Business Briefs - Thursday

ENERGY

Exelon boosts NRG takeover offer

The utility sweetened its hostile bid for NRG Energy NRG by more than 10% to $7.13 bil in stock. Exelon EXC said it decided to raise its offer because it found an additional $1.5 bil in potential savings from a tie-up with Reliant Energy. NRG had rejected Exelon's previous offer as too low. Exelon is now offering 0.545 shares of its stock for each NRG share, valued at $26.91 a share as of Thu.'s close. The merger would create the largest U.S. power generator, providing energy to about 45 mil homes. Exelon is already the nation's top nuclear power company. Exelon fell 4.3% to 49.37. NRG declined 4.8% to 24.80.

LDK Solar LDK, a solar panel maker, disclosed after hours that it expects Q2 revenue of $215 mil-$225 mil, below views for $247 mil. Shares fell 3% to 10.91 ahead of the news and slid further in late trading. Repsol REP rose 0.4% to 22.90 after the Spanish oil company said it received several offers for its Argentine unit. China Nat'l Petroleum, the parent of PetroChina PTR, plans to bid $17 bil for the Repsol division, a Chinese newspaper reported. RETAIL

Walgreen's front-end sales fall

The drugstore operator said June same-store sales rose 3.4%, helped by a 5.8% increase in pharmacy sales despite the negative impact of new generic drug introductions. Walgreen WAG said same-store front-end sales, which include items like cosmetics and food, dipped 0.9% as seasonal sales lagged. The chain said it benefited from a calendar shift that added an extra weekday in June. Pali Capital said the front-end same-store sales decline was "pretty disappointing." Walgreen shares fell 2.2% to 28.70.

Rite Aid RAD, the drugstore chain, said June same-store sales fell 0.6%. Pharmacy sales were up 1.4%, but front-end sales dropped 4.5%. Shares tumbled 12% to 1.35. TECHNOLOGY

PC makers supply filter in China

Some PC makers including Sony SNE are shipping Internet-filtering software in disks with their computers to China despite China's decision to postpone its plan to make such a filter mandatory. Last week, Beijing decided to delay the requirement that filtering software known as Green Dam to be preinstalled. Meanwhile, China's regulators intend to revive the plan to make filtering mandatory at some point. Hewlett-Packard HPQ is working with the U.S. gov't to get more information. Sony dropped 3% to 25.19.

Oracle ORCL, an enterprise software maker, plans to lay off up to 1,000 workers in Europe, or about 1% of its global staff, the French news agency AFP reported. Oracle declined comment. MEDIA

TiVo felled after ruling favors Dish

The maker of digital video recorders tumbled 15.6% to 8.09 after an appeals court said it will allow customers of cable company Dish Network DISH to continue using its digital video recorder until it holds a hearing on a licensing dispute, possibly in Nov. Initially, Dish was ordered to pay TiVo TIVO $103 mil by a lower court for using a modified version of TiVo's DVR technology, but Dish appealed the decision.

FOOD

Kellogg seen beating like rival

Janney Montgomery Scott raised its Q2 EPS estimate for the world's largest cereal maker by 4 cents to 84 cents vs. consensus views of 82 cents. Janney cited the recent quarterly earnings beat by rival General Mills GIS. It said Kellogg K is the most likely food company to post strong results like General Mills, helped by lower input costs and solid pricing. Janney also hiked its '09 EPS forecast by 6 cents to $3.11 vs. views of $3.09. Kellogg is slated to post Q2 results on July 30. It slid 1.5% to 46.82.

FINANCE

Regulators shut down 6 banks

Government regulators took control of 6 banks after the market closed Thu., raising to 51 the number of U.S. bank failures this year. The FDIC-insured banks were all relatively small, with total assets ranging from $36 mil-$166 mil, according to gov't records. Five banks were based in Ill., including First National Bank of Danville, Elizabeth State Bank, Rock River Bank,and First State Bank of Winchester. Millennium State Bank of Texas also failed.

CME Group's June volume drops

The derivatives exchange operator said its average daily trading volume in June fell 20% from a year ago to 11.4 mil contracts a day. CME Group's CME total June volume was 251 mil contracts, with 79% traded electronically. CME also said interest-rate contract volume tumbled 24% from June '08 to an average of 5.1 mil contracts a day, but it was up 8% from the previous month and marked the best monthly volume this year. It dipped 2.2% to 301.45.

Nasdaq OMX trading climbed 13%

The exchange operator said its May average daily volume for all U.S. securities rose 13% to 2.2 bil shares. Nasdaq OMX Group's NDAQ average daily trade count in U.S. equities was 9.5 mil, an increase of 6% from a year ago. In addition, the Nasdaq share of U.S. equity volume in May was 19.8%, more than any other U.S. exchange for the 26th consecutive month. It declined 1.1% to 20.46.

Bank of America BAC, which has received $45 bil in federal aid, authorized $713 mil in dividend payment to the U.S. gov't under the TARP program. The bank fell 3.1% to 12.64. MEDICAL

J&J buys stake in Elan for $1 bil

Health care giant Johnson & Johnson JNJ said it'll take an 18.4% stake in Ireland-based drugmaker Elan ELN for $1 bil. J&J also is buying Elan's stake in its Alzheimer's disease treatment partnership with Wyeth WYE and rolling it into a new J&J unit that will be 49.9% owned by Elan. J&J agreed to buying 107.3 mil newly issued Elan ADRs at $9.32 each. Elan climbed 8.6% to 7.60. J&J slipped 1.95 to 55.98.

BUILDING

MSC profit falls sharply, but tops

The tools and industrial service provider said its Q3 EPS fell 45.7% to 44 cents, topping views by 6 cents. Sales fell 23% to $350.5 mil, above views. MSC Industrial Direct MSM expects summer shutdowns will be longer in duration than last year and that they will likely affect sales in the coming months. It sees Q4 EPS of 33-37 cents vs. views of 36 cents. It fell 1% to 35.89.

Acuity Brands AYI, a maker of lighting equipment, said its Q3 EPS fell 48% to 53 cents, missing views by 4 cents. Sales declined 23% to $397 mil. It fell 7.3% to 26.75. TELECOM

Buzz rises over T-Mobile UK deal

Deutsche Telekom DT is working to overhaul its ailing T-Mobile UK unit, but is willing to sell if it receives a good offer, said a Reuters report citing unnamed sources. Earlier published reports said Vodafone VOD, the world's largest wireless carrier, is mulling a bid for the T-Mobile division, estimated to be worth $4.2 bil. Analysts said Telefonica's TEF O2 is monitoring the situation but hasn't held deal talks.

TRANSPORTATION

Continental traffic down in June

The No. 4 U.S. airline said passenger traffic last month fell 6.5% as capacity dropped 7.8%. Its load factor, the industry term for occupancy rate, increased to 84.8% from 83.7% a year ago. Continental CAL said revenue per available seat mile, a key industry metric, declined in a range of 19.5%-20.5%, which UBS said was roughly in line with expectations. Shares rose 6.2% to 9.79.

Boeing BA said the aerospace company delivered 125 commercial aircraft in Q2, bringing its total deliveries to 246 year to date. It fell 3.3% to 40.83. Republic Airways RJET, a regional carrier, said its June traffic rose 4.5%, capacity climbed 3.5% and load factor edged up 0.8 percentage point 15 79.3%. It slid 2.6% to 6.47.