Company Report: Qualcomm Leads Tech Down; Financials Surge
(Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.)
Qualcomm
(QCOM) - Get QUALCOMM Incorporated Report
led the technology sector down, shedding 24 5/16, or 16.3%, to 124 5/8 after reporting earnings last night. (see below)
Yahoo!
(YHOO)
was also feeling blue, dropping 17 to 328 9/16.
Meanwhile, financial stocks flexed some muscle and helped lift the
Dow Jones Industrial Average
, particularly
Citigroup
(C) - Get Citigroup Inc. Report
up 2 1/4 to 58 1/8 and
American Express
(AXP) - Get American Express Company Report
which gained 1 3/8 to 159 3/4.
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Mergers, acquisitions and joint ventures
Computer Associates
fell 1/8 to 74 9/16 and
Red Hat
(RHAT)
lost 7/8 to 113 3/8 after the companies said they have agreed to a sales and distribution deal, which calls for Red Hat to deliver Computer Associates business management software with its
Red Hat Linux Enterprise Edition
series. In exchange, Computer Associates would sell Red Hat's business support deals to its
Unicenter TNG
customers.
Sprint
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fell 5/8 to 61 1/8 after it said it has entered a $1.13 billion cash agreement with
Deutsche Telekom
(DT) - Get Dynatrace Inc. Report
and
France Telecom
(FTE)
to sell its stake in the floundering
Global One
. The deal also calls for Sprint to be repaid $276 million in debt for its interest in Global One. According to the terms, Deutsche Telecom and France Telecom would relinquish their seats on Sprint's board after Sprint shareholders vote on the $115 billion proposed Sprint-
MCI WorldCom
(WCOM)
merger. Deutsche Telekom and France Telecom are also surrendering their special rights as Class-A holders.
Thomson
is acquiring the
Sylvan Prometric
unit of
Sylvan Learning Systems
(SLVN)
for $775 million in cash. Sylvan Prometric is a computer-based testing and assessment services company. Sylvan gained 1 1/16, or 7.6%, to 15 1/4.
Earnings/revenue reports and previews
As noted above, technology titan Qualcomm shed 24 5/16, or 16.3%, to 124 5/8 after it reported first-quarter earnings of 25 cents a share, excluding net nonrecurring charges, a penny ahead of the 16-analyst estimate and up from the year-ago 8 cents.
Merrill Lynch
downgraded its intermediate-term rating on Qualcomm to neutral from accumulate. It maintained its long-term buy rating on the stock.
Qualcomm said it expects that shipments of its phone chips in the second quarter may be lower than in the first quarter due to seasonal factors, inventory balancing by customers due to continued shortages of other phone components, and transition from older chips to the latest chips. The company, again citing seasonal factors, also said phone shipments in the second quarter could be lower than in the first quarter.
Excluding items, Qualcomm expects earnings per share in the second quarter to meet or exceed the 25 cents it earned in the first quarter. The company also said it's comfortable with the current analyst consensus estimate for fiscal 2000. The 17-analyst estimate calls for the company to earn $1.02 for the fiscal year.
Today Qualcomm said it is buying
Snaptrack
, a privately held company, for $1 billion in stock.
For more on this
story, see coverage from
TheStreet.com/NYTimes.com
joint newsroom.
Compaq
(CPQ)
dropped 3, or 7.3%, to 28 3/4 after it posted fourth-quarter earnings of 19 cents a share, including an investment gain, ahead of the 31-analyst estimate of 16 cents, but well below the year-ago earnings of 43 cents a share. Net income fell to $332 million from $758 million a year ago. The decline in profits comes as Compaq struggles to rebound from plunging PC prices, a management house cleaning and problems integrating acquisitions it has made in the past two years.
Bear Stearns
sliced its fiscal 2000 earnings estimates on Compaq to $1.05 a share from $1.20.
Consolidated Freightways
(CFWY)
slipped 1/8 to 7 after it posted a fourth-quarter loss of 52 cents a share, wider than the three-analyst estimate of a 45-cent loss and down from the year-ago 11-cent profit. The company also said it has tapped G. Robert Evans to succeed W.R. Curry as its CEO.
Duke-Weeks
(DRE) - Get Duke Realty Corporation Report
lost 1/4 to 19 13/16 after it reported fourth-quarter funds from operations of 57 cents a share, a penny better than the 15-analyst forecast and the year-ago 50 cents. Duke-Weeks said it authorized a share buyback of up to $100 million.
eBay
popped 16 1/8, or 11.8%, to 153 9/16 after it reported fourth-quarter earnings of 4 cents a share, beating the 24-analyst estimate of 2 cents and the year-ago 3 cents. The online auction giant said fourth-quarter operating profit surged as sales more than doubled and it added 305,000 users. eBay also issued an upbeat outlook for the current fiscal year, saying it expects revenue to come in between $30 million to $40 million higher than the $350 million analysts expect for 2000.
Ford
(F) - Get Ford Motor Company Report
fell 2 1/8 to 48 after it reported fourth-quarter earnings of $1.47 a share, beating the 16-analyst estimate of $1.45 and up from the year-ago $1.35. For more
details, see coverage from
TheStreet.com/NYTimes.com
joint newsroom.
EMC
(EMC)
lost 6 15/16, or 5.8%, to 113 1/16 after it reported fourth-quarter earnings, including the operations of
Data General
, which it acquired in October, and excluding a charge, of 34 cents a share, ahead of the 23-analyst estimate of 31 cents and up from the year-ago 25 cents.
Ingersoll-Rand
(IR) - Get Ingersoll Rand Inc. Report
added 3 5/16, or 7.2%, to 49 1/4 after it posted fourth-quarter earnings of $1.01 a share, a penny better than the 19-analyst estimate and up from the year-ago 91 cents.
3M
rose 4 15/16, or 5.4%, to 96 5/16 after it reported fourth-quarter earnings of $1.10 a share, well-ahead of the nine-analyst estimate of $1.02 and up from the year-ago 86 cents, excluding nonrecurring items. 3M said it expects earnings to increase 10% or more in 2000.
TheStreet.com/NYTimes.com
joint newsroom wrote about 3M's earnings
this morning.
Nortel Networks
(NT)
lost 8 15/16, or 8.2%, to 99 15/16 after it reported fourth-quarter earnings of 44 cents a share, 2 cents better than the 20-analyst forecast. The company also set a 2-for-1 stock split.
PC Connection
(PCCC)
inched up 7/8 to 30 13/16 after it reported fourth-quarter earnings of 47 cents a share, beating the five-analyst estimate of 42 cents and up from the year-ago 32 cents.
PP&L Resources
(PPL) - Get PPL Corporation Report
slipped 3/16 to 22 5/8 after it reported fourth-quarter earnings of 64 cents a share, beating the seven-analyst of 61 cents and the year-ago earnings of 40 cents.
Polaroid
(PRD)
gained 2 3/16, or 10.7%, to 22 9/16 after it posted fourth-quarter earnings of 64 cents a share, in line with the eight-analyst estimate and up from the year-ago $1.72 loss.
Sempra Energy
climbed 1 3/8, or 8%, to 18 5/8 after it reported fourth-quarter earnings of 44 cents a share, beating the eight-analyst estimate of 42 cents and up from the year-ago 36 cents.
Union Carbide
(UK)
rose 1/4 to 56 5/16 after it said stronger margins in its basic chemicals and polymers business and improved performance by its equity companies should result in earnings coming in somewhat above First Call estimates. The 11-analyst estimate currently calls for Union Carbide to earn 46 cents a share in the fourth quarter. Union Carbide said it will report earnings Monday.
In other earnings news:
Offerings and stock actions
Comdisco
(CDO)
lost 2 5/8, or 6.6%, to 37 after it said it has set an IPO for its
Prism Communications
division and anticipates filing with the
Securities and Exchange Commission
in the next few months. Last night, the company posted first-quarter earnings of 36 cents a share, a penny better than the seven-analyst estimate and up from the year-ago 24 cents.
Goldman Sachs
and
J.P. Morgan
priced a 13 million-share offering of
Corning
(GLW) - Get Corning Incorporated Report
at $151.375 a share. Shares of GLW climbed 4 3/4 to 156.
Eaton
(ETN) - Get Eaton Corporation PLC Report
lost 1/4 to 70 1/16 after it said it set a $500 million share repurchasing plan.
SG Cowen
priced a 3.75 million-share offering for
Healthgate Data
(HGAT)
at $11 a share. Shares rose 3/4, or 6.8%, to 11 3/4.
SilverStream Software
(SSSW)
jumped 6 7/8, or 6%, to 120 7/8 after it said it has set a 2.2 million-share secondary offering at $114 a share. The company will offer 1.45 million shares, while stockholders will put up the remaining 750,000 shares.
Morgan Stanley Dean Witter
is serving as the deal's lead underwriter.
Robertson Stephens
priced a 3 million-share IPO for
T/R Systems
(TRSI)
at $10 a share. TRSI jumped 5 15/16, or 59.4%, to 15 15/16.
Analyst actions
Credit Suisse First Boston
raised its price target on
Advent Software
(ADVS)
to 90 from 80. Shares of Advent Systems popped 3 7/8, or 5.7%, to 71 5/8.
CSFB lowered its rating on
AK Steel
(AKS) - Get AK Steel Holding Corporation Report
to buy from strong buy and cut its price target to 26 from 32. Shares of AK Steel slipped 3 13/16, or 23.5%, to 12 3/8.
Banc of America Securities
said it upped its price target on
Apex
(APEX) - Get APEX Global Brands Inc. Report
to 56 from 42. Shares of Apex added 4, or 9.8%, to 44 5/8.
Credit Suisse First Boston
sliced its fourth-quarter EPS estimate on
BMC Software
(BMCS)
to 48 cents from 57 cents a share. Shares of BMC Software retreated 4 1/4, or 9.7%, to 39 3/8.
SoundView Technology
upped its price target on
CDW Computer Centers
(CDWC)
to 105 from 80. The stock lifted 5 1/2, or 8.3%, to 71 3/8.
Merrill Lynch
raised its intermediate rating on
Cigna
(CI) - Get Cigna Corporation Report
to buy from accumulate. Separately, Cigna added $1 billion to its current share-repurchasing plan. Shares of Cigna moved up 1 1/4 to 72 3/4.
CSFB raised its price target on
Cypress Semiconductor
(CY) - Get Cypress Semiconductor Corporation Report
to 45 from 32. Shares of Cypress Semiconductor skidded 5/16 to 36 1/16.
SoundView Technology upped its rating on
EDS
(EDS)
to buy from hold and set a price target of 85. Shares of EDS stumbled 1 11/16 to 69 13/16.
Schroder
upped its rating on
Merrill Lynch
(MER)
to outperform from perform in line. Shares of Merrill Lynch rose 6, or 7.4%, to 87.
Merrill Lynch
raised its rating on 3M to intermediate-term buy from accumulate. Shares of 3M climbed 4 15/16, or 5.4%, to 96 5/16.
Merrill Lynch upped its intermediate rating on
Nortel Networks
(NT)
to near-term buy from accumulate. Shares of Nortel Networks declined 8 15/16, or 8.2%, to 99 15/16.
Bear Stearns
upped its fiscal 2000 earnings estimate on
RealNetworks
(RNWK) - Get RealNetworks Inc. Report
to 31 cents a share from 30 cents.
Donaldson Lufkin & Jenrette
raised its six-to-12-month price target to 280 from 150. Last night, the company posted
fourth-quarter earnings that beat consensus estimates. Shares of RealNetworks advanced 12 1/16, or 7.6%, to 169 7/8.
Merrill Lynch upped its intermediate-term rating on
Robert Half
(RHI) - Get Robert Half International Inc. Report
to accumulate from neutral and raised its fiscal 2000 estimate to $1.75 a share from a range of $1.60 to $1.75. CSFB also lifted its rating on the stock to buy from hold. Shares of Robert Half tacked on 10 1/16, or 35.9%, to 38 1/16.
Merrill Lynch upped its rating on
Scientific-Atlanta
(SFA)
to long-term buy from accumulate. Shares of Scientific-Atlanta bounced 7 5/8, or 10.5%, to 80 1/8.
SG Cowen
upped its fiscal 2000 EPS estimate on
Siebel
(SEBL)
to 75 cents a share from 67 cents. Banc of America Securities raised its fiscal 2000 EPS estimate to 75 cents from 70 cents. Shares of Siebel lifted 10 1/4, or 12%, to 95 3/8.
CSFB raised its fiscal 2000 earnings estimate on
Station Casinos
(STN) - Get Stantec Inc Report
to $1.52 a share from $1.35. Shares of Station Casinos climbed 1 3/8, or 7.2%, to 20 3/8.
ABN Amro
upped its fourth-quarter earnings estimate on
Telmex
(TMX) - Get Terminix Global Holdings Inc. Report
to $1.69 a share from $1.59. Telmex hopped 2 5/16 to 112 7/16.
Miscellany
Coca-Cola
(KO) - Get Coca-Cola Company (The) Report
slipped 2 13/16 to 63 1/16 after it said it will cut about 6,000 jobs in 2000. The beverage giant posted fourth-quarter earnings of 31 cents a share before a writedown, a penny ahead of the 17-analyst estimate of 30 cents a share.
The Heard on the Street column in
The Wall Street Journal
said there isn't much zest for the flood of big insurance company IPOs coming up. Adam Levy, a financial services analyst at
Invesco Funds Group
, is quoted as saying that the insurance companies going public "are oversaturating a market that doesn't have a lot of demand right now." Among the upcoming IPOs mentioned in the column:
John Hancock Financial Services
(JHF)
(of which 102 million shares were priced this evening midrange at $17 a share); Canada's
Sun Life Assurance
; and
Metropolitan Life
. Also, later this year,
Prudential Insurance Co. of America
is expected to do another huge IPO.
