Stock Market Chumps..........9-08-06

Shuffle Master Inc. (SHFL)

Last Trade:	24.12
Trade Time:	12:01PM ET
Change:	2.81 (10.43%)

Casino table game supplier Shuffle Master Inc. said on Thursday its fiscal third-quarter profit fell, as costs of an acquisition offset higher sales.

Its shares fell 7 percent to $25.08 in electronic after-hours trading, after closing at $26.93 on Nasdaq.

For the quarter ended July 31, the company posted net income of $7.3 million, or 20 cents a share, compared with $8.1 million, or 22 cents a share, a year earlier.

The company, which makes automatic card shufflers, roulette chip sorters and other casino products, reported that revenue rose 49 percent to $40.7 million.

It said profit was cut by 7 cents per share by costs from its recent acquisition of Australian casino equipment firm Stargames. It said profit was cut by a further 3 cents per share by adopting a new accounting rule relating to the valuation of stock options in the Stargames deal.

It said the sale of intellectual property resulted in a gain of 8 cents per share in the quarter.

Excluding items, Wall Street expected the company to earn 25 cents per share, according to Reuters Estimates.

Due to certain delays in winning contracts, including suppling electronic tables to the Delaware State Lottery, the company forecast a "modest impact" on profit, cutting its full-year earnings forecast.

Shuffle Master said it now expected full-year earnings of 97 cents to $1.00 per share. In June, it forecast earnings of $1.02 to $1.05 per share.

The company also said it authorized a plan to buy back up to $30 million worth of its own stock.

AirTran Holdings Inc. (AAI)

Last Trade:	9.20
Trade Time:	11:49AM ET
Change:	1.47 (13.78%)

Low-cost carrier AirTran Airways, a unit of AirTran Holdings Inc. , has cut its forecast for revenue growth in the third quarter due to softening travel demand related in part to security concerns.

The carrier, whose shares were down nearly 14 percent, predicted in a regulatory filing late on Thursday that growth in revenue per available seat mile would be in the low single digits in the third quarter compared with a year earlier. It previously forecast growth in the high single digits.

Chief Financial Officer Stan Gadek said in the filing that the carrier began seeing demand weaken near the end of August.

"This trend appears to be continuing into the month of September and likely resulted from the threat of recent terrorist events, tropical storm Ernesto, and capacity additions on the East Coast," Gadek said.

New airport security restrictions were issued after British authorities on August 10 said they had foiled a plot to blow up aircraft. Those restrictions, which include bans on liquids and gels in carry-on bags, have eroded demand for air travel, some experts say.

Gadek said AirTran plans to respond to the decline in demand by reducing its growth in 2007 and 2008. He said the carrier would announce changes in capacity -- the number of seats it puts up for sale -- at a later date.

In July, Gadek said the carrier planned to increase capacity by 27 percent in the third quarter, by 24 percent in the fourth quarter, and by 25 percent for all of 2006.

The airline industry has been weakened by stiff competition and overcapacity. Soaring fuel prices have further eroded earnings. But the industry is seeing signs of improvement as major carriers cut capacity and initiate lasting fare hikes.

AirTran, however, has used a different strategy. Instead of cutting capacity, it has pursued an aggressive growth plan. When rivals pull planes from a route, AirTran often uses that opportunity to add flights.

JP Morgan airline analyst Jamie Baker said in a research note on Friday that if AirTran were to cut its capacity growth outlook, it would be a welcome change for the industry.

"As one of just a handful of growth culprits, AirTran's reversal from its heretofore relentless pursuit of growth is likely to be greeted warmly by the market, in our view, contributing to optimism that other carriers may follow," Baker said.

AirTran said in the filing that its non-fuel costs continue to decline and should fall 3 percent to 5 percent in the third quarter. It previously predicted a reduction of 2 percent to 4 percent.

AirTran predicted fuel costs of $2.28 to $2.33 per gallon in the third quarter. In July it forecast $2.30 to $2.35 in the third quarter and $2.25 to $2.30 in the fourth quarter.

AirTran shares were down $1.47 at $9.20 in morning trade on the New York Stock Exchange.

Volt Information Sciences Inc. (VOL)

Last Trade:	34.20
Trade Time:	11:59AM ET
Change:	6.61 (16.20%)

Volt Information 3rd-Quarter Profit Climbs, Helped by Higher Sales

Staffing firm Volt Information Sciences Inc. reported on Friday a higher third-quarter profit, but shares slid in morning trading when the company reported lower operating profit in two of its divisions.

Shares of Volt lost $5.67, or nearly 14 percent, to $35.14 in morning trading on the New York Stock Exchange. In a 52-week range the stock has traded in a range of $17.52 and $48.99.

Net income rose 68 percent to $8.4 million, or 53 cents per share, from $5 million, or 32 cents per share, in the year-ago period. Sales grew nearly 8 percent to $584.9 million from $543.5 million.

But operating profit in the company's telephone directory segment decreased 24 percent to $4.2 million, as sales fell 10 percent to $21.4 million.

Operating profit in the computer systems segment also declined by $2 million, or 25 percent, to $6 million, due to a decrease in gross margins and higher overhead.

Separately, the company said its board approved the buyback of up to 1.5 million shares of its stock. As of July 30, Volt had roughly 15.6 million shares outstanding.

Quiksilver Inc. (ZQK)

Last Trade:	12.33
Trade Time:	12:01PM ET
Change:	1.31 (9.60%)

Lower demand for its ski products and higher interest rates led to a sharp drop in third quarter profits for Quicksilver.

In the quarter, the company earned $5.3 million, or 4 cents a share, down from $24.6 million, or 20 cents a share, in last year's third quarter.

Quarterly revenue came in at $525.9 million, up from $373.8 million a year ago.

Profits were down in he first nine months as well. In the period, the company earned $27.7 million, or 22 cents a share, on $1.6 billion in revenue. For the same period a year ago, the company earned $73.5 million, or 59 cents a share, on $1.14 billion in revenue.

Huntington Beach, California based Quiksilver manufactures its products, which include skiing and surfing-related apparel, shoes and accessories, for young men and women under the Quiksilver, Roxy, DC Shoes, Raisins, Radio Fiji and Island Soul labels.

FormFactor Inc. (FORM)

Last Trade:	42.28
Trade Time:	12:08PM ET
Change:	2.97 (6.56%)

Citigroup on Friday downgraded FormFactor Inc. to "hold" from "buy" while nudging up its price target by a dollar to $45.

The chipmaker's near-term revenues may take a hit following a drop in volume re-orders of dynamic random access memory probe cards as DRAM makers focus on technology upgrades ahead of the launch of Microsoft's Windows Vista, the brokerage said.

Citigroup said the higher price target raise was because of the company's unchanged medium and long-term growth prospects.

Formfactor's technology should continue to drive revenue growth over the next several years, the brokerage added in its research note.

However, the chipmaker's new products do create a near-term execution risk, Citigroup said.

Shares of the company closed at $45.25 Thursday on the Nasdaq.