What’s the Story?

by CC August 9, 2012 9:02 am • Commentary

Reuters

The number of Americans filing new claims for jobless benefits unexpectedly fell last week, government data showed on Thursday, suggesting a modest improvement in the labor market.

Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 361,000, the Labor Department said. The prior week’s figure was revised up to 367,000 from the previously reported 365,000.

Economists polled by Reuters had forecast claims rising to 370,000 last week. The four-week moving average for new claims, a better measure of labor market trends, rose 2,250 to 368,250.

CNBC

Elsewhere in the economy, the U.S. trade deficit in June was the smallest in 1-1/2 years as lower oil prices curbed imports, according to government data that suggested an upward revision to second-quarter growth.

Marketwatch

Ahead of earnings, Briggs & Stratton’s board approved a 9% increase in the company’s quarterly dividend on common stock, to 12 cents a share. The dividend’s payable Oct. 1 to stockholders of record as of business Aug. 20, the Milwaukee-based company said.

Nordion NDZ +0.31% NDN -0.21% said late Wednesday that it may not be in compliance with laws regarding corrupt practices in foreign countries and that it’s voluntarily contacted U.S. and Canadian authorities. The Ottawa-based company specializes in providing products and services for the prevention, diagnosis and treatment of diseases. Late Wednesday, it disclosed an internal inquiry into compliance with the terms of these laws regarding what the company called “a foreign supplier and related parties.” At issue in the inquiry, Nordion said, are “potential improper payments and other related financial irregularities in connection with the supply of materials and services to the company.” A special committee of Nordion’s board has been constituted to deal with the matter, the company said.

Along with reporting mixed-bag results for the second quarter, Allscripts Healthcare Solutions Inc. MDRX +3.75% raised its full-year profit outlook, citing a reduction in shares outstanding as well as increased borrowings associated with stock-repurchase activity. As revised, the Chicago-based company now sees 2012 earnings on an adjusted basis in a range of 77 cents to 83 cents, up from 74 cents to 80 cents a share previously. During the June quarter, Allscripts said it spent about $225 million to buy back some 21 million common shares. Read more on Allscripts.

Charter Communications Inc. CHTR -0.88% said it’s increased to $1.25 billion the size of a public offering of 5.25% senior unsecured notes, up from the $1 billion previously contemplated. The 10-year notes priced at 99.026% of par. Subsidiaries of St. Louis-based Charter are selling the notes, which will yield net proceeds of about $1.22 billion. The funds will be used for, among other things, financing by Nov. 30 the redemption of 13.5% senior notes due 2016 as well as repaying outstanding revolving-credit balances facility. The company expects to complete the debt offering Aug. 22. Separately, Charter said major stockholders have agreed to sell about 5 million of its common shares via an underwritten offering. Charter, which won’t receive any proceeds, said Citigroup will serve as sole underwriter.

Frontier Communications Corp. FTR +1.11% increased by $100 million the size a debt offering. A total of $600 million in 7.125% senior notes due 2023 priced at par, the Stamford, Conn.-based company said. Net proceeds will be used to buy back or retire debt or for general corporate purposes, according to Frontier.

Sirius XM Radio inc. SIRI +7.07% priced at par $400 million of 10-year senior notes for sale to institutional investors. Net proceeds from the sale of the 5.25% notes will, among other things, be used for the repurchase, redemption, defeasance, tender or repayment of outstanding debt, including its 13% senior notes due 2013, the New York-based company said.

Along with reporting second-quarter results late Wednesday, Dun & Bradstreet Corp. DNB -0.04% said its board authorized an increase of $500 million in the Short Hills, N.J.-based company’s stock-buyback program, bringing the total available for repurchases to $770 million.

The board of Parexel International Corp. PRXL -1.44% approved a new program authorizing the repurchase of up to $200 million of common stock, the provider of biopharmaceutical services said. Cash on hand, cash generated from operations, existing credit facilities or other financing will be used to finance stock buybacks. At the end of June, the Boston-based company said, cash and cash equivalents totaled about $214 million, with availability under existing credit lines amounting to $175 million. Terms of the program call for buybacks to be made in the open market or via block trades or privately negotiated transactions, Parexel said. About $6 million in authorization under its previous buyback has been canceled. As of June 30, Parexel had about 60.1 million shares outstanding.

Suburban Propane Partners LP SPH -6.42% priced at $37.61 each the 6.3 million common units it’s selling in a secondary public offering. It will yield net proceeds of about $226.5 million, the Whippany, N.J.-based company said. Underwriters will have the right to sell up to 945,000 additional common units if investor demand warrants, Suburban Propane said. Proceeds will be used to pay back borrowings of $225 million under the company’s 364-day incremental term-loan facility, in connection with its recent acquisition from Inergy LP NRGY -1.04% of the latter’s retail propane operations.

While acknowledging some margin pressure, Monster Beverage MNST -1.61% reported a second-quarter profit of $109.8 million, or 59 cents a share, up from $84.2 million, or 45 cents, earned in the same period a year earlier, as the Corona, Calif.-based energy-drink maker’s revenue increased 28% to $592.6 million. Analysts, on average, had been looking for a quarterly profit of 62 cents a share, according to estimates compiled by FactSet Research. Monster Beverage’s gross margin narrowed to 51.8% from 52.8%, the results showed.

Dillard’s DDS +1.28% reported results for the second quarter ended July 28 that showed improvement in both sales and gross margins. Quarterly profit of $31 million, or 63 cents a share, rose from the prior year’s $17.6 million, or 32 cents, and sales increased 3.2% to $1.49 billion, as comparable-store sales rose 3% and gross margin widened to 33.6% from 33.2%. The Little Rock-based retailer also said it bought back 2.1 million Class A common shares during the latest quarter, at a cost of $134.6 million, leaving Dillard’s with $115.4 million available for repurchases.