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Stocks in Motion: Flowers Foods

Mark Martinez

Shares of Integrated Alarm Services(IASG Quote) were among Nasdaq's losers Thursday, falling 30% after the security alarm company posted lackluster third-quarter results.

The company reported a loss of $5.4 million, or 22 cents a share, on sales of $24.5 million. Analysts polled by Thomson First Call were expecting a smaller loss of 14 cents a share and sales of $25 million. For last year's third quarter, the company reported a loss of $2.1 million, or 9 cents a share, on sales of $21.9 million.

"Third quarter residential attrition was very disappointing," the company said in a statement. "The causes for this performance were several and include unacceptable levels of customer service caused in part by excess personnel turnover in our Las Vegas customer retention call center." Shares recently were trading down 85 cents to $2.

Flowers Foods(FLO Quote) fell 6% after the company posted lower-than-expected third-quarter earnings and cut its 2005 earnings forecast due to hurricane-related costs. The packaged bakery-goods company earned $11.8 million, or 19 cents a share, on sales of $408 million. Excluding items, the company earned $13.5 million, or 22 cents a share. Analysts expected earnings of 26 cents a share, before items, and sales of $402.6 million. In last year's third quarter, the company earned $14.6 million, or 22 cents a share, on sales of $371.4 million.

Flowers now sees 2005 earnings of $59.5 million to $61.5 million, or 94 cents to 97 cents a share. Previously, the company expected earnings of $62.8 million to $68 million, or 99 cents to $1.07 a share. Flowers, however, boosted its sales view to $1.71 billion to $1.72 billion from $1.68 billion to $1.7 billion. Analysts forecast full-year earnings of $1.07 a share on sales of $1.71 billion. Flowers attributed the lower profit view to costs stemming from Hurricane Katrina. Because of the hurricane, the company has to transport products from other bakeries to replace production from its New Orleans bakery. The company's guidance doesn't include additional insurance proceeds it may recover as a result of Katrina damage.

For 2006, Flowers expects earnings of $68.6 million to $74 million, or $1.10 to $1.19 a share, shy of analysts' estimate of $1.21 a share. The company predicts sales of $1.83 billion to $1.85 billion, compared with Wall Street's projection of $1.83 billion. Shares were trading down $1.69 to $26.56.

Shares of Spectrum Brands(SPC Quote) fell 9% after the company posted mixed fourth-quarter results and forecast first-quarter earnings that are below expectations. The consumer products company, formerly known as Rayovac, posted pro forma earnings, which excludes items, of $6.6 million, or 13 cents a share, matching analysts' mean estimates. The company reported sales of $603.7 million, below analysts' projection of $626.5 million. During last year's fourth quarter, the company reported pro forma earnings of $21.2 million, or 60 cents a share, on sales of $377 million. Spectrum said that fourth-quarter results were hurt by declines in battery sales in North America and Europe, as well as increased raw material, fuel and transportation costs.

Spectrum sees first-quarter pro forma earnings of 20 cents to 25 cents a share, well below the 44 cents a share that analysts expected. For all of fiscal 2006, the company forecast earnings of $2.10 to $2.20 a share on sales of about $2.8 billion. Analysts projected earnings of $2.41 a share and sales of $2.84 billion. The weak outlook reflects "modest net sales growth as a result of a stagnant West European economy and moderate consumer spending growth," the company said. Spectrum also said it would be hurt by continued margin pressure from the increased materials, energy and transportations costs. Shares tumbled $1.83 to $18.45.

Gold Banc(GLDB Quote) climbed 18% after the financial holding company agreed to be acquired by Marshall & Ilsley(MI Quote) for about $700 million, or $18.50 a share, in cash and stock. The deal, which consists of $2.78 a share in cash and $15.72 a share in stock, represents a 23% premium over Gold Banc's Wednesday closing price of $15. The acquisition is expected to be slightly dilutive to M&I's 2006 earnings and accretive to earnings beginning in 2007. The deal is expected to close during the second quarter. Gold Banc shares were trading up $2.74 to $17.74. Marshall & Ilsley shares fell 76 cents, or 1.8%, to $41.94.

Shares of Four Seasons Hotels(FS Quote) dropped 6% after the hotel company posted third-quarter results that disappointed investors. The company reported a loss of $11.4 million, or 31 cents a share, on sales of $52.2 million. Excluding items, the company earned $8.1 million, or 22 cents a share. Analysts expected earnings of 36 cents a share, before items, and sales of $54.9 million. Last year, Four Seasons posted a third-quarter loss of $8.5 million, or 24 cents a share, on sales of $63.3 million. Excluding items, the company would have earned $9 million, or 24 cents a share, a year ago. Shares were down $3.47 to $53.20.

NYSE volume leaders included Nortel Networks(NT Quote), down 12 cents to $3.09; General Motors(GM Quote), down $1.70 to $22.93; Lucent Technologies(LU Quote), down 3 cents to $2.75; Exxon Mobil(XOM Quote), down $1.15 to $56.35; Pfizer(PFE Quote), down 23 cents to $21.93; JP Morgan Chase(JPM Quote), up 18 cents to $37.90; Citigroup(C Quote), up 19 cents to $47.01; and Motorola(MOT Quote), down 3 cents to $23.56.

Nasdaq volume leaders included Cisco Systems (CSCO Quote), down 55 cents to $17.20; Intel(INTC Quote), up 32 cents $25.12; JDSU(JDSU Quote), down 12 cents to $2.22; Microsoft(MSFT Quote), down 14 cents to $26.82; Sun Microsystems(SUNW Quote), down 5 cents to $3.73; Nvidia(NVDA Quote), up 91 cents to $35.69; Viropharma(VPHM Quote), down $3.59 to $18.37; Apple Computer(AAPL Quote), down 40 cents to $59.72; Sirius Satellite Radio(SIRI Quote), up 5 cents to $6.93; and Oracle(ORCL Quote), down 8 cents to $12.43.