Business Briefs - Tuesday

TECHNOLOGY

Apple surges on iPhone reports

Deutsche Telekom's mobile phone operator, T-Mobile, will pay Apple 10% of its sales for an exclusive retail deal in Germany, the Financial Times said, citing sources. Apple also received a boost from UBS, which said it sees a "modest upside" for its shipments and cited continued solid demand for the iPhone. Separately, Apple announced that it will sell refurbished iPhones for $100 less than its standard $499 and $599 prices. Shares climbed 4.4% to 127.57.

Dell PCs delayed by paint problem

The computer maker fell 1.4% to 26.17 amid concerns that its popular notebook PCs could be delayed due to issues with the paint on them, as well as a shortage of components for computer displays. The paint problem affects its XPS M1330 and Inspiron lines. Dell said only its Tuxedo Black color was meeting quality standards and that problems arise with others when they are painted in large quantities. Dell also cited "industrywide supply constraints" involving displays.

Agilysys AGYS, a vendor of computer systems, has initiated a self-tender offer to buy back up to 6 mil, or 19%, of its common shares at a price of $16.25 to $18.50 a share. It also approved the repurchase of an additional 2 mil share in the open market. It reiterated its '08 EPS outlook of 40-50 cents vs. views of 47 cents. Shares surged 13% to 17.68. TRANSPORTATION

Airline staffing continues climbing

U.S. passenger carriers employed 2.3% more workers in June than last year, totaling 413,500 full-time employees, according to the Bureau of Transportation Statistics. It marked the fifth straight month that U.S. airlines posted gains in employees. Delta Air Lines DAL and US Airways LCC led the pack with increases of 8.3% and 6%, respectively. AirTran AAI and Frontier Airlines FRNT had the largest increases among the low-cost carriers.

Chrysler Group's vice chairman and president, Tom LaSorda, said that the automaker could review its restructuring plan because of weak sales or economic uncertainty. Cerberus Capital bought an 80% interest in Chrysler from DaimlerChrysler in a $7.4-bil deal that closed this month. DIVERSIFIED

Bayer up on rumored buyout talks

Shares of the German drug maker BAY rose 2.9% to 76 on renewed market talk that Novartis NVS was interested in Bayer. Last week it was rumored that Novartis might offer $94.39 a share for Bayer, whose stock rose as much as 7% on the speculation. Analysts expressed doubt that Novartis would pay such a high premium for Bayer, which has a current market cap of about $58 bil. Bayer, which invented aspirin over 100 years ago, boosted its health care business and its competitive edge with its $22.9 bil acquisition of Schering last year. Novartis dipped 3 cents to 52.22.

MEDICAL

View deflates Adams Respiratory

The drug maker ARXT said it lost 3 cents a share in Q4, down from a 17-cents-a-share profit last year but a penny better than expected. Revenue dipped 11% to $46.9 mil as sales from its adult Mucinex franchise declined. Mucinex SE sales slid 25%, Mucinex DM declined 27%, and Mucinex D slipped 22%. Adams Respiratory Therapeutics forecast '08 earnings of $1.55-$1.75, below views of $1.84, sending shares tumbling 11.4% to 36.10.

MEDIA

Tribune shareholders OK buyout

The media conglomerate's shareholders approved an $8.2 bil buyout offer. The deal still needs financing and federal waivers. Led by Sam Zell, 97% of Tribune TRB shareholders OK'd the deal that is more than 20% below the $34-a-share buyout price, indicating doubts. Adding to worries: Since the offer was made, the newspaper industry's overall outlook and advertising revenue have weakened. Shares rose 3.6% to 27.98.

RETAIL/APPAREL

Dick's Sporting beats, guides up

The sporting goods retailer DKS said Q2 profit soared 77% to 83 cents a share, topping views by 7 cents. Revenue swelled 38% to $1.01 bil, while same-store sales increased 7.2%. It opened 6 Dick's stores and two Golf Galaxy stores during the quarter. It raised its full-year outlook to $2.47-$2.50 a share, above views of $2.42. It also said it plans to open 45 new Dick's stores this year and that same-store sales should rise 2%. Shares leapt 8.7% to 60.43.

Perry Ellis beats, raises guidance

The clothing maker reversed a year-ago loss of 17 cents to post a 2 cents a share profit in Q2. Analysts had expected a loss of 14 cents. Revenue rose 14% to $195.3 mil. It raised its 2008 earnings guidance to $1.87-$1.91 a share, above analysts' forecast of $1.85. It also expects sales of $900 mil-$910 mil vs. views of $903 mil. Perry Ellis PERY edged up 0.3% to 30.07.

BJ's Wholesale Club beats views

The nation's No. 3 warehouse club BJ said Q2 earnings rose 15% to 46 cents a share, topping views by a nickel. Revenue grew 8% to $2.25 bil. Including membership fees, total sales rose 8% $2.29 bil. Same-store sales increased 3.7%. Under CEO Herb Zarkin's plan to rejuvenate BJ's product mix, the results were driven by strong sales of perishable foods and flat-screen TVs, but TV margins were down amid a pricing war. It expects Q3 EPS of 30-34 cents, in line with views.

American Eagle Outfitters beats

The teen clothing retailer AEO said Q2 earnings grew 19% to 37 cents a share, a penny above views. Revenue increased 17% to $703.2 mil. Merchandise margins declined 50 basis points due to higher markdowns, which were partially offset by a strong initial mark-up. Total merchandise inventories were $321 mil, an increase of $54 mil from last year. It expects Q3 profit of 47-48 cents a share vs. views of 50 cents.

Saks narrows losses, beats views

The department store said it narrowed Q2 earnings losses to 14 cents ex items from 26 cents, besting views by a penny. Saks' SKS revenue grew 15% to $694.1 mil, topping estimates. It said its same-store sales jumped 13.2%. The company added that it expanded its gross margin rate through reduced markdowns. Shares tumbled 6.2% to 16.83.

Wal-Mart offers DRM-free music

The world's largest retailer WMT launched a catalog of MP3 music downloads in a new digital format without copy protection. The tracks can be played on most media players, including Apple's AAPL iPod and iPhone. The digital rights management-free MP3 downloads are available on the company's Web site for 94 cents a track, $9.22 an album and discounted pricing for older albums. The catalog will include major record labels and hundreds of thousands of songs and albums.

Darden Restaurants DRI rose 2.7% to 41.39 after Goldman Sachs upgraded it to a buy. FINANCE

Blackstone buys Indian company

The private equity company will pay up to $165 mil for a majority stake in India's No. 1 garment exporter, Gokaldas Exports. Blackstone BXagreed to acquire a 50.1% stake and later made an open offer for another 20%. India's garment industry has been strong since the country reduced imports from Europe. Gokaldas employs 47,000 people at 46 factories. Blackstone edged up 0.5% to 23.51.

Ginnie Mae tied to lender collapse

The Government National Mortgage Association, known as Ginnie Mae, demanded that bankrupt American Home Mortgage hand over $450 mil worth of home loans it is servicing. Ginnie Mae told a bankruptcy court it fears a "serious disruption" for homeowners whose mortgages are entangled in American Home's collapse. In addition to gov't agency, Credit Suisse CS, Morgan Stanley MS and Deutsche Bank DB are seeking the mortgages.

Wells Fargo WFC said it has fixed a computer glitch that prevented bank customers from accessing their accounts online or through ATMs. Problems lasted almost a day. It rose 0.7% to 37.37. BUILDING

Illinois Tool Works OKs buyback

The maker ITWof fasteners, food service and welding equipment said its board approved the repurchase of up to an additional $3 bil of its shares, representing 10% of the manufacturer's 552 mil shares outstanding. Its current stock buyback program that it announced last year consists of 35 mil shares. There are about 12 mil more shares left to be purchased under the current plan. It raised its share buyback forecast for 2007 to $1.1 bil-$1.4 bil, up from $700 mil-$900 mil.