Stocks to Watch Thursday: GE, Honeywell, Corning, Texas Instruments

By TSC Staff ,

Updated from 5:44 p.m. ET Wednesday

General Electric's

(GE) - Get Report

proposed acquisition of

Honeywell

(HON) - Get Report

appears to be hitting a major snag in Europe, as regulators there are asking the companies to unload more operations than the Dow components may be willing to let go. The companies say they will divest operations that bring in $2.2 billion in revenue for Honeywell's aerospace business in a bid to get the approval of European regulators for their merger. The recommendation is less than the regulators wanted, and GE said it is "not optimistic" about receiving European approval.

In a press release Thursday morning, GE said the proposals, "in the unlikely event they were accepted, would modestly reduce the positive impacts of the GE-Honeywell combination." The divestitures would reduce Honeywell's $25 billion in revenue by 9% and the top line of the combined company by about 1.5%.

Earnings/revenue reports and previews

Enzo Biochem

(ENZ) - Get Report

posted third-quarter earnings that were flat with the same period last year.

The biotech firm, which specializes in gene identification and gene regulation technologies, said net income for the third quarter was $1.9 million, or 7 cents a share, compared with $2 million, or 7 cents a share, in the year-ago period. Operating revenue increased 20.9% to $15.2 million from $12.6 million last year.

H.J. Heinz

(HNZ)

posted fourth-quarter earnings that were in line with expectations, but the company slashed its first-quarter and 2002 forecast, citing the strength of the U.S. dollar, high energy costs, and softness in the quick-serve segment of its U.S. food-service business.

The maker of ketchup and StarKist Tuna said fourth-quarter earnings, excluding unusual items, fell to $185.7 million, or 53 cents a share, from $226.4 million, or 63 cents a share, a year ago. Analysts on average expected earnings of 53 cents a share. Revenue for the quarter rose to $2.69 billion from $2.59 billion last year.

The company projected first-quarter earnings of 60 cents to 62 cents a share, down from 68 cents a share a year ago. Analysts on average expect the company to earn 65 cents a share.

After Wednesday's Close

Computer reseller

Ingram Micro

(IM)

warned investors Wednesday that second-quarter sales and earnings would fall well short of forecasts. The company said that revenue for the period would come in between $5.8 billion and $6 billion, more than $200 million below the level analysts were looking for, according to

Thomson Financial/First Call

. The bottom line, meanwhile, would likely finish somewhere between break-even and a loss of $10 million, the company said. Analysts were expecting the company to earn 9 cents a share.

Memory computer chipmaker

Silicon Storage Technology

(SSTI) - Get Report

reduced its guidance for the second-quarter, and is now projecting earnings of break-even to 3 cents a share. Analysts expect the company to earn 6 cents a share. The company now expects revenue of $60 million to $68 million for the period.

Texas Instruments

(TXN) - Get Report

, reiterated that it still sees second-quarter sales falling 20% from the first quarter. The company originally offered the forecast in its first-quarter earnings release on April 17.

Data protection company

Quantum

(DSS) - Get Report

projected fiscal first-quarter earnings of 10 cents to 12 cents share, on revenue of $265 million to $275 million. Wall Street's consensus estimate was for 17 cents a share in the first quarter.

The company also ended plans to hold an initial public offering of its unit

Snap Appliances

, citing changes in market conditions. Quantum filed for the Snap IPO in October.

Business-to-business software services provider

Software Spectrum

( SSPE) reported fourth-quarter earnings of $1.1 million, or 34 cents a share. Last year, the company lost $1.1 million, or 30 cents a share.

Enterprise software maker

SAP AG

(SAP) - Get Report

reaffirmed its guidance for the current quarter and projected at least 23% growth during the first nine months of 2001.

Analyst actions

Merrill Lynch

cut its intermediate-term investment rating on

Corning

(GLW) - Get Report

to neutral from accumulate, saying the company's high-margin fiber business sales may be weak over the next few quarters.

In a research note, analyst Steven Fox said Corning's the business may be "below even our worst-case scenario." The analysts also said he expects pricing pressure to spread to "healthy markets in Asia."

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Mergers & Acquisitions

Lucent Technologies'

( LU) plan to sell two manufacturing plants has fallen through, according to published reports this morning.

According to

The Wall Street Journal's

online edition, the Murray Hill, N.J., company was expecting to raise $600 million to $900 million for the plants through a deal with Singapore's

Flextronics

(FLEX) - Get Report

, a contract manufacturer. Flextronics and Lucent disagreed over whether Flextronics would buy existing inventories.

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Miscellany

Xerox

(XRX) - Get Report

disclosed plans to exit the small office/home office business segment in a move to generate "significant cash savings" and "return to profitability in the second half and for the full year."

Over the next six months, Xerox will discontinue its line of personal inkjet and xerographic products sold primarily through retail channels. However, the company will continue to provide service, support and supplies for its customers who own Xerox small office/home office products.

After Wednesday's Close

Standard & Poor's

reduced film and camera-maker

Polaroid's

( PRD) unsecured debt rating to CCC from CCC-plus. S&P said it may reduce the rating further, and added that the ratings remain on CreditWatch, with negative implications. The company was placed on CreditWatch on Oct. 20.

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