Lehman Brothers Holdings (LEH) expects to report a second quarter net loss of about $2.8 billion, or a loss of $5.14 per share, vs. $2.21 in year ago second quartr. It sees second quarter net revenue of negative $0.7 billion, vs. $5.5 billion in year ago quarter. Also, the company announces that it intends to raise $6 billion through common stock and non-cumulative mandatory convertible preferred stock offerings. Moody's Investors Service lowers rating outlook on Lehman Brothers Holdings to negative from stable; affirms rating on the senior long-term debt and its principal rated operating and guaranteed subsidiaries.
Apple (AAPL) shares fall as it introduces the new iPhone 3G, combining all the features of iPhone with 3G networking that is twice as fast as the first generation iPhone, built-in GPS for expanded location based mobile services, and iPhone 2.0 software which includes support for Microsoft Exchange ActiveSync and runs the hundreds of third party applications already built with the recently released iPhone SDK. iPhone 3G will be available in the U.S. on July 11 for $199 for the 8GB model and $299 for the 16GB model.
Washington Mutual (WM) falls 0.94 to 6.59 after UBS Financial cuts estimates, target, keeps neutral. Also says it expects WM to incur $27 billion in additional credit losses into 2011.
Taser International (TASR) announces that a jury verdict in U.S. District Court for Northern District of Calif. found that the extended duration of a TASER ECD contributed 15% to the death of an individual on Feb. 19 2005. While jury attributed 85% of cause of death to actions of decedent, the jury awarded $1.021 million in compensatory damages and $5.2M in punitive damages against TASR based on alleged negligent failure to warn.
Rimage (RIMG) announces that due to the impact of the sluggish economy, cuts second quarter EPS guidance to $0.09-$0.12 on revenues of $20-$22 million. Says previously issued guidance called for EPS of $0.22-$0.27 on revenues of $24-$26 million. Dougherty & Co. cut estimate, target.
DreamWorks Animation SKG (DWA) rises 1.29 to 31.34. S&P says shares are up on domestic box office-topping $60 million opening weekend for Kung Fu Panda, DWA's best-ever non-sequel debut and 3rd highest opening ever. S&P maintains hold.
WSJ reports that, two days before American International Group's (AIG) May 14 annual meeting, three of AIG's major shareholders sent a letter to the board asking for a meeting to discuss "steps that can be taken to improve senior management and restore credibility." The letter cited "a staggering breakdown of risk control" and "an unequivocal loss of investor confidence."
Willis Group Holdings Ltd. (WSH) and Hilb Rogal & Hobb (HRH) announce an agreement whereby WSH will acquire HRH for $46 per share (50% cash, 50% stock: subject to a collar) in a deal having an equity value of about $1.7 billion and an enterprise value of about $2.1 billion. The deal is expected to close in the fourth quarter. WSH expects acquisition to be accretive to cash EPS from the close and to GAAP EPS from year two.
Cost Plus (CPWM) says Pier 1 Imports (PIR) has proposed to acquire all the outstanding shares of the company for $4.00 per share. Terms: 0.60 PIR share for each CPWM share held.
McDonald's (MCD) posts 7.7% higher May global same-store sales, 16% higher system-wide sales for McDonald's worldwide restaurants (9.1% in constant currencies).
Merck & Co. (MRK) says treatment with its Januvia diabetes medicine was associated with a 93% lower risk of having a confirmed symptomatic hypoglycemic event on a given day (p=0.001) compared to treatment with glipizide, a sulfonylurea.
Vertex Pharmaceuticals (VRTX) announces positive results from a planned interim analysis of PROVE 3, an ongoing Phase 2b study evaluating telaprevir-based treatment in patients with genotype 1 chronic hepatitis C virus infection who did not achieve sustained virologic response with at least one prior pegylated interferon and ribavirin regimen.
QLT (QLTI) says its QLT USA Inc. unit has entered into an asset purchase agreement with a unit of Allerganto fully divest QLTI's worldwide rights to Aczone, a prescription topical medicine approved in the U.S. and Canada for treatment of acne vulgaris. Under terms of the deal, QLTI will receive a one-time cash payment of approximately $150 million upon closing, which is expected to occur in the third quarter 2008.
BE Aerospace (BEAV) says Honeywell International (HON) has agreed to sell its consumables solutions business to the company for $1.05 billion. Under the agreement, which is expected to close in the third quarter, BE Aerospace will pay at least $800 million in cash, the rest in common stock. With the deal expected to boost earnings, BEAV raises 2009 and 2010 EPS estimates by $0.05 and $0.15/share, respectively, to about $2.85 and $3.65.
Jefferies downgrades Amylin Pharmaceuticals (AMLN) to hold from buy, citing competition from Novo Nordisk's diabetes drug.