Company Report: RTRSY, RJR, ADCT, WAC, MEAD, ORCH

R.J. Reynolds (RJR) is considering an offer for its former parent company Nabisco (NGH) that would bring the two companies together again.

Nabisco, which has been for sale for the past month, dropped its former name, RJR Nabisco, after spinning off its RJ Reynolds tobacco division last year. The

Journal

reported that if the deal should go through, RJ Reynolds would secure an asset that would give the tobacco giant cash to cover litigation and stock repurchases. R.J. Reynolds declined 1/16 to 22 3/4, while Nabisco added 7/16 to 17 1/16.

Cisco Systems

(CSCO) - Get Report

gained 4 1/8, or 6.4%, to 67 3/4 after it said it agreed to acquire

Arrowpoint

(ARPT)

for roughly $5.7 billion. According to the terms, Cisco would swap 2.12 shares for each share of Arrowpoint. The companies' boards have both favored the merger.

Cisco CFO Larry Carter said the purchase would have no effect on fiscal 2000 earnings but would be accretive in calendar 2001. Arrowpoint jumped 5 3/8 to 140 3/16.

Mergers, acquisitions and joint ventures

ADC Telecommunications

(ADCT) - Get Report

will pay $888 million to acquire unlisted Swedish laser manufacturer

Altitun AB

. The company also announced it will buy Denmark-based

IBSEN Micro Structures

for $80 million.

Altitun has developed a laser product with a variable wavelength, which is used in optical communications networks and permits the delivery of broadband links with a capacity 100 times greater than at present.

IBSEN makes micro-optical and opto-electronic products for high-speed telecommunications and data networks. ADC Telecommunications mounted 5 7/8, or 10.2%, to 63 1/8.

Gannett

(GCI) - Get Report

stumbled 1 5/16 to 60 3/4 after it said it launched its second bid for British publisher

News Communications & Media

, raising it 48% to $702 million. The deals calls for Gannett to pay Newscom holders $28.44 for each share of they own. Gannet would also take on all of Newscom's debt. Last year, Newscom turned down Gannett's initial $488 million offer, deeming it too low.

Reuters

(RTRSY)

and

Aether Systems

(AETH)

said that they have initiated their wireless data services venture and are reviewing possible acquisitions. The London-based

Sila Communications

will develop and operate services to wireless customers through data centers in Europe. The venture will initially concentrate on financial service markets, supplying information from

Reuters

and the Web. Aether holds a 60% stake in the unit, with Reuters owning the remainder. Reuters skidded 1 11/16 to 107 3/4, and Aether added 4 1/2 to 167 1/2.

PaineWebber

(PWJ)

is bringing a lawsuit against

Morgan Stanley Dean Witter

(MWD)

, claiming the investment bank tried to interfere with its acquisition of

J.C. Bradford

, as reported in

The Wall Street Journal

. PaineWebber advanced 15/16 to 43 1/16 and Morgan Stanley fell 1/2 to 71 1/8.

Spanish-based

Telefonica

and Dutch telecom company

KPN

(KPN)

have ended negotiations for a possible merger,

CNBC

said the

Wall Street Journal

was reporting. But according to

Reuters

, a spokesman for the companies was unaware of the development, saying "If it has, then that's news to me." KPN slid 1 1/16 to 106 15/16.

Earnings/revenue reports and previews

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.

)

Business-to-business software company

J.D. Edwards

(JDEC)

warned that it expects to report a second-quarter operating loss of $20 million to $25 million, mainly due to lower-than-anticipated margins on license-fee revenue. The current 12-analyst First Call/Thomson Financial estimate calls for earnings of 2 cents a share. The company said it expects to report revenue in the range of $225 million to $235 million, in line with the company's prior second quarter, in what it called a "transitional quarter." Second-quarter results will be released May 24. J.D. Edwards skidded 1, or 6.2%, to 15 1/16.

Mitel

(MLT)

reported fourth-quarter earnings of about 25 cents, or 37 Canadian cents, beating the 1-analyst estimate by a penny and up from the year-ago 9 cents, or 13 Canadian cents.

QLT Phototherapeutics

(QLTI)

was unchanged at 53 3/8 after it reported a first-quarter loss of about 13 cents, or 19 Canadian cents, beating the five-analyst estimate of a 15-cent loss, but higher than the year-ago loss of 6 cents, or 10 Canadian cents. Kenneth Galbraith, QLT's executive vice president and chief financial officer, attributed the increased loss to QLT's share of costs for the

Visudyne

expanded access program and accelerated premarketing activities by

CIBA Vision

.

Selective Insurance

(SIGI) - Get Report

tacked 7/16 to 18 9/16 after it posted first-quarter earnings of 35 cents a share, missing the six-analyst estimate of 37 cents but up from the year-ago 29-cent profit.

SciQuest.com

(SQST)

shed 7/16 to 15 5/16 after it posted a first-quarter loss of 28 cents a share, narrower than the 13-analyst estimate of 31-cent loss but wider than the year-ago 22-cent loss.

Warnaco

(WAC)

slid 1 11/16, or 15.9%, to 8 7/8 after it reported earnings of 53 cents, including a pretax gain of 42 cents related to the sale of the company's investment in Interworld and $6.5 million in severance costs. The 11-analyst estimate was 40 cents and earnings a year ago were 39 cents.

Offerings and stock actions

Eaton's

(ETN) - Get Report

wholly owned subsidiary

Axcelis Technologies

, formerly Eaton Semiconductor Equipment, has filed with the

Securities and Exchange Commission

for the initial public offering of common stock. Late last month, Eaton, which will own more than 80% of the shares of the spinoff, announced its intent to reorganize its semiconductor equipment operations into an independent company and conduct an IPO for this business. Eaton currently plans to complete its divestiture of the remaining Axcelis stock on a tax-free basis to its shareholders about six months after the completion of the IPO, subject to a favorable tax ruling and the Board of Directors' approval. Eaton gained 1 7/8 to 82.

Warburg Dillon Read

priced a 7 million-share IPO for

Genomic Solutions

(GNSL)

at the bottom end of its expected price range, at $8 a share. Genomic Solutions advanced 3/8 to 8 3/8.

KPMG Consulting

filed to raise $1 billion in an initial public offering. The company, which filed for a Nasdaq listing under the symbol KCIN, is one of the world's largest consulting firms specializing in Internet strategies. KPMG Consulting had been a part of

KPMG LLP

, one of the Big 5 accounting and consulting firms.

Meade Instruments

(MEAD)

set a 2-for-1 stock split. Shares of Meade rose 3 1/2, or 5.1%, to 72 1/2.

Credit Suisse First Boston

priced a 6 million-share IPO for

Orchid Biosciences

(ORCH)

at the bottom of its revised price range at $8 a share. Orchid Biosciences climbed 2 15/16, or 36.7%, to 10 15/16.

Sierra Wireless

(SWIR) - Get Report

said it would hold a 2.2 million offering at $48.63 a share. Sierra Wireless slipped 1 25/32 to 47 1/4.

Analyst actions

Upgrades

Cablevision

(CVC)

UP to buy from attractive at

Paine Webber

. Cablevision traded up 2 to 63.

CVS

(CVS) - Get Report

: price target UP to 52 from 48 at

Morgan Stanley Dean Witter

. CVS gained 15/16 to 42 1/2.

Mitchell Energy

(MNDB)

: UP to strong buy from buy at

Credit Suisse First Boston

. Mitchell Energy advanced 2 1/4, or 9.5%, to 26 1/16.

Summit Technology

(BEAM)

up to buy from market perform at

Chase H&Q

. Summit Technology rose 1/2 to 11 1/4.

Visx

(VISX)

UP to buy from market outperform at Chase H&Q. Visx jumped 3 3/4, or 22.3%, to 20 9/16.

Downgrades

Kmart

(KM)

rose 3/16 to 7 7/8: DOWN to neutral from outperform at Morgan Stanley.

Plug Power

(PLUG) - Get Report

slipped 3 7/16, or 5.78%, to 56: DOWN to market performer from outperformer at

Goldman Sachs

.

Provantage

(PHS)

edged up 1/16 to 11 15/16: CUT to neutral from buy at

Bear Stearns

.

Initiations

Digital Think

(DTHK)

was off 7/16 to 29 1/16: NEW buy rating at

Thomas Weisel

by analyst Frederick H. McCrea.

Group Moves

Lehman Brothers

launched coverage on e-tailers:

Amazon.com (AMZN) - Get Report jumped 3 7/16, or 6.2%, to 58 1/2: NEW buy, price target: 80.
eBay (EBAY) - Get Report fell 2 15/16 to 134: NEW buy, price target of 200.
eToys (ETYS) stumbled down 3/16 to 6 13/16: NEW neutral.
Priceline.com (PCLN) shares lost 1/2 to 57 7/16: NEW outperform, price target of 75.

Chase H&Q

upgraded three retailers:

Talbots (TLB) grew 1/8 to 48 7/8: to strong buy from buy.
Limited (LTD) hopped up 1 11/16 to 47 3/8: to strong buy from buy.
Zale (ZLC) inched up 1 13/16 to 41 7/16: to strong buy from buy.

Miscellany

24/7 Media

(TFSM)

was unchanged at 20 7/8 after it announced it had filed a patent infringement lawsuit against

Doubleclick

(DCLK)

. Doubleclick rose 7/8 to 62 13/16. According to the proceedings, 24/7 Media is asking for damages along with injunctive relief. The suit stems from the use of a technology that Doubleclick's DART and serving system uses to direct specific ads to certain users.

CarrAmerica Realty

(CRE)

jumped 1/8 to 24 13/16, which yesterday reported a 20% increase in earnings over last year, said its founder and chairman, Oliver Carr, would retire. Chief Executive Thomas Carr will replace him as chairman.

Salomon Smith Barney

upped shares of CarrAmerica Realty to outperform from neutral.