Strong financial performance in the most recent quarter and continued growth in results despite a challenging economy have led Standard & Poor's (S&P) Rating Services to raise Red Hat Inc.’s  (RHT) corporate credit rating from BB to BB+.   Red Hat is a leader in open source software solutions and has been upgraded thrice in less than two years. The company believes that it is still in the early stages of growth and has tremendous growth opportunity beyond 2010.   We believe the company’s strong market position, focused execution, strong balance sheet, impressive cash flow, international expansion and proven value proposition will help grow its business in the near term and deliver strong revenue growth beyond fiscal 2010.   We remain positive on the company’s long-term growth given its robust performance, driven by the record bookings and billings, substantial recurring revenue stream and growth in deferred revenues.  ...

Standard & Poor's Ratings Services has lowered its ratings on Southwest Airlines Co. (LUV), lowering the debt ratings to 'BBB' from 'BBB+’ and placing it with negative implications. However, Southwest has retained its investment grade rating. The downgrade reflects lower operating cash flow caused by record high fuel prices, low global demand for air travel and weak prices. The travel downturn has eroded the airline's flow of cash at a time when the airline faces substantial fixed obligations and declining cash balances. Southwest's cash balance fell to $902 million in the third quarter from $1.4 billion at the end of 2008. Recently, Southwest borrowed $124 million under a new term loan agreement secured by five Boeing 737-700 aircrafts. It also replaced its previous $600 million unsecured revolving credit facility with a new $600 million unsecured revolving credit facility that will expire in Oct. 2012. The rating ...

Note: We are re-issuing this post after correcting a mistake in the original post that ran yesterday.

As a result of another sign of dwindling confidence about MBIA Incorporated’s (MBI) business prospects, Standard & Poor's (S&P) has downgraded its ratings on the parent company as well as its structured finance insurance arm, MBIA Insurance Corporation. Rating of the parent company has been slashed to “BB-“ from “BB" and its subsidiary MBIA Insurance Corporation’s rating has been slashed to “BB+" from “BBB". The ratings for both the parent and the subsidiary are now below investment grade. The rating agency holds a negative outlook on the ratings, which means that there could be additional downgrades if the company incurs further losses. The rating action follows concerns about the company's exposure to residential mortgage-backed securities and collateralized debt obligations that ...

As a result of another sign of dwindling confidence about MBIA Incorporated’s (MBI) business prospects, Standard & Poor's (S&P) has downgraded its ratings on the parent company as well and its structured finance insurance arm, MBIA Insurance Corporation. Rating of the parent company has been slashed by one notch to “BB+" from “BBB" and its subsidiary MBIA Insurance Corporation’s rating has been slashed by one notch to “BB-“ from “BB." While the parent company’s rating stands at one step below investment grade, the subsidiary’s rating has been reduced to three steps below investment grade. The rating agency holds a negative outlook on the ratings, which means that there could be additional downgrades if the company incurs further losses. The rating action follows concerns about the company's exposure to residential mortgage-backed securities and collateralized debt obligations that it delved into during the heights of credit boom, ...

Yesterday, NCI Building Systems Inc. (NCS) posted third-quarter profit of 25 cents per share, which came in well above the Zacks Consensus Estimate of 2 cents. The better-than-expected earnings primarily came from the company’s cost-reduction programs implemented since November 2008.

NCI Building not only downsized 43 manufacturing facilities to 32, but also eliminated overlapping and less efficient operations. Moreover, it started utilizing more automation and lean manufacturing tools. These measures reduced cost of goods sold by 17% sequentially and 49.7% on a year-over-year basis. SG&A expenses were down by 9.2% compared to the previous quarter and 31.9% from the year-ago level.

However, quarterly earnings were significantly lower than year-ago net income of $1.63 per share due to lower sales. Quarterly sales of $238.4 million were off by 50% compared to the comparable period in 2008, driven by significantly lower sales volume in all three segments. Engineered Building Systems

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• Novellus (NASDAQ:NVLS) CEO Rick Hill provided optimistic outlooks for the current quarter and next. He narrowed the gain in bookings to an expected 40-55% rise from 20-50%, the range of shipments to $150 -$170 million from $140-$170 million, with earnings expected to range between a nine cent loss and breakeven, up from a 15 cent loss and breakeven

• Citigroup (NYSE:C) analysts lowered their rating on Abercrombie and Fitch (NYSE:ANF) to "sell" from "hold" and cut the price target to $24 from $33

• Costco (NASDAQ:COST) received an upgrade from JP Morgan (NYSE:JPM)

• H&R Block (NYSE:HRB) reported fiscal first quarter loss from continuing operations of 39 cents a share, a bit worse than the Zacks expectations of a 37 cent loss, as revenues grew 1.3% to $275.5 million, off estimates of $281 million. The firm, however, maintained full year projections of $1.60-$1.80

• Cooper Companies (NYSE:COO) reported third quarter earnings of 54

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Standard & Poor's said on Friday that it is apprehensive about The Boeing Company’s (BA) risk in terms of order cancellations and deferrals for its commercial aircrafts. Pitted against Airbus’s A319 aircraft, Boeing’s 787 series is plagued by delays. The inaugural test flight at the end of fiscal 2009 is more than two years behind the original delivery schedule. The company has already deferred the inaugural delivery of the 787 series aircraft five times. Standard & Poor's is apprehensive this may force Boeing to scale back production of models 737, 747, 767 and 777 -- virtually everything other than its new 787 series in fiscal 2010. This viewpoint is shared by Fitch Ratings as well. As of now, Standard & Poor's has a Buy rating on Boeing’s shares while Fitch has an "A+" rating. The goliath of the commercial aerospace, Boeing has witnessed falling orders in ...

For Immediate Release

Chicago, IL – August 31, 2009 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Brown Foreman (BF.B), Ciena (CIEN), ADC Telecom (ADCT) and Zale Corporation (ZLC). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=5612.

This Week's Events

With just 51 companies scheduled to report, economic news will be at the forefront. The only S&P 500 members on the earnings calendar are Brown Foreman (BF.B) and Ciena (CIEN).

The economic calendar is pretty packed with the August ISM surveys, August employment data and minutes from the last Fed meeting all scheduled to be released. Adding to the potential volatility will be light volume, particularly on Friday afternoon as many traders leave early for the holiday.

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Earlier today, NCI Building Systems (NCS) announced that it has obtained an extension of the waivers granted by its senior credit facility lenders until November 6, 2009, giving it more time to arrange for refinancing. Previously, these waivers had been in effect through August 14, 2009, with an automatic extension to September 15, 2009 upon the signing of a definitive agreement for an equity investment. The company is in negotiations with the CD&R Fund and some of the company's existing convertible noteholders regarding potential amendments to the offer contemplated in the investment agreement. The CD&R Fund would continue to invest $250 million in the company through newly issued Convertible Participating Preferred Shares, but for a pro forma ownership of 68.5% instead of 72%. NCS said that the convertible noteholders would receive $500 cash and 390 shares for each $1000 principal amount tendered in the exchange offer. ...

The retail sector is all over the news. Unfortunately, the headlines are almost all negative. As unemployment risks remain high, consumers refuse to spend.

It has been a tough week if you have anything to do with the world of retail. Just about every company that opened its books to the Street this week got punished for the act.

The list of “disappointing” reports is getting longer by the day.

Lowes (NYSE:LOW) kicked off the week with scary-low figures. Home Depot (NYSE:HD) beat the Street but still got punished after a slew of less-than-stellar economic reports.

Outside of the home-centric sector, shares of Liz Claiborne (NYSE:LIZ) plummeted on Monday after the Standard and Poor’s cut its rating on the unprofitable retailer to B, a two-notch downgrade. The company’s rating now stands five levels below investment grade.

High-end retailer Abercrombie & Fitch (NYSE:ANF) is also deep in negative

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