Analog Devices (ADI Quote) jumped 5 5/8, or 8.3%, to 73 3/8 after it reported second-quarter earnings of 32 cents a share, beating the 18-analyst estimate of 29 cents and the year-ago 11 cents. Analog said its quarterly earnings tripled amid booming demand for chips in cell phones and other products. The company also forecast higher third-quarter earnings-per-share and said revenues could rise more than 65% for the full year. It expects third-quarter earnings between 36 cents and 37 cents a share based on a backlog, which is above the 17-analyst estimate of 31 cents. The company said it expects third-quarter revenue of $640 million to $650 million and that 2000 revenues could exceed $2.4 billion.
The earnings did little to cheer the rest of the chip sector, with the Philadelphia Stock Exchange Semiconductor Index off 1.8% on news of a minor earthquake in Taiwan and some profit-taking after yesterday's gains.
Merger partners
Lycos (LCOS Quote) and Spanish Internet service
Terra Networks (TRRA Quote) lost their earlier upward momentum after a number of analysts downgraded the stocks today. (See details below.)
Mergers, acquisitions and joint ventures
Spanish Internet company Terra Networks dropped 6 9/16, or 12.3%, to 47 after it agreed to buy Internet portal Lycos for $12.5 billion in stock, or $97.55 a share. Lycos sank 15 1/64, or 20.7%, to 57 39/64. The combined company, to be called Terra Lycos, will have an estimated 50 million unique users and 175 million daily page views. As part of the agreement, Germany's Bertelsmann agreed to purchase $1 billion of advertising, placement and integration services over five years. This morning ABN Amro cut Lycos to hold from outperform, while Merrill Lynch analyst Peter Bradshaw cut Terra to neutral from accumulate. In his note, Bradshaw said, "We expect the premium paid for Lycos may outweigh the synergies gained. As a result we expect a transfer of value towards Lycos and away from Terra." Also this morning, UBS Warburg downgraded Lycos to hold from buy. For more on this story, see coverage from TheStreet.com/NYTimes.com joint newsroom.
Online consumer automotive firm Autoweb (AWEB Quote) added 1, or 28.1%, to 4 9/16 and America Online (AOL Quote) lost 15/16 to 57 1/16 after it signed a four-year deal that will boost AOL's online car sales offerings to its more than 22 million subscibers. A group of major chemical companies agreed to form a B2B e-commerce company to operate an online marketplace for the global chemicals industry. The companies include BASF, Bayer, BP Amoco (BPA Quote), Dow (DOW Quote) and DuPont (DD Quote). BP Amoco slipped 1/8 to 53 3/8, Dow dropped 2 1/2 to 112 1/8 and DuPont lost 3/16 to 52 3/4. Oil giant Chevron(CHV Quote) lost 15/16 to 91 5/16 after it agreed to buy a 5% stake in the Tengizchevroil oil joint venture from the Kazakhstan government, in a deal worth over $450 million. The purchase will bring Chevron's stake in the oil project to 50% and reduce Kazakhstan's stake to 20%. ExxonMobil(XOM Quote) also owns 25% of the project. ExxonMobil lost 1 7/8 to 81 3/8. General Electric (GE Quote) fell 5/8 to 53 5/8 after its NBC unit and Time Warner's (TWX Quote) Time Warner Cable unit said they signed a retransmission pact through 2008. Time Warner fell 2 3/16 to 83 13/16. Hughes Electronics (GMH Quote) is likely to benefit from billionaire investor Craig McCaw's decision to merge his planned Teledesic with ICO Global Communications' satellite phone project, The Wall Street Journal reported. Hughes fell 2 1/4 to 87 1/2 despite the news. Hughes' satellite-making unit is scheduled to direct all engineering, systems-integration and testing efforts for ICO, as well as supply up to eight additional satellites beyond the 12 already announced by the venture, the story said. Data communications company KPNQwest (KQIP Quote) dropped 2 3/4, or 7.4%, to 24 1/2 after it said Qwest Communications International (Q Quote) sealed a multimillion-dollar multiyear deal with Microsoft (MSFT Quote) for high-speed Internet access. Qwest International lost 9/16 to 46 11/16 while Microsoft moved down 1 13/16 to 67 11/16. M&T Bank(MTB Quote) fell 14 1/16 to 400 15/16 after it said it will buy Keystone Financial(KSTN Quote) for $1 billion. Keystone gained 4 1/4, or 27%, to 20. Under terms of the merger, Keystone shareholders may elect to receive 0.05 of a pre-split share of M&T common stock or $21.50 in cash in exchange for each outstanding share of Keystone common stock. Simultaneous with the completion of the merger, M&T intends to declare a 10-for-1 split on its common stock. StaffMark (STAF Quote), a staffing services company, slipped 1/8 to 7 1/8 after it said it will sell its Commercial Services division to investment firm Stephens Group for $196 million in cash. Xerox(XRX Quote) fell 1/8 to 27 1/8 and Dell (DELL Quote) lost 3/4 to 49 1/8 after the companies announced a strategic marketing relationship which calls for Dell to carry out the direct marketing of Xerox-branded office printers in the United States, followed by Europe and other worldwide markets later this year. The joint marketing agreement with Dell represents the most significant relationship to date between Xerox and a leading personal computer company involving color and black-and-white laser and solid ink printers. Back to top Earnings/revenue reports and previews
(Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.) Hewlett-Packard (HWP Quote) was hit by profit taking, falling 7 13/16, or 5.6%, to 130 11/16 after it reported second-quarter earnings of 87 cents a share before items, beating the 23-analyst estimate of 82 cents and the year-ago 73 cents. Total revenue grew 15% to $12 billion from $10.4 billion in the previous year. Hewlett-Packard said the latest results reflect a company reinvention that set it on a course of consistent double-digit growth. Lehman Brothers raised its 2000 earnings-per-share view on Hewlett-Packard to $3.50 a share from $3.40. H-P spinoff Agilent Technologies (A Quote) also dropped after reporting second-quarter results. Agilent slid 10 9/16, or 11.9%, to 77 15/16. The company said it earned 36 cents a share in the latest quarter, including a gain of 4 cents. The 11-analyst estimate called for 32 cents, while the year-ago earnings were 41 cents. Agilent said the 11% decline in its operating earnings reflected planned activities related to operating independently. For more on these earnings, see coverage from TheStreet.com/NYTimes.com joint newsroom.
Campbell Soup (CPB Quote) lost 1 3/16 to 29 1/4 after it posted third-quarter earnings of 32 cents a share, beating the 13-analyst estimate of 31 cents but below the year-ago 37 cents a share. Consolidated Stores(CNS Quote) slipped 3/8 to 11 15/16 after it reported a first-quarter loss of 12 cents a share, beating the 14-analyst estimate of a 15-cent loss, but an increase over the year-ago loss of 3 cents. The first-quarter loss, excluding the company's online toy store Kbkids.com, was 5 cents a share. Level 3 (LVLT Quote) lost 1 3/4 to 80 5/8 after it said it foresees $750 million in revenues for 2000, and $1.7 billion in 2001. Ross Stores(ROST Quote) dropped 1 13/16, or 8%, to 20 3/4 after it reported first-quarter earnings of 47 cents a share, in line with the 13-analyst estimate and up from the year-ago earnings of 37 cents a share. Talbots(TLB Quote) edged up 7/8 to 53 5/8 after it reported first-quarter earnings of $1.04 a share, in line with the 14-analyst estimate and up from the year-ago earnings of 62 cents. TD Waterhouse (TWE Quote), the online brokerage owned by Canada's Toronto-Dominion Bank (TD Quote), posted second-quarter earnings of 20 cents a share, beating the 10-analyst estimate of 16 cents and more than double the year-ago 9 cents. The company reported earnings of 15 cents a share in the previous quarter. Excluding goodwill amortization, TD Waterhouse said earnings were 23 cents in the latest quarter and 11 cents a year ago. TD Waterhouse revenues during the quarter rose 22% to $488.7 million from $381.6 million last quarter and were up from $249 million a year ago. A slowdown in trading during the month of April hit growth in revenue trades per day. Trades grew 25% on the quarter to 239,800 from 179,400 in the three months ended Jan. 31. That's a slowdown from the 40% growth to 236,600 trades the company was averaging during the first three months of the year when stock trading volumes were at record heights. TD Waterhouse slipped 1/8 to 18 9/16. Toro(TTC Quote) tacked on 7/16 to 32 5/16 after it reported second-quarter earnings of $2.08 a share, beating the three-analyst estimate of $1.96 and up from year-ago earnings of $1.83 a share. Intel (INTC Quote) climbed 1 5/16 to 123 3/16 after it set a 2-for-1 stock split. Back to top Analyst actions
Upgrades Enron (ENE Quote): price target UP to 100 from 90 at FAC/Equities. Enron slipped 3/8 to 77 1/2. Public Service Enterprises (PEG Quote): UP to buy from hold at ABN Amro; price target: 44. Public Service Enterprise lost 1/2 to 35 5/8. Sprint PCS (PCS Quote): UP to strong buy from buy at W.R. Hambrecht; price target: 85. Sprint PCS gained 2 5/8 to 57. Downgrades AT&T (T Quote): price target DOWN to 65 from 75 at Salomon Smith Barney. AT&T shed 11/16 to 38 1/16. Schwab (SCH Quote): earnings estimates DOWN at Salomon Smith Barney. Second quarter EPS down to 24 cents from 28 cents; third-quarter at 23 cents from 25 cents; fourth-quarter to 31 cents from 33 cents and 2000 EPS at $1.12 from $1.19 and 2001EPS at $1.35 from $1.45. Schwab fell 1 15/16 to 43 3/4. TriZetto Group (TZIX Quote): DOWN to buy from strong buy at Wit Soundview. TriZetto Group dropped 4 15/16, or 20.6%, to 19 1/16. Initiations Agile Software (AGIL Quote): NEW buy at Wit SoundView; price target: 65. Agile Software missed 1 3/4 to 44 1/2. Citizens Communications (CZN Quote): NEW buy at Bear Stearns; price target: 25. Citizens Communications lifted 1/8 to 15 5/8. Engage (ENGA Quote): NEW buy at ING Barings; price target: low 30's. Engage traded down 15/16 to 18 15/16. Igen International (IGEN Quote): NEW buy at UBS Warburg; price target: 30. Igen International declined 1/8 to 16 3/8. SpectraSite (SITE Quote): NEW buy at Lehman Brothers; price target: 31. SpectraSite staggered 5/8 to 20. Group Moves Credit Suisse First Boston raised the price targets for two retailers: Limited (LTD Quote): raised to 55 from 46. Limited dropped 1 1/4 to 48 3/8. Tiffany (TIF Quote): raised to 80 from 75. Tiffany lost 2 1/2 to 70 7/16.
UBS Warburg initiated coverage of two business-to-business electronic commerce firms: Ariba (ARBA Quote): INITIATED buy. 12-month price-target: 90. Ariba moved down 4 3/16, or 5.9%, to 67 1/4. Commerce One (CMRC Quote): INITIATED buy. 12-month price-target: 65. Commerce One decreased 3 1/16, or 6.2%, to 46 3/16.
Back to top Miscellany A federal jury ordered Bear Stearns (BSC Quote) to pay $111.5 million to Henryk de Kwiatkowski, a Canadian investor, who claimed the firm's negligence resulted in currency-trading losses of $300 million in his account, the Journal reported. Bear Stearns inched up 3/16 to 42 3/4 despite the news. Mattel (MAT Quote) moved up 1 1/2, or 13.3%, to 12 3/4 after it named Robert Eckert, the 45-year-old head of Philip Morris' (MO Quote) Kraft Foods unit, as chairman and CEO. Eckert succeeds Jill Barad. Salomon Smith Barney upgraded Mattel to buy from hold and said it is carrying a price target of 16 but recognizes there could be significantly more upside if the turnaround is successful. TheStreet.com's Brett D. Fromson took a look at Eckert's appointment in a story this evening. TheStreet.com Inc. (TSCM Quote), publisher of this Web site, moved up 7/8, or 12.4%, to 7 15/16 after it said it is canceling its television program, which runs on the Fox News Channel, because of differences with the broadcaster and parent company News Corp. (NWS Quote). News Corp. lost 1 to 49 1/8. The Heard on the Street column in the Journal said T. Rowe Price technology fund manager Charles "Chip" Morris has reduced holdings of bellwethers like Dell, Intel and Microsoft in favor of smaller tech companies that are more focused on communications, networking and the Internet. Alternatives such as Sun Microsystems (SUNW Quote) and Oracle (ORCL Quote) may be more expensive, but according to Morris, "the epicenter of technology is shifting away from the PC."
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