The company is still in a grossly different position versus rivals Walgreen Co. (NYSE: WAG) and CVS Caremark Corporation (NYSE: CVS). 

It is not a forecast of earnings yet, but the company is also narrowing its loss expectations for 2012.  The new forecast is -$0.50 EPS to -$0.37 EPS versus a prior target of -$0.56 EPS to -$0.40 EPS. 

Revenues are also now put in a range of $25.85 billion to $26.0 billion for the year, but the prior target given was $25.8 billion to $26.1 billion in revenues.  The consensus estimates are -$0.45 EPS and $25.86 billion for the year.  Keep in mid that the annual 2012 is for the year ending on February 29, 2012.

The results were credited with a “well-planned and executed flu immunization program and continued favorable customer response to our wellness+ loyalty program.”  Rite Aid also said that it has already provided over twice the number of flu shots from 2010 and is on pace to achieve its goal of administering 1.5 million immunizations for this season.  It also claims that it now has more than 47 million enrolled members in its wellness+ program.

Rite Aid shares closed at $1.14 on Wednesday and the 52-week trading range is $0.85 to $1.47.
JON C. OGG

The unofficial closing bells put the DJIA down more than -389 points to 11,780.94 (-3.2%), the NASDAQ fell nearly -106 points (-3.88%) to 2,621.65, and the S&P 500 fell -3.67% or nearly -47 points to 1,229.10.

There were several analyst upgrades and downgrades today, including DreamWorks Animation SKG Inc. (NYSE: DWA) cut to ‘sell’ at Janney; H&R Block, Inc. (NYSE: HRB) raised to ‘outperform’ at Oppenheimer; Priceline.com Inc. (NASDAQ: PCLN) cut to ‘hold’ at S&P Capital IQ; Rite Aid Corporation (NYSE: RAD) raised to ‘outperform’ at Credit Suisse; Walgreen Co. (NYSE: WAG) cut to ‘neutral’ at Credit Suisse; and Autodesk Inc. (NASDAQ: ADSK) cut to ‘neutral’ at BofA/ML.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: General Motors Co. (NYSE: GM) is up down about -10%, at $22.48; A123 Systems Inc. (NASDAQ: AONE) is down less than -1%, at $3.09; IntraLinks Holdings, Inc. (NYSE: IL) is down more than -37%, at $5.50, after posting a new 52-week low of $5.44 earlier today; Blue Nile Inc. (NASDAQ: NILE) is down nearly -16%, at $33.24; Harvest Natural Resources Inc. (NYSE: HNR) is down more than -19%, at $8.80; and Neenah Paper, Inc. (NYSE: NP) is up more than 12%, at $18.84.

Several other standouts from today are as follows…

Energy Conversion Devices, Inc. (NASDAQ: ENER) is down more than -32%, to $0.41. The company has said that it will suspend manufacturing and cut 500 jobs. Excess inventory of solar panels gets the blame.

U.S. Auto Parts Network, Inc. (NASDAQ: PRTS)  is down  more than -22%, at $3.94, after posting a new 52-week low of $3.66 earlier in the day. The company received a waiver from one of its lenders for failing to meet coverage ratio requirements.

O’Reilly Automotive, Inc. (NASDAQ: ORLY) is down about -1.1%, at $76.44, after posting a new 52-week high of $77.95 earlier today. We noted the company’s performance earlier today in an article on auto sector implied gains.

American Superconductor Corp. (NASDAQ: AMSC)) is up nearly 10%, to $4.49. The company reported earnings today, and its growing order backlog indicates a possible turnaround following the loss of its biggest customer earlier this year.

Noranda Aluminum Holding Corp. (NYSE: NOR) is down more than -16%, at $8.51. The company will pay a special dividend of $1/share to shareholders of record as of yesterday’s close. That pushed the shares down a buck this morning, and the rest is due to the overall market decline today.

Citigroup (NYSE: C) is down more than -8%, at $28.78. The bank claimed the largest decline among the big US banks today.

Beazer Homes USA Inc. (NYSE: BZH) is down nearly -8%, at $2.17. There was no special news from Beazer today, but the threatened burst of new foreclosures soon to hit the housing market have had a nasty effect on this lower-priced builder.

Stay tuned for Thursday. Atlanta Federal Reserve Bank president Dennis Lockhart is giving a speech in the morning and Federal Reserve chairman Ben Bernanke will hold a town hall meeting with soldiers and their families at Fort Bliss, Texas, at 11:45 a.m. We have noted the following events (all times Eastern):

• 8:30 a.m. – International trade balance report
• 8:30 a.m. – Initial unemployment benefits claims
• 8:30 a.m. – Monthly import/export price report
• 9:45 a.m. – Bloomberg consumer comfort index
• 10:30 a.m. – EIA natural gas inventory report
• 2:00 p.m. – Monthly US Treasury budget report
• 4:30 p.m. – Federal Reserve balance sheet and money supply report

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Paul Ausick

Alaska Communications Systems Group Inc. (NASDAQ: ALSK) Cut to Underperform at BofA/ML.
Autodesk Inc. (NASDAQ: ADSK) Cut to Neutral at BofA/ML.
Avon Products, Inc. (NYSE: AVP) cut to Underperform as Bear of the Day at Zacks.
Blue Nile Inc. (NASDAQ: NILE) Cut to Sell at Deutsche Bank.
China Automotive Systems Inc. (NASDAQ: CAAS) Cut to Neutral at Piper Jaffray.
DreamWorks Animation SKG Inc. (NYSE: DWA) Cut to Sell at Janney.
Equity Residential (NYSE: EQR) Raised to Buy at Argus.
H&R Block, Inc. (NYSE: HRB) Raised to Outperform at Oppenheimer.
Priceline.com Inc. (NASDAQ: PCLN) Cut to Hold at S&P Capital IQ (late-Tuesday).
Rite Aid Corporation (NYSE: RAD) Raised to Outperform at Credit Suisse.
Rovi Corporation (NASDAQ: ROVI) has seen at least three downgrades: Collins Stewart, CLSA, Brean Murray.
Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) named Momentum stock of the day at Zacks.
Textainer Group Holdings Limited (NYSE: TGH) named Value stock of the day at Zacks.
Walgreen Co. (NYSE: WAG) Cut to Neutral at Credit Suisse.
The Washington Post Co. (NYSE: WPO) named Bull of the Day at Zacks.

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JON C. OGG

Among NYSE stocks, the short interest in AMD (NYSE: AMD) fell 15% to 80.4 million shares. Shares sold short in embattled airline stock AMR (NYSE: AMR), the parent of American Airlines, dropped by 19% to 48.8 million. Rumors suggest the company may declare Chapter 11. Eastman Kodak (NYSE: EK) may also face bankruptcy. Shares short in the company fell 11% to 70.2 million.

Shares short in BP (NYSE: BP) were down 49% to 7 million. The short interest in struggling drug retailer Rite Aide (NYSE: RAD) dropped 11% to 61.1 million. Shares short in its competitor CVS Caremark (NYSE: CVS) were off 21% to 27.3 million.

In the medical sector, shares short in Boston Scientific (NYSE: BSX) were down 19% to 39 million. The short interest in Pfizer (NYSE: PFE) fell 10% to 79.3 million.

The same pattern of abandonment of stocks in weak companies held true for Nasdaq-traded shares. The short interest in Dell (NASDAQ: DELL) dropped 23% to 60.6 million. The short interest in Level 3 (NASDAQ: LVLT) fell 8% to 168.6 million. Shares short in News Corp. (NASDAQ: NWSA) dropped 9% to 51.8 million. The short interest in Cisco (NASDAQ: CSCO) dropped 6% to 80.7 million. Shares short in Affymetrix (NASDAQ: AFFX) fell 32% to 6.0 million.

Notable increases in short interest included troubled wireless broadband company Clearwire (NASDAQ: CLWR). Shares sold short in the company rose 15% to 47.8 million. The short interest in Southwest Air (NYSE: LUV) was higher by 15% to 25.2 million.

Short interest as of October 14. Data from NYSE and Nasdaq.

Douglas A. McIntyre

We have broken these out by day and included consensus earnings and revenue estimates from Thomson Reuters.  We have also added in a price and recent trading activity and even added in the consensus analyst price targets.  Many of these also have some added color for traders to consider about the earnings reports.

Monday

Lennar Corporation (NYSE: LEN) has estimates of $0.10 EPS and $810.2 million in revenues; next quarter estimates are $0.19 EPS and $908.35 million in revenues.  Shares are trading around $13.90, the 52-week trading range is $12.39 to $21.54.  Wait a minute… EARNINGS rather than losses?  Go figure.

Tuesday

Adobe Systems Inc. (NASDAQ: ADBE) has estimates of $0.54 EPS and $1.03 billion in revenues; next quarter estimates are $0.59 EPS and $1.07 billion in revenues.  Shares are trading around $25.50, the 52-week trading range is $22.67 to $35.99.  Analysts still have a consensus target above $34.00, which seems a bit optimistic in the new normal where Apple’s mobility service is still crimping Flash.

Carnival Corporation (NYSE: CCL) will show the cruise industry who is boss, maybe.  The estimates are $1.63 EPS and $4.91 billion in revenues; next quarter estimates are $0.36 EPS and $3.89 billion in revenues.  Shares are trading around $33.50, the 52-week trading range is $28.96 to $48.14.  Keep in mind that this report is the King-Maker quarter that dictates the earnings for the full year due to the summer travel months.  With an estimate of $1.63 EPS for the quarter, the full year is expected to be $2.46 EPS.  Analysts have a consensus target of $almost $44.75.

ConAgra Foods Inc. (NYSE: CAG) has estimates of $0.31 EPS and $2.96 billion in revenues; next quarter estimates are $0.46 EPS and $3.3 billion in revenues.  Shares are trading around $24.00, the 52-week trading range is $21.02 to $26.60, and the consensus analyst target is $28.13.

Jefferies Group Inc. (NYSE: JEF) has estimates of $0.26 EPS and $665.6 million in revenues; next quarter estimates are $0.36 EPS and $746.1 million in revenues.  Shares are trading around $14.65, the 52-week trading range is $13.85 to $27.12, and the consensus target is $22.22.  Jefferies has not been immune from the market’s pounding of banks and brokerage firms, but this is one broker and i-banker expected to grow.

The new company is going to eventually look perhaps more like a Kroger Co. (NYSE: KR) or a Safeway Inc. (NYSE: SWY), but perhaps the real targets are Wal-Mart Stores Inc. (NYSE: WMT) and even Target Corporation (NYSE: TGT).  Yes, Walgreen is going after more and more of the lower-end grocery and consumer products market.

Walgreens is now planning to open some 400 Nice! stores that sell its private label products in grocery and household product categories.  The company is claiming that it will offer its grocery and household products at prices which are up to 30% below other national brands.  The company plans to have most of the Nice! product on its shelves by early 2012.

Walgreen has always been a place to get a flu shot or to get your medical prescriptions or consumer health and body products.  While it carries some basics in food and consumer products, this really sounds like it is going a step farther.  The company said its Nice! label will be on soups, sauces and bakery items, and it will add more and more Nice! brand products over the next few years.

The current store brands include Café W, Deerfield Farms, W and others, but these will be phased out and transitioned to Nice! brand products.  The company has already had its private label brands under dry grocery items like tea, dried fruit, rice and even macaroni and cheese.

The drugstore chain is also going to launch a national marketing campaign in 2012 to drive awareness and generate trial and it is going to have employees promote Nice! products.  This sounds a bit ambitious on the surface, except that it does have some solid data behind its news.  The company noted, “Nielsen consumer research shows that 75 percent of Walgreens shoppers purchase store brands in Walgreens.”  It also noted that the total private label sales market segment has grown from about $64.9 billion in 2005 to $88.5 billion in 2010 and the fastest growing private label segment is actually households with incomes of more than $100,000.00.  The company also backed it up by consumer testing and new design packaging with strong reviews.

Frankly, this seems a bit of a stretch on the surface.  Perhaps there is room for yet one more brand in shopping for grocery and consumer product goods.  The question is whether or not this will cannibalize sales and just create another small format grocery and consumer products store.

If you ever saw the cult film “Repo Man” in the 1980s you may remember a shoot-up scene in the convenience store.  The movie was such a low-budget and undesired production that all of the white-box products on the shelves had no labels and just had a physical name like “Soap” and “Cereal” and on and on.  Walgreen is highly unlikely to fall into that category, but it would be easy to argue that there is a big risk here even if the launch is only 400 stores.

Maybe the real target is just 7-Eleven.  This may turn out to be a profitable move for the company, but it is far from being a riskless move.

JON C. OGG

Rite Aid reported first quarter 2011 revenues of $6.4 billion, roughly equal to first quarter revenues for 2010.  Isolated store closings roughly offset an 0.8% increase in same store sales.  The struggling drugstore chain realized minor improvements on its bottom line, posting a net loss of $63 million versus a net loss of nearly $74 million for 2010. Rite Aid’s 2011 first quarter loss of $0.07 per share compares with last year’s first quarter net loss of $0.09 per share.  Thomson Reuters had estimates of -$0.12 EPS and $6.36 billion in revenues.

Rite Aid confirmed 2012 guidance with expected sales near $26 billion. The company expects 2012 same store sales to exceed 2011 numbers by 0.5% to 2.0%.  The company also said that anticipates a net loss between $0.42 to $0.64 per share.  Thomson Reuters has estimates of -$0.53 EPS for the year on $25.65 billion in sales.

Sadly, Thomson Reuters still sees losses for the years into the future as next year’s estimates are -$0.40 EPS and $25.24 billion in revenues.  We want to show you in math exactly how Rite Aid compares to peers on the trouble-front.  We are going to assume that revenue targets are merely hit by Rite Aid, but also by Walgreen Co. (NYSE: WAG) and CVS Caremark Corporation (NYSE: CVS) which are both profitable and which pay dividends.  Wal-Mart Stores Inc. (NYSE: WMT) is a huge thorn in the side of Rite Aid but it is not a pharmacy pure-play and therefore not counted.

In our world of make-believe that Rite Aid is in next year, magically Rite Aid is a profitable company but its sales remain at the targeted $25 billion.  Walgreen Co. (NYSE: WAG) has a market cap of $38.75 billion and its expected sales next year are $75.68 billion.  CVS Caremark Corporation (NYSE: CVS) has a market cap of $49.6 billion and its expected sales next year are $113.66 billion.  That puts values at 0.51-times expected sales for Walgreen and 0.43-times expected sales for CVS.

Rite Aid has been “stuck at the buck” for longer than one can imagine and its losses have been endless.  Its market cap is only $1.01 billion, and that is after a 3% gain to $1.132 today.  If you evaluate its $1 billion against the $25.24 billion you get a whopping valuation of 0.04-times expected revenues.  If you used the Walgreen and CVS valuations on revenues, Rite Aid would be worth more than 10-times to 12-times its current share price.  Of course that is not the case, but now you see just how rotten things are.

There is a ray of sunshine here.  We aren’t only negative, not all of the time. Rite Aid’s loss did narrow.  It did actually have positive same-store sales.  Strengths were lower interest expenses and lower operating expenses.  Another ray of sunshine is that even though this was a $1.40 stock in February, the stock is actually up more than 20% year-to-date.

Our concerns are not alone.  Most analysts have simply abandoned covering the stock and the consensus price target is a mere $1.24 from Thomson Reuters.  Back in 2007, Rite Aid did manage to get back above $5.00 before the recession interrupted what was looking like an incredible turnaround.  Still, shares have been stuck close to the $1.00 level for most of the recovery period.

Rite Aid was one of the great growth stories of the 1990s.  It grew and grew in many markets but it became very bloated and it nearly imploded.  The fact that it is still alive is no small miracle.

Our question for the long-term remains: Can Rite Aid actually survive?  Losses eat cash reserves.  Credit lines are not assured endlessly, and as losses continue those credit lines can come at more and more expensive terms.  Will Rite Aid fold this year or next?  That is unlikely.  The concerns still remain.  And if you think that “can is survive” is a tough question, there is another consideration here… SHOULD Rite Aid survive?

We invite Rite Aid’s management to respond.  We will listen.

JON C. OGG

We have given a detailed preview on each, shown effective price data, and added in color if applicable.  It is amazing to see this many companies with earnings due.

Renren Inc, (NYSE: RENN) has been a pig of an IPO and we will get to see if this is just another China bash or if there is anything real under the hood on Monday.  Thomson Reuters has no estimates yet. Shares are trading around $6.92 and the 52-week trading range is $6.55 to $24.00.  Renren was touted as “The Facebook of China” but its stock and the scandal from right before the earnings turned it into “The Face$%^& of China.”

Adobe Systems Inc. (NASDAQ: ADBE) reports Tuesday and Thomson Reuters has estimates of $0.51 EPS and $994.79 million in revenues; next quarter estimates are $0.54 EPS and $1.02 million in revenues.  Shares are trading around $30.67 and the 52-week trading range is $25.45 to $35.99.

Barnes and Noble Inc. (NYSE: BKS) is interesting considering that it is at a premium to its implied buyout price.  Thomson Reuters has estimates of -$0.91 EPS and $1.39 billion in revenues; next quarter estimates are -$0.88 EPS and $1.45 billion in revenues.  Shares are trading around $20.00 and the 52-week trading range is $8.45 to $20.46.

Altria Group, Inc. (NYSE: MO) Reiterated Buy and Raised target to $30 at BofA/ML.
Amazon.com Inc. (NASDAQ: AMZN) Started as Equal Weight at Barclays.
BlackRock, Inc. (NYSE: BLK) Raised to Buy at Goldman Sachs.
Citigroup, Inc. (NYSE: C) Started as Outperform at RBC.
eBay Inc. (NASDAQ: EBAY) Started as Equal Weight at Barclays.
Google Inc. (NASDAQ: GOOG) Started as Overweight at Barclays.
Hansen Natural Corporation (NASDAQ: HANS) Started as Buy at Jefferies.
HDFC Bank Ltd. (NYSE: HDB) Maintained Underperform as Bear of the Day at Zacks.
HJ Heinz Co. (NYSE: HNZ) Cut to Sell at Goldman Sachs.
Hill-Rom Holdings, Inc. (NYSE: HRC) Started as Outperform at Wells Fargo.
Netflix, Inc. (NASDAQ: NFLX) Started as Overweight at Barclays.
Nokia Corporation (NYSE: NOK) Cut to Neutral at Goldman Sachs; Cut to Hold at Canaccord Genuity.
Rite Aid Corp. (NYSE: RAD) Started as Neutral at UBS.
SLM Corporation (NYSE: SLM) Raised to Outperform at Bull of the Day at Zacks.
SYKES Enterprises, Inc. (NASDAQ: SYKE) Reiterated Strong Buy as Value at Zacks.
Tiffany & Co. (NYSE: TIF) Cut to Hold at Deutsche Bank.
Walgreen Co. (NYSE: WAG) Started as Buy at UBS.
Yahoo! Inc. (NASDAQ: YHOO) Started as Equal Weight at Barclays.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Data and ranking provided by the Flame Index.