Wednesday's Early Winners & Losers

ECC Capital soars more than 40% on news of a unit sale to Bear Stearns.
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ECC Capital

(ECR) - Get Report

soared some 43% in after-hours trading Tuesday on news of a unit sale. The Irvine, Calif.-based REIT said Bear Stearns Residential Mortgage, a subsidiary of

Bear Stearns

(BSC)

, agreed to buy the subprime mortgage origination platform of ECC Capital's subsidiary, Encore Credit, for about $26 million in cash and the assumption of certain lease liabilities.

Encore Credit, specializing in subprime mortgage origination, will operate as a separate division of Bear Stearns Residential Mortgage. The deal is expected to close by the end of 2006. ECC Capital expects to make an initial distribution to stockholders of about 80 cents a share within 30 days after the close of the transaction. Shares were up 45 cents at $1.49.

Alcoa

(AA) - Get Report

tumbled after-hours Tuesday after the New York-based aluminum company posted a gain in third-quarter earnings but came up short of Wall Street's expectations. The company earned $537 million, or 61 cents a share, compared with $289 million, or 33 cents a share, a year ago. Revenue increased 19% from a year ago to $7.6 billion. Analysts polled by Thomson First Call were looking for earnings of 79 cents a share on revenue of $7.68 billion. Shares were trading down $1.99, or about 7%, to $26.30.

Legg Mason

(LM) - Get Report

dropped after the Baltimore-based asset manager warned of a steep earnings shortfall, citing a weaker-than-expected showing in September. The company said it expects 96 cents to $1.02 earnings per share (EPS), far shy of the $1.16 EPS estimate from Wall Street. Legg Mason said revenue fell 1% from second-quarter levels, as the asset mix shifted toward lower revenue-generating fixed-income assets.

Legg Mason also saw a 4-cents-a-share hit from what it called "unanticipated mutual fund distribution-fee expenses payable by our acquired business to our principal third-party distributor that relate to prior quarters." Legg Mason estimates that its assets under management as of Sept. 30 were $890 billion (about 50% fixed income, 35% equity and 15% liquidity). Assets under management at June 30 were $855 billion. The company also confirmed that its integration of the business it acquired in December 2005 remains on schedule and that it continues to expect to achieve the previously announced cost savings from that integration. Shares were dropping $10.31, or 9.8%, to $95.

Navarre

(NAVR)

retreated after the New Hope, Minn.-based video-game publisher said that it take a charge of about 3 cents a share in the second quarter as a result of the Tower Records' Chapter 11 bankruptcy. An attorney for Tower Records said the music retailer will be sold for a total of $150 million, including the sale of various leases and properties, the

Associated Press

reported. Shares fell 30 cents, or about 7%, to $3.90.

Nobility Homes

(NOBH)

gained after the Ocala, Fla.-based manufactured-homes company said a special committee of its board of directors chose the investment banking firm of Savvian Advisors to assist the committee in exploring "strategic alternatives" available for the company. Savvian Advisors is expected to begin its analysis on Wednesday. Nobility Homes said the board is exploring available strategic alternatives primarily because of the increasing costs related to Sarbanes-Oxley 404 compliance and other costs of being a public company. Shares were trading up $1.16, or 4.3%, to $28.01.