Bell Atlantic(BEL Quote) and Vodafone AirTouch(VOD Quote) said they would spin off a part of their U.S. wireless joint venture, Verizon Wireless , in an IPO. The companies said Verizon would put $3 billion toward developing its network. Bell Atlantic advanced 2 3/16 to 65 1/4, while Vodafone AirTouch declined 4 1/2, or 8.1%, to 51.
Mergers, acquisitions and joint ventures
Italian airliner Alitalia stated today that a merger with its strategic partner KLM Royal Dutch Airlines (KLM Quote) was only one of the issues currently under discussion between the two. The Italian financial daily Il Sole 24 reported earlier that Alitalia and KLM had stepped up talks to consider a full merger. KLM Royal Dutch Airlines lifted 3/16 to 20 3/8. Cable & Wireless (CWP Quote) lost 3 13/16, or 7.1%, to 49 9/16 after it said it entered a three-year, $91 million online hosting agreement with Microcast. The deal calls for Cable & Wireless to supply the video-streaming provider with Web connectivity that would link Microcast's video-server installations to Cable & Wireless' Internet protocol network. Interpublic Group(IPG Quote), an advertising firm, and NFO Worldwide(NFO Quote) said that the terms of their planned merger have been adjusted, leaving Interpublic to pay $581 million in stock for NFO. According to the revised deal, NFO holders would now receive .5503 shares of Interpublic, with the breakup fee rising to $30 million from $25 million. NFO can only exercise its terminate option if Interpublic's price drops below $44.80. NFO said it received a rival bid from a third party which it said was unacceptable. Interpublic Group climbed 1 1/4 to 48 5/8. NFO Worldwide also rose 1 5/19, or 5.5%, to 25 1/16. JDS Uniphase (JDSU Quote), which specializes in fiber-optic equipment, said it has agreed to acquire privately held Cronos Integrated Microsystems in a stock deal valued at $750 million. Cronos develops micro-electromechanical systems that are incorporated into optical communication switches. JDS Uniphase fell 15, or 13.4%, to 96 5/8. The European Commission said it has postponed its deadline to render a decision on the MCI WorldCom (WCOM Quote) and Sprint(FON Quote) merger until July 11. According to the EU, the initial July 4 deadline was extended by a week to allow the agency to gather additional information from the company. MCI WorldCom dropped 15/16 to 44 1/2, while Sprint descended 3/4 to 62. Solectron (SLR Quote), an electronic manufacturing services company, announced an agreement with Nortel Networks (NT Quote) to acquire some of Nortel's assets in North America and Asia. The companies are also discussing outsourcing certain manufacturing and repair operations in Europe. Under terms of the deal and proposed agreements, Solectron will pay approximately $900 million to assume these operations. The companies also agreed to enter into a four-year supply agreement valued in excess of $10 billion. Solectron rose 2 5/8, or 6.7%, to 41 7/8, while Nortel Networks slumped 14, or 11.7%, to 105 3/4. Earnings/revenue reports and previews
(Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.) Ariba (ARBA Quote) dropped 3 9/16 to 85 1/8 after said that it would post second-quarter revenue of between $36 million and $38 million, edging out the analyst consensus estimates by 25% to 30%. The 22-analyst estimate sees the company reporting a loss of 8 cents a share. The company attributed the solid revenue outlook to B2B platform demand. Separately, Bank of America(BAC Quote) and Ariba said they entered a B2B e-commerce pact. Bank of America fell 5/16 to 55 3/16.
Avnet (AVT Quote), a distributor of electronic components and computer products, stated that it expects third-quarter earnings per share, before special charges, to exceed analysts' estimates by about 10%. The six-analyst estimate calls for third-quarter earnings of 92 cents a share. Avnet said third-quarter sales exceeded $2.6 billion, reflecting a cyclical recovery in the electronic components industry and the company's recent acquisition activity. Avnet declined 1 15/16 to 59 3/8. Fairchild Semiconductor (FCS Quote) said first-quarter sales would increase 10% from the fourth quarter. Fairchild also said it expects first-quarter earnings to beat the four-analyst estimate of 38 cents a share. The company said it is aiming to double its revenue by 2002 and hit a 10% market share. Fairchild Semiconductor moved down 1 3/8 to 33 5/16. Federated Department Stores(FD Quote) said its March same-store sales fell 0.6%. Federated Department Stores lost 1 to 41 3/4. Kaiser Aluminum (KLU Quote) announced that its financial results for the first quarter of 2000 will include a pre-tax gain of approximately $14 million, or 11 cents a share after tax, to reflect "mark-to-market adjustments" on certain aluminum hedging contract positions. Kaiser Aluminum stayed flat at 4 3/4. Picturetel(PCTL Quote) cautioned investors that its first-quarter revenue and earnings would fall short of previous forecasts. The company said it expects to post a first-quarter loss between 55 cents and 60 cents a share, wider than the four-analyst estimate of a 34-cent loss. Picturetel blamed the weak results on customer order deferrals. Picturetel fell 1 7/8, or 22.7%, to 6 3/8. Unisys (UIS Quote) warned investors that it would report first-quarter revenue of between $1.66 billion and $1.69 billion, falling below prior forecasts. The company said it remains on track to post first-quarter earnings within the 11-analyst estimate range of 33 cents to 34 cents a share. The company blamed its revenue shortfall on a softer-than-expected sales recovery after Y2K. Unisys declined 3 7/16, or 13.5%, to 22. Walgreen(WAG Quote) said its March same-store sales increased 8%. Walgreen rose 1 7/16, or 5.7%, to 26 7/8. Offerings and stock actions
Teligent(TGNT Quote) slipped 5 7/16, or 9.9%, after pricing a 5 million-share offering of its Class A stock at $50 a share. Analyst actions
This morning, Procter & Gamble (PG Quote) was upgraded to buy from market perform at Donaldson Lufkin & Jenrette. The firm -- which placed a 70 to 75 12-month price target on the stock -- said that Procter & Gamble shares were "oversold within its group." Procter & Gamble popped 3 7/16, or 5.7%, to 63.
Bear Stearns rolled out coverage of Ballard(BLDP Quote) and Power Plug(PLUG Quote) with buy ratings. Ballard slipped 8, or 10%, to 71 5/8 and Power Plug edged up 3 11/16 to 79 7/8. Bindview (BVEW Quote): rating DOWN to near-term accumulate from buy at Merrill Lynch; rating DOWN to market perform from buy at Deutsche Banc Alex. Brown. Bindview sank 16 1/2, or 64.5%, to 9 1/16. Core Laboratories(CLB Quote): DOWN to buy from strong buy at Alex. Brown. Core Laboratories declined 7/16 to 30 9/16. Diamond Offshore Drilling (DO Quote): rating UP to buy from hold at Warburg Dillon Read. Diamond Offshore Drilling slid 7/16 to 41 3/8. Emerson Electric (EMR Quote): coverage INITIATED with a strong buy rating at Morgan Stanley. Emerson Electric jumped 2 7/16 to 55 1/2. Espeed(ESPD Quote): NEW strong buy; price target of 80 at CIBC World Markets. Espeed lost 9 1/2, or 21%, to 35 1/2. Ingersoll-Rand (IR Quote): coverage INITIATED with an outperform rating and a 57 price target at Lehman Brothers. Ingersoll-Rand lifted 2 11/16, or 6%, to 46 15/16. Louis Dreyfus Natural Gas(LD Quote): DOWN to hold from strong buy at Warburg Dillon Read. Louis Dreyfus Natural Gas fell 3/16 to 28 7/8. Parker Hannifin (PH Quote): coverage INITIATED with an outperform rating and a 50 price target at Lehman Brothers. Parker Hannifin added 13/16 to 42 5/8. R&B Falcon (FLC Quote): rating UP to buy from hold and price target raised to 35 at Warburg Dillon Read. R&B Falcon skidded 1 7/16, or 6.7%, to 19 13/16. Rowan (RDC Quote): rating UP to buy from hold; price target UP to 42 at Warburg Dillon Read. Rowan declined 1 1/8 to 28 7/8. StarTek(SRT Quote): DOWN to hold from buy at Credit Suisse First Boston. StarTek plummeted 23, or 31%, to 51. Telecorp PCS(TLCP Quote): NEW buy; price target of 56 at Alex. Brown. Telecorp PCS slid 4, or 7.4%, to 49 5/8. Tiffany (TIF Quote): NEW rating of buy and price target of 100 at Thomas Weisel by analyst Anne-Marie Lillestrand. Tiffany stumbled 2 to 81. UAL(UAL Quote): UP to buy from hold at ING Barings. UAL was unchanged at 60 1/8. Miscellany
A federal judge ruled that Microsoft (MSFT Quote) broke federal antitrust law by abusing its monopoly in PC operating systems. Judge Thomas Penfield Jackson said the software maker violated key parts of the Sherman Antitrust Act. The finding will lead to consideration of penalties, including a possible breakup of the company. Microsoft said it would eventually appeal the judge's ruling and expressed confidence that it would prevail in the case. Microsoft fell 3 13/16 to 87 1/16. For more details on the decision, see separate coverage from the TheStreet.com/NYTimes.com joint newsroom..
E*Trade was losing 4 7/8, or 185, to 22 1/2 after it said it would offer online banking services, which include interest-bearing checking and savings accounts through it newly launched E*Trade Bank. The Web brokerage merged with Telebank, an online bank, less than three months ago. The service would enable users to combine and move funds between their bank and brokerage accounts. The Heard on the Street column in The Wall Street Journal discusses investors' shift to Old Economy stocks in the wake of the carnage in Microsoft and the Nasdaq's nose dive yesterday.
