Company Report: MSFT, AXP, ETR, OCLR, QCOM, PCLN

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Federal antitrust officers are leaning towards a forced spin-off of Microsoft's (MSFT) - Get Report Office software business in an effort to end company's monopoly in the U.S. computer industry, The Wall Street Journal reported, citing people familiar with the situation.

Office software is the largest part of Microsoft's applications unit, accounting for more than 40% of total revenue and a significant portion of profits. The story also said Microsoft would be subject to restrictions on its conduct until the unit is divested as well as during any appeal of a breakup decision.

USA Today

and

The Washington Post

published separate accounts about the proposed plan, also involving splitting the company along product lines.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com's

joint newsroom.

A number of firms released negative research on Microsoft in the wake of the company's downward revision of its revenue outlook and disappointing March quarter revenue reported.

Goldman Sachs

analyst Rick Sherlund took the stock off the recommended for purchase list and downgraded the stock to market outperform from buy

. SG Cowen

cut its rating to buy from strong buy.

Lehman Brothers

cut its price target on the stock.

Thomas Weisel

analyst David Readerman cut the stock to market perform from buy. Microsoft shed 12 5/16, or 15.6%, to 66 5/8.

American Express

(AXP) - Get Report

jumped 7 to 150 after it posted first-quarter earnings of $1.44 a share, slightly above the 15-analyst estimate of $1.42 and up from the year-ago $1.26. The company also said shareholders approved a 3-for-1 stock split.

Mergers, acquisitions and joint ventures

American Trans Air

will lease about 40 new planes, worth about $2.3 billion, from

Boeing

(BA) - Get Report

, the

Journal

reported.

Separately,

Lucent

(LU)

said it has tapped former Boeing CFO Deborah Hopkins, as its new CFO. Hopkins is replacing Don Peterson, who is CEO of an $8 billion Lucent equipment unit that will be spun off in 2000. Lucent lost 2 3/8 to 60 5/8 while Boeing fell 2 3/16, or 5.5%, to 37 7/8.

For more on this

story, check out the coverage from

TheStreet.com/NYTimes.com's

joint newsroom.

Corning

(GLW) - Get Report

dropped 3 5/8 to 148 1/2 after it announced that it will acquire the remaining equity in

NZ Applied Technologies

of Woburn, MA, for up to $150 million in Corning common stock. Corning had held a 20% equity ownership position in the company in 1999.

Louis Dreyfus Natural Gas

(LD) - Get Report

rose 15/16 to 25 13/16 after it said it agreed to acquire the oil and gas assets of

Costilla Energy

for $100 million.

Diversified energy company

Entergy

(ETR) - Get Report

rose 1 1/2, or 6.4%, to 24 13/16 after it and closely held

Koch Industries

said they plan to form an energy marketing and trading company. Entergy and Koch said the new company will have $1 billion in assets, including a pipeline.

Separately, Entergy posted first-quarter earnings of 48 cents a share, well above the 10-analyst estimate of 28 cents and the year-ago 21 cents a share. The company also said it is on pace to meet its 2000 EPS target of $2.35 to $2.45 a share. Entergy was raised to accumulate from neutral at

Merrill Lynch

.

Kellogg

(K) - Get Report

lost 5/16 to 26 1/8 and

Salton

(SFP)

sailed up 2 1/2, or 6.1%, to 43 3/16 after the companies said they entered a marketing alliance. The companies said the initial products included in the agreement are Kellogg's Pop Tarts and Eggo waffles and Salton's Toastmaster products.

Ocular Sciences

(OCLR) - Get Report

rose 2 9/16, or 18.4%, to 16 1/2 after it said it is working with

Wesley Jessen VisionCare

(WJCO)

to find a white knight to help them save their proposed merger, now valued at about $625 million in stock.

Wesley Jessen, the target of a $600 million hostile bid by

Bausch & Lomb

(BOL)

, earlier said it was in talks with an unnamed third party for a possible transaction. Wesley Jessen said the preliminary talks with the third party were being conducted with the consent of Ocular Sciences. Wesley Jessen gained 2 3/16, or 5.9%, to 39 3/8, while Bausch & Lomb lifted 2 3/4, or 5.1%, to 56 13/16.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com's

joint newsroom.

Qualcomm

(QCOM) - Get Report

shed 9 7/8, or 9%, to 99 5/8 after it said it invested $144 million in

NetZero

(NZRO)

, an advertising-supported free Internet access provider, for a 10% stake. The wireless communications company now owns about 11.5 million shares of NetZero. NetZero gained 3 5/32, or 38.1%, to 11 7/16.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com's

joint newsroom.

Westvaco

(W) - Get Report

-- a paper, packaging and specialty chemicals company -- slipped 1/2 to 30 3/8 after it announced plans to pay $500 million to acquire IMPAC Group, a consumer goods packaging and printing products supplier. Westvaco said the price includes the assumption of $271 million of net debt and the assumption of $23 million of preferred stock.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com's

joint newsroom.

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.

)

Days before

AT&T's

(T) - Get Report

more than $10 billion planned offering of its wireless division, the company said the unit saw strong revenue and operating growth in the first quarter. First-quarter revenue for the wireless group mobility unit grew 40.7% to $2.2 billion from $1.6 billion a year earlier. Adjusted for its purchase of

Vanguard Cellular

last year, revenue increased 33.1%, the company said. AT&T lost 1 to 48 15/16.

Bank holding company

Charter One Financial

(CF) - Get Report

inched up 1/4 to 19 1/2 after it reported first quarter earnings of 53 cents a share, just under the 17-analyst consensus estimate of 54 but beating the year-ago 50 cents.

priceline.com

(PCLN)

dropped 6 1/8, or 9%, to 61 3/4 despite posting a first-quarter loss of 4 cents a share, narrower than the 16-analyst expected loss of 6 cents a share and the year-ago loss of 12 cents.

Merrill Lynch

raised its fiscal 2000 revenue estimates for Priceline.com to $1.3 billion from $1.0 billion and cut its fiscal 2000 loss estimates to 15 cents a share from 21 cents.

Chewing-gum giant

Wrigley

(WWY)

added 1 3/4 to 77 3/4 after it reported first quarter earnings of 65 cents per share, missing the 4-analyst estimate of 67 cents, but up from the year-ago figure of 60 cents.

Offerings and stock actions

AVX

(AVX) - Get Report

climbed 3/8 to 92 5/8 after it set a 2-for-1 stock split.

Cabletron Systems'

(CS) - Get Report

declined 11/16 to 19 5/8 after its board approved a $400 million share repurchase plan.

First Security

(FSCO)

added 5/16 to 14 7/16 after it said it revoked its 15 million-share buyback plan announced April 3.

Analyst actions

Upgrades

CommScope

(CTV) - Get Report

: fiscal 2000 earnings estimates UP to $1.67 from $1.60; fiscal 2001 estimate set at $1.95 at Merrill Lynch. CommScope was unchanged at 46 3/8.

Nordstrom

(JWN) - Get Report

: UP to intermediate-term buy from accumulate; price target up to 40 at Merrill Lynch. Nordstrom tacked on 1 3/8 to 31.

Silicon Valley Group

(SVGI)

: UP to outperform from neutral at

Lehman Brothers

. Silicon Valley Group lifted 3/8 to 26.

Simpson Manufacturing

(SSD) - Get Report

: UP to buy from long-term attractive at

Robertson Stephens

. Simpson Manufacturing mounted 13/16 to 42.

Independent refiner

Sunoco

(SUN) - Get Report

: UP to buy from attractive at

Bear Stearns

; price target: 38 per share. The upgrade was announced after Sunoco reported sharply higher first-quarter earnings last week. Sunoco bounced 1 11/16, or 6%, to 29 11/16.

Downgrades

Cerner

(CERN) - Get Report

: DOWN to hold from buy based on valuation at

Warburg Dillon Read

. Cerner slid 2 3/8, or 9.5%, to 22 5/8.

Earthlink

(ELNK)

: Price target DOWN to 34 from 46 at

Morgan Stanley Dean Witter

. Earthlink stumbled 13/16, or 5.7%, to 13 1/4.

Legato Systems

(LGTOE)

: DOWN to neutral from outperform; price target LOWERED to 15. Legato Systems lost 3/4, or 6.5%, to 10 5/8.

Quintiles Transnational

(QTRN)

: DOWN to neutral from attractive at Bear Stearns. Quintiles fell 1/4 to 14 3/8.

Salomon Smith Barney

lowered its opinion on two regional banks:

  • Sky Financial (SKYF) : fiscal 2000 estimates DOWN to $1.69 from $1.72 and fiscal 2001 earnings estimates DOWN $1.85 from $1.90 a share; DOWN to outperform from buy. Sky Financial skidded 1/8 to 15 1/4.
  • Wilmington Trust (WL) : DOWN to neutral from outperform; price target LOWERED to 50 from 62. Wilmington Trust declined 1 1/8 to 47 15/16.

Initiations

Satellite Radio

(XMSR)

: NEW buy rating at CSFB. Satellite Radio sank 3/8 to 23 5/8.

Group Moves

Telocity

(TLCT)

: NEW buy rating and a 12-month target of 18 at CSFB. Telocity gained 5/8, or 5.4%, to 12 1/8.

TMP Worldwide

(TMPW)

: RE-STARTED as an accumulate at Merrill Lynch. TMP Worldwide slipped 4 13/16, or 6.8%, to 65 5/8.

Credit Suisse First Boston

initiated coverage of

Freemarkets

(FMKT)

,

Ventro

(VNTR) - Get Report

and

VerticalNet

(VERT)

.

  • Online business auctioneer FreeMarkets was rated a buy with a six- to 12-month price target of 85 to 90. Freemarkets stumbled 2 1/2 to 57 5/16.
  • Ventro, which operates a B2B e-commerce, marketplace, was rated a buy with a 12-month target of 45. Ventro declined 9/16 to 29 1/8.
  • VerticalNet, which runs B2B Web sites, was rated a strong buy with a 12-month target of 110 to 120. VerticalNet skidded 2 3/16, or 5.2%, to 39 7/16.

Merrill Lynch raised its opinion on two gaming companies:

  • Station Casinos (STN) - Get Report: UP to an intermediate-term buy from accumulate. Station Casinos added 5/16 to 25 1/2.
  • Argosy Gaming (AGY) : fiscal 2000 earnings estimates UP to $1.65 from $1.55 a share; UP to buy from accumulate. Argosy Gaming climbed 1/4 to 15 1/16.

Miscellany

Envision Development

(EDV) - Get Report

fell 1/2 to 64 5/16 after it named William Patch as chairman and CEO.

A possible merger between the London and Frankfurt exchanges, the top two in Europe, could include a link to the

Nasdaq Stock Market

, the

Journal

reported, citing people familiar with the situation. According to the story, any link would stop short of a three-way merger.