Thursday's Winners & Losers: Musicland, Brinker, Hasbro, Scient

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M&A Earnings/revenue Analyst actions Offerings/stock actions Miscellany By the numbers

Updated from 11:13 a.m.

Sound familiar? Motorola(MOT) this morning became the latest tech company to say it will miss already-lowered earnings targets for the fourth quarter.

Motorola, a maker of cell phones and semiconductors, said sales for the fourth quarter will be $10 billion and earnings will be 15 cents a share. Motorola had earlier said it would hit sales of $10.5 billion and have earnings of 27 cents a share for the quarter. The 25 analysts polled by First Call/Thomson Financial are expecting Motorola to earn 27 cents a share.

The company said first-quarter 2001 sales are expected to be $8.8 billion, with earnings per share of 12 cents. Motorola said it wouldn't give full-year 2001 guidance until it announced its final earnings results for 2000, but that those estimates, too, will likely be lowered. Motorola previously said it was expecting $44 billion in 2001 sales and $1.20 per-share earnings. Analysts are expecting earnings of $1.18 for 2001, according to First Call.

Motorola blamed the slowdown in the chip sector and "delays in achieving expected cost reductions in wireless phone production." In October, Motorola had said the weak euro would hit its fourth-quarter results.

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Hasbro(HAS) warned that it expects 2000 EPS to -- at best -- break even, but the world's largest toymaker could record a loss of 10 cents to 20 cents a share. That's way below the 11-analyst estimate of a 43 cent profit.

The company also said it's selling its interactive and Games.com units to French entertainment company Infogames Entertainment for about $100 million in cash and stock. And it will cut its staff across all divisions by 750, well over the previously expected 500 to 550 job cuts.

TheStreet.com covered the warning more in-depth in a separate story.

Lehman Brothers cut its fourth-quarter EPS view to a loss of 37 cents from earnings of 20 cents a share. It also slashed 2000 EPS estimates to a loss of 15 cents a share from earnings of 40 cents.

Mergers, acquisitions and joint ventures

Univision Communications(UVN) plans to acquire USA Broadcasting, the television station group of USA Networks(USAI), for $1.1 billion in cash.

Univision, based in Los Angeles, broadcasts Spanish-language television. The company will acquire USA Broadcasting's 13 fully owned full-power stations, as well as USA Networks' minority interests in four additional full-power stations. Univision owns and operates 12 full- and seven low-power television stations. The acquisition includes stations in Chicago, Los Angeles, New York and Philadelphia.

Musicland(MLG) works fast. Yesterday, the mall-staple music chain said it was in talks with a third party about a "combination." Today, it announced that electronics retailer Best Buy(BBY) is buying it for about $403.1 million, or $12.55 a share.

The tender offer, expected to begin late this month, should be completed in the first quarter of 2001.

Musicland operates 1,331 retail stores under the names Media Play, On Cue, Sam Goody and Suncoast. Best Buy recently announced that its same-store sales for its third quarter rose 5.9% and that it would meet estimates for that quarter.

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Earnings/revenue reports and previews

Ding-dong! Avon Products(AVP) said it expects to report fourth-quarter and full-year earnings in line with estimates. The beauty products peddler also said it's comfortable with estimates for 2001 earnings. First Call/Thomson Financial's 13-analyst estimate for the fourth quarter is currently 65 cents and for the full year is $1.87.

Avon CEO and President Andrea Jung said in a statement, "Based on everything we see right now, we're comfortable with the range of $2.10 to $2.12 per share that most analysts are estimating, even after continued healthy increases to fund our growth strategies in 2001. First Call's estimate is $2.10 for 2001.

Ciena(CIEN) posted fourth-quarter earnings that exceeded analysts¿ expectations by 2 cents, and raised its revenue expectations for full-year 2001.

The telecommunications-equipment maker earned $41.3 million, or 14 cents a share, excluding provisions for doubtful accounts and payroll tax on stock option exercises, compared with earnings of $4.7million, or 2 cents a share, in the same period last year. According to First Call/Thomson Financial, 22 analysts expected earnings of 12 cents a share for the quarter.

Fourth-quarter revenue was $287.6 million, up from $141.4 million last year.

Ciena also said it sees full-year 2001 revenue growth of 75% to 85% over fiscal 2000 based on expectations that its business will ¿continue to grow faster than the overall market.¿ Analysts on average expect revenues of $1.4 billion in 2001 and $845.1 million in 2000. Revenue for full-year 1999 was $482.1 million.

National Semiconductor(NSM) posted second-quarter earnings of 56 cents a share, a nickel better than the 17-analyst estimate and up from year-ago earnings of 37 cents a share. The company warned that revenue would likely slow in the third quarter. TheStreet.com wrote more about the warning in a separate story.

Viant(VIAN) said it would take a fourth-quarter charge of $5 million to $7 million associated to restructuring costs. The Internet consulting firm said it will cut its work force by 125 employees, including 99 billable consultants. Viant said it expects cost savings of about $18 million in 2001.

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After Wednesday's Close

Brinker(EAT), which owns restaurant chains Chili's and Macaroni Grill, posted a 4.4% jump in same-store sales for November. Based on its latest figures, the company said it's expecting earnings per share to be in the range of 46 cents to 47 cents. First Call/Thomson Financial's 18-analyst estimate for the quarter is currently 46 cents.

Burlington Coat Factory(BCF) reported that its second-quarter sales increased 14.3%. Same-store sales rose 5.1%. The company attributed the increase to strength in its coat and children's clothing departments as well as a cool November.

CSG Systems International(CSGS), a customer care and billing services company, expects earnings for 2001 of $1.98 to $2.05 a share, an increase of 25% to 30% from the earnings forecast for this year.

The nine-analyst estimate projects the company to earn $1.58 a share for 2000 and $2.01 a share for 2001.

The company, which is based in Denver, expects 2001 revenue to reach $475 million to $495 million and said it expects to increase the number of shares outstanding by 150,000 to 350,000 shares a quarter.

Publishing company Journal Register(JRC), which owns 24 daily newspapers, said it's comfortable with the lower end of estimates for its fourth quarter. The company said estimates range from 31 cents to 33 cents. The consensus estimate from five analysts surveyed by First Call/Thomson Financial is 32 cents.

Citing tightening technology spending by its clients and increasing competition, Scient(SCNT) lowered its earnings forecast for the third quarter to a loss of 16 cents a share, before a restructuring charge of $40 million to $45 million.

The San Francisco-based company also said it expects to eliminate about 460 positions worldwide and close offices in Silicon Valley and in Austin, Texas.

A 20-analyst estimate expected the e-business service provider to earn 8 cents a share. The company broke even in the same period a year ago. Scient expects revenue of about $80 million for the quarter, while Wall Street is expecting $108.9 million. The company had revenue of $42.7 million for the year-ago period.

This morning, the stock was cut to neutral from outperform at Morgan Stanley Dean Witter.

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Analyst actions

This morning, Bear Stearns cut Hewlett-Packard's(HWP) 2001 EPS estimate to $1.80 from $1.95 and downgraded the stock to neutral from attractive because of concerns about the industry. And Goldman Sachs lowered 2001 EPS estimates for Microsoft(MSFT) to $1.88 from $1.91 because of sluggish PC sales.

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Upgrades

Comverse Technology(CMVT): 2000 EPS forecast UP to $1.45 from $1.40 at US Bancorp Piper Jaffray; 2001 EPS estimate UP to $1.77 from $1.70 and 2002 EPS UP to $2.12 from $2.04

Dril-Quip(DRQ): UP to strong buy from outperform at Morgan Stanley Dean Witter.

Mattel(MAT): UP to buy from accumulate at Merrill Lynch; and 12-month price target UP to $18.

New York Times(NYT): UP to outperform from neutral at Salomon Smith Barney.

Southern Energy(SOE): UP to strong buy from buy at Banc of America.

Downgrades

Bank of America(BAC): 2000 EPS view DOWN to $4.74 from $5.20 at Prudential Securities, and 2001EPS view DOWN to $5 from $5.82. It was also downgraded to outperform from buy at Lehman.

Breakaway Solutions(BWAY): DOWN to neutral from outperform at Morgan Stanley.

Razorfish(RAZF): DOWN to neutral from outperform at Morgan Stanley.

Solectron(SLR): DOWN to hold from buy at UBS Warburg and its 12-month price target down to $32 from $63.

Visteon(VC): DOWN to market perform from long-term buy at J.P. Morgan. The firm also cut its 2001 EPS view to $1.35 from $3.15 and 2002 EPS to $1.80 from $3.40.

Initiations

Alcoa(AA): NEW long-term buy at J.P. Morgan; and 12-month price target: $38.

Ariba(ARBA) was started at Goldman Sachs as an addition to its recommended-for-purchase list.

Group Moves

Credit Suisse First Boston lowered 2001 estimates on companies in the imaging sector:

• Eastman Kodak(EK): 2001 EPS estimate DOWN to $5.10 from $5.40.

• Polaroid(PRD): 2001 EPS estimate DOWN to $1.40 from $1.60.

• Lexmark(LXK): 2001 EPS estimate DOWN to $2.60 from $2.65.

• Pitney Bowes(PBI): 2001 EPS estimate DOWN to $2.60 from $2.65.

Lehman downgraded auto-parts makers American Axle & Manufacturing Holdings(AXL) and Delphi Automotive Systems(DPH) to outperform from buy.

ABN Amro started coverage on specialty chemical companies, rating the following as the best buys in the industry:

• 3M(MMM)

• Cytec Industries(CYT)

• Symyx Technologies(SMMX)

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Offerings and stock actions

Southern Co.(SO) said its offering of 25 million share was priced at $28.50 a share. It raised the money to repay debt and invest in the company's wholesale generating business and its operations in the Southeast. The utility and energy company increased its offering from 20 million shares because of heavy investor demand.

This morning, Southern Energy, which is 80% owned by Southern, was upgraded to strong buy from buy at Banc of America.

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After Wednesday's Close

Lattice Semiconductor(LSCC) authorized the company to repurchase up to 5 million shares of its common stock. The company said the repurchased shares will be used to offset dilution from employees exercising stock options.

Providian Financial's(PVN) board authorized an extension of the company's stock repurchase program to $500 million.

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Miscellany

Burlington Northern Santa Fe's(BNI) board elected Matthew Rose to succeed Robert Krebs as CEO of the railroad. Krebs will stay on as chairman.

Corning's(GLW) board has approved a plan to invest $450 million to expand a North Carolina optical-fiber manufacturing facility.

Corning estimated that its expansion programs will allow the company to increase fiber manufacturing capacity by at least 25% a year through 2004. The fiber-optic cable company, based in Corning, N.Y., said the expansion will make its Concord, N.C., plant the largest fiber plant in the world.

Deere(DE), which makes heavy equipment, said it plans to invest close to $127 million to update and improve its manufacturing facilities for agricultural equipment at its site in Waterloo, Iowa.

Global online-banking venture Merrill Lynch HSBC said it hired Margaret Barrett as its CEO. Barrett was most recently in charge of consumer lending products in the personal banking division at Bank of Montreal. The joint venture between the two financial powerhouses is aimed at the "mass affluent" market.

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After Wednesday's Close

Cooper Tire & Rubber(CTB) reorganized its tire group into three divisions -- North America, international and commercial products -- headed up by three separate presidents.

Critical Path(CPTH), which provides Internet messaging services, said Lawrence Reinhold will join the company as CFO following the resignation of Mark Rubash, who left the company for personal reasons.

International Game Technology(IGT) named G. Thomas Baker its chief executive. Baker will add the title to a string of them he already has. He's currently president, COO and CFO. He succeeds Charles Mathewson, who will stay on as chairman. The manufacturer of microprocessor-based gaming products and software systems said it will continue to search for a new CFO.

Clothing manufacturer Russell(RML) said D.W. Barney Wachtel will retire as CEO of its athletic division on March 1, 2001. Carol Mabe, who was elected senior vice president Tuesday, will be his successor.

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By the Numbers

5 Biggest NYSE Percent Winners
Name	Price	Change	%
Bethlehem Steel (BS.)	21.9375	7.625	53.3%
Musicland (MLG)	12.1875	1.9375	18.9%
Maverick Tube (MVK)	16.6875	2.5625	18.1%
Meritage (MTH)	28.125	4	16.6%
Shopko (SKO)	5.75	.75	15%

5 Biggest NYSE Percent Losers
Name	Price	Change	%
Hasbro (HAS)	9.125	2.4375	21.1%
Best Buy (BBY)	22.9375	5.875	20.4%
Turkcell (TKC)	6.5625	1.25	16%
Oakley (OO)	15.8125	2.25	12.5%
Russell (RML)	14	1.875	11.8%

5 Biggest Nasdaq Percent Winners
Name	Price	Change	%
Network Engines (NENG)	5.8125	1.75	43.1%
Constellation 3D (CDDD)	6.71875	1.59375	31.1%
Smartserv (Warrants) (SSOLW)	5.6875	1.25	30.5%
Sangstat (SANG)	14.3125	3.25	29.4%
InforMax (INMX)	15.5	3.0625	24.6%

5 Biggest Nasdaq Percent Losers
Name	Price	Change	%
Diamond Technology (DTPI)	21	7.4375	26.2%
Netsolve (NTSL)	6	2	25%
Intersil (ISIL)	22.8125	6.1875	21.3%
InfoVista (IVTA)	15	4	21.1%
V3 (VVVI)	5.0625	1.3125	20.6%

The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.

5 Biggest Dow Point Winners
Name	Price	Change	%
ExxonMobil (XOM)	88	1.75	2.03%
Merck (MRK)	91.0625	1.5	1.67%
Coca-Cola (KO)	62.375	1.5	2.46%
Procter & Gamble (PG)	73.5625	1.4375	1.99%
Eastman Kodak (EK)	39.4375	1.1875	3.10%

5 Biggest Dow Point Losers
Name	Price	Change	%
J.P. Morgan (JPM)	145	3.875	2.60%
Microsoft (MSFT)	53.125	4.4375	7.82%
Alcoa (AA)	29.1875	2.125	6.79%
IBM (IBM)	95.375	1.375	1.42%
AT & T (T)	19.6875	1	4.83%

Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.

Large-Cap Nasdaq Movers
Name	Price	Change	%
Cisco (CSCO)	49.9375	2.25	4.26%
Dell (DELL)	17.4375	.6875	3.48%
Ericsson (ERICY)	13	.625	4.69%
Intel (INTC)	32.3125	.5	1.57%
Microsoft (MSFT)	53.125	4.0625	7.05%
Oracle (ORCL)	28.3125	2.375	7.88%
Qualcomm (QCOM)	104.4375	4.4375	4.47%
Sun Microsystems (SUNW)	42.8125	3.25	7.20%
WorldCom (WCOM)	14.875	.3125	2.07%
Yahoo! (YHOO)	34.9375	2.9375	7.83%

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