Stock Market Predictions

Acadia redesigns study on Parkinson's psychosis drug

Stock Market Predictions

The redesigned study will include only patients from North America, and will exclude mildly psychotic patients, Acadia CEO Uli Hacksell said at the JMP Securities Healthcare Conference.

He said a previous late-stage trial in 2009 failed because of the inclusion of mildly psychotic patients.

"After the results of (the ongoing) study, which we expect will be very good, we will immediately plan for the startup of an identical Phase 3 study," Hacksell said.

The main goal of the ongoing study is to reduce psychotic symptoms in Parkinson's disease patients. The secondary goal is to check tolerability to the drug pimavanserin.

The study will now enhance the main goal, which Hacksell said has already been approved by the U.S. Food and Drug Administration.

The CEO said Acadia will also conduct two additional safety studies, which will roll over patients from the main study.

Hacksell said patients on pimavanserin slept better. There was no worsening of motor symptoms, as often seen in other anti-psychotic drugs. Also, unlike its peers, pimavanserin did not sedate the patient.

The company said it has completed 90 percent of patient enrollment for the late-stage study and it expects to finish enrollment in August.

Apart from Parkinson's, pimavanserin has shown promise in treating psychosis in Alzheimer's disease and as a co-therapeutic with risperidone in schizophrenia.

Acadia said it would stop developing its experimental schizophrenia treatment after the drug failed to meet the goal of an early-stage trial.

Shares of the San Diego, California-based company were down 8 percent at $1.62 on Friday on the Nasdaq.

(Reporting By Pallavi Ail; Editing by Saumyadeb Chakrabarty and Don Sebastian)

ReneSola raises shipment outlook

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ReneSola, which produces polysilicon, wafers and panels, said it agreed to provide 100-megawatt (MW) high-efficiency solar modules to Big Solar over the next year.

The China-based company now expects full-year shipments of between 2.2 gigawatts (GW) and 2.4 GW, up from its earlier forecast of 1.8 GW to 2 GW.

American depositary shares of the company, valued at $816.4 million, touched a more than three-week high of $1.59 on the New York Stock Exchange.

(Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Maju Samuel)

Lexmark's outlook warning pulls down printer makers

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Lexmark's stock slid as much as 17 percent, making it one of the biggest losers on the New York Stock Exchange and dragging down rivals Xerox Corp and Hewlett-Packard.

Deteriorating economic conditions in Europe and a stronger dollar have led to bleak forecasts from several American technology companies, including Advanced Micro Devices and Applied Materials.

Shares of HP, known for its once ubiquitous Deskjet printers, fell 3 percent to $18.77, their lowest in a year, while those of Xerox were down as much as 3 percent. Japanese rivals Canon Inc and Ricoh Co Ltd both closed down on the Tokyo Stock Exchange.

Morningstar analyst Michael Holt said printing, one of the most dispensable parts of a company's budget, is always the first target of cost-cutting measures.

"When you see times of macroeconomic distress, printing is one of the areas most susceptible to changes in demand. Even if we have long term negative trends in printing, they can be exaggerated in the short run by economic conditions."

Lexmark, which derives almost 40 percent of its sales from Europe, Middle East and Africa, cut its profit outlook on Thursday and said second-quarter revenue would fall about 12 percent, much more than it had earlier anticipated.

Lexmark said it would be hurt by a strong dollar in the second quarter. The euro has shed 5.5 percent against the dollar this year.

HP, unlike Lexmark, has other business segments to fall back on, including its Personal Systems Group, which is being merged with the printing business.

Palo Alto-based HP derives 20 percent of its revenue from its Imaging and Printing Group, considered as a steady cash cow because of recurring sales of printer cartridges.

"Lexmark is focused on mainly business printing but HP has exposure to both businesses and consumers. We see consumer printing as declining much more rapidly than business," analyst Holt said.

(Reporting by Himank Sharma in Bangalore; Editing by Don Sebastian)

Accreditation scrutiny weighs on Bridgepoint shares

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The company's shares fell 26 percent to their life-low of $9.33 on Friday. The stock has plunged 40 percent in the last four days, shaving more than $600 million off its market value, since Bridgepoint first disclosed its troubles with accreditors.

Higher Learning Commission (HLC), to which Ashford University is accredited, has asked Bridgepoint to submit a report proving that the university is in compliance with its guidelines, after the institution was denied accreditation by another agency.

The university has been put on 'special monitoring' status, which means that the HLC can evaluate accreditation without the usual review procedures. The HLC was not expected to review its accreditation before 2014-15.

Bridgepoint has been trying to switch the university's accreditation to the Western Association of Schools and Colleges (WASC) from the HLC, but the WASC refused accreditation earlier this week.

The WASC had said Ashford University spends more money on recruiting students than on teaching them.

"Given the WASC denial, we are not completely surprised by the HLC's heightened scrutiny, though we expect this may put further pressure on the stock," BMO Capital analyst Jeff Silber said.

Loss of accreditation to Ashford University can deny the university access to federal student aid, which makes up for most of the parent company's revenue.

The HLC has asked Ashford University to prove that it has an effective way to monitor student learning and outcomes. It has also been asked to establish its autonomy from Bridgepoint, and prove that it spends sufficient money on student retention and education.

"The question is whether BPI has grown too quickly to be able to adequately monitor and assess the learning that is taking place," Citigroup analyst James Samford said.

Regional accreditation by the HLC had helped Bridgepoint grow its enrollment at a fast pace.

The WASC had pointed out that enrollment at Ashford University had grown from 10,000 students in 2007 to nearly 100,000 students in 2012.

Ashford University is required to a host an advisory visit by the HLC by October 9, Bridgepoint said in a statement on Friday. HLC will review the report of the visit team in February.

The commission had recently asked the company to demonstrate "substantial presence" in the 19-state north central region by December 1 this year.

(Reporting by Megha Mandavia in Bangalore; Editing by Sreejiraj Eluvangal, Saumyadeb Chakrabarty)

Marriott shares fall on forecast cut

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Marriott cut its 2012 fee revenue forecast range due to lower-than-expected revenue per available room (revPAR) from non-U.S. regions.

"This is not a thematic reduction but driven by individual market dynamics," Chief Executive Arne Sorensonon said on a conference call on Thursday. "We really did not see a global slowdown theme."

India and China suffered from oversupply, while the luxury market in other regions in Asia and the Middle East were weak, he said.

The company, which owns the Ritz-Carlton, Residence Inn and Courtyard by Marriott brands, however, said there was no slowdown in the United States and even its historically weaker markets such as Washington D.C. were performing well.

Marriott raised its 2012 earnings outlook but analysts said that was only due to additional share buybacks and a gain from a sale of its stake in a joint venture.

"Weakness in the global economy is impacting Marriott's ability to drive double-digit revPAR in many of its international markets," said Nomura Securities analyst Harry Curtis.

Marriott's U.S. business was picking up the slack, Curtis added.

Shares of the company fell 5 percent to $36 in late morning trade on Thursday on the New York Stock Exchange.

Starwood Hotels & Resorts (HOT.N), which has a big international presence and will report results later this month, fell 6 percent. Other hotel operators Hyatt Hotels (H.N) and Host Hotels & Resorts (HST.N) were also down.

(Reporting by A. Ananthalakshmi in Bangalore; Editing by Supriya Kurane)

Activist investor Ackman buys into P&G, shares rise

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Ackman's $10 billion Pershing Square Capital Management has been buying shares in P&G for the last few weeks and may want to increase its stake further, a person familiar with the portfolio said on Thursday.

The news comes three weeks after the maker of Tide detergent and Pampers diapers lowered expectations for profits and sales as it navigates tough economic conditions, with Chief Executive Bob McDonald acknowledging that missteps have been made.

Ackman has been instrumental in shaking up management at Canadian Pacific Railway (CP.TO) and retailer J.C. Penney (JCP.N) and his interest lifted P&G shares 3.7 percent higher and helped limit a decline in the blue-chip Dow Jones industrial average .DJI on Thursday.

According to a report from Bloomberg, P&G board members are not satisfied with McDonald's performance and are talking about a possible leadership change, citing people familiar with the situation. Ackman's decision to take a stake in P&G was partially prompted by the board's discussions, Bloomberg reported, citing one person.

Pershing Square received antitrust clearance from the Federal Trade Commission to purchase the shares according to a public notice.

P&G said it welcomed new investors.

ACKMAN'S INTEREST

The size of the stake has not been disclosed and may not become public until Pershing lodges a quarterly filing with the Securities and Exchange Commission.

McDonald, who has been at the helm of Cincinnati-based P&G since July 2009, unveiled a $10 billion restructuring program in February and is also is refocusing on core categories, countries and innovations.

But analysts have been more critical lately about McDonald's moves and speculated about how an activist might change things.

"From the beginning of McDonald's CEO-ship, we wrote that he should embark on more aggressive cost-cutting, which he did not do. He has finally now stepped it up when he was forced to do so," Caris & Co analyst Linda Bolton Weiser wrote in a note.

While speculation has swirled that Ackman might soon push for a new CEO to come in, as he has at other companies, analysts agreed that any potential management shakeup may not happen soon.

"I don't think his involvement will change anything really, right now," UBS analyst Nik Modi said of Ackman, explaining that McDonald has a few quarters to prove that he can change the course of things.

At P&G, Ackman will join a long list of other powerful investors including billionaire Warren Buffett, whose Berkshire Hathaway Inc (BRKa.N) is one of the top five shareholders.

Any shareholder who wants to present potential business-related proposals to P&G faces a July 13 deadline set by the company, months before its annual meeting later this year.

Ackman is moving on to P&G only a few months after scoring a big victory in Canada where he was able to unseat the CEO at Canadian Pacific Railway after winning a bitter proxy contest.

At J.C. Penney, Ackman was also instrumental in wooing Ron Johnson from Apple Inc (AAPL.O) to run the ailing retail chain. Ackman began building his Penney position two years ago but due to a sharp decline in the stock price, the position is currently hurting his portfolio.

(Reporting by Svea Herbst-Bayliss; Editing by Jeffrey Benkoe, Tim Dobbyn, Matthew Goldstein and Edwina Gibbs)

Coinstar shares fall on DVD release schedule, JV concerns

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The third quarter has fewer DVD movie releases than last year, analyst Steve Frankel wrote in a note.

DVD releases of such blockbusters as Disney's (DIS.N) "The Avengers" would fall outside the company's third quarter, the analyst said.

He also raised doubts about Coinstar's joint venture with Verizon offering a "competitive" video streaming product without investing significantly beyond the initial commitment of $450 million.

Coinstar's Redbox unit and Verizon formed a joint venture in February to sell video services aimed at competing against video rental giant Netflix Inc (NFLX.O).

Wall Street thinks Verizon/Redbox's success in competing with Netflix and other online rivals like Amazon.com (AMZN.O) and Hulu Plus, will depend hugely on the price of the service and the depth of content.

While Netflix charges $7.99 a month for unlimited streaming of movies, the Redbox and Verizon offering's price will start from around $6 a month for movie streaming and one DVD rental at a time from the Redbox kiosks, Global Markets reported in February.

Frankel said Verizon-Redbox's $450 million commitment compares with Netflix's budget of more than $1.5 billion on content and $580 million on marketing this year.

The venture, 65 percent owned by Verizon and 35 percent by Redbox, plans to launch its service in the second half of 2012.

Frankel maintained his "neutral" rating on the stock saying the JV has a potential for substantial losses.

Coinstar is scheduled to report second-quarter results on July 26, when Frankel expects the company to offer a conservative outlook.

Shares of the company were down 4 percent at $64.10 on the Nasdaq on Friday.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Don Sebastian)

Stifel cuts Green Mountain estimates, shares fall

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Stifel's report on Friday came the same week that communications between Green Mountain and the U.S. Securities and Exchange Commission were made public, in which the company downplayed the importance of the increased competition.

Stifel analyst Mark Astrachan reduced his earnings estimate for fiscal 2013 to $1.80 per share from $2.27. He also estimated fiscal 2014 earnings of $1.64 per share.

Analysts on average were expecting earnings per share of $2.37 for the current year, fiscal 2012, and $3.05 for fiscal 3013, according to Thomson Global Markets I/B/E/S.

Astrachan predicts growing competition for Green Mountain's proprietary K-Cups for its Keurig brewers, due in part to the expiration of certain patents in September. This will pressure pricing, increase promotions and eat into Green Mountain's market share, reducing its long-term earnings power, he said.

"A few pennies of reduced pricing has a meaningfully negative impact on earnings, assuming no material change in input costs," he wrote in a research note.

Green Mountain sells its Keurig brewers virtually at cost in order to drive consumer adoption. It makes most of its profit from the K-Cup refills.

New, cheaper entrants to the K-Cup market throw the sustainability of Green Mountain's margins into question.

Green Mountain shares fell as much as 10 percent to $19.17, their lowest in 3 years, before trading down $1.55, or 7.3 percent, at $19.72 on Nasdaq.

Before Friday's decline, Green Mountain shares were already down more than 80 percent since September, due to questions about its business model, accounting practices and interest from short-sellers, including Greenlight Capital's David Einhorn, who have bet the shares would fall.

SEC QUESTIONS OUTLOOK

Green Mountain is also facing questions from the SEC.

According to documents made public this week, Green Mountain told the SEC that even though certain of its patents that cover "significant aspects" of its K-Cup packs will expire in September, it does not have any data beyond what was disclosed in its annual report that leads it to conclude that the expirations are likely to have "a material impact" on its financial position, results or liquidity.

"The company believes that it has competitive strengths, aside from its intellectual property portfolio, that enhance its business and mitigate the potential material impact on its financial position and results of operations in the future arising from the patent expirations," the company said in a letter to the SEC dated May 4.

The company said its advantage as the market pioneer gives it efficiencies and scale, while its large portfolio of brands and new Vue brewer decrease the importance of the expiring patents.

Yet on Friday, Astrachan said K-Cup pricing is already decelerating. Citing scanner data from stores, he said there have been declines in markets where Rogers Family, owner of San Francisco Bay OneCups, have achieved the highest market share.

Rogers Family, a privately held California company, is also manufacturing cups for Safeway Inc's (SWY.N) private label single-serve coffee cups without the blessing of Green Mountain.

Astrachan also said there have been heightened K-Cup promotions in other retail channels, including department stores, big box retailers and drug stores and substantially increased availability at discount chains Big Lots (BIG.N) and TJ Maxx (TJX.N).

That could indicate slowing demand and/or an oversupply of K-Cups, Astrachan said.

(Reporting By Martinne Geller in New York; Editing by Gerald E. McCormick and Richard Chang)

Supervalu shares tumble 44 percent after poor results

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Analysts also questioned Supervalu's ability to withstand a price war with rival companies such as Kroger Co (KR.N) and Wal-Mart Stores Inc (WMT.N).

Supervalu shares were down 44 percent at $2.96 in morning trading.

After the stock market closed on Wednesday, Supervalu, the third-largest U.S. supermarket operator, said it had suspended its dividend to fund aggressive price cuts aimed at winning back shoppers.

"SVU (Supervalu)'s future is highly uncertain given the magnitude and speed of the deterioration," said BMO Capital Markets analyst Karen Short.

The company, which reported a sharply lower quarterly profit, said it was mulling including a sale. Supervalu, based in Minneapolis-based, owns grocery chains such as Jewel-Osco and Save-A-Lot.

"Our belief that operations will improve has eroded meaningfully," JPMorgan analyst Ken Goldman wrote in a research note, citing the aggressiveness of Supervalu's rivals.

He said Supervalu's pricing plans boded ill for other food retailers.

Safeway Inc (SWY.N) shares slipped 9.8 percent, while Kroger fell 3.6 percent.

Supervalu said on Wednesday that it would bid to get its everyday pricing as low as those of its competitors.

"Competition is growing more intense, and we believe that it will likely take time for new price investments to gain traction," Citi Research analyst Deborah Weinswig wrote in a note. She lowered her price target on Supervalu shares to $4 from $7.

Analysts from BMO, Cantor and Guggenheim also lowered their price targets on the stock.

Guggenheim Securities analyst John Heinbockel said in a note Supervalu could still be facing declining comparable-store sales and earnings before interest and taxes in two or three years.

"It is very difficult to fundamentally alter one's price perception in any reasonable time period," Heinbockel said, adding the prospects for success in Supervalu's approach were dim.

(Reporting by Phil Wahba in New York; Editing by Bernadette Baum)

ThinkEquity starts Callidus Software with buy, shares up

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Shares of Callidus, whose software is used to manage employee compensation, were up 8 percent at $4.71 on Friday morning on the Nasdaq. ThinkEquity set a price target of $8.00 on the stock.

"We view the opportunity to cross sell recently acquired cloud solutions into a large installed base of 1,200 large enterprise customers as an attractive opportunity," analyst Bradley Sills said in a research note.

Since 2011, the Pleasanton, California-based company has acquired several small companies such as ForceLogic, Webcom and Leadformix to expand its footprint in the incentive and compensation management software market.

The brokerage said with more companies evaluating cloud-based tools, Callidus is likely to gain market share due to its credibility and the wide range of its products and features.

The brokerage also started coverage of web-based software maker Salesforce.com Inc (CRM.N) with a "buy" rating, citing its ability to consolidate its share in the customer relationship management (CRM) market.

Salesforce shares were up 2 percent at $129.64 on Friday on the New York Stock Exchange.

(Reporting by Shubham Singhal in Bangalore; Editing by Sreejiraj Eluvangal)