Stocks to Watch: SanDisk Rises, but ADP Plunges

The Day's Winners

Pharmaceutical Product Development (PPDI Quote) was up 10% to $19.62 after reporting a 65% increase in net income and increasing its full-year guidance. The company said it earned $17.2 million, or 31cents a share, in the second quarter, up from 20 cents a year ago and in line with estimates. Revenue was up 39% to $42.2 million. For the full year, the company boosted its forecast to a range of $1.23 to $1.27 a share, up from $1.21 to $1.25.

Quintiles Transnational (QTRN Quote) added 4% to $8.82 after reporting stronger second-quarter results despite a decrease in revenue. The pharmaceutical testing company said it earned $20.6 million, or 17 cents a share, up from $9.7 million, or 8 cents a share. Analysts had been looking for about 15 cents. Revenue dropped to $390 million from $406 million, but cost-cutting measures contributed to the better than expected earnings.

SanDisk (SNDK Quote) added 5% to $15.75 after reporting its first operational profit in more than a year. The company earned $9 million, or 13 cents a share, in the second quarter, compared with a loss of $3.7 million, or 5 cents a share, in the first quarter. Analysts had been looking for a loss of 17 cents in the quarter. Revenue was up sequentially to $127.7 million from $92.6 million. SanDisk said it saw "surprisingly strong growth in global retail and consumer OEM sales."

Shares of United Healthcare (UNH Quote) were up about 4% to $95.90 after the company reported a 46% increase in second-quarter profits thanks to membership growth and price increases. The company earned $325 million, or $1.01 a share, up from $223 million, or 68 cents a share, last year. Analysts expected 95 cents. Revenue increased 5% to $6.08 billion. For the year, United expects to earn $4 to $4.05 a share, compared with the consensus estimate of $3.87.

The Day's Losers

Automatic Data Processing (ADP Quote) fell 22% to $32.26 after the company missed analysts' consensus earnings estimate and the stock was downgraded by Prudential Financial. ADP said its fourth quarter was hurt by lost business from bankruptcies as the company reported earnings of 46 cents a share, up from 40 cents a year ago, but below the consensus estimate of 47 cents. Prudential cut its rating on the stock to sell from hold, saying cost cutting can no longer cover for the deteriorating fundamentals in the company's business. The firm cut its 2003 earnings estimates on ADP to $1.86 on revenue of $7.38 billion from earnings of $1.98 on revenue of $7.63 billion. Prudential also cut its price target on the stock to $35.

Insight Enterprises (NSIT Quote) plunged 47% to $12.55 on a lowered outlook and a stock downgrade. The company said it will earn 26 cents to 29 cents in the second quarter, down from earlier guidance of 31 cents to 35 cents. Also, the company said its U.K. division president and COO resigned following weaker than expected sales results from the unit. Raymond James downgraded the stock to market perform from strong buy on the news, saying investors should stay on the sidelines until further information about the shortfall is available.

Shares of reservations company Sabre Holdings (TSG Quote) dropped 11% to $25.52 after the company warned of a slow recovery in the travel sector. The company earned $68 million, or 57 cents a share before items, up from $28 million, or 20 cents a share, last year. Analysts had been expecting 56 cents, but Sabre warned of trouble ahead. The company said the travel industry "is not recovering as we had anticipated." The company lowered its full-year earnings guidance to $1.85 to $1.95 a share from its earlier forecast of $1.93 to $2.03.

Tollgrade Communications (TLGD Quote) shed 6% to $16.01 after the company said difficult market conditions caused its second-quarter earnings to fall 68%. Tollgrade, which makes testing equipment for telecommunications companies, said it earned $1.2 million, or 8 cents a share, in the quarter, down from $3.8 million, or 28 cents a share, a year ago. Analysts had been expecting 7 cents a share. Revenue fell to $14.6 million from $21.8 million last year. Tollgrade forecast third-quarter revenue of $12 million to $15 million with earnings ranging from breakeven to 6 cents a share, below the current consensus of 8 cents.