Stock Market Predictions

Cepheid shares tumble after outlook cut

Stock Market Predictions

Coupled with macro-economic conditions, including volatile currency rates and longer order cycles ahead of the U.S. presidential election, the company said it was lowering its full-year outlook.

The company now expects full-year adjusted earnings of between 38 cents and 42 cents per share, down from its prior forecast of 50 cents to 55 cents per share.

Cepheid said it installed 133 GeneXpert testing systems in its commercial clinical business and another 138 systems through its developing country program. During the same period last year, the company had installed 148 systems through the commercial program and 38 systems through the assistance plan.

Cepheid shares were trading down 20 pct at $34.79 late Friday morning on the Nasdaq.

(Reporting by Balaji Sridharan in Bangalore; Editing by Anthony Kurian)

Dole shares jump 8 percent on hopes of packaged foods deal

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On Thursday, Dole said it has been in talks with numerous third parties who have expressed interest in certain businesses.

For its packaged foods business, Dole said it is exploring a possible sale or spin-off. It also said it was considering combining that business with other Dole operations in Asia to form a stand-alone Asia-based business, either through a possible joint venture or an initial public offering in Asia.

Dole Chief Executive Officer David DeLorenzo told analysts that a month or two ago, when they first started exploring options, that executives felt they might be able to get a higher valuation in Asia than in North America.

"When we got into the process and we were talking to different companies that either contacted us or our advisors had contacted, we generated a lot of interest coming out of Asia," DeLorenzo said. "So that prompted us to look at all different options."

He also said he was confident some kind of transaction would happen by the end of the year.

Janney Capital Markets analyst Jonathan Feeney said an Asian partnership or IPO was a sensible alternative.

"Dole's packaged foods arm has a well-known brand, with logistics and presence in several large Asian countries that are viewed by many global food and beverage players as highly attractive," Feeney said in a research note.

Feeney added that the planned acquisition of Bolthouse Farms by Campbell Soup (CPB.N), at 10 times earnings before interest, taxes, depreciation and amortization, made him think that his projection for a deal at 8.5 times EBITDA, which would be worth roughly $1 billion, could prove conservative.

Dole's packaged foods business includes canned pineapple, canned pineapple juice, fruit juice concentrate, fruit in plastic cups and other packages and frozen fruit. It's other businesses sell fresh bananas, pineapples and berries, and more than 20 different types of fresh vegetables as well as bagged salads.

Dole shares were up 68 cents, or 7.7 percent, at $9.51 on the New York Stock Exchange. They earlier had earlier rising as high as $10.06.

(Reporting By Martinne Geller in New York; Editing by David Gregorio)

Staar Surgical shares fall on weak revenue estimate

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Staar's stock was down about 21 percent at $6.37 on Friday on the Nasdaq, its biggest single-day percentage drop in three-and-a-half years. It touched a low of $6.19 earlier in the day.

At least two brokerages cut their price targets on the stock citing weak sales outlook for Staar's Visian ICL lenses.

The company's full-year outlook of 15 percent revenue growth and 32 percent growth in Vision sales was ambitious, especially after its first-quarter sales missed expectations, Canaccord Genuity analyst Jason Mills said in a note to clients.

The analyst said he expects the company to lower its full-year outlook when it reports second-quarter results on August 1. He cut his price target on the stock to $10.50 from $14.00.

The transition to a direct-delivery model hurt Visian ICL sales in Spain, while uptake in Korea -- its largest market -- was also lesser than anticipated, Staar said on Thursday.

Analyst Mills said the company's previous distributor in Spain did not re-order ICL lenses and the company bought back some inventory from the distributor.

Staar, however, expects the new model to show benefit in the second half of the year.

Benchmark analyst Raymond Myers attributed lower sales to the "increasingly difficult global economic climate," and cut his price target on Staar's stock to $10 from $12.50.

"With approximately 80 percent of sales outside of the United States, we feel it is unlikely that Staar can avoid some impact to growth," he said.

However, Myers said the drop in share price was "an outstanding buying opportunity" as weakness in the company's second quarter is transitory.

(Reporting By Pallavi Ail in Bangalore; Editing by Roshni Menon)

Chipotle sales slowdown chills consumer stocks

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Chipotle's stock shed nearly 25 percent of its value on Friday, a day after the upscale burrito chain's closely-watched sales at established restaurants missed analysts' expectations for the second quarter.

Other companies that rely on consumers having a little extra cash to spend, including Panera Bread Co (PNRA.O), Starbucks Corp (SBUX.O), Anthropologie clothing chain owner Urban Outfitters Inc (URBN.O) and organic retailer Whole Foods Market Inc (WFM.O), were also down anywhere from almost 2 percent to more than 7 percent.

"Consumer confidence is down and this is despite a rebound in housing, falling gas prices. Consumers are very cautious right now," Ken Perkins, president of research firm Retail Metrics, told Global Markets.

Denver-based Chipotle relies on diners' willingness to pay premium prices for its food made with organic produce and antibiotic-free meats. Its shares have soared since going public in 2006, due to rapid growth and sales trends that lately have defied the malaise in the U.S. economy.

"Our hypothesis going into quarterly results had been that Chipotle would be one of few companies to buck a broader restaurant slowdown this quarter," William Blair & Co analyst Sharon Zackfia, said.

But Chipotle's stock - which debuted at $22 and hit an all-time high of more than $442 in April - plunged 21.5 percent to close at $316.98 on Friday, making it the biggest percentage loser on the New York Stock Exchange.

Chipotle was also Friday's biggest decliner on the S&P 500 Consumer Discretionary Index .GSPD, which fell more than 1 percent on Friday but remains up over 12 percent year-to-date.

Consumer spending was healthy during the first quarter of the year, when mild winter weather lured people to stores and restaurants and prompted companies to add jobs earlier than usual.

But that shift led to a second-quarter hangover, marked by stalled job growth and softer consumer spending.

"I think the second quarter will be the worst quarter this year â€" the weather in Q1 took business out of Q2," said retail consultant Jan Kniffen, of retail consulting and equity research firm J. Rogers Kniffen Worldwide Enterprises.

Compounding concern, consumer confidence declines have been greater for consumers making more than $50,000 over the past two months, Zackfia said.

BURRITO BELLWETHER?

Chipotle on Thursday said second-quarter sales at restaurants open at least 13 months rose a healthy 8 percent, but fell short of the 10 percent gain analysts expected.

Company brass said those sales decelerated in late April and continued through May and June.

"It's a squeezed consumer," said Malcolm Knapp, whose Knapp-Track monthly sales and guest count data is a restaurant industry benchmark. "If they spend a lot on retail, they spend less on restaurants. They can't do everything."

Whole Foods, which has taken well-heeled and health-conscious shoppers from more mainstream supermarket chains, is another company that has been posting robust growth despite the bumpy U.S. economic recovery.

Analyst Zackfia said Chipotle's sales miss "does create incrementally greater caution in our minds about whether the softening macro environment could weigh on Whole Foods' business."

Investors will find out next week when Whole Foods reports quarterly results. Meanwhile, shares of the retailer closed down 7.2 percent at $84.03 on the Nasdaq - where they hit an all-time high of more than $97 in late June.

(Reporting By Lisa Baertlein in Los Angeles)

Warner, theater shares drop after "Dark Knight" shooting

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Shares of Cinemark Holdings (CNK.N), owner of the Century 16 movie theater where the shooting occurred in the Denver suburb of Aurora, dropped 3.3 percent to $23.46 in afternoon trading on the New York Stock Exchange. Regal Entertainment Group (RGC.N) shares fell 2.9 percent to $13.54 on Nasdaq.

Cinemark, in a statement, said it was "working closely" with law enforcement authorities in Aurora and was "deeply saddened" by the incident.

Shares of Time Warner Inc (TWX.N), the big media conglomerate that owns the Warner Bros. studio that produced "Dark Knight Rises," dropped 10 cents, or 0.3 percent, at $39.04.

"It's possible you'll see some backlash to theaters from this awful tragedy," said Tony Wible, an analyst with Janney, Montgomery Scott, who follows theater stocks. "Investors were already worried about the box office softness before this happened."

"The Dark Knight Rises" was expected before the shooting to draw some of the biggest box office crowds of the year.

Warner Bros separately on Friday said the film took in $30.6 million at U.S. and Canadian box offices in screenings just after midnight on Friday.

(Reporting By Ronald Grover and Lisa Richwine; Editing by Leslie Adler)

Palo Alto shares soar 31 percent on NYSE debut

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The Santa Clara, California-based company, which makes security software for businesses, opened to trade at $55.15, after shares were priced at $42 apiece a day earlier, above their expected range. In late morning trading Friday, shares gained even more, adding 33 percent to $56.03.

Palo Alto's 6.2 million shares were priced late Thursday, raising $260.4 million. Earlier this week, the company had raised its price range to $38 to $40 from a range of $34 to $37.

Palo Alto's IPO comes on the heels of a successful offering from IT management services provider ServiceNow Inc last month. ServiceNow's public debut helped open an IPO market that was effectively frozen for a month following Facebook Inc's botched offering.

Besides Palo Alto, other IPOs that priced this week include online travel company Kayak Software Corp, teen retailer Five Below Inc and pharmaceutical company Durata Therapeutics Inc. The offerings raised a total of $606.9 million. Guitar maker Fender Musical Instruments Corp pulled its IPO Thursday, citing market conditions.

Palo Alto sells firewalls to companies that block out malware and viruses.

"We have some pretty aggressive ambitions as far as growing into our market opportunity," CEO Mark McLaughlin said in an interview on Friday. "This is a $10 billion market and we have a 2 to 3 percent market share."

McLaughlin was formerly the CEO of Internet infrastructure services provider VeriSign Inc.

In fiscal 2011, Palo Alto's revenue more than doubled to $118.6 million. The company reported a net loss of $12.5 million, down from $21.1 million a year earlier.

Palo Alto offered 4.7 million shares during the IPO, while existing shareholders offered 1.5 million. The company's backers include Greylock Partners, Sequoia Capital and Globespan Capital Partners.

Morgan Stanley, Goldman Sachs and Citigroup are the lead underwriters of the offering.

(Reporting by Olivia Oran; Editing by Bernadette Baum)

Universal Stainless shares plunge after results miss estimates

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The company's stock, which touched a seven-month low of $32.28 in morning trading, was one of the top percentage losers on the Nasdaq.

The company on Thursday warned that demand for its specialty steel products would continue to soften due to inventory adjustments.

Second-quarter net income dropped 18 percent to $4.5 million, or 62 cents per share.

Analysts on average had expected earnings of 83 cents per share, according to Thomson Global Markets I/B/E/S.

Sales rose 7 percent to $67.9 million, but still missed estimates of $83.4 million.

Tons shipped to the power-generation market in the quarter declined by 25 percent from the first quarter, the company said.

Bridgeville, Pennsylvania-based Universal sells stainless steel and tool steel products to re-rollers, forgers and original equipment manufacturers (OEMs) in the aerospace, petrochemical and power-generation markets.

(Reporting by Kartick Jagtap in Bangalore; Editing by Maju Samuel)

Hub Group cuts forecast as truck brokerage slows, shares down

Stock Market Predictions

Truck brokerage revenue in the second quarter fell 11 percent to $80 million. The segment accounted for about 13 percent its total revenue in the quarter.

"We haven't lost any share there (truck brokerage business); it's just that the projects are much smaller than they were the prior year," Chief Executive David Yeager said on a conference call with analysts.

The company cut its full-year earnings forecast to between$1.80 and $1.90 per share from between $1.89 and $2.10 per share, prompting at least two brokerages to cut their rating on the stock.

KeyBanc Capital Markets downgraded Hub Group to "hold" from "buy," citing a "longer and greater-than-anticipated" earnings impact from the brokerage turnaround and a potentially slower freight environment going forward.

Raymond James cut its rating on Hub Group to "market perform" from "outperform".

Hub Group shares, which have shed 10 percent of their value in the last three months, were down 9 percent at $28.96 in morning trade on the Nasdaq. They touched a low of $27.86 earlier in the session.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Supriya Kurane)

Google shares rise as strong ad business eases macro fears

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A slew of analysts reiterated their ratings and price targets on Google's stock, saying there were no real surprises and that the positives had offset the negatives in the quarter.

"There is still material return on investment upside available to advertisers from search advertising, and that such upside will continue to fuel ongoing demand for search ads and revenue growth," Sanford C. Bernstein analyst Carlos Kirjner said in a note.

Google's advertising rates have been pressured as consumers increasingly use smartphones to access mobile versions of the Web, but the concern was alleviated as overall clicks on Google's search ads jumped 42 percent in the second quarter.

"While the quarterly results were somewhat unremarkable, we believe shares may form a base at or near $600, in part because investors will soon shift attention to back-to-school and holiday shopping seasonality," Stifel Nicolaus said.

The brokerage has a "hold" rating on Google's stock.

The success of Google's web browser, Chrome, will offset rising traffic acquisition costs (TAC), Barclays Capital analyst Anthony DiClemente said in a client note.

TAC is the money paid by internet search companies to online firms that direct traffic to their websites.

DiClemente is a five star-rated analyst for the accuracy of his earnings estimates on Google, according to Thomson Global Markets StarMine data.

Chrome users nearly doubled by the second quarter to 310 million.

Benchmark Co, which has a "hold" rating on Google's stock, raised its price target by $10 to $625.

NO WORD ON MOTOROLA

The world's No.1 search engine, however, evaded questions about its plans for Motorola Mobility, which it recently bought for $12.5 billion, saying Google was yet to complete its homework on the various businesses.

"Results were somewhat difficult to decipher with the consolidation of the Motorola Mobility acquisition," RBC Capital Markets analysts said.

"Management did not outline a specific plan for the future of MMI as a part of Google, and so we anticipate that Street estimates for the combination could vary quite widely."

Motorola reported an operating loss of $233 million in the second quarter on revenue of $1.25 billion.

Barclays' DiClemente said Google had the ability to instill fiscal discipline for Motorola to limit the spending investors fear.

Google also did not provide much details about its hardware business where margins are low and competition from the likes of Apple Inc and Samsung Electronics Co Ltd is fierce.

Benchmark said it expects aggressive development of mobile devices, which could push expenses higher in the near-term, while J.P. Morgan Securities said it continues to expect Motorola product portfolio to be pared back and headcount to be reduced.

Shares of the company, which closed at $593.06 on the Nasdaq on Thursday, rose to $610 in trading before the bell. The stock has dropped 11.5 percent since its touched a four-year high of $670.25 in January.

(Reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty and Don Sebastian)

Kayak Software shares debut 16 percent above initial price

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The Norwalk, Connecticut-based company opened NASDAQ trading at $30.10 after 3.5 million shares priced at $26.00. Kayak raised $91 million in its offering.

Shares continued rising and were at $32.83 in morning trading.

Kayak, which filed to go public in November 2010, was originally slated to launch its offering following Facebook's IPO in May. But those plans were pushed back after Facebook's shares fell and lost around a third of their value.

Kayak's debut is the latest in a strong week for IPOs. Shares of security software company Palo Alto Networks (PANW.N) soared 31 percent on Friday in their market debut. Teen retailer Five Below Inc (FIVE.O), meanwhile, saw shares rise more than 65 percent on their debut Thursday.

"Clearly there was damage done by Facebook but a high quality company with brand awareness can still get an extremely attractive premium," said Scott Sweet, senior managing partner with IPO Boutique.

In fiscal year 2011, Kayak's revenue rose 32 percent to $224.5 million. The company's net income grew 21 percent to $9.7 million.

Kayak, which uses a website and a mobile site to help consumers compare prices for airlines and hotels, faces competition from Google Inc (GOOG.O), Orbitz Worldwide Inc (OWW.N), Expedia Inc (EXPE.O), Travelocity and Microsoft Corp (MSFT.O).

Kayak's venture backers include Sequoia Capital, Accel Partners, General Catalyst Partners and Oak Investment Partners.

The IPO is being underwritten by Morgan Stanley, Deutsche Bank, Piper Jaffray, Stifel Nicolaus and Pacific Crest Securities.

(Reporting By Olivia Oran; Editing by Andrew Hay and Jim Marshall)