Ultimate Market Recap: Facebook’s First Pitch, Fossil Gets Buried

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Wall Street Top Stories: Wendy’s Earnings, Facebook Roadshow, GE’s Purchase

Wendy’s Co. (NYSE:WEN) reported a first-quarter profit of $12.4 million ($0.03 per share) as compared to a $1.41 million loss (less than a penny per share) from the previous year. This came from an an investment gain but Wendy’s fast-food chain’s revenue growth was slower than than expected and its higher costs affected margins.

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Facebook kicked off its roadshow on Monday with company founder and CEO Mark Zuckerberg dressed in a black hoodie and sneakers.The event started at the Sheraton Hotel in Manhattan around noon with more 500 investors and analysts hearing Facebook’s pitch.  According to The Wall Street Journal, a 30-minute video about Facebook, which had been distributed prior to the event, kicked off the luncheon, followed by a delayed presentation by Zuckerberg. Questions to executives then lasted about 20 minutes.

General Electric Co.(NYSE:GE) will buy a 15% stake in China XD Electric Group in an effort to build and upgrade its electrical infrastructure globally. XD Electric’s shares rose almost 10% in Shanghai on Tuesday. In a joint statement, GE didn’t acknowledge the cost of its stake in the Chinese company but Reuters put the number at $535 million. The agreement also has a GE representative to be appointed to XD Electric’s board.

Even though Apple Inc.’s (NASDAQ:AAPL) CEO Tim Cook recently minimized fears about declining iPhone subsidies, telecom operators have protected themselves and took steps to curtail hits from the subsidies. For U.S. carriers, they are making subtle moves by increasing data plan rates and creating upgrade fees, while Telefonica (NYSE:TEF) and Vodafone (NASDAQ:VOD) have ceased subsidies for their new customers in economically-challenged Spain.

This week, Bank of America (NYSE:BAC) will begin getting in touch with 200,000 distressed homeowners to offer them reduced mortgage repayments. This comes as part of a $25 billion settlement between the large lenders and government agencies. The bank has a $11 billion commitment but the cost could be higher if enough borrowers respond and don’t throw out the bank’s letter as junk mail.

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6 Buzzing Stocks: McDonald’s Same-Store Sales Misses, Rackspace Drops 13%

Shares of McDonald’s Corp. (NYSE:MCD) fell 2.21 percent in early trading. The company reported a smaller-than-expected increase in April sales. Global same-store sales gained 3.3 percent in April, compared to estimates of about 5 percent.

FreightCar America Inc. (NASDAQ:RAIL) shares surged 17.77 percent before the opening bell. The company reported first-quarter earnings of almost $10 million (81 cents per share), compared to only $1.3 million (11 cents of a loss per share) a year earlier.

The Wendy’s Co. (NYSE:WEN) shares declined nearly 3 percent after reporting first-quarter financial results. The company earned $12.4 million (3 cents per share), compared to a loss of $1.4 million a year earlier. Higher beef prices reduced margins from 13.4 percent to 11.8 percent.

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Rackspace Hosting Inc. (NYSE:RAX) shares fell 13.41 percent before the opening bell. Late Monday, the company reported net income of $23 million (10 cents per share) for the first-quarter, but missed estimates of 17 cents per share. “While we’ve made a lot of progress so far in 2012, we have much more to do. We are executing through a very important platform shift to our next generation cloud, and we need to make this experience incredible for our customers,” said Lanham Napier, chief executive officer.

Shares of WYNN Resorts Ltd. (NASDAQ:WYNN) dropped more than 2 percent this morning. The casino company reported disappointing results for the first-quarter. Wynn earned $140.6 million ($1.23 per share), compared to $173.8 million ($1.39 per share) a year earlier. Revenue increased 4.2 percent to $1.31 billion.

Electronic Arts (NASDAQ:EA) declined 5.16 percent early Tuesday. The video game maker recently reported it earned $400 million ($1.20 per share) for the fourth-quarter, compared to $151 million (45 cents per share) a year earlier. However, the company lowered its outlook and is expecting a loss of 40 cents to 45 cents in the fiscal first-quarter, compared to estimates for a loss of 33 cents.

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Fossil, Rackspace, FreightCar, Generac, MAKO Attract High Trading Demand May 8th

Fossil, Inc. (NASDAQ:FOSL): Fossil’s stock is plunging, after the designer of upscale fashion accessories reported Q1 revenue that came in below both its previous guidance and analysts’ consensus estimate. Fossil blamed the macro economy in Europe – which weakened at the end of Q1, according to the company – and changes in its merchandising and assortment strategies for the shortfall. Meanwhile, Fossil, which said that it remains cautious about the European economy and its impact on the company’s results, reduced its 2012 EPS guidance to $5.20-$5.40, versus analysts’ consensus estimate of $5.56. On a positive note, the retailer reported that its Q1 same-store sales jumped 7.7%, and the company, citing strong watch sales and a positive outlook in the Asia Pacific region, now expects its 2012 net sales to increase about 16%, up from its previous outlook for an increase of about 15%. In early trading, Fossil tumbled $36.56, or 29%, to $89.21. Other high end fashion companies also fell, with Coach (NYSE:COH), Ralph Lauren (NYSE:RL), and Michael Kors (NYSE:KORS) all sinking at least 3%. Shares of Fossil, Inc. are trading 34.8% lower today.

Rackspace Hosting, Inc. (NYSE:RAX): After Rackspace reported in-line Q1 revenue, Stifel Nicolaus still believes that the company’s revenue growth is solid, while most of the company’s metrics are positive. The firm doesn’t believe that the company’s EBITDA miss reflects a change in its profitability outlook, and Stifel reiterates a Buy rating on the shares. Shares of Rackspace Hosting, Inc. are trading 13.41% lower today.

FreightCar America, Inc. (NASDAQ:RAIL): Reported Q1 revenue $219.1M versus consensus $170.61M. EPS may not be comparable to consensus estimates. The Company delivered 2,613 railcars to customers in the first quarter of 2012, of which 2,146 were new cars, 80 were used cars and 387 were leased cars. Total manufacturing backlog was 6,934 units at March 31, 2012 compared to 5,206 units at March 31, 2011 and 8,303 units at December 31, 2011. Shares of FreightCar America, Inc. are trading 6.89% higher today.

Generac Holdings Inc. (NYSE:GNRC): Consensus is $941.24M. Specifically for the second quarter of 2012, net sales are forecasted to increase approximately 35-40% in comparison to the second quarter of 2011, which reflects the expectation of lead times for residential products returning to more normalized levels during the quarter. Consensus is $244.02M. This revised guidance continues to assume no material improvement in the macroeconomic environment and no comparable major outage events during the balance of 2012. Shares of Generac Holdings Inc. are trading 26.26% higher today.

MAKO Surgical Corp. (NASDAQ:MAKO): Mako Surgical overall option implied volatility of 57 is near its 26-week average of 59 according to Track Data, suggesting non-directional price movement into shares tumbling on weaker than expected results and guidance. Shares of MAKO Surgical Corp. are trading 36.14% lower today.

Active Stocks: GTx, Vitamin Shoppe, Synch Tech, Perrigo May 8th

GTx, Inc. (NASDAQ:GTXI): GTx announced that the FDA removed its Full Clinical Hold on the company’s Investigational New Drug application for Capesaris following the review by the FDA of the Company’s complete response and its new Phase II clinical protocol. GTx plans to initiate during the third quarter this Phase II open label clinical study of 75 men with metastatic castration resistant prostate cancer to test three lower doses of Capesaris sequentially in cohorts of 25 patients each. Shares of GTx, Inc. are trading 14.19% higher today.

Vitamin Shoppe, Inc. (NYSE:VSI): Reports Q1 revenue $248.1M versus consensus $239.71M. Shares of Vitamin Shoppe, Inc. are trading 16.76% higher today.

Synchronoss Technologies, Inc. (NASDAQ:SNCR): Reiterates 2012 revenue outlook $280M-$290M, consensus $287M. The company sees 2012 gross margin at the high end of 60%-61%. Guidance was issued on last night’s earnings conference call. Shares of Synchronoss Technologies, Inc. are trading 23.85% lower today.

Perrigo Company (NASDAQ:PRGO): The adjustment in revenue guidance is due to a historically mild cough/cold and flu season. FY12 revenue consensus of $3.25B. Shares of Perrigo Company are trading 6% lower today.

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