Market Report: Story Stocks^™

Early this morning, TiVo (TIVO 9.37, -1.40) announced that U.S. Court of Appeals for the Federal Circuit granted the request of EchoStar and its related companies to stay the contempt order imposed by the U.S. District Court pending the outcome of EchoStar's appeal.

TiVo accuses Dish Network (DISH 16.02, -0.46) of infringing on its DVR patent, but the court ruling granted a stay on a contempt order that would have forced Dish Network and Echo Star to disable Dish DVRs.

Exelon (EXC 50.39, -1.17) said Thursday that it is raising its bid for NRG Energy (NRG 25.38, -0.67) by 12.4% from its original offer.

Exelon said it increased its offer to acquire all of the outstanding NRG common stock in an all-stock transaction with a fixed exchange ratio of 0.545 of a share of Exelon common stock for each NRG share, a 12.4% increase over the initial exchange offer of 0.485.  The new offer has a value of approximately $8 billion.

"We listened to NRG investors and balanced their views with the best interests of Exelon shareholders. An exhaustive analysis by our internal team, informed by the best third-party experts, resulted in additional synergies, allowing us to increase our offer to NRG shareholders," said John Rowe, chairman and chief executive officer of Exelon.

Chip maker Xilinx (XLNX 20.34, -0.23) this morning disclosed that its June quarter sales are expected to be down approximately 5% sequentially vs. consensus of a sales increase of ~0.5% quarter-over-quarter. This is a revision from previous sales guidance of down 4% to up 4% sequentially.

The company said the shortfall in sales is primarily due to supply constraints on certain Virtex-5 devices that are in high demand. Xilinx currently expects most of the existing delinquency issues to be resolved in the September quarter.

Gross margin guidance of 61% to 63% and operating expense guidance of flat to slightly down sequentially remain unchanged.

Johnson & Johnson (JNJ 56.43, -0.64) and Elan Corp (ELN 8.51, +1.51) announced a definitive agreement whereby Johnson & Johnson will acquire substantially all of the assets and rights of Elan related to its Alzheimer's Immunotherapy Program (AIP Program), through a newly formed company.

Additionally, Johnson & Johnson, through its affiliate, will invest $1 billion in Elan in exchange for newly issued American Depositary Receipts (ADRs) of Elan which will represent 18.4% of Elan's outstanding ordinary shares.

The AIP Program represents Elan's interest in a collaboration with Wyeth (WYE 44.95, -0.42) to research, develop and commercialize selective products for the treatment and/or prevention of neurodegenerative conditions, including Alzheimer's disease.

Johnson & Johnson said upon closing, the transaction will have an estimated dilutive impact of $0.02 to $0.03 on 2009 adjusted earnings per share. The companies anticipate concluding the transaction in the second half of 2009.

After the close Wednesday, Illumina (ILMN 33.28, -4.86) announced it expects second quarter revenue of approximately $161 million vs. the First Call consensus of $172 million, due to a direct result of a shortfall in the company's array business.

The company said despite the challenges it saw in the second quarter, it believes the fundamentals in its markets remain intact and that its competitive position, execution and new product flow are as strong as ever.

Given the Q4 upside opportunities related to the stimulus, offset by the near-term weakness in the array business, the company is also lowering its fiscal 2009 revenue outlook to the original range it provided entering the year of $690 million to $720 million vs. consensus of $717 million. Prior guidance was $700 million to $720 million.