Stocks to watch Wednesday: Wet Seal, Fifth Third

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Posted On: 08/22/2012 8:42:39 AM

Posted By: ruliquid

Stocks to watch Wednesday: Wet Seal, Fifth Third

WASHINGTON (MarketWatch) — Among the stocks that could see active trade in Wednesday’s session are Wet Seal Inc., Fifth Third Bancorp and La-Z-Boy Inc.

Companies on deck to report quarterly financial results include Hewlett-Packard Co. (NYSE:HPQ) and Synopsys Inc. (NASDAQ:SNPS) from the technology sector as well as American Eagle Outfitters Inc. (NYSE:AEO) , Chico’s FAS Inc. (NYSE:CHS) , Express Inc. (NYSE:EXPR) , Tilly’s Inc. (NYSE:TLYS) and Pacific Sunwear of California Inc. (NASDAQ SUN) from the retail sector. Hain Celestial Group Inc. (NASDAQ:HAIN) , Guess Inc. (NYSE:GES) , Krispy Kreme Doughnuts Inc. (NYSE:KKD) , Toll Brothers Inc. (NYSE:TOL) , Eaton Vance Corp. (NYSE:EV) , DFC Global Corp. (NASDAQ LLR) , Vanguard Health Systems Inc. (NYSE:VHS) , Heico Corp. (NYSE:HEI) and Kayak Software Corp. (NASDAQ:KYAK) round out Wednesday’s roster.

WTSLA 3.06 , -0.02, -0.65%

Along with reporting results for the second quarter ended July 28, Wet Seal (NASDAQ:WTSLA) said its board appointed a committee to evaluate “potential strategic initiatives to enhance shareholder value” as well as review and make recommendations regard the retailer’s capital allocation. The three-director committee “will consider the company’s cash position in light of its recent negative financial performance, revised operational strategy and other potential strategic opportunities,” said Foothill Ranch, Calif.-based Wet Seal. Chairman Hal Kahn called the latest results “disappointing” and said they necessitated “taking aggressive actions to refocus our strategy.” Since the abrupt departure of Susan McGalla as the company’s latest chief executive a month ago, Wet Seal reported a big drop in comparable-store sales for July and New York-based Clinton Group Inc., a major shareholder, has called on management to put the company up for sale. Also late Tuesday, Wet Seal forecast lower third-quarter sales pegged at $128 million to $133 million as well as narrower gross margins and a drop in comp-store sales of 14% to 18%.

FITB 14.84 , +0.45, +3.13%

The board of Fifth Third Bancorp (NASDAQ:FITB) approved a stock-buyback authorization for up to 100 million shares, superceding a 2007 authorization that had about 14 million shares remaining. The Cincinnati-based company said it anticipates initiating buybacks “shortly,” via a counterparty contract for the repurchase of $350 million of common stock. In addition, Fifth Third’s directors are likely to consider next month a dividend increase, potentially to 10 cents a share from the current 8 cents. The repurchases and prospective dividend increase are the result of Fifth Third’s proposed capital actions for the period through March 31, 2013, not meeting with any objections from Federal Reserve Board governors. Fifth Third’s capital plan included potential common-stock repurchases of up to $600 million through the first quarter of 2013, in addition to any incremental repurchases related to any after-tax gains from the sale of shares of Vantiv Inc. (NYSE:VNTV) , which went public last March.

UCTT 6.70 , -0.02, -0.30%

Issuing an update for the third quarter ending Sept. 28, Ultra Clean Holdings Inc. (NASDAQ:UCTT) cut its revenue forecast to $96 million to $101 million, down from the $107 million to $112 million that management projected a month ago. The Hayward, Calif.-based supplier of high-tech subsystems didn’t provide an updated projection for third-quarter earnings. A business decline in semiconductor capital equipment “has been greater than previously expected, but we project it to flatten out during the fourth quarter,” noted Chairman and CEO Clarence Granger. Ultra Clean, he added, has also lost a portion of the gas panel business it had with an unnamed customer in the semiconductor equipment industry. “While this decision will not have a material impact on our revenue in the second half of 2012, it could have a negative quarterly impact of 7% to 9% on total revenue by the end of 2013,” Granger said.

Along with reporting results for the second quarter ended July 29, Williams-Sonoma Inc. (NYSE:WSM) revised modestly higher its full-year profit forecast. The San Francisco-based retailer now sees earnings of $2.44 to $2.51 a share on an adjusted basis, up from a prior outlook of $2.42 to $2.49 a share, with revised sales pegged at $3.98 billion to $4.03 billion, implying full-year growth of 7% to 8% on the top line.

The board of Lorillard Inc. (NYSE:LO) cleared plans for further stock repurchases by the Greensboro, N.C.-based cigarette manufacturer, up to $500 million. Buybacks may be made from time to time in the open market or via privately negotiated transactions, block purchases or otherwise, using Lorillard’s existing cash balances. The share-purchase program has no expiration date, the company said.

The board of MTS Systems Corp. (NASDAQ:MTSC) declared a quarterly dividend of 30 cents a share, representing a 20% increase. It’s payable Oct. 1 to stockholders of record as of Sept. 10, the Eden Prairie, Minn.-based supplier of test systems and sensors said. The MTS board also authorized the repurchase up to $40 million of the company’s common stock. MTS said plans to purchase about 700,000 outstanding shares under an accelerated buyback program, 80% of which is projected take place by the end of its current fiscal year. Such transactions will be funded from cash on hand, the company said.

Tuesday earnings recap

La-Z-Boy (NYSE:LZB) reported a net profit of $4.4 million, or 8 cents a share, for the first quarter ended July 28, down from $45.5 million, or 85 cents, earned in the comparable period during fiscal 2012. Quarterly revenue reached $301.5 million from the prior year’s $280.1 million, as same-store sales jumped 9.2% for the Monroe, Mich.-based company. Analysts, on average, had been looking for La-Z-Boy to generate a profit of 8 cents a share on revenue of $290.5 million, according to a poll by FactSet Research. The year-earlier profit included 81 cents a share related to a reduction of some valuation reserves.

Dell Inc. (NASDAQ ELL) reported mixed-bag results for the second quarter ended Aug. 3, as earnings on an adjusted basis outpaced consensus forecasts but sales came up short of Wall Street’s expectations.

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