Nortel Files Bankruptcy; Tiffany, Bunge Fall

Mayank Mehta
14 Jan, 2009
New York City

Nortel plunges on bankruptcy filings. Tiffany declines on weak holiday sales. Bunge Limited and Under Armour decline on weak earnings outlook. Deutsche Bank drops on a larger than expected loss. HSBC falls on a need to raise capital of as much as $30 billion.

[R]3:30PM New York – Nortel plunges on bankruptcy filings. Tiffany declines on weak holiday sales. Bunge Limited and Under Armour fall on weak earnings outlook. Deutsche Bank falls on a larger than expected loss. HSBC falls on a need to raise capital of as much as $30 billion.[/R]

Of the stocks in S&P 500 index, 15 increased, 484 declined and 1 was unchanged.

Citigroup Inc led decliners in the index with a loss of 22% followed by losses in Huntington Bancorp of 16.4%, in Principal Financial of 12.7%, in Archer Daniels of 12.4%, in Consol Energy of 11.9% and in Lincoln National Corp of 11.4%.

VF Corp led gainers in the index with a rise of 5.2% followed by gains in Raytheon Corp of 4%, in Allergan Inc of 3.8%, in Lexmark International of 2.8% and in Yahoo! Inc of 2%.

Other Movers

Bunge Limited ((BG)) slipped 15.4% or $7.43 to $40.74 after the world’s largest oilseed processor lowered its earnings expectations for the full year 2008. The company''s revised preliminary earnings estimate to $1.06 billion or $7.70 a share.

The company in a press release noted, “Weak fourth quarter results were impacted by soft demand for soybean meal and oil due to challenging economic conditions in our end markets and substitutions of other agricultural commodity products.”

CalAmp Corp ((CAMP)) added 11.6% or 70 cents to $$0.670 after the provider of wireless products, services and solutions said third quarter revenues fell 11% to $25.8 million from $32.1 million a year ago. Net loss in the quarter was $1.8 million or 7 cents per diluted share compared to net loss of $58.9 million or $2.49 per share a year ago.

Citigroup Inc ((C)) fell 12.7% or 75 cents to $5.15 after the diversified global financial services company and Morgan Stanley agreed Tuesday to combine their brokerages in a deal that shows how much Citigroup wants to slim down and build up cash. Morgan Stanley is paying Citigroup $2.7 billion for a 51% stake in the joint venture. Citigroup will have a 49% stake. Citigroup may be forced to sell more operations to raise cash to preserve its banking franchise.

Deutsche Bank AG ((DB)) plunged 8.0% or $2.56 to $29.34 after Germany’s biggest bank reported a record loss of about 4.8 billion euros or $6.3 billion in the fourth quarter.

Eagle Rock Energy Partners, L.P. ((EROC)) jumped 10.9% or 69 cents to $7.00 after the Houston based natural gas company announced that on January 8, 2009, it executed a series of “hedging transactions” which enhances the partnership''s expected 2009 cash flows and its ability to maintain its current distribution level of $1.64 per unit on an annual basis.

F.N.B. Corporation ((FNB)) dropped 18.4% or $2.17 to $9.59 after the owner of banks in Ohio, Tennessee and Pennsylvania today announced that it expects to report a net loss of between $17 million and $21 million, or 19 to 23 cents per diluted share, for the fourth quarter of 2008.

HSBC Holdings PLC ((HBC)) lost 9.6% or $4.44 to $41.41 after Morgan Stanley estimated that Europe’s largest bank may have to raise as much as $30 billion in capital and halve its dividend as earnings are likely to deteriorate more than expected, Morgan Stanley analysts said on Tuesday.

Infosys Technologies Limited ((INFY)) gained 5.8% or $1.52 to $27.40 after India based IT services provider said third quarter revenues gained 8% to $1.17 billion from $1.08 billion a year ago. Net income in the quarter increased 6.4% to $332 million or 58 cents per ADS compared to net income of $312 million or 55 cents per ADS a year ago.

Majesco Entertainment Company ((COOL)) rose 13.3% or $0.10 to $0.85 after the innovative provider of video games for the mass market said fourth quarter revenues increased 51.2% to $18.0 million from $11.9 million a year ago. Net loss in the quarter was $0.9 million or 3 cents per diluted share compared to net loss of $1.0 million or 4 cents per share a year ago.

Mesa Air Group, Inc ((MESA)) lost 16.6% or $0.04 to $0.240 after the regional air carriers providing scheduled passenger and airfreight service said fourth quarter revenues declined 0.76% to 51.2% to $325.3 million from $327.8 million a year ago. Net loss in the quarter was $30.6 million or $1.15 per diluted share compared to net loss of $68.1 million or $2.37 per share a year ago.

Nortel Networks Corp ((NT)) plunged more than 40% to 32 cents after the company filed for bankruptcy protection in Canada and in the U.S. as it failed to secure additional financing. The company has booked the largest corporate write-down of assets of more than $55 billion at the time of Internet and telecom bubble in 2001.

Rio Tinto plc ((RTP)) dropped 12.9% or $11.93 to $80 after the world’s third-largest mining company said it will trim diamond production at its Argyle mine in Western Australia and slow its underground mine development and reduce debt of $10 billion. Earlier the company said it will not go ahead with its iron ore mining expansion project in Brazil.

Siemens AG ((SI)) sank 12.7% or $8.12 to $55.75 after Europe’s largest engineering company was downgraded to “neutral” from “buy” at Merrill Lynch & Co. First quarter orders dropped “significantly” on weak orders in manufacturing and medical devices.

Sterling Financial Corporation ((STSA)) lost 42.9% or $2.82 to $3.63 after the community bank Washington and Oregon suspended its quarterly dividend and estimated fourth quarter loss.

Tiffany & Co ((TIF)) dropped 3.3% or 73 cents to $21.27 after the world’s second-largest luxury jewelry retailer estimated worldwide net sales in the holiday period in November and December declined 21% to $687.4 million from $867.3 million a year ago. For fiscal year 2009 the retailer expects net sales of $2.85 billion and earnings per share between $2.25 and $2.30.

Under Armour, Inc. ((UA)) fell 14.2% or $3.18 to $19.15 after the maker of athletic clothes reported profit and sales that missed estimates. The company estimated fourth quarter net of between 16 cents and 18 cents and full year earnings of between 76 cents and 78 cents a share, below $1.05 a share in 2007.