U.S. stocks traded lower Tuesday as the Dow Jones Industrial Average recently fell 111 points to 11804, the Standard & Poor's 500 lost 1.1% to 1240 and the Nasdaq Composite declined 1.3% to 2664. Among the companies whose shares are actively trading in the session are Netflix Inc. (NFLX), 3M Co. (MMM) and Sherwin-Williams Co. (SHW).
Netflix (NFLX, $77.70, -$41.14, -34.62%) said it lost roughly 800,000 subscribers in its third-quarter and forecast fourth-quarter earnings below expectations following an exodus of users unhappy with a subscription pricing change in the summer.
3M (MMM, $77.46, -$4.72, -5.74%), blaming "economic softening" and weakness in demand for the supplies it sells to makers of television sets and other electronic gadgets, reported a 1.6% decline in third-quarter earnings and slashed its forecast for the full year.
Sherwin-Williams ($84.84, +$3.26, +4.00%) third-quarter earnings rose 2.6% as higher sales buoyed by price increases helped to offset rising materials costs.
Quest Diagnostics Inc.'s (DGX, $56.35, +$5.37, +10.53%) third-quarter earnings fell 13% on restructuring and integration-related charges as the medical-diagnostic company company's revenue rose due to recent acquisitions. The company also said it has begun its search to find a successor for Chairman and Chief Executive Surya N. Mohapatra, who has agreed to stay for up to six months, and also raised its quarterly dividend by 70%.
Cummins Inc.'s (CMI, $93.51, -$5.31, -5.37%) third-quarter profit rose 60% as sales of engines for commercial trucks surged, but inflation-reduction strategies in China and India caused the engine maker to soften its sales and profit outlook for 2011.
Other Stocks In Focus:AK Steel Holding Corp.'s (AKS, $7.70, -$0.96, -11.04%) third-quarter loss narrowed on improved selling prices, though shipments dropped and revenue missed expectations.
Aaron's Inc.'s (AAN, $26.34, -$2.00, -7.04%) third-quarter earnings rose 7.1% as revenue grew in its sales and lease ownership segment, but the renter and seller of furniture also lowered the high end of its full-year earnings forecast.
Advent Software Inc. (ADVS, $25.93, +$1.64, +6.75%) reported record revenue as its third-quarter results slightly beat analyst estimates. The software and services provider for the investment management industry also said it has been authorized to repurchase up to 2 million additional shares of the company's common stock.
Albemarle Corp.'s (ALB, $51.89, +$3.28, +6.75%) third-quarter results topped the Street's estimates as the specialty chemicals maker saw continued strength in its fine chemistry business.
Amgen Inc.'s (AMGN, $57.36, -$1.59, -2.70%) third-quarter earnings fell 63% as the biopharmaceutical company posted a big charge for a litigation reserve.
Boyd Gaming Corp.'s (BYD, $6.81, +$0.25, +3.73%) third-quarter earnings dropped 44% as the casino operator again reported weak revenue, although the adjusted bottom line increased.
BP PLC (BP, $43.98, +$2.14, +5.11%) shares rose after the U.K. energy giant reported solid earnings and announced plans to expand its asset sale program and boost distributions to shareholders on an improved outlook for free cash flow.
Centene Corp.'s (CNC, $32.34, +$3.27, +11.25%) shares climbed after the Medicaid insurer posted modest a third-quarter earnings-per-share beat, while noting it hasn't seen signs of rising Medicaid medical costs. This "may partly ease concerns over the potential for trend pressure that has been looming," Goldman Sachs says, since competitor Amerigroup Corp. (AGP, $49.14, +$0.28, +0.58%) raised its forecast last month for the ratio of premium revenue it expects to spend on patient care. But Centene's ratio in the third-quarter was down versus the year earlier at 83%, and lower than some analysts expected, while the insurer cited "lower levels of utilization and contract enhancements."
CubeSmart (CUBE, $9.23, -$0.52, -5.33%), a real estate investment trust focused on self-storage facilities, said its offering of 20 million shares priced at a 5.6% discount from Tuesday's closing price.
Delta Air Lines Inc.'s (DAL, $8.46, -$0.44, -4.94%) third-quarter earnings jumped 51% from a year earlier as strong top-line growth helped offset higher fuel prices, though fuel hedging impacts forced the airline to turn in core earnings below analysts' expectations.
Miller Tabak said in a note Tuesday that flooding at optical components maker Fabrinet's (FN, $12.37, -$3.42, -21.66%) Thailand facilities creates major uncertainty around optical companies. It suspended its ratings on Emcore Corp. (EMKR, $0.98, -$0.12, -10.46%) and Oclaro Corp. (OCLR, $3.48, -$0.23, -6.20%), saying it won't be able to analyze the next several quarters. The firm sees moderate risk for Ciena Corp. (CIEN, $12.35, -$1.39, -10.12%), with the potential for supply chain disruptions that could impair results for a quarter or two. It sees considerable near-term earnings risk for JDS Uniphase Corp. (JDSU, $10.36, -$0.85, -7.54%) but maintained its buy rating.
Ethan Allen Interiors Inc.'s (ETH, $20.18, +$0.56, +2.85%) fiscal first-quarter earnings rose 78% as the home-furnishings company posted double-digit revenue growth and wider margins. The results, which mark the company's fifth straight quarterly profit, beat analysts' expectations.
Fortinet Inc. (FTNT, $21.00, +$1.88, +9.83%) posted better-than-expected third-quarter results. The computer security company's product revenue, which it views as a leading indicator for its business, surged 48% and services revenue rose 30%.
Hancock Holding Co.'s (HBHC, $30.38, -$2.93, -8.80%) third-quarter earnings more the doubled as the bank set aside far less money for loan losses. Still, shares fell as earnings-per-share sharply missed analysts' estimates.
Shares of Healthways Inc. (HWAY, $6.43, -$4.74, -42.44%) plunged Tuesday morning after the health services firm disclosed its top customer, Cigna Corp. (CI, $45.66, +$0.32, +0.71%), will allow its contract with the company to wind down ahead of expiration. The contract is expected to account for $110 million to $115 million in Healthways sales this year, or about 16% of overall revenue the Street expects, but means much more for the bottom line, Piper Jaffray said. It downgraded Healthways to neutral from overweight while saying the Cigna loss "will eliminate earnings growth for the next two years."
Heidrick & Struggles International Inc. (HSII, $20.04, +$1.85, +10.17%) posted better-than-expected third-quarter revenue, with the executive recruiting firm's consumer, industrial and life sciences practices seeing the largest growth. Excluding an impairment charge to write off remaining goodwill and intangible assets of its European business, the company's operating income and operating margin both improved. Heidrick & Struggles also reiterated its full-year guidance.
Shares of oil refiners tumbled as Nymex crude oil futures hit their highest levels in nearly three months, with fund buying emerging amid tightening U.S. oil inventories. HollyFrontier Corp. (HFC, $28.75, -$3.80, -11.66%), Marathon Petroleum Corp. (MPC, $33.09, -$2.80, -7.81%) and Valero Energy (VLO, $21.98, -$1.27, -5.46%) were among the biggest decliners.
Hub Group Inc.'s (HUBG, $30.90, -$3.60, -10.43%) third-quarter results missed analysts' estimates, and Robert W. Baird cut its stock-investment rating on the transportation management services company to neutral from outperform, citing valuation as well as building investor sentiment headwinds from decelerating industry pricing growth trends within the domestic truckload space. Stifel Nicolaus also downgraded the company, cutting its rating to hold from buy.
II-VI Inc.'s (IIVI, $16.48, -$3.24, -16.43%) lowered its fiscal-year targets and predicted unexpectedly weak results in the current quarter, which the manufacturing company said reflected the cautious sentiment of its industrial and military customers.
Illinois Tool Works Inc.'s (ITW, $46.60, -$1.63, -3.38%) third-quarter earnings rose 20% on a solid revenue increase as demand held up, although the diversified industrial manufacturer reined in its outlook for the year.
Interactive Intelligence Group Inc.'s (ININ, $26.51, -$7.28, -21.54%) third-quarter results fell short of expectations as the business communications solutions company saw its business mix shift toward cloud-based deals.
S&P Indices said fiber-based network service provider Lumos Networks Corp. will replace Kid Brands Inc. (KID, $2.06, -$0.27, -11.42%) in the S&P SmallCap 600 index as of the close of trading on Oct. 31. S&P said Kid Brands, a supplier of juvenile products with a market capitalization of $50 million, is no longer representative of the small-cap market space. S&P Indices will also removed Smith Micro Software Inc. (SMSI, $1.16, -$0.10, -7.94%) from the S&P SmallCap 600 index.
Lennox International Inc. (LII, $31.99, +$2.54, +8.62%) posted a 19% decline in its third-quarter profit as higher commodity costs hit margins and offset top-line growth. But shares rose as the results beat analysts' expectations.
Lexmark International Inc.'s (LXK, $29.67, -$1.60, -5.12%) third-quarter earnings slipped 7% under the weight of higher expenses, though the printing company posted modest top-line growth ahead of its own forecast.
Masco Corp. (MAS, $9.43, +$0.09, +0.94%) swung to a third-quarter profit on strong international sales, though the company's core profit slipped, absent a benefit from investment gains.
MF Global Holdings Ltd.'s (MF, $2.24, -$1.31, -36.90%) fiscal second-quarter loss widened on charges and as market volatility weighed on revenue. The futures broker's results missed expectations. On Monday, Moody's Investors Service cut its debt rating on MF Global, citing the brokerage firm's risk appetite and exposure to European sovereign debt.
Momenta Pharmaceuticals Inc. (MNTA, $12.21, -$1.75, -12.54%) said partner Sandoz Inc. confirmed the launch of a generic version of its Lovenox blood thinner in the fourth quarter under an agreement that features a hybrid royalty-profit sharing plan.
Copper tube and fittings manufacturer Mueller Industries Inc.'s (MLI, $38.17, -$7.83, -17.02%) third-quarter net income tumbled to $10.5 million from $18.9 million the prior year as the company was hurt by copper price fluctuations.
Nara Bancorp Inc.'s (NARA, $7.66, +$0.74, +10.69%) third-quarter results beat analysts' expectations as the company saw solid balance sheet growth for the quarter, due in part to its efforts to attract more commercial loan and deposit relationships.
Office Depot Inc.'s (ODP, $2.29, -$0.25, -9.84%) third-quarter profit more than doubled on a tax benefit and as the office-supply retailer's lower input costs masked a slight decline in sales. The results missed expectations. Peer OfficeMax Inc. (OMX, $5.47, -$0.39, -6.66%) also declined.
Peabody Energy Corp.'s (BTU, $40.16, -$0.78, -1.91%) third-quarter profit rose 22% as revenue per ton increased, offsetting a drop in global sales. Peabody lowered the higher end of its target total sales for the year to 245 million tons from 255 million tons.
September's new home sales could show an increase--albeit a tiny 1%--to an annualized 298,000 Wednesday morning, according to Credit Suisse. If new home sales finish the year at their current pace, 2011 will be the worst year dating back to 1963. Shares of home builders PulteGroup Inc. (PHM, $4.92, -$0.29, -5.57%) and KB Home (KBH, $7.27, -$0.51, -6.56%) both fell.
PrivateBancorp Inc.'s (PVTB, $10.56, +$1.30, +14.04%) third-quarter results handily topped Street estimates on stronger-than-expected net interest margin, stronger core fee income and a lower-than-expected tax rate.
Regions Financial Corp. (RF, $3.86, -$0.04, -1.03%) swung to a third-quarter profit, helped by sharply reduced credit costs for risky loans, though the lender's top line weakened from a year earlier.
Rent-A-Center Inc.'s (RCII, $33.51, +$1.30, +4.04%) third-quarter earnings fell 23% as restructuring charges more than offset revenue growth. But shares of the largest operator of rent-to-own stores rose as the results topped the Street's estimates.
(The Wall Street Journal)
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