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US HOT STOCKS: Hologic, Align Tech Active In Late Trading

(Wall Street Journal) - U.S. stocks closed lower Monday as the Dow Jones Industrial Average fell 6.7 points to 12654, the Standard & Poor's 500-stock index declined 3.3 points to 1313, and the Nasdaq Composite Index dropped 4.6 points to 2812. Among the companies whose shares are actively trading in the after-hours session are Hologic Inc. (HOLX) and Align Technology Inc. (ALGN).

Hologic's fiscal first-quarter earnings rose 90% as the company reported broad revenue growth. Shares rose 6.2% to $20.38 in after-hours trading, as the results were better-than-expected and the company boosted its full-year earnings view.

Align Technology's fourth-quarter profit more than doubled as shipments of its trademark Invisalign teeth aligners continued to climb. Shares still dropped 5.8% to $23.90 after-hours despite stronger-than-expected results as the orthodontic-product maker projected a cautious adjusted current-quarter profit.

 
Regular-Session Movers: 
 

Gannett Co. (GCI, $14.17, -$1.05, -6.90%) reported a 33% decline in fourth-quarter profit as persistent advertising declines at its newspapers and lower television revenue more than offset growth in the publisher's digital businesses.

United States Steel Corp. (X, $28.73, -$1.15, -3.85%) agreed to sell its Serbian unit to the country's government for a "nominal" price, adding it expects a loss on the sale. News reports last week suggested the nation's government had agreed to buy back the underperforming unit for $1 to avert major job losses and preserve a key exporter.

Switzerland's ABB Ltd. (ABB, $20.55, -$0.69, -3.25%) (ABBN.VX) agreed to pay $3.9 billion in cash for electrical-component maker Thomas & Betts Corp. (TNB, $71.31, +$13.36, +23.05%) to increase its exposure to the U.S. low-voltage electrical-equipment market. The power and technology group said it is paying $72 a share, representing a 24% premium to Thomas & Betts' closing share price on Friday and a 35% premium to its average stock price over the past 60 trading days. Separately, Thomas & Betts posted fourth-quarter earnings that rose a better-than-expected 42% because of a consistent run of double-digit percentage revenue growth, aided by strong results in its steel-structures segment.

Pep Boys-Manny Moe & Jack (PBY, $14.93, +$2.85, +23.59%) agreed to be taken private by private-equity firm Gores Group in a deal that values the auto-repair company at roughly $803.9 million and puts an end to long-running speculation over its future.

U.S. regulators filed suit late Friday to block Omnicare Inc.'s (OCR, $32.86, -$0.19, -0.57%) bid for rival PharMerica Corp. (PMC, $12.61, -$1.69, -11.82%), claiming that combining the two biggest nursing-home pharmacies in the U.S. would hurt competition and raise drug prices.

The U.S. Food and Drug Administration approved Amylin Pharmaceuticals Inc.'s (AMLN, $14.26, +$2.12, +17.46%) diabetes drug Bydureon after a prolonged regulatory process. The drug, which treats type 2 diabetes, was developed by Amylin along with its partner Alkermes PLC (ALKS, $18.86, -$0.24, -1.26%).

Goldman Sachs shook up its ratings on some of the largest U.S. banks. It downgraded Bank of America Corp. (BAC, $7.07, -$0.22, -3.02%) to neutral and removed J.P. Morgan Chase & Co. (JPM, $37.01, -$0.20, -0.54%) from its "conviction buy" list while boosting Citigroup Inc. (C, $30.23, -$0.64, -2.07%) to buy and adding Morgan Stanley (MS, $18.20, -$0.36, -1.94%) to conviction buy. Goldman said it sees "higher execution risk" at Bank of America in the next 12 to 18 months, and "higher earnings power" at Citigroup. Morgan Stanley's focus on addressing legacy issues from the financial crisis "positions it to benefit from cyclical improvements in client activity," the firm said.

Bed Bath & Beyond Inc. (BBBY, $61.30, -$1.24, -1.98%), Hibbett Sports Inc. (HIBB, $47.91, -$1.04, -2.12%), Dick's Sporting Goods Inc. (DKS, $40.80, -$0.36, -0.87%) and Williams-Sonoma Inc. (WSM, $35.59, +$0.47, +1.34%) may be in Amazon.com Inc.'s (AMZN, $192.15, -$3.22, -1.65%) cross hairs, as it is expected to launch a specialty e-commerce site for the home-furnishings category, called Casa.com, and a sporting goods-specific site. The near-term impact on the stocks of the four retailers "will be negative," Credit Suisse said.

BMO raised its stock-investment rating on Boston Private Financial Holdings Inc. (BPFH, $8.02, +$0.15, +1.91%) to outperform from market perform and raised its price target to $10 from $8, based on increased earnings estimates. The firm expects better net revenue growth as a result of accelerating loan growth, less margin pressure, and a rebound in asset-management fees, while positive operating leverage should drive improved profitability over the next year.

Goldman Sachs lowered its view on the telecommunications-services sector to neutral as "superior 2012 earnings growth appears to be already reflected in valuation and improving U.S. growth data reduce the appeal of traditionally defensive sectors." The move weighed on the shares of companies including Cbeyond Inc. (CBEY, $8.41, -$0.48, -5.40%), Level 3 Communications Inc. (LVLT, $18.96, -$0.48, -2.47%), General Communication Inc. (GNCMA, $9.99, -$0.48, -4.58%) and Centurylink Inc. (CTL, $36.97, -$0.29, -0.78%).

Comstock Resources Inc. (CRK, $12.96, +$0.62, +5.02%) said its proved oil and natural gas reserves at the end of 2011 increased 25% from the previous year, while production rose by 31%.

Consensus on the Street looks to be that solidly performing D.R. Horton Inc. (DHI, $14.08, -$0.31, -2.15%) shares are priced properly at present. That is why Keefe, Bruyette & Woods downgraded the home-building company to market perform while recognizing its "strong operating leverage relative to peers and balance-sheet strength." Meanwhile, RBC said the price on D.R. Horton, after hitting a nearly two-year high last week, "already incorporates expectations for strong operating performance." Susquehanna, which boosted its price target 30% to $13, added that "Housing, while bottomed, is not recovering to the extent sector share prices are reflecting."

Tudor Pickering said Goodrich Petroleum Corp. (GDP, $17.85, -$0.44, -2.41%) needs to cool off some after this month's surge as it downgraded the oil-and-gas producer to accumulate from buy.

Citigroup raised its price target on GTx Inc. (GTXI, $5.88, +$1.94, +49.24%) to $19 from $8 after adding trials of ostarine, used for the prevention and treatment of cancer-related muscle wasting, to its valuation. "Importantly, as it is a novel product in a novel indication, we believe it could attract interest from biopharma companies with oncology products," the firm said.

Morgan Keegan raised its stock-investment rating on Hancock Holding Co. (HBHC, $32.97, +$0.86, +2.68%) to outperform from market perform, noting that improving returns and clarity on its earnings power following last year's acquisition of fellow Gulf Coast bank Whitney Holding Corp. should drive valuations higher over the coming months.

Horizon Lines Inc. (HRZL, $2.55, +$0.10, +4.08%) agreed to pay $1.5 million to resolve federal regulators' allegations of improper oil disposal on one of its Pacific Ocean ships.

Hyperdynamics Corp. (HDY, $2.60, -$0.77, -22.85%) slid as the independent oil and gas producer and explorer said it would offer 10 million shares at $3 a piece, an 11% discount to Friday's closing price of $3.37.

Platinum mining company Impala Platinum Holdings Ltd. (IMPUY, $22.15, -$0.97, -4.20%) (IPLA.LN) said the majority of the mining workforce at the Impala Rustenburg operation failed to report for duty on Jan. 30. This followed on a work stoppage by the operation's rock drill operators, or RDO's, who participated in an illegal work stoppage last week.

L&L Energy Inc. (LLEN, $2.84, +$0.20, +7.58%) agreed to acquire a majority stake in the Weishe coal mine in the Guizhou province in China for about $16 million, a move the company said will help upgrade its mining portfolio.

R.W. Baird cut its stock-investment rating on Methode Electronics Inc. (MEI, $9.84, -$0.21, -2.09%) to neutral from outperform, noting that the company's recent move above $10 diminishes its risk/reward.

Openwave Systems Inc. (OPWV, $2.03, -$0.06, -2.87%) said it adopted a poison pill with a 4.99% trigger in an effort to protect the software maker's $1.6 billion in tax assets that stem from its net operating losses and tax credit carry forwards. As part of the plan, the poison pill grants shareholders a dividend of one preferred-share purchase right for each outstanding share of common stock. A triggering event would occur if any entity acquires 4.99% or more of the company's stock, diluting the entity's ownership interest.

Peoples Bancorp of North Carolina Inc.'s (PEBK, $6.05, +$0.58, +10.55%) board authorized a special cash dividend after the company swung to a fourth-quarter profit on a reduced provision for loan losses and higher non-interest income.

PetMed Express Inc. (PETS, $12.54, +$0.46, +3.81%) will increase its quarterly dividend by 20%, to 15 cents a share.

JMP Securities upgraded its stock-investment rating on Progress Software Corp. (PRGS, $23.36, +$1.00, +4.47%) to market outperform from market perform with a $27 price target. The firm is placing its bets on new CEO Jay Bhatt and expects the company to have better sales execution. Progress Software "will require some investor patience" as it transitions, but the downside risk is "fairly limited," the firm added.

SoundBite Communications Inc. (SDBT, $2.75, +$0.28, +11.34%) said it expects to report record fourth-quarter revenue, exceeding the company's previously issued guidance.

Raymond James downgraded Florida developer St. Joe Co. (JOE, $16.27, -$1.00, -5.79%) to market perform "until we gain better visibility into its future plans." But Keefe Bruyette & Woods isn't as bearish, saying, "positive cash flow in 2012 and hitting the 'restart' button for new management team should be viewed positively." St. Joe had a vague disclosure Friday about shifting strategies as it noted fourth-quarter write-downs could reach $375 million.

Goldman Sachs downgraded Staples Inc. (SPLS, $15.23, -$0.78, -4.87%) to sell as the investment bank said office-products demand remains sluggish even as employment and industrial-production improves. Goldman said it expects office supplies to grow at a slower rate than other retail categories as paper consumption per office employee continues to fall. Goldman maintained neutral ratings on highly leveraged OfficeMax Inc. (OMX, $5.99, -$0.05, -0.83%) and Office Depot Inc. (ODP, $2.78, -$0.16, -5.44%), saying changes to margins or costs structures have a greater impact than top-line momentum. All three shares were down on Monday, while Stamps.com Inc. (STMP, $32.20, -$0.67, -2.04%) and United Stationers Inc. (USTR, $32.54, -$0.28, -0.85%) are also trading lower.

Delta Air Lines Inc. (DAL, $10.77, +$0.38, +3.66%) is studying US Airways Group Inc. (LCC, $8.52, +$0.34, +4.16%) as a possible acquisition target, people familiar with the matter said, the latest twist in a swirl of deal strategizing for the industry.

Wendy's Co.'s (WEN, $5.01, -$0.20, -3.84%) fourth-quarter earnings fell 30% as charges masked the fast-food chain's improved same-store sales and stronger-than-expected revenue growth.

WisdomTree Investments Inc.'s (WETF, $5.73, -$0.58, -9.19%) fourth-quarter earnings met analysts' expectations, but revenue fell short of Wall Street's consensus view.

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