Northwest Airlines Corporation (NYSE:NWA) announced its first results following its exit from bankruptcy and swung to quick profit as it kept fuel and other costs under control. The airliner reported profit of $244 million, or 93 cents per share, compared to an analyst estimate of just 76 cents per share. Shares on the NYSE rose over two percent in early trading.

Northwest also said it was considering spinning off its frequent flier program in a move that would mirror those being considered by other major airlines including US Airways, AMR Corp, and UAL. Northwest CEO Doug Steenland said in a conference call that separating WorldPerks from the parent company "has the potential for significant value creation".

Many industry analysts believe that any move to spin-off frequent flier programs will come after a much-anticipated wave of airline mergers. Executives are worried bout giving up control over a business that has such close ties to their most loyal and active customers. Delta CEO Richard Anderson said, "Frequent flyer candidly needs to be a post-consolidation sort of decision."

In the end, Northwest has announced great earnings and already returned to profitability. The upcoming wave of consolidation should be nice to Northwest shareholders (assuming they are on the selling end) given this growth while any move to spin-off its frequent flier program could provide a windfall for existing shareholders. Combined, these factors make NWA a stock worth watching!

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A large Cape Fear Bank Corp. (NDAQ:CAPE) shareholder expressed his concerns regarding the company's belief that its long-term plan for success trumps any short-term sale of the company. The activist shareholder believes that there is little the company could do, short of a sale, to maximize shareholder value in a company that has been among the worst bank stocks of the de novo banks started in North Carolina over the past nine years.

Maurice Koury, who owns a 5.8 percent stake in the company, said that he believes there is little investor confidence in the struggling Cape Fear. The bank recently retained an investment banking firm that found it is "premature to abandon the bank's long-term plan for success". Arguable, the "long-term plan for success" will need to be dramatically different from the past nine years' lack of success measured by shareholder returns.

Cape Fear also told a newspaper that "the bank's recent returns reflect substantial investment in expanding its ability to serve customers and expand its customer base and create long-term shareholder value". However, shareholders and the market don't appear to be buying this and there is little confidence reflected in the stock price, according to Mr. Koury.

The activist investor also pointed out another problem: The company reduced its second quarter provisions and added a modest provision for the first quarter of 2007. This could be an attempt to artificially boost the company's earnings in order to convince shareholders that it is on the right track when it is really simply pushing numbers around on the balance sheet.

"A skeptic might wonder if the second quarter provision was reduced in order that the Company might show quarter to quarter comparisons that, just by happenstance, were equal to one another," said Koury in a letter to the board. "It also makes a shareholder wonder if perhaps the loan loss provision was being 'managed' in order to boost earnings and hence impact management compensation."

In the end, it will be interesting to see what becomes of this situation. Any sale of the company could result in a windfall for shareholders while a board that continues to ignore shareholders could be detrimental. Overall, this stock is definitely one worth watching in case any actions take place that would increase the likelihood of a sale.

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Chiquita Brands International (NYSE:CQB) announced a broad restructuring plan that involves the elimination of 160 managment positions and business model alterations designed to accelerate its previously announced strategy to improve profitability and efficiency. Shareholders are hoping that these moves can help pump life into a stock that has traded sideways for a year.

"While we have already taken various actions to strengthen our balance sheet, improve our risk profile and diversify the company, we continue to endure rising industry costs, punitive European banana import regulations, and a slower-than-expected recovery in the value-added salads category," Chief Executive Fernando Aguirre said in a statement.

The distributor and marketer of bananas and farm products said it expects annual cost savings to come through reductions in the company's operating and corporate overhead structure including elimination of management positions and business model changes by planned exit from non-profitable businesses. This is expected to yield sustainable savings of $60 to $80 million anually after a one-time charge of $25 million in the fourth quarter.

"With these changes, however, we will need to redefine our growth targets, since the negative impacts of rising industry costs, the EU tariff regime and the E. coli event have slowed down our strategic growth plan considerably, such that reaching our goals will take us longer than we originally estimated," Aguirre said.

In the end, this is great news for shareholders as any cost savings are a direct boost to the company's bottom line. However, cost cutting can only boost margins so much - unless the company's sales start improving, there may be more trouble on the horizon Combined, these factors make CQB a stock worth watching!

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