Bear Bid Revised to $10, Tiffany Surges

123jump.com Staff
24 Mar, 2008
New York City

U.S. stocks rose in the morning trading, extending a two-day rally. JP Morgan lifted its Bear Stearns bid to $10 per share from $2 as Bear Stearns shareholders mounted aggressive campaign to scuttle the deal. Dow, Nasdaq, and S&P 500 jumped 1% in the morning trading. Tiffany soared 13% after it reported better than expected earnings. Walgreen Co earnings jumped 5% on 10% rise in sales.

[R]10:00AM New York – U.S. stocks opened higher lifted by the revised bid for Bear Stearns and earnings from luxury retailer Tiffany and pharmacy chain Walgreen.

U.S. stocks opened on a higher note after earnings from Tiffany and Walgreens and a revised bid from JP Morgan for Bear Stearns.

JP Morgan likely to lift it Bear Stearns bid

JP Morgan is likely to its bid for Bear Stearns to $10 per share from $2 per share. The sharp increase in price has come after severe criticism from employee shareholders who have threatened to block the takeover.

The news of the revised bid was first reported on the Web site of the New York Times.

Bear Stearns ((BSC)) rose 67% or $3.98 in the first fifteen minutes of trading to $9.94.

Tiffany Surges on quarterly earnings

Tiffany ((TIF)) reported its net sales increased 15% in the fiscal year ended January 31, 2008 and rose 10% in the fourth quarter.

Net earnings per diluted share from continuing operations excluding non-recurring items increased 22% to $2.33 in the year and increased 19% to $1.27 in the fourth quarter.

Net sales in the fiscal year increased 15% to $2.93 billion. Adjusting for currency fluctuations, net sales increased 13% and worldwide comparable store sales increased 7%. Net earnings in the fiscal year increased 20% to $303 million, or $2.20 per diluted share, compared with $254 million, or $1.80 per diluted share.

Net sales in the fourth quarter rose 10% to $1.05 billion. On a constant-exchange-rate basis, net sales increased 7% due to incremental sales from newly-opened stores and a 1% increase in worldwide comparable store sales. Net earnings in the fourth quarter declined 16% to $118.25 million, or $0.89 per diluted share, from $140.5 million, or $1.02 per diluted share, in the prior year. Earnings in the current year were adversely affected by several one-time items.

Tiffany ((TIF)) stock rose $5.40 to $44 after twenty minutes of trading.

Walgreen earnings up 5.2%

Walgreen Company ((WAG)) reported second quarter earnings for the quarter ended Feb. 29 were up 5.2% to $686 million or 69 cents per share, from $652 million or 65 cents per share in the same quarter a year ago. Sales in the quarter rose 10% to $15.3 billion.

This year’s results benefited from one extra day because of leap year.

Prescription sales, which accounted for 62.8% of sales in the quarter, climbed 11.1%. Prescription sales in comparable stores rose 5.2% in the quarter, while the number of prescriptions filled in comparable stores increased 3.6%. That compares to a 2.3% increase in total U.S. retail prescription volume during the same period, according to IMS Health.

Meanwhile, gross profit dollars increased 9.9% in the quarter, slower than the year-ago quarter’s 16.7% increase that was aided by popular generic drugs introduction.

Gross profit margins decreased 14 basis points versus the year-ago quarter to 28.82. Margins for the front-end decreased as a result of a shift in sales mix to lower margin items. Softer seasonal sales in December and digital photo promotions also reduced front-end margins. Pharmacy margins overall increased with the growth in generic drug sales.

Walgreen ((WAG)) stock increased $1.62 in the morning trading to $38.40.