Global Slowdown, Greece Weigh on U.S. Indexes; VeriFone Swings to Loss

Arthi Gupta
06 Mar, 2012
New York City

The U.S. indexes declined on the worries that a disorderly default on Greek bonds will do more harm if private investors fail to agree to debt swap terms. AmerisourceBergen agreed to buy World Courier Group for $520 million.

[R]9:35 AM New York – The U.S. indexes declined on the worries that a disorderly default on Greek bonds will do more harm if private investors fail to agree to debt swap terms. AmerisourceBergen agreed to buy World Courier Group for $520 million.[/R]

U.S. indexes edged lower on the rising worries of a disorderly default on Greek bonds and slowing economic backdrop in China and the euro zone.

Yesterday, China lowered its growth target to an eight-year low for 2012 and today the euro-zone reported a contraction in the last quarter. U.S. service sector activity rose to one-year high in February but failed to lift investor sentiment. Asian markets declined tracking the U.S. and European markets.

European indexes traded lower after Eurostat confirmed that the euro-zone economy contracted 0.3% in the fourth quarter.

Investors are awaiting the outcome of Greek private investors’ willingness to participate in the bond swap deal with a deadline on March 8.

U.S. Service Index Rises

U.S. service sector activity rose in February, according to the Institute for Supply Management report released yesterday.

The ISM said its non-manufacturing index rose to 57.3 in February from 56.8 in January and the business activity index climbed to 62.6 in February from 59.5 in January.

Archipelago Learning to Go Private

Archipelago Learning agreed to be taken private by PLATO Learning, a portfolio company of Thoma Bravo, LLC for $11.10 per share in cash, representing an equity value of approximately $291 million. The transaction represents a premium of 23% to the closing price of $9.04 on March 2.

Newcastle to Acquire Excess Mortgage Servicing Rights

Newcastle Investment Corp. agreed to acquire an approximately 65% interest in Excess Mortgage Servicing Rights from Nationstar Mortgage LLC for about $170 million. The deal is in connection with Newcastle's acquisition of mortgage servicing assets from Aurora Bank FSB, a subsidiary of Lehman Brothers Bancorp Inc.

AmerisourceBergen to Buy World Courier Group

AmerisourceBergen Corporation agreed to purchase World Courier Group, Inc., a privately held leading global specialty transportation and logistics provider for the biopharmaceutical industry, for $520 million in cash.

Earnings Review

ABM Industries, Inc. ((ABM)), the facility services provider reported first quarter revenue rose 4.3% to $1.07 billion from $1.03 billion in the prior year. Net income for the quarter advanced 26.6% to $10.6 million or 20 cents per diluted share compared to net income of $8.4 million or 16 cents per share a year ago.

Bridgepoint Education, Inc. ((BPI)), the provider of postsecondary education services reported fourth quarter revenues rose 15% to $221.3 million from $192.4 million in the prior year. Net income in the quarter fell 13% to $22.9 million or 41 cents per diluted share compared to net income of $26.3 million or 45 cents per share reported a year ago.

For fiscal 2011, revenue increased 31% to $933.3 million from $713.2 million for 2010. Net income for the year advanced 35.4% to $172.8 million or $3.02 per diluted share compared with net income of $127.6 million or $2.14 per share for 2010.

Casey's General Stores, Inc. ((CASY)), the convenience stores operator reported third quarter revenue increased 15.3% to $1.58 billion from $1.37 billion last year. Net income in the quarter climbed 29.4% to $16.7 million or 43 cents per diluted share compared to net income of $12.9 million or 34 cents per share last year.

United Natural Foods, Inc. ((UNFI)), the distributor of natural, organic and specialty foods said second quarter net sales increased 15.5% to $1.29 billion from $1.11 billion in the prior year. Net income for the quarter increased 18% to $22.01 million or 45 cents per diluted share compared to net income of $18.73 million or 39 cents per share a year ago.

VeriFone Systems Inc. ((PAY)), the electronic payment technology company said first quarter total net revenues soared 48% to $419.52 million from $283.77 million in the prior year quarter. Net loss for the quarter was $3.12 million or 3 cents per diluted share compared to net income of $32.03 million or 35 cents per share in the same quarter last year.