Stocks in the News: Costco, Pfizer, Novell

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The following is a round-up of news likely to affect stock prices today:

Costco Wholesale (COST) reported its profit climbed 25% in the latest quarter as strong overseas sales growth and increased gasoline prices boosted its top line by 11% to $18.74 billion, beating Wall Street's $18.56 billion estimate. The bottom line of $299 million, or 67 cents per share, however, came short of analysts' estimates of 72 cents a share, even after adding a 3 cent charge. COST shares dropped nearly 4% in premarket trading.

Pfizer (PFE), furthering its quest for more diversification and expansion of its generic business, is apparently prepared to bid as much as 3 billion euros ($4.08 billion) for German generic-drug maker Ratiopharm GmbH, Bloomberg reports sources said. It is not alone, however. Teva Pharmaceutical Industries (TEVA) and Actavis Group are also bidding. Ratiopharm is expected to decide by the end of the month, the sources said.

In other Pfizer news, its Alzheimer's drug Dimebon, investigated in collaboration with Medivation (MDVN) failed to benefit patients in an advanced study. MDVN shares plunged nearly 70% ahead of the bell.

Novell (NOVL) shares are soaring over 27% in premarket trading after private equity firm Elliott Associates LP on Tuesday offered to buy the 91.5% of the shares it doesn't already own in the company for $5.75 each, an offer valuing the company at about $2 billion. The offer represented a 20% premium to Novell's closing stock price of $4.80 on Monday.

Hovnanian Enterprises (HOV) on Tuesday posted its first profit since 2006, helped by a tax benefit. Excluding a $291.3 million tax gain, the home builder lost about $55.1 million, or 69 cents a share as revenue fell 14.5% to $319.6 million, reflecting continued weakness in the housing market. Shares advanced 5% in premarket trading.

Joy Global (JOYG) reported a lower first-quarter net income, but managed to beat analyst estimates on revenue and earnings. Joy Global also raised the low end of its 2010 earnings target by 20 cents. Shares were 2.7% higher before the bell.

BJ's Wholesale Club (BJ) said Wednesday fourth-quarter earnings rose to $1.01 a share, beating estimates of 95 cents. For fiscal 2011, the retailer projected lower earnings than Wall Street consensus. Shares fell 4% in premarket trading.

Molson Coors Brewing Co.'s (TAP) investor day is scheduled for Wednesday in New York.

Apple (AAPL) is suing one of the iPhone's main rivals, HTC Corp, with patent lawsuits claiming theft of touch screen technology and other features. HTC phones use Google's (GOOG) Android mobile operating system and Google is likely to back HTC in the suit.

Viacom (VIA) has decided to take down Comedy Central favorites, The Daily Show and The Colbert Report, from Hulu's video streaming site.

Yahoo Inc. (YHOO) CEO Carol Bartz says she hopes investors growing impatient with the slumping Internet company remember how long it took Steve Jobs to revive Apple, implying it could take years to turn Yahoo around as well.

Analyst calls:
  • Bank of America Merrill Lynch downgraded Netflix (NFLX) by two notches -- from buy to underperform, saying the company would need to nearly triple its subscriber base by 2015 to justify the current share price of nearly $70. Shares dropped 3.8% before the bell.
  • Merriman upgraded Akami Tech (AKAM) from neutral to buy. Shares were 1.7% higher.
  • Oppenheimer upgraded Blackstone (BX) from perform to outperform. Shares advanced 2.7% in premarket.
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