Monday's Winners & Losers: American Freightways, Willamette, Western Multiplex, Hewlett-Packard

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Updated from 5:13 p.m.

Hewlett-Packard

(HWP)

posted fourth-quarter earnings of 41 cents a share, missing the 15-analyst estimate by 10 cents, but beating year-ago earnings of 36 cents a share.

Hewlett-Packard also said it has ended talks to acquire

PricewaterhouseCoopers'

consulting business. The company's stock

fell 6% when it initially announced the merger in early September. On Halloween, H-P Chief Executive Carly Fiorina said the company was

reconsidering the price and the purchase of the consulting unit.

The missed earnings were a surprise, because on Sept. 22, the company had said it would make

fourth-quarter estimates.

H-P attributed its reduced profitability to "margin pressures, adverse currency effects, higher-than-expected expenses and business mix." The company did say that business is "healthy," demand is strong and the company is not backing away from its growth targets. It said for the fourth quarter there is strong revenue growth in computing systems, but an order backlog in software.

The figure for the fourth quarter excludes investment and divestiture gains and losses, the effects of stock appreciation rights and restructuring expenses. H-P closed down $5, or 12.8%, yo $34.13.

Mergers, acquisitions and joint ventures

Weyerhaeuser

(WY) - Get Report

proposed to buy

Willamette

(WLL) - Get Report

in a $7 billion cash deal, including $1.7 billion in Willamette's debt.

Weyerhaeuser sent a letter to the company Nov. 6, saying it would pay $48 a share, or $5.3 billion for outstanding shares. The offer is a 38% premium on Willamette's closing price Friday and a premium of about 63% over Willamette's closing price in the last 60 days.

Willamette's board met Nov. 9, but told Weyerhaeuser it did not act on the proposal.

In a letter to Willamette CEO Duane McDougall, Weyerhaeuser CEO Steven Rogel said he first proposed the merger two years ago, believing the combination of the companies would result in the "premier" forest and paper products company. Rogel went on to say in the letter that the merger would result in annual cost savings of $300 million, and that Weyerhaeuser's board is confident the proposal won't raise antitrust issues.

Weyerhaeuser closed down $1.19, or 2.8%, to $41.69; Willamette was up $11.19, or 32.2%, to $45.94.

Cendant

(CD)

said it will pay about $935 million, or $33 a share, for the remaining shares of car-rental company

Avis Group Holdings

(AVI)

that it doesn't already own.

The share price for the remaining shares represents a 10% premium for the Avis stock. Franchising company Cendant doesn't yet own 25.6 million shares and the options for about 7.9 million shares. The equity value of the deal is net of option proceeds.

Upon completion of the transaction, which is expected to close in 2001's first quarter, Avis Group will become a subsidiary of Cendant. According to the company, the acquisition is expected to be "immediately" accretive to Cendant's earnings. Cendant CEO/Chairman/President Henry R. Silverman said that adding Avis will enhance both its off-line and online travel strategies. Cendant closed down 50 cents, or 4.2%, to $11.50; Avis was up $1.88, or 6.3%, to $31.88.

FedEx

(FDX) - Get Report

, the world's largest express mail service, announced Monday that it would acquire regional freight carrier

American Freightways

(AFWY)

in a stock and cash deal valued at $1.2 billion.

Under the terms of the agreement, FedEx will exchange $28.13 in cash or FedEx stock per share of American Freightways -- a nearly 61% premium based on Friday's closing price. The acquisition will expand FedEx's next-day regional freight service coverage in the Midwest, South, and Northeast, and form one of the country's largest ground-freight units when combined with FedEx subsidiary

Viking Freight

, which has its strongest presence in the West. FedEx closed up 10 cents, or 0.2%, to $45.27; American Freightways was up $10.13, or 57.9%, to $27.63.

Smithfield Foods

(SFD)

, the world's largest pork producer, announced a bid today to acquire all outstanding shares of

IBP

(IBP) - Get Report

in a $4.1 billion all-stock deal that includes the assumption of $1.4 billion of IBP debt.

Under the offer -- the second IBP has received in the past two months -- IBP shareholders would get $25 worth of Smithfield Foods stock per share of IBP, a nearly 20% premium based on Friday's closing price of $20.88. Smithfield Foods already has about a 7% stake in IBP, the world's largest beef producer and one of the nation's top pork processors.

TheStreet.com/NYTimes.com

joint newsroom wrote more about

the acquisition in a separate story. Smithfield closed down $3.63, or 11.5%, to $28; IBP was up $1.38, or 6.6%, to $22.25.

Wal-Mart

(WMT) - Get Report

will begin selling

Handspring's

(HAND)

Visor handheld computers, accessories and some Springboard expansion modules in 500 stores starting later this month. Wal-Mart closed up $1.63, or 3.7%, to $45.31.

Western Multiplex

(WMUX)

will buy data networking company

Adaptive Broadband

(ADAP) - Get Report

for $645 million in stock. The deal is expected to close in 2001's first quarter and will be accretive to communications-equipment maker Western Multiplex's EPS by the end of calendar 2001.

Western Multiplex closed down $3.75, or 29.4%, to $9; Adaptive Broadband was down $1, or 7.8%, to $11.81.

After Friday's Close

JNI

(JNIC)

, a designer of hardware and software products that connect servers and data storage devices, saw its shares fall 35.4%, or $38.44, to $70.13 on Friday after news the company said was previously disclosed began to circulate and cause confusion.

In a quarterly report filed with the

Securities and Exchange Commission

, JNI said President/Chief Executive Terry M. Flanagan had said he would like to retire -- information that was already public, JNI said.

Additionally, JNI said in the filing that it believes

Sun Microsystems

(SUNW) - Get Report

has started phasing out the SBus interface, a JNI product, in its workstations and low-end servers and may in the future discontinue using the interface in its high-end servers.

However, JNI issued a statement that said Sun "has never officially announced an end-of-life date for SBus in its servers, but in public forums, certain executives from Sun have indicated that Sun would eventually move to the PCI bus interface or a successor to the PCI bus." JNI added that it "is not aware of any plan by Sun to eliminate the SBus other than Sun's past public statements."

Shares of JNI closed down $5.81, or 8.3%, to $64.31; Sun was down $3.88, or 4.3%, to $85.31.

For more, check out

TheStreet.com's

earlier story.

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Earnings/revenue reports and previews

After Friday's Close

Berkshire Hathaway

(BRK.A) - Get Report

, the holding company led by investor Warren Buffett, reported third-quarter operating income of $301 million, or $197 a share, before realized investment gains.

In the year-ago period, the company earned $156 million, or $103 a share, before investment gains.

Net income for the quarter ended Sept. 30 rose to $797 million, or $523 a share, from $420 million, or $276 a share, last year. The company closed up $3,200, or 5.1%, to $64,400.

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Analyst actions

Credit Suisse First Boston's

John Pitzer cut

Applied Materials'

(AMAT) - Get Report

2001 earnings projections to $2.85 a share from $3.25 a share. He said in a research note that his firm is worried about growth in Applied Materials' April quarter.

"We have perhaps a more bearish view than most on the length of the current inventory correction. We are lowering our 2001 capital growth estimate from 10% to 15% to 0% to 5%."

Pitzer said he believed the company would meet its upcoming fourth-quarter earnings forecasts of 73 cents to 75 cents a share. Pitzer's estimate for the quarter is 77 cents share, which he said "may be above the high end." The

First Call/Thomson Financial

26-analyst estimate is 76 cents a share for the quarter.

SG Cowen

said it expects Applied Materials to meet fourth-quarter EPS estimates of 76 cents a share. AMAT closed down 69 cents, or 1.7%, to $40.25.

Upgrades

Avon Products

(AVP) - Get Report

: 12-month price target UP to $60 from $48 at CSFB. Avon closed down 81 cents, or 1.7%, to $47.

PNC Financial Services

(PNC) - Get Report

: 12-month price target UP to $85 from $75 at

UBS Warburg

. PNC closed down $1.50, or 2.2%, to $65.81.

TCF Financial

(TCB)

: price target UP to $52 from $47 at

Lehman Brothers

. TCF ended the day down 75 cents, or 1.9%, to $39.56.

USFreightways

(USFC)

: UP to strong buy from buy at CSFB. The stock closed up $1.56, or 6.3%, to $26.25.

Downgrades

Firstar

(FSR)

: 12-month price target DOWN to $26 from $35 at UBS Warburg. Firstar closed down 19 cents, or 0.98%, to $19.

SunTrust Banks

(STI) - Get Report

: 12-month price target DOWN to $65 from $70 at UBS Warburg. SunTrust closed down 63 cents, or 1.2%, to $51.31.

Wachovia

(WB) - Get Report

: 12-month price target DOWN to $60 from $50 at UBS Warburg. Wachovia ended the day down 56 cents, or 1.1%, to $53.13.

Yahoo!

(YHOO)

: price target DOWN to a range of $55 to $65 from a range of $65 to $75 at

Wit Soundview

; 2001 first-quarter earnings estimates to 12 cents a share from 13 cents and full-year estimates to 56 cents a share from 58 cents a share. Yahoo! Closed down $1.13, or 1.99%, to $55.31.

Initiations

Ixia

(XXIA)

: NEW intermediate accumulate and NEW long-term buy at

Merrill Lynch

. Ixia closed down 25 cents, or 1.1%, to $23.63.

Johnson & Johnson

(JNJ) - Get Report

: NEW add rating at

ABN Amro

; and 12-month price target of $107 a share. JNJ ended down $1.38, or 1.5%, to $93.06.

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Offerings and stock actions

Documentum

(DCTM)

completed its 2-for-1 stock split it announced Oct. 18. The stock closed down $3.44, or 4.6%, to $70.81.

Shaw Group

(SGR)

said its board declared a 2-for-1 common-stock split. Shaw closed down $3.50, or 4.7%, to $71.13.

SurModics

(SRDX) - Get Report

said its board declared a 2-for-1 stock split. SurModics ended flat at $48.63.

After Friday's Close

Kaydon

(KDN)

said its board has approved an increase in its quarterly dividend to 12 cents from 11 cents. Kaydon closed up 25 cents, or 1.2%, to $21.06.

Park Place Entertainment

(PPE)

, which owns, manages or has an interest in 28 gaming properties, said its board of directors approved the repurchase of up to 20 million additional outstanding common shares. The plan will enable it to meet obligations under employee stock option and other benefit programs.

Year to date through Oct. 31, Park Place said it has bought about 11.8 million shares at $12.12 each. Park Place closed down 13 cents, or 1%, to $12.25.

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Miscellany

CacheFlow

(CFLO)

said its founder and chairman, Michael Malcolm, will resign as chairman to start an Internet-infrastructure company. The stock closed down $8.31, or 7.7%, to $99.63.

Redback Networks'

(RBAK)

CFO said Senior Vice President Craig Gentner plans to retire in the first quarter of 2001. He cited family medical issues as the reason for leaving.

Gentner said he will stay with the company until his successor is named. Redback closed down $5.69, or 7.3%, to $72.75.

After Friday's Close

PacifiCare Health Systems

(PHSY)

said it plans to limit enrollment in its "Secure Horizons" health plan in 41 of 101 counties in five of eight states served, effective Dec. 10.

PacfiCare Health said it needs to address medical inflation, rising prescription drug costs, and network instability issues before it can accept more members. Insufficient federal funding of the program was also cited.

The managed health care services company said enrollment limits won't affect the 1.1 million current members or newly eligible beneficiaries and retirees. PacifiCare closed down $1.38, or 9.8%, to $12.63.

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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.

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