Stocks in Motion: RedEnvelope

The gift retailer guides sharply lower and says its CFO quits.
By Mark Martinez ,

Updated from 11:32 a.m. EST

Shares of

RedEnvelope

( REDE) were among the

Nasdaq's

losers Tuesday, falling 27.6% after the specialty retailer lowered its fourth-quarter outlook and announced the departure of its chief financial officer.

The company now expects to post a loss of $3 million to $3.5 million on sales of $21.5 million to $22 million. Previously, the company said that it would earn as much as $500,000 on sales of $21 million to $23 million. Analysts surveyed by Thomson First Call had been expecting earnings of 1 cent a share on sales of $22.1 million. The company also said that it expects fourth-quarter gross margin to be 10 percentage points below expectations. RedEnvelope blamed the fourth-quarter shortfall on below-plan Valentine's Day business, which resulted in heavy discounting, and higher-than-expected merchandise returns. In addition to the weak business trends, the company also discovered an error in budgeting for costs of goods sold, which resulted in an overestimation of its gross margins and its assumption for earnings during the quarter.

Separately, RedEnvelope announced the departure of CFO Eric Wong. Polly Boe will replace Wong, who had served as CFO since April 2003. Wong will remain in his CFO position until Boe assumes the position on or about April 18. RedEnvelope did not provide a reason for Wong's departure. Shares traded down $3.20 to $8.40.

Signature Bank

(SBNY) - Get Report

traded heavily after the company said that its largest shareholder would sell 15.2 million shares at $26.40 apiece as part of a public offering. About two weeks ago, Signature Bank said that Hapoalim U.S.A. Holding Company, a subsidiary of Israel's Bank Hapoalim, planned to sell its stake in the company, but it didn't offer any financial details at the time. Friedman Billings Ramsey and Lehman Brothers are leading the underwriting syndicate. The transaction is expected to close on March 31. Shares traded down 7 cents to $26.51 on volume of more than 8 million shares.

Shares of

Apollo Group

(APOL)

fell 2.4% after the company posted mixed second-quarter results and warned that third-quarter sales would miss analysts' expectations. The for-profit education company posted earnings of $87.1 million, or 47 cents a share, on sales of $505.7 million. Analysts expected earnings of 46 cents a share on sales of $510.7 million. A year ago the company earned $63 million, or 35 cents a share, on sales of $396.9 million. Looking ahead, Apollo forecast third-quarter earnings of 74 cents a share on sales of $622 million to $626 million. Analysts are expecting earnings of 74 cents a share on sales of $633.9 million. Shares traded down $1.74 to $71.17.

Monsanto

(MON)

rose 1.4% after the company said that second-quarter results would be better than expected and raised its 2005 earnings guidance. Monsanto, an agricultural products company, expects to post second-quarter earnings of $1.37 a share on a reported basis and $1.38 on an ongoing basis. Analysts had been expecting earnings of $1.17 a share. For all of 2005, Monsanto now expects earnings of 85 cents to 97 cents a share on a reported basis and $2 to $2.05 a share on an ongoing basis. Previously, Monsanto expected to post earnings of 71 cents to 93 cents a share on a reported basis and earnings at the high end of the range of $1.85 to $2 a share on an ongoing basis. Analysts are expecting 2005 earnings of $2.05 a share. The company said that continued strength in its seeds and traits business led to upbeat outlook. Shares traded up 84 cents to $60.94.

Shares of

Matrix Service

(MTRX) - Get Report

got slammed after the company announced the resignation of CEO Brad Vetal. Michael Hall, the company's former chief financial officer and current board member, will serve as interim CEO. The company also announced that it received a temporary waiver from its senior lenders until April 11. The additional time will allow Matrix and its lenders to draft a more permanent waiver once final third-quarter results are available. Matrix expects third-quarter results to be available by April 11. The company warned, though, that it is unlikely that any of its senior debt would be refinanced before April 1, at which time the interest rate on its $20 million term note B will increase to 18% from 12.5%. Shares traded down $2.39, or 35.3%, to $4.38.

NYSE

volume leaders included

Hewlett-Packard

(HPQ) - Get Report

, up $1.99 to $21.78;

American International Group

(AIG) - Get Report

, up $1.18 to $58.20;

Lucent Technologies

( LU), up 2 cents to $2.72;

Pfizer

(PFE) - Get Report

, down 59 cents to $25.64;

Time Warner

(TWX)

, down 36 cents to $17.30; and

NCR

(NCR) - Get Report

, down $6.50 to $31.40.

Nasdaq volume leaders included

Microsoft

(MSFT) - Get Report

, down 28 cents to $23.92;

Intel

(INTC) - Get Report

, down 15 cents to $23.15;

Cisco Systems

(CSCO) - Get Report

, down 14 cents to $17.75;

Sun Microsystems

(SUNW) - Get Report

, up 6 cents to $4.09;

Oracle

(ORCL) - Get Report

, down 15 cents to $12.28;

Sirius Satellite Radio

(SIRI) - Get Report

, up 10 cents to $5.38; and

MCI

( MCIP) up 84 cents to $23.78.

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