Company Report: FreeMarkets' Free Fall and Biotechs' Battering Highlight Today's Ugliness
FreeMarkets
(FMKT)
freefell 61 15/16, or 18.1%, to 278 1/2 after it said that
General Motors
(GM) - Get Report
would exercise its 90-day cancellation option, ending its deal with FreeMarkets. Shares of GM dropped 3 to 71 5/8.
According to FreeMarkets Chairman and CEO, Glen T. Meakem, the cancellation should not hurt revenue or results for operations in 2000. Meakem said General Motors accounted for 17% of FreeMarkets' revenues in the first nine months ended Sept.30, 1999, with the percentage decreasing 10% during the fourth quarter. Meaken said the company expected the percentage to drop further in 2000.
Earlier today,
Wit Capital
started coverage of FreeMarkets with a buy rating. DLJ started the stock as a buy and set a six- to 12-month price target of 550.
Goldman Sachs
started coverage of the stock as a market outperformer.
Salomon Smith Barney
took a cut at biotech today, slicing its rating on
MedImmune
(MEDI)
to an out perform from a buy. MedImmune shed 20 15/16, or 13.5%, to 134 3/8. Salomon also downgraded shares of
Genzyme
(GENZ)
and
Biogen
to a neutral from an out perform ratings. Genzyme lost 2 15/16, or 6.7%, to 40 7/8, while Biogen dropped 14 7/8, or 16.9%, to 73 1/16.
Mergers, acquisitions and joint ventures
CNet
(CNET) - Get Report
slipped 9/16 to 60 13/16 after it said it will join forces with
AMFM
(AFM)
to create CNet Radio, the country's first all-tech radio format. The companies will share revenue on advertising sales and CNet said the first radio station would launch in San Francisco. Shares of AMFM lost 2 11/16 to 74 7/16.
Earnings/revenue reports and previews
(
Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.
)
Baan
fell 4 9/16, or 30.9%, to 10 1/8 after it warned it expects its 1999 fourth-quarter loss to widen to as much as $250 million, partly as a result of a restructuring. The company also announced the departure of CEO Mary Coleman.
HSBC
cut its rating on Baan to sell from hold.
For more on this
story, check out the coverage by
TheStreet.com/NYTimes.com's
joint newsroom.
Canandaigua Brands
(CDB)
fell 1 7/8 to 47 15/16 despite reporting third-quarter earnings of $1.60 a share, beating the 12-analyst estimate of $1.56 a share and the year-ago $1.10 a share. The company attributed its latest-quarter sales gains to acquisitions completed between December 1998 and June of last year.
Cross Timbers
(XTO)
fell 1/4 to 8 1/2 after it said it has dropped plans to form Texas Permian Trust and will sell some of the properties expected to be included in the trust as part of a plan to generate $320 million to $340 million of cash flow in 2000.
Family Dollar Stores
(FDO)
moved up 13/16, or 5.2%, to 16 5/16 after it posted first-quarter earnings of 21 cents a share, in line with the 13-analyst estimate and up from the year-ago 17 cents a share. The company said it plans to open about 400 stores, and close 50 during its current fiscal year.
Helen of Troy
(HELE) - Get Report
inched up 1/32 to 7 3/16 after it posted third-quarter earnings of 20 cents a share, beating the five-analyst estimate of 18 cents, but lower than the year-ago 37 cents.
Kulicke & Soffa
(KLIC) - Get Report
climbed 1 9/16 to 42 15/16 after it said its first-quarter profit would beat estimates by more than 30%. The 13-analyst estimate calls for earnings of 36 cents a share. The company attributed the strength to demand for its
Model 8028
wire bonder and improving overall activity in the industry.
For more on this
story, check out the coverage provided by
TheStreet.com/NYTimes.com's
joint newsroom.
Lattice Semiconductor
(LSCC) - Get Report
lost 3 9/16, or 7.4%, to 44 15/16 despite saying it will report a $92 million aftertax gain in the first quarter from the appreciation of foundry investments made in two Taiwanese companies.
Sears
(S) - Get Report
rose 1 1/2, or 5%, to 31 9/16 after it reported a 0.6% decline in same-store sales for December, but said it sees fourth-quarter earnings (before items) on a percentage basis to be up in the high-teen's to low-twenty's, citing strength in its credit business and full-line stores. Sears also said it is revising its full-year outlook, expecting an increase at a high-single-digit to low-teen percent rate, excluding items.
For more on this
story, check out the coverage provided by
TheStreet.com/NYTimes.com's
joint newsroom.
Trident Microsystems
(TRID)
inched up 1/2, or 5.1%, to 10 5/8 after it said it will report a $125 million onetime gain in its March quarter.
Ultimate Electronics
(ULTE)
dropped 3 3/4, or 14.3%, to 23 after it said changes in its accounting methods would reduce its fiscal fourth-quarter earnings and force the company to restate past results lower.
Xilinx
(XLNX) - Get Report
fell 1 1/16 to 45 11/16 despite saying it would report a $400 million aftertax gain in results for its fourth fiscal quarter, ending April 1. The gain comes from its investment in Taiwanese company
United Silicon
, which is merging with
United Microelectronics
.
Offerings and stock actions
MicroStrategy
(MSTR) - Get Report
fell 13, or 6.2%, to 196 after it said its board approved a 2-for-1 stock split.
Felcor Lodging Trust
fell 3/8 to 17 11/16 after it said it added $200 million to its current $100 million share buyback.
Lycos
(LCOS)
lost 6 13/16, or 8%, to 78 3/8 after it said it has filed for a 5 million-share offering.
Credit Suisse First Boston
,
Goldman Sachs
,
Merrill Lynch
,
Allen & Company
,
Bear Stearns
and
Hambrecht & Quist
are serving as the deal's underwriters.
Pinnacle Holdings
lost 2 1/4, or 5.7%, to 37 after it said it filed for an 8 million-share offering. Pinnacle said that it would offer 5.3 million shares, while some of its shareholders would put up 2.7 million shares.
Universal Electronics
(UEIC) - Get Report
gave up 2 1/16 to 43 after it said its board approved a 2-for-1 stock split payable around Jan. 31 to shareholders of record Jan. 10.
Analyst actions
Yahoo!
(YHOO)
was lower despite
Schroder
slapping a 600 price target on the stock this morning, upped from 350. Shares of Yahoo! sank 31 7/8, or 6.7%, to 443.
Salomon started coverage of
Airnet Communications
(ANCC)
with a buy rating. Shares Airnet Communications dwindled 1 1/16 to 35 5/8.
PaineWebber
upped its price target on
Amgen
(AMGN) - Get Report
to 80 from 60. Shares of Amgen slid 5, or 7.9%, to 58 1/8.
Deutsche Banc Alex. Brown
said it sees airline stocks rallying in 2000 and said it favors
AMR
(AMR)
and
Skywest
(SKYW) - Get Report
. Shares of AMR stumbled 1 1/2 to 65 7/8 and Skywest slid 7/16 to 28 3/16.
Donaldson Lufkin & Jenrette
cut
Bristol-Meyers Squibb
(BMY) - Get Report
to market perform from buy. Shares of Bristol-Meyers Squibb slipped 4 15/16, or 7.6%, to 59 1/2.
Credit Suisse First Boston
said it started coverage of the following CLECs with buy ratings:
Northpoint Communications Group -- lost 15/16 to 24 3/4.
Allied Riser Communications -- retreated 1 7/16, or 6.7%, to 19 15/16.
Focal Communications -- up 1/16 to 26.
Intermedia Communications -- shed 1 5/8 to 34 7/8.
Teligent -- climbed 5/8 to 61 3/8.
IXNet -- declined 3/4 to 29.
Covad Communications -- tumbled 1 3/16 to 57 15/16.
Rhythms NetConnections -- fell 1 1/8 to 30 5/8.
Credit Suisse also rolled out coverage of
e.spire Communications
(ESPI)
,
Electric Lightwave
(ELIX)
,
GST Telecommunications
(GSTX)
and
ICG Communications
(ICGX)
with hold ratings.
e.spire advanced 7/16 to 6 15/16 and Electric Lightwave retreated 3/16 to 19 1/2, while GST Telecom skidded 1/32 to 9 11/32. ICG Communications slipped 9/16 to 17 5/16.
Morgan Stanley Dean Witter
upped its rating on
Disney
(DIS) - Get Report
to outperform from neutral. Shares of Disney climbed 1 7/8, or 6.2%, to 31 3/4.
A.G. Edwards
sliced its rating on
Doubleclick
(DCLK)
to maintain from accumulate. Shares of Doubleclick plummeted 30 5/8, or 11.4%, to 237 1/16.
Credit Suisse cut its rating on
Labor Ready
(LRW)
to hold from buy. Shares of Labor Ready stumbled 2 7/8, or 24%, to 9 1/16.
Banc of America
upped its price target on
Macromedia
(MACR)
to 110 from 70. Shares fell 1/4 to 75 3/4.
PaineWebber cut fourth-quarter estimates on
Northwest Natural Gas
(NWNG)
to 70 cents from 80 cents. Shares of Northwest Natural Gas skidded 1/4 to 21.
Merrill Lynch
raised its rating on three defense companies, citing an improved defense outlook for the first half of this year and overly poor stock performance in 1999.
Northrop Grumman
(NOC) - Get Report
was lifted to buy and long-term buy from accumulate and long-term buy. Merrill set a 12-month price target of 82.
General Dynamics
(GD) - Get Report
was upped to buy from long-term buy and accumulate with a price target of 72, and
Alliant Techsystems
(ATK)
was raised to buy and long-term buy from neutral and long-term accumulate. Alliant's price target was raised to 80.
Shares of Northrop Grumman lifted 11/16 to 53 9/16 and General Dynamics bounced 2 1/16 to 51 1/8, while Alliant Techsystems advanced 3 1/2, or 5.6%, to 65.
Warburg Dillon Read
sliced its 2000 earnings estimates on
Parametric
(PMTC)
to 47 cents a share from 80 cents and its 2001 EPS estimates to 76 cents a share from $1.01. Shares of Parametric shed 5 1/8, or 20.4%, to 20.
Banc of America
upped its rating on
Robert Mondavi
(MOND)
to buy from marketperformer. Shares of Robert Mondavi rose 1 3/16 to 34 13/16.
Soundview Technology
rolled out coverage of
Newport
(NEWP)
with a buy rating and a price target of 59. Shares of Newport pushed up 6 11/16, or 15.5%, to 49 5/8.
Salomon Smith Barney
rolled out coverage of
T. Rowe Price
(TROW) - Get Report
with a buy rating. Shares of T. Rowe Price slid 1 1/16 to 34 1/16.
Alex. Brown started coverage
of VA Linux
(LNUX)
at a buy and set a price target of 260. Shares of VA Linux dwindled 12, or 6.2%, to 180.
Banc of America
upped its price target on
Vignette
(VIGN)
to 265 a share from 133. Shares of Vignette retreated 7 to 181 5/8.
Miscellany
Bell Atlantic
(BEL)
introduced a package of local and long-distance services. The company introduced three long-distance plans which it said would help consumers save between 10% and 50%. Shares of Bell Atlantic stumbled 2 9/16 to 57 3/8.
U.S. Senate Majority Leader
Trent Lott
said he sees the Senate confirming Alan Greenspan's renomination to serve as
Federal Reserve
chairman for a fourth term. President
Bill Clinton
earlier this morning renominated Greenspan for the position. Senate Banking Committee Chairman
Phil Gramm
said he would set a hearing on Greenspan's renomination by the end of the month.
Fidelity Investments
wants shareholders of its more than $100 billion
(FMAGX) - Get Report
Magellan fund to let the fund make bigger bets, the
Journal
reports. Trustees are recommending shareholders approve a plan that would allow Magellan to invest up to 25% of its assets in a single company. Fidelity was down 1.52 to 135.11.
Web Street
(WEBS)
popped 5/16 to 12 3/4 after it said its online brokerage unit was seeking to become a self-clearing brokerage firm, which would allow it to cut costs and offer more services to its customers. Its wholly owned subsidiary,
Web Street Securities
, filed with the
National Association of Securities Dealers
(NASD), the parent of NASDAQ, to become such a firm.
A growing number of American corporations are concluding dividends are no longer necessary to attract investors, according to a story in
The New York Times
. While companies once needed dividends to convince investors that their stock was worthy of buying, more and more firms are not bothering to pay them. A quarter of the value of the
S&P 500
comes from companies that do not pay dividends, the story says. In comparison, two decades ago only 2% of the value of the index came from such companies.
The Heard on the Street column in the
Journal
takes a look at short-seller blues in recent years as major indices have roared to records. According to one investment adviser who tracks the group, short-sellers were down 3.2% last year through November, and December is not shaping up any better. The last time the average short had a positive year was 1994, when the S&P 500 finished the year down, the story says.
