Stocks to Watch: Frontier Airlines Flies, Mentor Graphics Sinks

The Day's Winners

Shares of Action Performance (ATN Quote) were rising 5% to $26.91 after the company, which makes motorsports collectibles, said its third-quarter revenue will meet or exceed estimates. The company said it will record revenue of at least $106 million to $107 million, compared to Wall Street's consensus estimate of $107 million.

Auto supplier Aftermarket Tech (ATAC Quote) was gaining 3% to $19.63 after raising its second-quarter earnings guidance. The company expects to earn 46 cents a share, up from a previous forecast of 44 cents. Analysts are looking for 44 cents. Aftermarket said the new outlook comes despite "softening" in its drivetrain segment due to the mild winter weather. The company also reiterated its goal of $1.90 per share for the year.

Frontier Airlines (FRNT Quote) was climbing 10% to $8.28 on an upgrade from Raymond James. The brokerage firm raised its rating on Frontier to buy from market perform, saying that investors should be able to realize a "very good" return from the stock over the next year. The firm set a new price target of $11 on Frontier.

Local and long-distance phone services provider Talk America (TALK Quote) tacked on 10% to $3.80 after the company said it will exceed its previous guidance for the second quarter. The company said it expects to exceed its prior earnings before interest, taxes, depreciation and amortization forecast of $12 million to $14 million. Talk America added that it anticipates billed local lines for the quarter to also exceed its previous estimate of 230,000 to 240,000 lines.

The Day's Losers

Allegheny Energy (AYE Quote) was dropping 6% to $24.50 after the company warned that profits would be about 30% lighter than expected and it would cut about 600 jobs. The utility company fell to a new 52-week low after saying mild weather, low power prices and a slowdown in energy trading will slash its full-year earnings to $2.50 to $2.70 a share, well below its earlier guidance of $3.60 to $3.70. In addition, Allegheny said it has canceled power projects in Arizona and Indiana that would have cost about $700 million over the next few years.

Bruker Daltonics (BDAL Quote) was shedding 10% to $4.10 after the company lowered its 2002 revenue forecast and announced plans to cut its workforce by 10%. The maker of scientific research tools cut its revenue growth estimates to 18% to 22% from 22% to 27% for the year. Bruker, citing ongoing economic uncertainties and slower bookings, also said it will cut some jobs. The company said the restructuring should result in savings of $2.5 million next year and will allow the company to meet its 2003 earnings guidance of 12 cents to 15 cents a share.

Software provider Hummingbird (HUMC Quote) slid 15% to $15.81 after the company warned of a third-quarter earnings and revenue shortfall. Hummingbird expects to post a loss of about 9 cents to 11 cents a share on revenue of $43 million to $44 million. On an operating basis, the company expects to earn 24 cents to 26 cents a share. Analysts had been looking for operating earnings of 32 cents on revenue of $48.2 million for the quarter.

Shares of hardware and software design company Mentor Graphics (MENT Quote) were plunging 39% to $9.92 after the company warned late Friday of a second-quarter loss on disappointing sales. Mentor expects a loss, including acquisition charges, of about $30 million, or 40 cents a share. Excluding the charges, Mentor expects to break even, way down from Wall Street's consensus estimate of earnings of 16 cents a share. Revenue for the quarter should be around $135 million. The stock was also downgraded to neutral from strong buy by D.A. Davidson.