Business Briefs - Tuesday

RETAIL

GameStop EPS tops, lifts outlook

The video game retailer said Q4 EPS rose 39% to $1.14, topping estimates by 2 cents. Revenue gained 24% to $2.87 bil, just below projections. GameStop GME cited solid sales of software titles such as Activision's ATVI "Guitar Hero III." It sees Q1 EPS of 32-33 cents, above views of 29 cents, and expects same-store sales to jump 24%-25%. GameStop also sees full-year EPS of $2.25-$2.34, above views of $2.22. It plans to open 575-600 new stores this year. GameStop rose 3.3% to 48.55.

Wal-Mart boosts stake in Japan

The world's biggest retailer will buy the remaining 4% stake in Japanese retail chain Seiyu, saying it needs to turn around the money-losing supermarket operator. Wal-Mart WMT has gradually raised its stake in Seiyu since '02, but Wal-Mart has struggled to make money in Japan. In Feb., Seiyu reported a net loss of $216 mil for last year. Wal-Mart has stumbled in Japan and Germany. It sold German operations to rival German retailer Metro AG in '06 and also sold 16 stores in South Korea. Wal-Mart rose 2.1% to 50.98.

CVS Caremark CVS, a pharmacy chain, said it would pay $36.7 mil, plus $800,000 in fees, to settle a federal probe of its practice of dispensing an ulcer drug in capsule rather than tablet form and charging Medicaid more for reimbursements. CVS rose 4.6% to 39.25. MEDICAL

18 states sue Abbott over TriCor

The drug maker was sued by 18 states that alleged Abbott stymied efforts by rivals to offer low-cost generic versions of its popular cholesterol medication. The states say Abbott Laboratories ABT and a French drug company continuously made minor changes in the formulation of cholesterol drug TriCor to block generic versions. The drug's revenue accounted for more than $1 bil of Abbott's sales last year. Abbott rose 2.4% to 53.82.

TRANSPORTATION

Delta offers buyout to 30,000

The No. 3 U.S. carrier, facing higher fuel costs and a weakening U.S. economy, plans to offer voluntary severance payouts to more than half its work force in an effort to offset surging fuel costs. Delta DAL hopes to eliminate 2,000 frontline, administrative and management jobs through the voluntary program, attrition and other initiatives. It also is cutting domestic capacity by an extra 5% this year. Shares surged 9.3% to 10.09.

United revamps to offset high fuel

The nation's No. 2 airline, which is predicting that its fuel costs will surge by more than $1 bil this year, said it will charge fees for extra baggage, shed old aircraft, boost its fuel hedging and consider other cuts to reduce expenses and preserve profit. The firm also will cut domestic capacity and boost international flights to take advantage of stronger demand and pricing overseas, its CFO told a transportation conference. Shares climbed 8% to 22.57.

Weak dollar curbs Tsakos' profit

The Greek company that operates oil and gas tankers said its Q4 EPS fell 21% to 56 cents ex items, 4 cents over views. Voyage revenue rose 17% to $131 mil. Tsakos Energy Navigation TNP said the weak dollar pushed up costs, offsetting higher charter rates. It rose 4 cents to 30.51.

Auto sales seen worst in 14 years

U.S. sales of cars and light trucks are expected to fall sharply in '08, hitting the lowest level since '94, according to J.D. Power & Associates. Light vehicle sales will drop 4.8% to 14.95 mil vehicles this year, J.D. Power said. The new forecast is a weaker outlook than most major automakers have anticipated for '08, and it suggests that U.S. carmakers may have to cut production and costs more sharply than they had planned.

Ford F and India's Tata Motors will announce a $2 bil deal for Tata to buy Jaguar and Land Rover as soon as next week, published reports said. Ford rose 3.5% to 5.29. ENERGY

Exxon loses round to Venezuela

A British judge canceled a freeze on $12 bil in Venezuelan assets, handing a setback to oil giant Exxon Mobil XOM. A U.K. court had frozen the assets of Venezuela's state oil company, Petroleos de Venezuela SA or PdVSA, so cash would be available if Exxon won arbitration over an oil project lost in President Hugo Chavez's nationalization drive. The judge reportedly indicated that he agreed that PdVSA had no link to the U.K., buying one of the state oil company's main arguments. Shares rose 3% to 88.47.

FMC jumps, but analyst raises flag

Shares of the maker of oil drilling equipment surged 8.3% to 59.89 amid a broader rebound in energy-related stocks fueled by rising crude prices. But Citi cautioned that FMC Technologies FTI would need a "dramatic increase" in drilling rig productivity to meet projected sales growth for FMC equipment, known as subsea trees that link underwater wells to oil and gas pipelines.

Devon Energy DVN, Noble Energy NBL and Occidental Petroleum OXY rose a little over 4% after Lehman Bros. raised their earnings estimates. TELECOM

Nokia expected to ring up sales

Shares of the world's No. 1 maker of cell phones rose after a few analysts said strength in regions like India should offset weakness elsewhere. RBC Capital Markets said stronger handset demand in India, Eastern Europe and Africa may be countering Q1 softness that Nokia NOK has experienced in China. Meanwhile, Cowen and Co. doesn't see economic issues hurting the Indian handset market, adding that Nokia's market dominance there is not declining. Shares rose 5.3% to 32.74.

SERVICES

New subscriptions boost FactSet

The financial data provider lifted Q2 EPS 27% to 62 cents ex items, topping estimates by 2 cents. Revenue climbed 21% to $140.2 mil, edging views. FactSet Research Systems FDS cited increased subscriptions in its investment management business. It sees sees Q3 revenue of $145 mil-$149 mil vs. forecasts of $143.5 mil. Shares surged 17.7% to 52.43.

TECHNOLOGY

Microsoft, Intel partner on R&D

The two computer giants announced plans to spend about $20mil to build computing centers at the Univ. of Ill. and Univ. of Calif. at Berkeley to spur the development of parallel computing, in which computers leverage the power of dozens of processors simultaneously. Microsoft MSFT said multicore processors represent a "revolution in the computer industry." Intel said it already is developing a chip powered by 80 processors.