.D. Golan and John Wallace)

Sony shares tumble as revival plan disappoints

Stock Market Predictions

Sony is struggling to recover from four years of losses and regain the innovative flair of its 1980s glory days, having been overrun by today's gadget leaders Apple (AAPL.O) and Samsung Electronics (005930.KS).

The company this week forecast a record net loss of 520 billion yen ($6.4 billion) for the just-ended fiscal year and has been floundering under the weight of a TV business that has not made a profit in eight years.

Hirai, less than two weeks into his job as chief executive, mapped out on Thursday a plan to revitalize the company, including a major push into smartphones, growth in games and cameras, and cutting costs.

He confirmed media reports that Sony would cut 10,000 jobs, 6 percent of its global workforce, and take a 75 billion yen restructuring charge this business year.

In the TV business, Hirai aims to cut fixed costs by 60 percent and operating costs by 30 percent over two years, while offering fewer models.

"I don't see anything new here," said Toshiyuki Kanayama, a senior market analyst at Monex Inc. "They've talked about bringing the TV business back to profits. The comments about the electronics business are the same. Nothing has changed from what they've flagged in the past."

A Sony executive previously told Global Markets that Sony may forge a grand alliance with Sharp Corp (6753.T) and Panasonic Corp (6752.T), combining their television set-making divisions with the backing of a Japanese government eager to safeguard jobs.

"We are looking at a number of possibilities, but there are other parties to consider. At this moment, there's not anything I can share," Hirai told a news conference on Thursday when asked about such an alliance.

Sony shares were last down 3.9 percent at 1,468 yen after dropping to 1,447 yen, their lowest since early February.

($1 = 80.9000 Japanese yen)

(Reporting by Chris Gallagher; Editing by Paul Tait and Matt Driskill)

Google's stock split raises questions

Stock Market Predictions

Shares of Google closed 4 percent lower at $624.60 on Friday, driven by deepening worries about its search ad rates and payments to partners.

The declining search trends underscored investor uncertainty about Google's growth prospects and unease about the company's pending $12.5 billion acquisition of Motorola Mobility.

For some investors though, Google's move to split its stock and create a new class of non-voting shares represented a troubling development.

"We worry that this will set a precedent for other people to emulate this move," said Janice Hester Amey, a portfolio manager in the corporate governance unit of the California State Teachers' Retirement System, the second largest pension fund in the United States.

Google's existing stock structure, which concentrates roughly 66 percent of the voting shares in the hands of co-founders Larry Page and Sergey Brin and Executive Chairman Eric Schmidt, has been followed by Web companies such as Zynga Inc, Groupon Inc and Facebook.

The creation of new non-voting shares will allow the trio to maintain control without risk of their stakes getting diluted when new shares are issued for employee compensation, acquisitions and other purposes.

"It's one thing for them to maintain it," CalSTRS' Hester Amey said of the Google founders' voting control. "But perhaps they should put their own capital behind it, instead of taking it out of the hide of the existing shareholders."

CalSTRS, which owns more than $400 million in Google shares, planned on "engaging" with the company about the move, as well as with other companies which may be tempted to follow Google's lead, said Hester Amey.

Some wondered whether the new non-voting Google shares, which will have a separate ticker, will trade at a discount to the company's voting shares. That's typically the case when companies have two classes of shares.

In Google's case, the voting shares don't benefit shareholders much, since the founders have majority control of the company. As a result, the premium on the voting shares is not likely to be as large as it normally would be, said Richard Roll, the chair in Applied Finance at UCLA Anderson School of Management.

Most analysts who cover Google shrugged off the planned stock split and said it merely perpetuated a two-tier system that has long given Google's founders majority control of the company.

"It's not inconsistent with how Google has been run in the past," said ITG Investment Research analyst Steve Weinstein. "You, as a public investor, are just along for the ride."

Google attributed a 12 percent drop in its cost per click (CPC) for the first quarter to a shift to cheaper mobile advertising rates among other factors.

Google explained the reasons for the decline on a conference call with analysts, but that may not comfort bearish investors, BMO Capital Market analyst Daniel Salmon wrote in a research note.

"Mobile is increasingly an area of concern. Google has roughly 90 percent share of mobile search, but this revenue must be shared with OEM handset manufacturers and carriers," said Benchmark analyst Clayton Moran.

The fall in ad rates follows an 8 percent decline in the fourth quarter of 2011.

Barclays analyst Anthony DiClemente, however, said he was less concerned by this decline than others as cost-per-clicks was only part of Google's revenue growth prospects.

"(We) are of the belief that CPCs will improve over time as Google's core search business will monetize well on mobile devices," he said in a note.

Analysts also said the uncertainty around Google's plans for Motorola Mobility may pressure its shares in the near term.

"These results bode well and keep us positive on Google long-term, all the while recognizing that the lack of clarity around MMI is likely to remain an overhang on the stock short-term," Jefferies & Co analysts, led by Youssef Squali, said in a note to clients.

More than three times the average volume of Google shares traded hands on Friday.

The stock, which fell 9 percent after Google's fourth-quarter results on January 19, has risen 2 percent since then.

(Reporting by Alexei Oreskovic in San Francisco and Sayantani Ghosh in Bangalore; editing by Richard Chang)