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Stocks to Watch: Chevron, Sears (Update 1)

NEW YORK (TheStreet) -- Chevron (CVX), the oil giant, said it expects fourth-quarter earnings to come in "significantly below" the third quarter because of the impact of lower margins and refinery input volumes in its downstream business.

Chevron, a component of the Dow Jones Industrial Average, also said it expects to record a loss on foreign currency translation in the quarter compared with a third-quarter gain of almost $450 million.

The company said it expects charges in the fourth quarter to come in "notably higher" than its guidance range of $250 million to $350 million.

Analysts expect Chevron to earn $3.28 a share in the fiscal fourth quarter. It earned $3.67 a share in the third quarter.

Chevron shares were down 1.4% to $106.24 in premarket trading Thursday.


Sears' (SHLD) suppliers will no longer be able to get loans from CIT Group (CIT) for shipments to the struggling retailer starting Thursday, Bloomberg reported, citing two anonymous people familiar with the situation.

Goods provided to Sears on CIT loans represent less than 5% of the company's inventory, Sears said, according to Bloomberg.

CIT's decision comes in the wake of Sears' decision at the end of last month to close up to 120 of its stores after a dismal holiday selling season. In November, the Illinois-based company reported its 19th straight quarter of sales declines.

Sears shares were falling 9.1% to $29.90 in premarket trading.


Alcoa (RBS) was rising in early morning trading Thursday after reports that Chinese aluminum smelters may cut annual production capacity by a third as the metal's prices drop.

China may reduce production to around 20 million metric tons of aluminum when it has a capacity of as much as 30 million, according to Luo Rongjin, a Beijing-based analyst with Bocom International. Bloomberg reported.

Alcoa, the largest U.S. aluminum producer, announced a 12% cut to its capacity earlier in the month as the metal's falling prices hurt the company's profits. The added production cuts out of China may help Alcoa if aluminum prices start to rise on the decrease in supply.

Alcoa shares were rising 2.3% to $9.85 in early trades.


Tractor Supply (TSCO) boosted its earnings outlook late Wednesday for the full year following a strong sales performance in the fourth quarter.

The Brentwood, Tenn.-based company now sees earnings of $2.97 to $2.99 a share for fiscal 2011, up from its previous projection for a profit of $2.85 to $2.89 a share. The current average estimate of analysts polled by Thomson Reuters is for earnings of $2.91 a share in fiscal 2011.

The company's outlook implies a profit range of 92 cents to 94 cents a share for the fourth quarter ended in December, compared to Wall Street's current consensus view of 86 cents.

Tractor Supply shares were up 5.6% to $76.99 in premarket trading.


Williams-Sonoma (WSM) lowered its full-year and fourth-quarter guidance despite better holiday sales as high promotional activity limited profit.

Though the company reported that net revenue for the eight-week holiday period ended Dec. 25 increased 4.2% to $901 million, the company cut fourth-quarter earnings projections to $1.10 to $1.15 a share, from a previously estimated $1.15 to $1.20 a share. The company also cut fiscal year 2011 forecasts to earnings of $2.16 to $2.21 a share from the $2.21 to $2.26 share predicted in November.

The company also announced a 29.4% boost of its quarterly dividend to 22 cents a share.

Williams-Sonoma shares were dropping 8.3% to $35.85.


PVH Corp. (PVH) announced Wednesday an outlook for fiscal year 2012 that missed Wall Street's current expectations.

The New York-based apparel company, whose brands include Calvin Klein and Tommy Hilfiger, said it expects non-GAAP earnings of $5.90 to $6 a share for its fiscal year ending in January 2013. The current average estimate of analysts polled by Thomson Reuters is for a profit of $5.97 a share for the period.

"2012 earnings growth is expected to occur entirely in the second half of the year," the company said in a statement. "Earnings for the first half of 2012 are expected to be disproportionately impacted by the continued pressure on gross margins, as significantly higher year-over-year product costs began to impact the Company during the second half of 2011 and are expected to continue into the first half of 2012."

The shares were down 3.9% to $71 in premarket trading.


Royal Bank of Scotland (RBS) plans to cut 3,500 jobs as it scales back its investment banking arm.

RBS said the cuts, largely in its global banking and markets division, will be phased in over three years.

The bank is 83%-owned by the U.K. government. The job cuts announced Thursday are in addition to the 2,000 job cuts the bank announced last summer.


Regions Financial (RF) said it would record a goodwill impairment charge of $575 million to $745 million in the fourth quarter from the $930 million sale of its Morgan Keegan brokerage unit to Raymond James Financial (RJF).

Regions is expected to report earnings on Jan. 24, and expects to lose as much as $633 million -- or up to 50 cents a share -- in the fourth quarter of 2011 because of the goodwill charge.


The Obama administration is likely going to block Omnicare's (OCR) proposed $716 million offer for PharMerica (PMC), the New York Post reported, citing a source close to the situation.

A decision from the Federal Trade Commission on the deal is expected by the end of next week, the source told the newspaper.

Omnicare, the pharmacy services provider, said Wednesday it wouldn't complete its $15 a share offer until the FTC says it has reached the end of its investigation.


-- Written by Joseph Woelfel and Kaitlyn Kiernan



>To contact the writer of this article, click here: Joseph Woelfel or Kaitlyn Kiernan

>To submit a news tip, send an email to: tips@thestreet.com.

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