TOP STORY
Santa Ana-based vocational school operator Corinthian Colleges Inc. is paying $395 million to acquire a San Francisco-based operator of schools throughout the Western U.S. Corinthian is using cash and part of a $280 million credit line to buy Heald Capital LLC, parent of Heald Colleges. The deal is expected to close by March. Heald runs 11 campuses in Northern California, Oregon and Hawaii. The schools offer two-year degrees in healthcare, business, paralegal and technology training.
TECHNOLOGY
Lake Forest disk drive maker Western Digital Corp. easily beat Wall Street estimates with higher September quarter profits of $288 million and sales of $2.2 billion. For the current quarter, Western Digital said it sees “challenging” conditions but offered a profit and sales forecast that topped what analysts had been looking for. The company projected sales of $2.25 billion to $2.4 billion, versus expectations of $2.2 billion. Profits are seen coming in at $292 million to $316 million, versus a consensus estimate of $253 million.
Irvine-based chipmaker Broadcom Corp. saw its shares slump late last week after giving a tepid outlook for the critical fourth quarter. The company expects sales of about $1.3 billion, flat with the third quarter. It didn’t give a profit outlook but hinted that it expects costs to rise. For the current quarter, analysts on average are expecting Broadcom to report profits of $174 million on sales of $1.2 billion. The company’s forecast came on the heels of its third-quarter results, which topped forecasts.
Aliso Viejo’s QLogic Corp., a maker of electronics for data storage networks, reported September quarter results that beat Wall Street’s expectations with sales of $132 million, down 23% from a year earlier but ahead of analysts’ expected $126 million in revenue. Excluding charges, the company posted profits of $25 million, down 44% but ahead of the $21 million expected by analysts.
Costa Mesa’s Emulex Corp., a maker of electronics for data storage networks, offered a better-than-expected outlook for the current quarter. Emulex is expecting adjusted profits of $8 million to $10 million on sales of $88 million to $92 million. Analysts, on average, had been looking for Emulex to post profits of $8 million on sales of $87 million. The outlook came with Emulex’s results for the three months through September, which were down from a year earlier but ahead of expectations.
HEALTHCARE
Aliso Viejo’s Vertos Medical Inc., a maker of devices to treat degenerative spinal diseases, raised $15.5 million in a fourth round of venture funding. The funding brings Vertos’ total raised to $32.5 million since its 2005 founding. The company plans to use the money to build up sales of its device and procedure to treat a narrowing of the spinal canal.
Irvine heart valve maker Edwards Lifesciences Corp. came in just ahead of expectations with its third-quarter profit of $41.8 million and upped its outlook for the current quarter. Edwards’ sales came in at $325.7 million, up 7% from a year earlier and up 13% excluding the impact of exchange rates and an $11.9 million reduction from divested products. Analysts expected sales to come in at $313.8 million.
REAL ESTATE
Santa Ana-based Grubb & Ellis Co. is raising $90 million in a stock sale with proceeds set to pay off two credit lines. The real estate brokerage and investor is selling preferred stock to two undisclosed institutional investors. The deal should allow Grubb & Ellis to pay off two credit lines totaling close to $67 million that were due to be paid by the end of November.
The California Supreme Court rejected Irvine’s appeal of a state mandate to build more than 35,000 homes in the city by 2014, ending a more than two-year legal battle. The mandate comes from a state housing need study done by the Southern California Association of Governments. It calls for Irvine to approve development of 35,000 homes—including 21,000 affordable homes—in the next five years.
OTHER NEWS
Fitch Inc. downgraded nearly $100 million of school facility bonds at two local school districts. The 52,700-student Capistrano Unified School District and the 13,500-student Fullerton School District saw the credit worthiness of their general-obligation bonds lowered earlier this month by Fitch. It cited “sharply reduced state aid” and concerns about the districts’ financial stability.
Irvine-based Diedrich Coffee Inc. is seeking a new chief executives as part of a shift in business at the highflying maker of coffee products. The company said late last week it has hired Korn/Ferry International to lead a search for a new chief executive. Current Diedrich chief Russ Phillips is expected to stay on during the search and remain a member of the company’s board.
