Afternoon Review

Walgreen (WAG) -4.22%
WAG reported first-quarter profit that trailed analysts’ estimates and said it would spend less on new locations. WAG continues to post solid sales in a difficult retail environment, but costs grew faster than sales and the company plans to further cut back on store openings in 2010 and 2011. The new target growth rate is expected to reduce capital spending through 2011 by approximately $500 million, in addition to the $500 million announced in July.

WAG said it will cut spending on new stores by $1 billion through 2011, double its forecast in July. That will bring the rate of new openings to as much as 3 percent in 2011 from almost 9 percent in the most recent fiscal year.


Caterpillar (CAT) -2.13%
CAT announced new cost saving measures and noted that it is seeing continued deterioration of conditions in many of the markets it serves. The company plans to cut executive compensation by up to 50 percent, and senior managers could see cuts of 5-35 percent. CAT has instituted a hiring freeze and said it is offering an incentive-based voluntary separation program to some of its employees.


St. Jude Medical (STJ) -1.56%
STJ is acquiring MediGuide for $283 million, giving STJ technology to track needles, catheters and guidewires inside the body. STJ will use MediGuide’s technology to help develop products for cardiac ablation, a way to destroy malfunctioning heart cells and correct irregular rhythm without open-heart surgery. The market for ablation equipment could reach $2 billion a year by 2011.

STJ also completed its acquisition of Radi Medical Systems for $250 million. The moves do not alter St. Jude’s outlook.


Quick Hits

• WisdomTree ETFs dropped significantly due to it being their ex-dividend date.
  
  
  

Peter Lazaroff, Junior Analyst