Friday: Tobacco Companies Say They'll Swallow 'Bitter Pill'

Compiled by John J. Edwards III
Staff Reporter

Well, our long national nightmare is over. No more smoking. Ever. Happy, clean-lunged children will cavort in the parks built on the ruins of Philip Morris (MO Quote - Cramer on MO - Stock Picks) headquarters, and we'll all live to 100. And if you believe that, stop by our office after you read these post-close items. We've got a bridge to Brooklyn that you'd just love.

Late news on the tobacco settlement, which would require tobacco companies to pay $368.5 billion over 25 years and meet a host of other conditions: In a statement, the companies called the deal a "bitter pill" but added that they were willing to accept the terms in the interest of moving on. And Brooke Group (BGL Quote - Cramer on BGL - Stock Picks), whose Liggett unit reached a separate settlement last year with 25 states, said it would fight to enforce its existing deal.

The CFO of Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks) said the company's fiscal 1998, ending June, will see continued research-and-development margin pressure and higher investments in sales and marketing, according to Reuters. The official wouldn't discuss the current quarter, citing the company's quiet period. The First Call 25-analyst consensus estimate for the current fourth quarter is 79 cents per share, matching the third-quarter figure and up from the year-ago 44 cents.

CACI International (CACI Quote - Cramer on CACI - Stock Picks) said it expects to report fourth-quarter earnings of 14 cents per share, well below the First Call six-analyst consensus view of 27 cents and the year-ago 25 cents. The company cited losses on a fixed-price contract, reduced U.K. profits and investments on marketing its Year 2000 service.

OPTI (OPTI Quote - Cramer on OPTI - Stock Picks) said it expects to lose 30 cents to 45 cents per share in the third quarter, missing the First Call two-analyst expectation of a 3-cent loss. The company lost 66 cents in the year-ago period.

Seven black workers at Sikorsky Aircraft, a unit of United Technologies (UTX Quote - Cramer on UTX - Stock Picks), filed a lawsuit charging the company with racially discriminatory policies and practices.

Red Lobster and Olive Garden parent Darden Restaurants (DRI Quote - Cramer on DRI - Stock Picks) said its corporate president and chief operating officer, Jeffrey O'Hara, resigned as part of the company's restructuring plan. He will remain a consultant. Darden, which hopes to save $15 million to $20 million a year through the plan, said it is seeking a new Red Lobster president from outside the company for a "fresh perspective." Executives who had reported to O'Hara will report directly to CEO Joe Lee in the interim. The Street looked at Darden's turnaround prospects in a June 5 story.

Bankrupt casino company Stratosphere (TOWVQ:Nasdaq) filed an amended Chapter 11 reorganization plan, saying it failed to meet the cash-flow goals of the original plan. Grand Casinos (GND Quote - Cramer on GND - Stock Picks) said it terminated its investment pact with Stratosphere and entered into a new one.

Standard & Poor's said AK Steel (AKS Quote - Cramer on AKS - Stock Picks) will join the S&P MidCap 400 after the close of trading Wednesday. It will replace VeriFone (VFI Quote - Cramer on VFI - Stock Picks), which is merging with Hewlett-Packard (HWP Quote - Cramer on HWP - Stock Picks).

You can respond to this story by posting in the Equity Markets Forum.