S&P MAINTAINS STRONG BUY OPINION ON SHARES OF PROCTER & GAMBLE (PG; 61.61):
September-quarter EPS of $1.03, vs. $0.92, is $0.03 above our estimate. Upside came from better-than-expected Beauty segment results and corporate expenses. Sales rose 9%, after positive 4% forex. With the recent sharp rise in U.S. dollar, we now expect the forex impact to be negative in December-quarter and fiscal year 2009 (June). We reduce our fiscal year 2009 EPS estimate by $0.15 to $3.73, to reflect $0.12 incremental restructuring charges and the rest from forex changes. We exclude an estimated $0.50 per-share gain from the Folgers deal. We are trimming our p-e- and DCF-based 12-month target price by $2 to $78. -L. Braverman-CFA
S&P REITERATES STRONG BUY OPINION ON SHARES OF KFAFT FOODS (KFT; 29.27):
Before some special items, third quarter EPS from continuing operations of $0.45, vs. $0.40, exceeds our estimate by $0.01. Amid concerns about economic weakness, we expect the shares to benefit from prospect that sales of KFT products will benefit from consumers eating more at home. While stronger U.S. dollar would likely be negative for translation of overseas sales and profits, commodity cost pressure may ease. We trim our 2008 EPS estimate to $1.90 from $1.91, and 2009's to $2.03 from $2.06, and keep our 12-month target price at $37. Indicated dividend yield is about 4.0%. -T. Graves-CFA
S&P MAINTAINS HOLD OPINION ON CORNING SHARES (GLW; 11.42):
Third quarter EPS of $0.46, vs. $0.38, is $0.01 ahead of our estimate on wider-than-expected operating margin. Display sales were weaker than we expected and telecom was slightly stronger. But due to slowing demand for LCD TVs in September and October and reduced orders from display customers, GLW sees fourth quarter sales and gross margin well below our forecast and it plans to reduce manufacturing and R&D costs to better realign its business. We look to the morning call for details on how protracted the downturn will be to GLW's typically high-margin display segment. -T. Rosenbluth
S&P MAINTAINS HOLD OPINION ON CLASS A SHARES OF COMCAST CORP. (CMCSA; 16.96):
Before $0.02 net tax benefit, third quarter EPS of $0.24, on 6% less shares, vs. $0.18 is $0.01 above our estimate, $0.02 above Street's. Despite 147,000 basic subscriber losses, 1.1 million revenue-generating unit net adds were encouraging, as economy and calendar shift weighed on ads at cable and programming units. CMCSA affirmed 8%-10% 2008 total revenue and EBITDA growth and, with lower capex, now sees prior 20% free cash growth forecast as conservative. As we expected, CMCSA pulls its prior target for $7 billion stock buyback completion ($4.1 billion unused), citing capital market turmoil. -T. Amobi - CPA, CFA
S&P DOWNGRADES OPINION ON SHARES OF VISTAPRINT TO HOLD FROM BUY (VPRT; 24.22) :
VPRT posts Sepembert-quarter EPS of $0.18, vs. $0.15, below our $0.26 estimate. While revenues of $114 million were better than we projected, helped by strong orders from new and repeat customers, gross margins narrowed from year-ago quarter. VPRT reduced its fiscal year 2009 (June) guidance on greater economic uncertainty. We continue to be concerned about the weakening global economy and adverse affects of currency shifts on VPRT's results in fiscal year 2009. We are lowering our fiscal year 2009 EPS estimate to $0.98 from $1.20, and cutting our 12-month price target by $11 to $30, on lowered 3-year growth expectations. -P. Wang