US HOT STOCKS: Medco Health, Netgear, Sherwin-Williams -3-

22nd Jul 2010 22:19

Medco Health Solutions Inc. (MHS, $49.00, -$4.33, -8.12%), the nation's biggest stand-alone pharmacy benefit manager, said second-quarter profits rose 14% on 10% revenue growth, thanks in part to rising demand for cheaper but more-profitable generic drugs. Medco, however, warned that the benefits the company has seen from the wave of popular drugs losing patent protection and going generic will pause in 2011 before returning strongly in 2012 and 2013. The company cited lower contributions from newer generics next year. Also declining on the news was Express Scripts Inc. (ESRX, $42.12, -$3.08, -6.81%). Netgear Inc. (NTGR, $22.70, +$2.46, +12.15%) posted second-quarter earnings that topped analysts' estimates as the networking product provider benefited from strong demand growth in all three geographic regions and in all product categories. Nokia Corp. (NOK, $9.17, +$0.35, +3.97%), the world's largest mobile phone maker, said profit for the second quarter fell as it struggled to compete with rivals like Apple Inc. (AAPL, $259.02, +$4.78, +1.88%) in the premium smartphone segment, but it expects new devices to spur a rebound later this year. Orbital Sciences Corp.'s (ORB, $14.73, -$0.89, -5.70%) profit dropped an unexpected 27% despite a 25% increase in revenue as the rocket maker said it saw higher costs because of the Galaxy 15 Satellite, which drifted out of its orbit, and because of the cancellation of its Orion spacecraft contract. Penn National Gaming Inc.'s (PENN, $26.42, +$2.32, +9.63%) second-quarter earnings fell 68% as the casino and racetrack operator posted $30.6 million in write-downs and demand remained soft. Still, results beat analysts' expectations. Other casinos trading higher Thursday included Boyd Gaming Corp. (BYD, $8.19, +$0.58, +7.62%), MGM Resorts International (MGM, $10.15, +$0.46, +4.75%) and Wynn Resorts Ltd. (WYNN, $85.48, +$3.52, +4.29%). Wynn was upgraded a notch by Fitch Ratings, which cited improved performance at its Macau business and its planned refinancing of $1.32 billion in mortgage notes. Qualcomm Inc.'s (QCOM, $39.11, +$2.95, +8.16%) fiscal third-quarter profit rose 4.1% as shipments of its mobile station modem chips increased 10% to a record 103 million units. The world's largest wireless-chip maker's results topped its forecast and it increased its year earnings forecast again. Royal Caribbean Cruises Ltd. (RCL, $27.56, +$2.98, +12.12%) recovered from a prior-year loss in the second quarter caused by charges and lower revenue as the cruise operator continued to see more signs of a travel and tourism recovery and topped expectations. The result exceeded estimates and also boosted shares of competitor Carnival Corp. (CCL, $33.67, +$2.24, +7.13%). Sherwin-Williams Co.'s (SHW, $66.88, -$2.68, -3.85%) second-quarter earnings rose 15% as the paint company reported continued sales improvement over last year's slumping levels. While results beat analysts' expectations, the company trimmed back its 2010 profit target from April's boosted level. SolarWinds Inc. (SWI, $12.71, -$3.81, -23.06%) shares plunged Thursday after the network-management software company lowered its expectations for the year, pointing to unfavorable exchange rates, a longer sales cycle and slower growth in Europe. The company also issued a disappointing view for the current quarter. Starwood Hotels & Resorts Worldwide Inc.'s (HOT, $45.45, +$1.65, +3.77%) second-quarter earnings fell 15% on charges as the lodging company continued to see demand improve. Results beat analysts' expectations and Starwood boosted its 2010 forecast again. Other hotels also were trading higher following Starwood's results and a strong showing from LaSalle Hotel Properties (LHO, $22.76, +$1.10, +5.08%). STR Global, an independent research company that tracks the lodging industry, Thursday reported "marked improvement" in first-half and second-quarter U.S. hotel industry performance. Gainers included Marriott International Inc. (MAR, $32.04, +$1.28, +4.16%), Host Hotels & Resorts Inc. (HST, $13.95, +$0.37, +2.72%), Wyndham Worldwide Corp. (WYN, $22.07, +$1.05, +5.00%) and Orient Express Hotels Ltd. (OEH, $8.30, +$0.50, +6.41%). TrueBlue Inc. (TBI, $12.93, +$1.85, +16.70%) more than doubled up the Wall Street consensus estimate for its earnings per share as the staffing company, which specializes in blue-collar work, said it continues to see customers rely on temporary labor so they can remain flexible. Union Pacific Corp.'s (UNP, $72.40, +$3.28, +4.75%) second-quarter profit climbed 53% as the railroad company posted volume growth for the second consecutive quarter and notched freight revenue growth across all business segments. The company's bottom line topped expectations. Western Digital Corp.'s (WDC, $28.16, -$2.02, -6.69%) fiscal fourth-quarter profit climbed 35% on double-digit growth in sales and shipments despite demand being softer than expected. The disk-drive maker's results fell short of Wall Street's expectations. -By Dow Jones Newswires; write to [email protected] (END) Dow Jones Newswires July 22, 2010 17:19 ET (21:19 GMT)