Friday's Company Report: BEAM, LU, DVN, ODP, FMO, SDL, ESPD

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M&A Earnings/revenue Analyst actions Offerings/stock actions Miscellany

Microsoft (MSFT) announced that it will delay its highly anticipated strategy announcement scheduled for next week until June 22, because of concerns it will be overshadowed by an expected court decree in the U.S. government's antitrust case against the software giant. The postponed event, called Forum 2000, will spotlight Microsoft's Next Generations Windows Services, the company's new strategy for combining its software with the Internet.

Earlier, the Justice Department refiled its plan to break Microsoft into two, including technical suggestions from Judge Thomas Penfield Jackson. A ruling in the landmark antitrust case could be handed down as early as next week. The revised order resembles the plan filed last month and could force the eventual break-up of Microsoft. Shares of Mister Softee finished down 1/16 to 61 7/16.

For more on the Microsoft update, see coverage from TheStreet.com/NYTimes.com joint newsroom.

Mergers, acquisitions and joint ventures

The Justice Department said it gave its approval for AT&T(T) to acquire MediaOne Group, citing the divestiture of MediaOne's stake in Web access provider Road Runner as the only stipulation. AT&T already holds a controlling stake in Excite@Home(ATHM), the biggest Internet access provider. The merger must still receive Federal Communications Commission approval. AT&T lifted 5/16 to 34 1/4, while Excite@Home slipped 13/16 to 17 11/16.

Eye-care company and Nestle unit Alcon agreed to acquire laser-vision firm Summit Autonomous (BEAM) for $893 million in cash. Alcon said it will begin a tender offer for all outstanding shares of Summit at $19 a share by June 5. Summit Autonomous jumped 5 13/16, or 45.8%, to 18 1/2.

Devon Energy(DVN) agreed to buy Santa Fe Snyder(SFS) in a deal worth about $2.35 billion in stock plus the assumption of $1 billion in debt.

Terms of the deal call for Santa Fe Snyder shareholders, who will own about 32% of the combined company, to get 0.22 of a Devon common share for each Santa Fe common share. Devon shareholders will own about 68% of the company. Both boards approved the merger, which is expected to be accounted for as a "pooling of interests" and to close in the third quarter.

Devon said it will rank among the top five U.S.-based independent oil and gas producers in terms of market capitalization, total proved reserves and annual production. Devon Energy lost 3 1/16, or 5.2%, to 55 5/8.

For more on this story, check out coverage from the TheStreet.com/NY Times.com newsroom.

Baan(BAANF), a Dutch business software company, shed 1/16 to 2 23/32. The company confirmed it was in talks with at least one buyer. The Wall Street Journal reported that people familiar with the matter are saying Baan is in serious talks with British company Invensys PLC(IVNSY). Invensys' spokesman said it would be "not unreasonable" for the company to acquire another electronics or software company, but would not comment on speculation it is about to buy Baan.

Reuters said rumors were circulating that the possible buyer could be Oracle(ORCL). Oracle added 9/16 to 67.

Boeing's (BA) proposed $3.75 billion acquisition of Hughes Electronics' (GMH) satellite-making operation is expected to be delayed for at least two months, The Wall Street Journal reported, citing increasing antitrust scrutiny in the U.S. and Europe.

Separately, Thai Airways International said it plans to buy five Boeing planes under its new five-year business plan starting this year, a company source told Reuters. Boeing lowered 1/8 to 38 1/4, while Hughes Electronics slid 1 91/6 to 94 7/8.

SBC Communications'(SBC) Southwestern Bell Mobile Systems unit chose Anglo-French software and services company Sema Group PLC for its short-messaging service. Financial terms of the deal were not disclosed. SBC Communications lifted 9/16 to 42 5/8.

Sema's short-messaging service center and other services will allow SBC customers to send and receive text messages over their phones.

Sema's managing director told a Credit Suisse First Boston technology conference in Barcelona that the company hoped to be listed on the Nasdaq Composite Index by July or August in order to boost its U.S. presence. The company signed an e-commerce alliance with Lucent Technologies'(LU) spin-off New Enterprise group in April, and bought German-American software house LHS Group(LHSG) for $4.7 billion in shares in March. Lucent advanced 3 1/2, or 6.7%, to 56 while LHS Group climbed 1 to 31.

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Earnings/revenue reports and previews

Office Depot(ODP), the world's largest seller of office products, said it anticipates earnings for its second quarter to be in the range of four to six cents below consensus Street estimates. First Call/Thomson Financial has an 18-analyst estimate of 24 cents a share for Office Depot's second quarter. The company blamed the decline on softer-than-expected retail store sales results in May, greater weakness in foreign currencies and other factors.

David Fuente, chairman and CEO said, "While we saw improvement in comparable store sales in the first quarter of this year, performance in the second quarter has failed to meet our expectations. The greatest sales shortfall occurred in the technology area in our retail stores during the month of May." Office Depot declined 3 3/16, or 30.4%, to 7 5/16.

Morgan Stanley Dean Witter downgraded the stock to neutral from outperform, J.P. Morgan cut its rating to market perform from long-term buy and Deutsche Banc Alex. Brown dropped it to market perform from strong buy.

For more Office Depot's earnings warning, see coverage from TheStreet.com/NYTimes.com's joint newsroom.

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Federal-Mogul(FMO), an auto parts maker, warned investors that its second-quarter and fiscal-2000 results would miss consensus estimates. The company said it would report second-quarter earnings of about 65 cents a share, below the nine-analyst estimate of a $1.12 profit, while fiscal-2000 earnings should come in at $3.00, which is also short of the 10-analyst estimate of $3.87.

Federal-Mogul blamed the shortfall on softness in North American aftermarket results and negative currency fluctuations. Federal-Mogul staggered 2 3/8, or 20.1%, to 9 7/16.

Telecommunications equipment maker SDL (SDLI) said it sees second-quarter operating results well in excess of estimates, due to strong bookings and a recent acquisition. SDL said it expects to beat second-quarter pro forma earnings-per-share estimates by 24% or better. The current 18-analyst estimate is for 25 cents. SDL hopped 29 3/4, or 17.7%, to 197 3/4.

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Analyst actions

Credit Suisse First Boston added Eastman Kodak (EK) to its focus list. The firm rates the company a strong buy. Eastman Kodak traded up 1 7/8 to 59 13/16.

eSpeed (ESPD): loss estimates widened to 80 cents in 2000 from previous view of 55 cents, strong buy and price target of 100 REITERATED at UBS Warburg. eSpeed sank 3 1/8, or 11.6%, to 23 7/8.

Upgrades

Atmos Energy (ATO): UP to buy from neutral at PaineWebber. Atmos Energy rose 1 3/8, or 9.1%, to 16 9/16.

Calpine (CPN): UP to strong buy from neutral at Morgan Stanley Dean Witter. Calpine gained 4 1/16 to 101.

Biotechnology firm Cor Therapeutics(CORR): UP to buy from outperform at Salomon Smith Barney. Cor Therapeutics improved 6 1/4, or 11.8%, to 59 1/8.

Harley-Davidson (HDI): intermediate-term rating UP to accumulate at Merrill Lynch. Harley-Davidson increased 3/16 to 38 3/16.

Server and enterprise hardware company NCR(NCR): UP to buy from outperform at Salomon Smith Barney, price target UP to 57 from 45. NCR gained 2 1/2, or 6.5%, to 40 13/16.

Reckson Associates Realty(RA): UP to buy from accumulate in the near- and long-term at Merrill Lynch. Reckson Associates Realty lifted 3/8 to 21 11/16.

Downgrades

ATI Technologies (ATYT): DOWN to hold from buy at CSFB, third-quarter revenue estimates trimmed to $303 million, excluding items, from $373 million, and third-quarter EPS view down to a loss of 6 cents from a profit of 17 cents. ATI Technologies traded up 3/4, or 8.9%, to 9 3/16.

Deere (DE): DOWN to neutral from outperform at Morgan Stanley Dean Witter. Deere missed 3 1/4, or 6.8%, to 44 11/16.

Initiations

Abbott Laboratories (ABT): NEW outperform at ABN Amro, 12- to 18-month price target: 50. Abbott Laboratories lowered 1 1/16 to 41 11/16.

Alcatel (ALA): coverage RESTARTED at CSFB with a buy rating. Alcatel improved 2 13/16, or 6.1%, to 49.

CNF Transportation(CNF): NEW buy at UBS Warburg, price target: 36. CNF Transportation staggered 13/16 to 24.

Software Tech(STCS): NEW near-term accumulate and long-term buy at Merrill Lynch and NEW outperform at Morgan Stanley Dean Witter. Software Tech slipped 2 3/4, or 14.1%, to 16 3/4.

Group Moves

Salomon Smith Barney initiated coverage of recycled paper packagers Caraustar(CSAR) and Rock-Tenn(RKT) with outperform and neutral ratings respectively. Caraustar added 3/16 to 17 1/16, Rock-Tenn climbed 3/16 to 9 5/16.

CSFB analyst Scott Barney initiated coverage of three leisure travel companies:

• Carnival (CCL) at buy, price target: 40. Carnival shed 5/8 to 24 15/16.

• Steiner Leisure (STNR) at buy, price target: 36. Steiner Leisure closed up 3/16 to 22 1/2.

• Royal Carribean Cruises (RCL) at buy, price target: 38. Royal Carribean Cruises increased 3/8 to 23 1/4.

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Offerings and stock actions

A unit of CNA Financial (CNA) said it was withdrawing its $13 a share tender offer for all shares of CNA Surety (SUR) citing unfavorable market conditions. CNA Financial rose 11/16 to 34 7/16, while CNA Surety fell 2 3/8, or 17%, to 11 5/8.

Estee Lauder (EL) said it is offering 8 million Class-A shares priced at $43.50 a share. Estee Lauder advanced 1/2 to 44 1/4.

Pet food maker Ralston Purina (RAL) said it will buy back up to 8 million of its shares, its second share repurchase plan announced in the last six months. Ralston Purina improved 1/4 to 18 5/8.

Three-Five Systems (TFS) said it offered 12.5 million shares at $55 each. Three-Five Systems shed 4 11/16, or 7.5%, to 57 7/8.

Tower Automotive (TWR) said it approved the repurchase of up to $100 million of its common stock. Tower Automotive moved down 3/16 to 13 5/8.

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Miscellany

The Journal reported that Mattel's (MAT) new CEO, Robert Eckert, received an employment package comparable to that of his predecessor Jill Barad, who was forced to resign in February. According to the story, in a proxy filing, Mattel's board said it gave Eckert a three-year contract structured similarly to the controversial package given to Barad, which resulted in an exit package valued at about $50 million. Mattel fell 1/4 to 13 9/16.

Standard & Poor's said Agilent(A) would replace holding company Nacco(NC) in the S&P 500 Index. Agilent decreased 4 7/16, or 6.5%, to 64 5/16.

The Heard on the Street column in the Journal discusses eSat (ASAT), a tiny Los Angeles-based satellite, microwave and Internet-service provider whose stock popped to $20 before plummeting amid questions about its business alliances and links to a disbarred lawyer with convictions for fraud and drug dealing. The column said eSat's case serves as a cautionary tale of the dangers of investing in the "out-of-the-way realms of the online world," including information posted in chat rooms, and the need to accurately determine a company's financial prospects. eSat lowered 9/16, or 23.1%, to 1 7/8.

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