TOP STORIES
Irvine-based Diedrich Coffee Inc. is being acquired by Emeryville-based specialty coffeehouse operator Peet’s Coffee & Tea Inc. in a $213 million cash and stock transaction. The offer is 28% higher than Diedrich was worth before the announcement. The deal is set to close by year’s end. Peet’s is buying Diedrich to get into the growing market for what are known as K-Cups, which brew single cups of coffee.
TECHNOLOGY
Santa Ana’s STEC Inc. got hammered on Wall Street last week after it reported an outlook for the current quarter that fell short of analysts’ expectations, sparking fears of a slowdown at the maker of a new type of data storage drive. For the current quarter, STEC forecast sales of $101 million to $103 million, below the $106 million Wall Street had been expecting. It expects adjusted profits of $25 million to $26 million, which at the low end fell short of the $26 million analysts had been expecting. Before slipping in mid-September, STEC’s shares were up some 800% since the start of the year and now are up about 230% for the year with a market value of $665 million.
Smith Micro Software Inc. saw a big drop on Wall Street last week as the maker of cell phone software slashed its sales outlook for the rest of the year. Smith Micro gave a murky outlook for fourth-quarter sales and lowered its 2009 sales guidance to $105 million to $110 million, down from a previous outlook of $110 million to $115 million. Analysts, on average, were looking for sales of $111 million. Shares were down 20% last week on a market value of $230 million.
Aliso Viejo’s Quest Software Inc., a maker of business software, reported third-quarter results last week that missed Wall Street expectations of $172 million in revenue but beat on profits. Quest reported $171 million in sales, down 9% from a year earlier. Excluding charges, the company posted profits of $31 million, down 15% and beating analysts’ expected $27 million. Quest also agreed to settle a 2006 shareholder class action lawsuit related to options backdating for $29 million. The settlement awaits court approval.
Santa Ana’s Powerwave Technologies Inc., a maker of cell phone tower gear, is set to open a factory in Thailand. The 135,000-square-foot plant is expected to be up and running by the end of the year. The company plans to add some 300 workers initially with plans to have a total of 500 by the end of 2010. The new site is subsidized by the Thailand Board of Investment, according to the company.
HEALTHCARE
Aliso Viejo-based Valeant Pharmaceuti-cals International said its adjusted third-quarter profit came in at $48.8 million, 192% higher than a year earlier and above analysts’ expectations of $41.1 million. The drug maker swung to a net profit from continuing operations of $37.3 million, compared to a loss of $7.3 million. Quarterly revenue rose 31% to $220.3 million, surpassing Wall Street’s expectation of $193.5 million. Valeant projects to make $176.1 million to $184.5 million in 2009, topping analysts’ forecast of $167.8 million.
Masimo Corp., a medical device maker, said that its third-quarter profit and sales beat analysts’ expectations. The Irvine-based maker of patient monitoring devices and supplies said its quarterly profit was $13.1 million, down less than 1% from a year ago. Wall Street expected Masimo to make $12.6 million in the quarter. Third-quarter revenue came in at $87.4 million, which was up 12% from a year earlier and above the $85 million expected by Wall Street.
REAL ESTATE
Newport Beach-based William Lyon Homes Inc. reported a loss of $11.6 million for the third quarter, an improvement from the $41.1 million loss the homebuilder saw a year earlier. The company, which went private in 2006 and still reports results for debt holders, posted revenue of $55.8 million, down 34% from a year earlier. Home sales were down slightly for the quarter.
APPAREL
Huntington Beach-based clothing maker Quiksilver Inc. laid off 125 workers at its headquarters and elsewhere in Southern California as part of its ongoing cost cutting. In all, 200 jobs were cut including 75 vacant positions at Quiksilver, which makes clothes inspired by surfing, skateboarding and snowboarding. The cuts came at Quiksil-ver’s America unit and at its Mira Loma warehouse.
OTHER NEWS
Irvine-based Freedom Communications Inc. plans to close an Arizona newspaper that is its third largest after the Orange County Register and a Colorado paper. Freedom, which is undergoing bankruptcy reorganization, plans to close the Phoenix area’s East Valley Tribune by Dec. 31 after failing to find a buyer. The closure covers the paper as well as its Web sites.
Fountain Valley-based Hyundai Motor America Inc. and Kia Motors America Inc. of Irvine saw sales soar in October while other automakers with operations here watched them tumble. Hyundai, part of South Korea’s Hyundai Motor Co., saw a 49% gain in vehicle sales last month from a year earlier to 31,005. Kia, also part of Seoul-based Hyundai, saw sales up 24% from a year earlier with 22,490 vehicles sold last month.
