Company Report: Qualcomm Leads Tech Down; Financials Surge

Author:: Eileen Kinsella
Publish date:: Jan 26, 2000 7:17 PM EST

(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 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

up 2 1/4 to 58 1/8 and

American Express

(AXP) - Get Report

which gained 1 3/8 to 159 3/4.

Mergers, acquisitions and joint ventures

Computer Associates

(CA) - Get Report

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

fell 5/8 to 61 1/8 after it said it has entered a $1.13 billion cash agreement with

Deutsche Telekom

(DT) - Get 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 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

(EBAY) - Get Report

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 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 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.

(MMM) - Get Report

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 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

(SRE) - Get Report

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 Report

at $151.375 a share. Shares of GLW climbed 4 3/4 to 156.

Eaton

(ETN) - Get 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 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 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 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 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 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 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 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)

to $1.69 a share from $1.59. Telmex hopped 2 5/16 to 112 7/16.

Miscellany

Coca-Cola

(KO) - Get 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.