NEW YORK (CNNfn) - In after hours news Thursday, a leading medical-services company came down with a case of the jitters concerning a proposal to divide its corporation, while Nabisco Inc. revealed a voracious appetite for Argentina biscuits.
HealthSouth Corp.
HealthSouth Corp. (HRC) announced its was postponing a previously announced plan to divide its operations into two separate companies and spin-off its inpatient operations.
The company also plans to continue a previously-announced $1 billion share repurchase program.
Calling the current environment for healthcare providers "uncertain," HealthSouth Chairman and Chief Executive Richard M. Scrushy said his company is better positioned to "weather the [industry's] changes" as a single entity for the time being.
As for the spin-off plans, Scrushy said "complexities involved in structuring the transaction" have made the current time frame unobtainable.
Several internal changes are planned to address the changing industry, company officials said, including eliminating separate divisional management for HealthSouth's outpatient lines of business and investing up to $1 billion in capital expenditures.
In addition to tabling its restructuring plans, HealthSouth warned its third and fourth quarter operating margins would fall in the range of 27 percent to 29 percent, below the 30 percent or higher levels it typically achieves. Cash flow for the current fiscal year is expected to be $1.2 billion.
Nabisco Inc.
Nabisco Inc. (NA) took a bite out of the Argentina snack market Thursday, acquiring Canale SA, the country's fourth-largest biscuit company, from SOCMA Alimentos. Terms of the deal were not announced.
The Parsippany, N.J.-based snack maker plans to merge Canale into its existing operations in Argentina, which includes facilities producing the Oreo, Terrabusi, Royal and Don Felipe brands.
Canale posted sales of approximately $100 million last year. In addition to producing Cerealitas, the nation's No. 1 cereal cracker, the company also makes pasta and a line of canned fruits and vegetables.
General Motors Corp.
General Motors Corp. (GM), the world's largest automaker, said it expects to produce roughly 1.45 million vehicles during the fourth quarter, including 764,000 cars and 686,000 trucks, in North America and Mexico.
That figure is down about 4 percent from last year due to model changeovers and the closure of the Buick City car assembly plant in Flint, Mich.
The Detroit-based company produced 558,000 vehicles in North America during August.
Intuit Inc.
Financial software maker Intuit Inc.'s (INTU) board announced a three-for-one stock split and moved up its shareholder's annual meeting from next January to Nov. 30, 1999.
The stock split, effective Sept. 30 to shareholders of record Sept. 20, will triple the company's current 62.5 million common shares outstanding.
St. Jude Medical Inc.
St. Jude Medical Inc. (STJ) hopes to cure its ailing stock with a $250 million share-repurchase plan announced Thursday. The plan, effective during the fourth quarter of this year, can be enacted over the next three years.
The St. Paul, Minn.-based medical device manufacturing company also sealed a deal to acquire Vascular Science Inc. for $80 million in cash and an addition $20 million in milestone payments.
The merger, expected to be completed in the third quarter of this year, will result in an undisclosed charge for research and development against the company's third-quarter earnings.
Mastech Corp.
Information technology service company Mastech Corp. (MAST) produced a glitch in its third-quarter earnings Thursday, announcing profits and revenues would both fall below expectations.
Mastech expects to earn between 18 cents and 22 cents per share excluding special charges. Wall Street had been expecting earnings of 26 cents per share.
The company also said its third-quarter revenue will fall between $116 million and $120 million, which was also below expectations.
Company officials attributed the shortfall to the "rapid winding down of business with a large systems integrator" as well as general softness in the information technology sector.
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Friday's outlook
Investors will no doubt keep an eye on the Labor Department's 8:30 a.m. release Friday of August's Producer Price Index, a key gauge of U.S. inflation. Analysts surveyed by Reuters are expecting the index to rise 0.3 percent. It climbed 0.2 percent during July.
On the corporate front, Microsoft Corp. (MSFT) and federal government both have a midnight deadline to submit their revised proposed findings of fact in the Justice Department's lawsuit against the company.
-- from staff and wire reports
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