Tuesday, October 8, 2013

Stocks to Watch: J.C. Penney, Hertz, Eli Lilly

Among the companies with shares expected to actively trade in Thursday’s session are J.C. Penney Co.(JCP), Hertz Global Holdings Inc. and Eli Lilly(LLY) & Co.

Concerns are growing about J.C. Penney as it considers raising fresh capital heading into the holiday season. The Wall Street Journal reported the struggling department store chain is exploring the possibility of borrowing more money with the help of investment bankers at Goldman Sachs(GS). Meanwhile, debt analysts from Goldman Sachs warned Wednesday that weak performance, particularly in Penney’s home department, could put pressure on its available cash in the quarter that ends in October. The retailer issued a statement Thursday saying it was pleased with its turnaround initiatives and anticipates positive same-store sales trends through the rest of the year. Shares fell following a 15% decline Wednesday.

Hertz lowered its full-year guidance, citing weaker-than-expected volume generated by its namesake brand in the U.S. airport car-rental market. “Weaker volume impacts not only revenues, but also generates related fleet issues, including lower utilization and the inability of the used-car market to absorb our excess vehicles at current market prices,” said Chairman and Chief Executive Mark Frissora. Shares dropped.

Eli Lilly said its experimental cancer drug ramucirumab failed to meet its target in a large late-stage trial of breast-cancer patients, a setback in the company’s hopes that the agent will be effective against a wide range of tumors. But in a separate late-stage study, the company said the drug successfully met its goal of demonstrating an improvement in overall survival in patients with stomach cancer. Shares slipped.

Jabil Circuit Inc.’s fiscal fourth-quarter earnings rose 53%, but the contract electronics manufacturer projected fiscal first-quarter results below expectations. Also, Jabil estimated that it will record roughly $35 million to $85 million in charges during the new fiscal year stemming from its exposure to BlackBerry Ltd., Jabil’s second-largest customer in the past fiscal year. Jabil shares fell.

Bed Bath & Beyond Inc.’s fiscal second-quarter earnings rose 11% as the home-furnishings retailer recorded a jump in sales. Shares rose as the company raised the lower end of its full-year earnings estimate.

Progress Software Corp.’s fiscal third-quarter profit more than quadrupled as the business software provider posted a gain on the divestiture of its Apama product line as well as lower input costs. The results were slightly better than Wall Street expectations. Shares rose as the company’s fiscal fourth-quarter guidance topped expectations.

Private equity firm American Industrial Partners has agreed to buy industrial-waterjet maker Flow International Corp. for $200 million. American Industrial said it would pay $4.05 a share in cash for Flow, an 8.6% premium over Flow’s closing price Wednesday. Shares rose.

Fibrocell Science Inc. said it intends to sell an unspecified number of shares in a public offering. The company recently had 27.5 million shares outstanding, according to FactSet. Shares fell.

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