Stocks to Watch: AT&T, Red Hat, General Mills (Update 1)

AT&T(T) said Monday it was dropping its $39 billion bid to acquire T-Mobile USA.

The transaction was sidelined by the antitrust concerns of U.S. regulators, who argued the combination would lead to less choice and higher prices for consumers.

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AT&T said it expects to record a pretax charge of $4 billion in its fiscal fourth quarter for a break-up fee it will pay Deutsche Telekom(DT), the parent company of T-Mobile. AT&T was down 1% to $28.45 in premarket trading Tuesday. Red Hat(RHT), the business software maker, posted fiscal third-quarter adjusted earnings of $55.7 million, or 28 cents a share, on revenue of $290 million, topping the forecasts of analysts. Analysts polled by Thomson Reuters expected Red Hat to earn 26 cents a share on revenue of $289.6 million.On its conference call, Red Hat said it expects earnings of 26 cents to 27 cents a share with revenue ranging from $289 million to $292 million for its fiscal fourth quarter ending in February. Wall Street's current consensus view is for a profit of 26 cents a share in the quarter on revenue of $292.5 million. For the full fiscal year, Red Hat sees earnings of $1.07 to $1.08 a share. The average analysts' view is profit of $1.05 a share. The stock was off 7% in premarket trading to $42.85. General Mills (GIS) said Tuesday that second-quarter earnings declined 28% because of rising costs.General Mills, the maker of Cheerios, earned $444.8 million, or 67 cents a share, in the quarter, down from year-earlier earnings of $613.9 million, or 92 cents.Adjusted earnings were 76 cents a share.Revenue in the second quarter rose 14% to $4.62 billion.Analysts expected fiscal second-quarter profit of 79 cents a share on revenue of $4.6 billion. General Mills said it would earn $2.59 to $2.61 a share in fiscal 2012. It said second-half gross margin as a percent of sales will be below year-earlier levels. General Mills shares fell 1.5% to $39 in premarket trading. ConAgra(CAG), the maker of Chef Boyardee and Slim Jim, said fiscal second-quarter net income fell 15%.Earnings were $171.8 million, or 41 cents a share, including certain items, down from $200.9 million, or 46 cents, a year earlier. Adjusted earnings were 47 cents a share.Sales rose to $3.4 billion from $3.15 billion.Analysts were expecting fiscal second-quarter profit of 43 cents a share on revenue of $3.34 billion. Oracle(ORCL), the software maker, is expected by analysts Tuesday to post fiscal second-quarter earnings of 57 cents a share on sales of $9.23 billion. Nike(NKE), the sneaker and sports apparel company, is expected to earn 97 cents a share in its fiscal second quarter on revenue of $5.63 billion. Bank of America (BAC) closed at $4.99 on Monday after falling more than 4.1%.It's the first time since March 2009 that the stock has dipped below $5. -- Written by Joseph Woelfel>To submit a news tip, send an email to: tips@thestreet.com.10 Worst-Performing S&P 500 Stocks of 2011

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