CB Richard Ellis Shares Skyrocket on Analyst UpgradeCommercial real estate firm CB Richard Ellis ( CBG) shares jumped more than 60% in morning trading Wednesday, on the heels of a JPMorgan analyst upgrade. JPMorgan Securities upgraded the company to "overweight" from "neutral," citing the recently restructured debt agreement. CB Richard Ellis has secured covenant waivers on its loans, which some analysts believe will provide some breathing room for the company. In addition to the upgrade, analyst Anthony Paolone put a $7 price target on the stock. CBG shares have lost more than 77% of their value in the past year. Shares of CBG are way off all-time highs of $41 hit in July 2007. The stock is trading near all-time technical lows. If the shares can continue today's momentum, we see the $5.50-$7.50 as initial overhead resistance. We do not currently rate this non-dividend paying stock, but do follow the name and the commercial real estate market closely. CB Richard Ellis does not currently pay a dividend.
Automatic Data Processing Cuts Fiscal 2009 Profit, Sales Forecasts AgainBusiness outsourcing solutions company Automatic Data Processing ( ADP) trimmed its full-year profit and sales forecasts Wednesday for the second time in six months. The Roseland, N.J.-based company said that it now sees revenue growth of 1%-to-2% for the year, one percentage point lower than its previous forecast. The company lowered its outlook to that previous level in November. ADP also said that it now expects earnings per share (EPS) to come in at the low end of its 10%-to-14% growth forecast. The company cited worsening economic conditions for the outlook reduction, but also said that it still expects over $1 billion in new-business sales for the fiscal year. Sales are expected to fall around 13% from year-ago levels, however, compared to a previous forecast of a 10% decline.
ADP shares fell about 1.5% in morning trading Wednesday. We had removed shares of ADP from our "Recommended" list back on Oct.6 when the stock was trading at $41.28. The company has a 3.61% dividend yield, based on last night's closing stock price of $36.56. The stock has technical support in the $30-$33 price area. If the shares can firm up, we see overhead resistance at the $39-41 levels. We would remain on the sidelines. Automatic Data Processing is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
DryShips Loses $1.02 Billion in Fourth Quarter on One-Time ChargesDry-bulk shipping company DryShips ( DRYS) reported more than $1 billion in losses for the fiscal fourth quarter, hurt mainly by goodwill impairment charges and contract termination fees. The Athens, Greece-based company said it lost $1.02 billion, or $18.42 per share in the quarter, compared with a profit of $194.4 million, or $5.35 per share, in the year-ago period. These results include a non-cash loss of $700.5 million, or $12.68 per share, on impairment charges derived from its acquisition of offshore drilling company Ocean Rig ASA. DryShips, which had previously owned a stake in the company, purchased the remaining shares of Ocean Rig in July 2008. Excluding these and other various one-time items, DryShips saw adjusted earnings of 43 cents per share. On average, Wall Street analysts expected adjusted profits of 66 cents per share. Net voyage revenue, excluding voyage expenses, totaled $117.1 million, down 47% from the year-ago period's total of $223.5 million. Analysts expected revenue of $206.8 million for the latest quarter.
In order to control costs, the company has canceled 17 vessel acquisition contracts totaling $2 billion. Charges relating to three of these cancellations will result in a $116.4 million loss in the fiscal first quarter. DryShips, whose stock has lost more than 97% of its value since hitting all-time highs in mid 2008, said it is in talks with lenders regarding additional covenant waivers on its debt. Shares of DryShips fell 78 cents, or 14%, in morning trading Wednesday. Shares of DRYS are way off their all-time highs of $116 hit in 2007. The stock is trading near all-time technical lows and support is basically shaky. If the shares can manage to stop the downtrend, we see initial overhead resistance at the $7-$9 levels. We do not currently rate this non-dividend paying stock, but do follow the name closely. DryShips suspended dividends in late January.
Jabil Circuit Reports $42 Million Second-Quarter LossElectronic manufacturing services company Jabil Circuit ( JBL) said Tuesday that it lost $42.1 million in the fiscal second quarter, hampered by one-time items. The St. Petersburg, Fla.-based company reported a second-quarter loss of $42.1 million, or 20 cents per share, compared with a loss of $24 million, or 12 cents per share, in the year-ago period. When disregarding one-time items, Jabil said it had earned $27.3 million, or 13 cents a share, while revenue fell 5.6% from the year-ago quarter to $2.89 billion. These adjusted results were slightly better than Wall Street's view. On average, Wall Street analysts were expecting profits of 12 cents per share, excluding items, on revenue of $2.81 billion.
Jabil said it will likely suffer goodwill impairment charges for the current quarter, which will lead to a loss of between 7 and 23 cents per share, on revenue between $2.5 billion and $2.7 billion. Wall Street analysts currently expect a profit of 11 cents per share, excluding items, on revenue of $2.75 billion. Jabil shares dropped sharply into Tuesday's market close, but rebounded more than 28% in morning trading Wednesday. We had removed shares of JBL from our "Recommended" list on Sept. 3, when the stock was trading at $15.59. The company has a 4.33% dividend yield, based on last night's closing stock price of $6.46. The stock has technical support in the $3-4 price area. If the stock can continue to gain on this morning's rebound, we see overhead resistance around the $6-$8 mark. We would remain on the sidelines for now. Jabil Circuit is not recommended at this time, holding a Dividend.com Rating of 2.7 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.