Updated from 3:01 p.m. EDT

Investors who thought they could make it through a day without a profit warning were wrong. Shortly after the closing bell yesterday,

Apple

(AAPL) - Get Report

warned that its fourth-quarter results would fall short of expectations.

The company said that it expects to report a profit of 30 cents to 33 cents a share -- well behind the 17-analyst

First Call/Thomson Financial

forecast of 45 cents. Apple also said its quarterly revenue would be $1.85 billion to $1.9 billion. (

TheStreet.com

discussed

Apple's warning in a separate story and in

The Night Watch.)

Apple closed today down $27.75, or 51.9%, to $25.75.

Paul Allen

, the billionaire co-founder of

Microsoft

(MSFT) - Get Report

, will step down from the company's board at its annual meeting Nov. 9. Microsoft said Allen will remain as a senior strategy adviser, while board member Richard Heckborn will also step down. The company said it will not fill the vacant seats and the number of board members will be reduced to six from eight. Microsoft closed down $1.06, or 1.7%, to $60.25.

Mergers, acquisitions and joint ventures

Boeing

(BA) - Get Report

was suffering from disappointment over Singapore Airlines' decision to purchase airplanes from its competitor

Airbus

. Boeing had been hoping to win the contract.

Boeing closed the day down $1.38, or 2.1%, to $63.13. But the aircraft manufacturer has lately been on a roll -- in March, its shares traded at $32.38.

Novartis'

(NVS) - Get Report

Ciba Vision unit said the Federal Trade Commission has terminated the Hart-Scott-Rodino antitrust waiting period for its acquisition of

Wesley Jessen VisionCare

(WJCO)

.

In May, Ciba Vision said it would acquire Wesley Jessen for about $780 million through a $38.50 a share cash tender offer, subject to 51% of Wesley Jessen's stock being tendered. On Sept. 6, the company said about 56% of Wesley Jessen's stock was tendered and not withdrawn. The tender offer is scheduled to expire Monday at 5 p.m. EDT.

Novartis closed down 38 cents, or 0.96%, to $38.69; Wesley Jessen ended the day up $1, or 2.7%, to $38.44.

Toy maker

Mattel

(MAT) - Get Report

said today that it had agreed to sell its

Learning Co.

unit to private buyout firm

Gores Technology Group

for a right to a share of the company's future earnings.

The deal, which netted Mattel no cash, ranks as one of the worst corporate deals ever. Just 16 months ago, Mattel bought the education software company for $3.5 billion. It has been trying to

sell the division for months. The toy-maker closed down 13 cents, or 1.1%, to $11.50.

Cement producer

Southdown

(SDW)

has agreed to be acquired by Mexican cement giant

Cemex

(CX) - Get Report

for a hefty $2.6 billion in cash, plus debt.

Cemex will pay $73 a share in cash, a 33% premium over its closing price of $54.87 yesterday. That's a lot of rocks. The acquisition of Southdown, the largest cement producer in the U.S., marks Cemex's effort to expand its presence in the U.S. market. The acquisition includes $185 million in long-term debt, bringing the value of the deal to $2.8 billion.

The combined company will have over $6.3 billion in annual sales. Cemex also said its board approved a repurchase program of up to $500 million of the company's shares traded on the Mexican stock market. The repurchased shares will subsequently be canceled.

Southdown CEO and President Clarence Comer will also be CEO and president of the U.S. operations of the combined company. Southdown closed up $16.38, or 29.9%, to $71.25; Cemex was down 88 cents, or 4.2%, to $20.06.

After Thursday's Close

North Fork Bancorp

(NFB)

said it would drop a $2.4 billion hostile bid for

Dime Bancorp

(DME)

, putting an end to a bitter 6-month takeover battle between the two regional New York banks. North Fork Chairman John Kanas said the company would buy back up to 10% of its common stock, or up to 17 million shares,

Reuters

reported. North Fork ended the day up 44 cents, or 2.1%, to $21.63, while Dime closed down $1.38, or 5.8%, to $22.25.

Back to top

Earnings/revenue reports and previews

Mitek Systems

(MITK) - Get Report

, which develops automated document-recognition technology, said fourth-quarter profits will fall short, and that it will restate third-quarter earnings to reflect appropriate recognition of certain revenue.

The company said several contracts not expected to be finalized by the close of the year are responsible for the anticipated shortfall.

Mitek also said in the course of reviewing a contract, it found that its terms were not in compliance with guidelines. Revenue associated with that contract will possibly be excluded from the third quarter and shifted to the fourth. Mitek closed down 31 cents, or 6.9%, to $4.19.

United Airlines parent

UAL

(UAL) - Get Report

surprised no one with news this morning that it expects to post a loss in the third quarter and possibly the fourth. The shortfall is blamed on flight cancellations, delays and higher costs for jet fuel and wages.

The airline was plagued with labor problems earlier this year. And higher oil prices are socking it to businesses that rely on fuel for their operations.

Two months ago, UAL said it would fall short of analyst forecasts for the second half of the year. The third-quarter estimate by 11 analysts is for 97 cents, while the fourth-quarter estimate by 10 analysts is for 63 cents, according to

First Call/Thomson Financial

.

This morning,

Merrill Lynch

analyst Michael Linenberg downgraded UAL to accumulate from buy and said he expects earnings to be under pressure for at least the next 12 to 18 months and possibly longer, citing higher labor costs. Merrill said it was not changing its 2001 estimates for UAL, but said it was "clearly at risk." UAL was down $2, or 4.6%, to $42.

After Thursday's Close

Management services company

CDI

(CDI)

announced that it anticipates third quarter earnings of 58 to 61 cents per share, below the seven-analyst estimate of 72 cents and the year-ago 70-cent result. CDI ended down 56 cents, or 3.4%, to $16.

Huntington Bancshares

(HBAN) - Get Report

closed down $2.94, or 16.7%, to $14.69 after saying it expects third- and fourth-quarter EPS to fall short of analyst estimates.

The Ohio-based bank forecast third-quarter EPS of about 30 cents a share, excluding a charge of $33 million, or 13 cents a share for the write-down of auto lease residual values, and fourth-quarter EPS of between 31 cents and 33 cents a share.

A

First Call/Thomson Financial

survey of 15 analysts produced a mean-operating earnings estimate of 41 cents a share for the company's third quarter. A 12-analyst estimate, also for mean earnings, was for 43 cents a share for the fourth quarter.

Northwest Pipe

(NWPX) - Get Report

said third-quarter profit would not meet Wall Street expectations, citing lower profit margins from lower selling prices and higher steel costs.

Northwest Pipe expects to earn between 38 cents to 46 cents per share in the quarter, compared to the four-analyst prediction of a 58 cent profit. Northwest earned 58 cents in the year-ago period. The company ended the day down 19 cents, or 1.6%, to $11.25.

Airborne Freight

(ABF)

, which does business as Airborne Express, said it expects a third-quarter loss of 5 cents to 10 cents a share, well below earnings of 28 cents a share expected by the 14 analysts surveyed by First Call/Thomson Financial.

The company cited a continued lack of growth in domestic shipments and a rise in fuel costs as the reasons for the shortfall. In a press release, it said it will start several new initiatives targeting the small business sector, electronic commerce market and additional product opportunities to combat these problems. The stock closed down $1.81, or 15.1%, to $10.19.

Arrow

(ARRO)

posted fourth-quarter earnings of 55 cents a share, missing the two-analyst estimate of 58 cents but up from year-ago earnings of 50 cents.

Arrow, which fell about $5 million short of its sales goal of $325 million for fiscal 2000, said the sales shortfall is due to slower-than-projected uptake of its HemoSonic 100 hemodynamic monitoring system and the prolonged unavailability of the drug FUdR, used with the company's implantable drug infusion pumps. FUdR is expected to be available again in October.

The company said it expects specialized selling, clinical application studies and the "championing" of its products by doctors to boost 2001 sales. The company closed down $1.69, or 4.4%, to $36.38.

Mentor

(MNTR)

warned of lower-than-expected earnings and said its CEO has resigned for personal reasons. The company, a breast-implant maker, said it expects earnings to be flat with the year-ago 24 cents a share, while the six-analyst estimate calls for 31 cents.

Mentor said Chairman Christopher Conway resumed the position of president and CEO following the resignation of Anthony Gette as an officer and director of the company. The company said it was still confident it will achieve record sales and earnings for the year. Mentor ended the day down $3.84, or 19.6%, to $15.75.

Software provider

Net Perceptions

(NETP)

said it expects to report a wider-than-expected loss of 22 cents to 32 cents a share, with revenue ranging from $6 million to $8 million. The current eight-analyst expectation is for a loss of 13 cents a share. The company said it had some deals it did not book as expected and that business in Asia and Europe has been slow. The company ended the day down $7.78, or 62.3%, to $4.72.

Newspaper publisher

Pulitzer

(PTZ)

said it expects to report third-quarter operating earnings in the range of 37 cents to 41 cents a share. The current two-analyst estimate calls for 41 cents. Pulitzer closed up 70 cents, or 1.7%, to $42.95.

Research In Motion

(RIMM)

posted a second-quarter loss of 2 cents a share, better than the 12-analyst estimate of a 3 cent loss, but down from year-ago earnings of 3 cents a share.

The company, which makes and markets wireless systems for the mobile communications market, said the second-quarter loss reflects its increased investment in marketing and channel support costs. "Expenses increased in line with expectations as we executed on our plan to grow the business," the company said. The stock closed up $15.13, or 18.1%, to $98.56.

Back to top

Analyst actions

Upgrades

Sempra Energy

TST Recommends

(SRE) - Get Report

: UP to the recommended for purchase list from market outperformer. at

Goldman Sachs

. Sempra closed up 88 cents, or 4.4%, to $20.81.

North Fork

(NFB)

: UP to buy from market perform at

Donaldson Lufkin & Jenrette

. North Fork closed up 44 cents, or 2.1%, to $21.63.

Research in Motion

(RIMM)

: price target UP to 100 from 70 at

Merrill Lynch

. The company ended the day up $15.13, or 18.1%, to $98.56.

Bill Crawford changed his price objective on the company to $100 from $70.

Downgrades

Airborne Freight

(ABF)

: 2000 EPS view DOWN to 50 cents from $1.25 at Goldman Sachs. Airborne Freight ended the day down $1.81, or 15.1%, to $10.19.

Net Perceptions

(NETP)

: DOWN to long-term attractive from buy at

Robertson Stephens

. As noted above, the company closed down $7.78, or 62.3%, to $4.72.

Pacificare Health Systems

(PHSY)

: DOWN to hold from accumulate at

Prudential Securities.

. Pacificare closed down $3.94, or 10.2%, to $34.81.

Initiations

Digital Insight

(DGIN)

: NEW buy at

Salomon Smith Barney

; price target: 43. Digital Insight ended up $3.13, or 9.5%, or $35.88.

Intuit

(INTU) - Get Report

: NEW neutral at Salomon; price target: 62. The stock closed down $1.44, or 2.5%, to $57.

Knight Trading

(NITE)

: NEW accumulate at Prudential. Knight ended the trading day up $1.19, or 3.4%, to $36.

Nextel

(NXTP)

: NEW accumulate at Prudential. Nextel closed up $1.13, or 4%, to $29.13.

TIBCO Software

(TIBX)

: NEW buy at

Thomas Weisel

. The stock ended the day down $3.69, or 4.2%, to $84.44.

Goldman Sachs removed food producer and grain processor

ConAgra

(CAG) - Get Report

from the firm's recommended-for-purchase list, replacing it with animal feeds maker

Ralston Purina

(RAL)

. ConAgra closed up 25 cents, or 1.3%, to $20.06; Ralston ended the day up 50 cents, or 2.2%, to $23.69.

Group Moves

The rot of the apple is spreading.

Bear Stearns

this morning sliced its ratings on five PC-makers, saying it was concerned with "the macro picture" of the sector. The downgrades come on the heels of Apple's announcement that its upcoming earnings will be much lower than expected.

Apple

(AAPL) - Get Report

: DOWN to neutral from buy. Apple, as noted above, ended the day down $27.75, or 51.9%, to $25.75.

Compaq Computer

(CPQ)

: DOWN to attractive from buy. Compaq closed down 73 cents, or 2.6%, to $27.52.

Hewlett-Packard

(HWP)

: DOWN to attractive from buy. H-P closed down $6.31, or 6.1%, to $97.50.

Gateway

(GTW)

: DOWN to neutral from buy. The stock closed down $5.75, or 10.7%, to $48.25.

Dell Computer

(DELL) - Get Report

: DOWN to neutral from buy. Dell ended the day down $2.63, or 7.9%, to $30.81.

Merrill Lynch commented on a number of airline stocks:

United Airlines parent

UAL

(UAL) - Get Report

: DOWN to accumulate from buy. As noted above, UAL was down $2, or 4.6%, to $42.

America West

(AWA)

: DOWN to neutral/accumulate from accumulate/buy; 2000 EPS view down to $1.40 from $1.55 and 2001 EPS view down to $2.00 from $2.15. The stock ended the day down 69 cents, or 5.3%, to $12.19.

Southwest Airlines

(LUV) - Get Report

: UP to buy/buy from accumulate/buy; 2001 EPS view up to $1.30 from $1.15. The LUV stock ended the trading day up 6 cents, or 0.3%, to $24.25.

Delta

(DAL) - Get Report

: September quarter DOWN to $2.10 from $2.25; 2000 EPS view unchanged. Delta had no flower on as it closed down $1.81, or 3.9%, to $44.38.

Alaska Airlines

(ALK) - Get Report

: 2001 EPS view DOWN to $3.75 from $4.90. It was a little chilly for the airline -- it closed down 25 cents, or 1%, to $24.

Continental.

(CAL) - Get Report

: 2001 EPS view UP to $6.50 from $5.80. The stock ended the day down 56 cents, or 1.2%, to $45.44.

Back to top

Miscellany

QuadraMed

(QMDC)

announced cost-saving plans to reduce its work force and divest its equity interest in its

ChartOne

joint venture.

The healthcare information systems company expects to achieve about $15 million in annual cost savings from the planned layoffs, and will take a charge of $4 million to $5 million in the third quarter to cover severance and other costs associated with the reductions.

Warburg Pincus

will acquire the remaining 53% equity interest in ChartOne for about $27 million in cash. QuadraMed ended the day up 13 cents, or 10.5%, to $1.31.

Unilever

(UL) - Get Report

announced it will close its Chicago manufacturing plant, which employs about 600 people, by the end of 2002 in order to consolidate production into fewer plants.

The company said the plant manufactures deodorant, shampoo, conditioner and skin lotions. Unilever will move production to Clinton, Conn., Jefferson City, Mo., and Raeford, N.C., starting next year. The company said its officials will meet with employees regarding benefit and severance packages and provide other employment assistance. Unilever closed up 75 cents, or 2.9%, to $26.25.

After Thursday's Close

Compaq

(CPQ)

named CEO and President Michael Capellas to the additional position of chairman. As noted above, Compaq closed down 73 cents, or 2.6%, to $27.52.

Motorola

(MOT)

filed a lawsuit against former executive and current

Advanced Micro Devices

(AMD) - Get Report

COO and President Hector Ruiz, alleging breach of contract.

In a press release Thursday, Motorola, which also alleges "tortious interference" against the former president of its semiconductor products unit, said it paid Ruiz a "substantial six-figure amount" when he left the company in January in return for his promise not to solicit Motorola personnel to join him. Motorola said Ruiz lured away a "senior Motorola finance officer." Motorola closed up $1.44, or 5.1%, to $29.50.

Back to top

By the Numbers

The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.

Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.

Back to top