Monday's Winners & Losers: Bindley Western, Henry Schein, 3M, ESS Tech, Xerox - TheStreet

Monday's Winners & Losers: Bindley Western, Henry Schein, 3M, ESS Tech, Xerox

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Updated from 3 p.m.

Reports that

3M

(MMM) - Get Report

was going to name

General Electric

(GE) - Get Report

executive James McNerney Jr. as its chief executive sent the stock flying. The stock hit a new high today before closing up $5.38, or 5.4%, to $105. And just for the heck of it, GE closed up, too, higher by 63 cents, or 1.2%, to $51.63.

The company, which makes Post-It Notes and Scotch tape, said it has not yet announced the successor to current CEO L.D. DeSimone, who is expected to retire in August 2001.

Hot-cereal maker

Quaker Oats

(OAT)

, which owns the lucrative line of Gatorade sports drinks, finally agreed to tie the knot with

Pepsi

(PEP) - Get Report

over the weekend. An earlier bid from Pepsi and previous talks with both cola rival

Coca-Cola

(KO) - Get Report

and France's

Danone

(DA)

fell through.

Pepsi agreed to buy Quaker for some $13.4 billion in stock, while Pepsi's Chairman and CEO Roger Enrico has said he will transfer both titles to Quaker President Steven Reinemund. Quaker Chairman and CEO Robert Morrison will also remain at the new merged firm.

Pepsi, initially attracted by Quaker's Gatorade brand, first offered to buy the drinks- and cereal-maker in early November, but Quaker rejected the bid. Quaker closed up $2.44, or 2.8%, to $91.06; Pepsi ended the day up $1.44, or 3.4%, to $43.81.

Xerox

(XRX) - Get Report

called a credit rating downgrade by

Moody's

"disappointing" in light of the company's turnaround plan.

Moody's today cut the company's senior unsecured debt to junk status. In response, the Stamford, Conn., copier- and office-equipment maker said its turnaround plan, which includes asset disposals, cost reductions and a refocusing of its core businesses, will keep its liquidity sufficient.

According to a report, Xerox, which has been fighting off rumors of liquidity concerns in recent weeks, also handed out layoff notices this week to 200 workers in the Rochester, N.Y., area. That's on top of 350 administrative staff who were let go last month.

The 350 layoffs in November included 115 in Rochester. All of the recently announced job cuts are separate from the 5,200 layoffs that the company announced in March -- those are to be carried out by April 2001. The stock closed down by $1.25, or 20%, to $5.

Mergers, acquisitions and joint ventures

Cardinal Health

(CAH) - Get Report

will acquire

Bindley Western

(BDY)

in a $2.1 billion stock swap. The deal will give Cardinal an entry into nuclear medicine distribution. Cardinal closed down $4.94, or 4.96%, to $94.56; Bindley was up $5.88, or 17.8%, to $38.88.

Cerus'

(CERS) - Get Report

and

Baxter's

(BAX) - Get Report

Phase III-A clinical study of their Intercept Plasma System was found to be effective in 34 patients with various blood-clotting factor deficiencies. Cerus closed down $3.31, or 5.3%, to $58.94; Baxter was up 75 cents, or 0.9%, to $86.06.

Tyson Foods

(TSN) - Get Report

, the No. 1 poultry producer, said it made a bid to buy

IBP

(IBP) - Get Report

, which is the largest beef producer in the nation, for about $2.8 billion in a stock and cash deal.

The price, which translates into $26 a share, beats earlier bids by

Smithfield Foods

(SFD)

and an earlier management buyout led by a unit of investment bank

Donaldson Lufkin & Jenrette

(DLJ)

. Tyson closed down $1.50, or 10.7%, to $12.50; IBP was up $2.25, or 9.9%, to $25.

After Friday's Close

AES

(AES) - Get Report

bought privately held Colombian power plant

KMR Power

in a $53 million stock swap.

Terms of the deal call for AES, which owns and operates electric power plants, to acquire controlling interests in two gas-fired power plants. AES closed down $2.63, or 5.1%, to $49.06.

Barron's

reports that

eBay

(EBAY) - Get Report

, the online auction house, is considering buying

uBid.com

, a unit of

CMGI

(CMGI)

. uBid specializes in business-to-consumer auctions, but plans to directly compete with eBay on a consumer-to-consumer site. eBay closed down $2.44, or 7%, to $32.31; CMGI was down 44 cents, or 4.3%, to $9.69.

British Telecom

(BTY)

may sell all or part of its property portfolio in an effort to raise capital, according to Sunday's

Telegraph

. As with many other large telecoms, BT is struggling under a heavy debt load. The sale could raise as much as

2 billion ($2.9 billion). British Telecom closed up $3.38, or 3.8%, to $92.50.

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Earnings/revenue reports and previews

Cisco

(CSCO) - Get Report

CEO John Chambers said in an annual analyst briefing that the company will make no change in the expectations of strong sequential and year-to-year revenue growth that it set in its last quarterly report.

That's good news for the company, but Chambers

tempered a celebration by declining to comment on how Cisco's business was progressing in its current quarter. Cisco closed down $2.69, or 5.5%, to $45.81.

ESS Technology

(ESST)

lowered its fourth-quarter earnings forecast because of a decrease in orders for its products. The company is now expecting EPS in the range of 3 cents to 8 cents, which is far below the three-analyst estimate of 29 cents a share. Also, ESS said it's now looking for 2001 first-quarter EPS in the range of 8 cents to 12 cents. The single-analyst estimate is currently 30 cents for the quarter.

TheStreet.com

wrote more about the

warning in a separate story. ESS closed down $4.22, or 41.4%, that's 41.4%, to $5.97.

After Friday's Close

More bad news for car companies. With higher energy prices and interest rates already taking a bite out of sales,

The New York Times

reported Saturday that

Allstate Insurance

(ALL) - Get Report

and

Progressive Insurance

(PGR) - Get Report

are charging higher liability insurance on sport utility vehicles, pickup trucks and large vans -- the automakers' most profitable areas. Allstate closed down 6 cents, or 0.2%, to $39.19.

Ford

(F) - Get Report

warned that its fourth-quarter earnings would be about 10 cents a share lower than current estimates. The

First Call/Thomson Financial

18-analyst estimate is for 85 cents. The company cited sagging sales and production cuts in North America and Europe for the drop.

It also said it would idle passenger-car plants the last week in December to cut inventories, but declined to give specifics.

Earlier Friday, the Chrysler side of

DaimlerChrysler

(DCX)

announced a series of temporary plant shutdowns in an effort to trim inventories.

General Motors

(GM) - Get Report

said its sales fell and that its inventories were running high, but it did not announce any plant closings.

Deutsche Banc Alex. Brown

cut fourth-quarter EPS estimates on DaimlerChrysler and Ford. Daimler's was cut to 23 euros from 77 euros, while Ford's was lowered to 75 cents from 81 cents. Ford closed down 38 cents, or 1.6%, to $23.81; DaimlerChysler was up $1.73, or 4.4%, to $41.04; General Motors was up $1.25, or 2.5%, to $51.56.

SBC Communications

(SBC)

said it still expects to report fourth-quarter earnings of 56 cents to 58 cents a share.

The San Antonio-based telecommunications company said it was responding to news reports of rumors that it wouldn't achieve its fourth-quarter earnings view. Analysts expect the company to earn 58 cents a share for the quarter, according to First Call/Thomson Financial. The company earned 54 cents in the year-ago period. SBC closed up 81 cents, or 1.6%, to $53.

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Analyst actions

ABN Amro's

recommendation this morning: Buy optical networking companies such as

Corning

(GLW) - Get Report

,

JDS Uniphase

(JDSU)

and

Digital Lightwave

(DIGL)

on trading weakness.

Dave Kang, the ABN Amro analyst who wrote the note, said demand remains solid despite constraint in the supply side for certain components. He also said his firm expects "relatively strong results" from the sector for the December quarter and that the firm anticipates the next wave of earnings releases -- which starts in about six weeks -- to be a catalyst. Corning ended the day up 56 cents, or 0.9%, to $61.50; JDS was up $2.38, or 4.2%, to $58.56; and Digital Lightwave was up $1.13, or 3.2%, to $35.81.

Credit Suisse First Boston

slashed earnings estimates on

Ford Motor

(F) - Get Report

after the company said its fourth-quarter earnings would miss estimates by about 10 cents.

The firm lowered fourth-quarter earnings estimates to 72 cents from 89 cents and 2001 EPS estimates to $3.44 from $3.59. Despite the cut, CSFB rates the stock a buy, saying auto stocks are bottoming and a

Federal Reserve interest-rate cut in the spring could serve as a catalyst. As noted above, Ford closed down 38 cents, or 1.6%, to $23.81.

Upgrades

Agrium

(AGU)

: UP to buy from hold at CSFB and 2001 EPS estimate to $1.40 from $1. Agrium closed up 44 cents, or 3.8%, to $11.94.

MetLife

(MET) - Get Report

: 12-month price target UP to $37 from $30 at CSFB. MetLife closed up $2, or 6.7%, to $31.81.

PepsiCo

(PEP) - Get Report

: 2001 EPS estimate UP a penny to $1.65 at

Goldman Sachs

. As noted at top, Pepsi ended the day up $1.44, or 3.4%, to $43.81.

Henry Schein

(HSIC) - Get Report

: UP to buy from outperform at

Lehman Brothers

and 12-month price target UP to $38 from $32. The stock closed up $2.81, or 10.5%, to $29.56.

Downgrades

Chase Manhattan

(CMB)

: 2001 EPS estimate DOWN to $3.95 from $4.10 at CSFB. Chase closed up 63 cents, or 1.7%, to $37.94.

Transocean Sedco

(RIG) - Get Report

: 2000 EPS view down to 63 cents from 73 cents at ABN Amro and 2001 EPS view to $1.80 from $1.95. The stock closed down $1.06, or 2.7%, to $39.

Visteon

(VC) - Get Report

: fourth-quarter earnings DOWN to 44 cents from 78 cents at CSFB and 2000 earnings to $3.01 from $3.35 a share. Visteon ended the day down 56 cents, or 3.6%, to $14.94.

Walgreen

(WAG)

: DOWN to neutral from outperform at Lehman. Walgreen closed down 50 cents, or 1.2%, to $42.75.

Group Moves

Butting heads this morning were

Bear Stearns

-- which downgraded the lodging stocks listed below on macro-economic concerns -- and Goldman -- which said it remains positive on lodging sector stocks such as

Marriott International

(MAR) - Get Report

:

  • Marriott International: DOWN to neutral from buy. The stock closed down 50 cents, or 1.2%, to $41.38.
  • Hilton Hotels (HLT) - Get Report: DOWN to neutral from buy. Hilton closed down $1.25, or 2.7%, to $9.13.
  • Starwood Hotels and Resorts (HOT) : DOWN to attractive from buy. Starwood closed down 19 cents, or 0.6%, to $32.31.
  • MeriStar Hospitality (MHX) : DOWN to attractive from buy. The stock closed up 6 cents, or 0.3%, to $18.94.
  • Extended Stay America (ESA) : DOWN to attractive from buy. Extended Stay America closed down 68 cents, or 5.3%, to $12.26.
  • Four Seasons (FS) : DOWN to neutral from attractive. Four Seasons closed down $4.50, or 7.3%, to $57.44.

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Offerings and stock actions

After Friday's Close

Adaptec

(ADPT) - Get Report

said the proposed initial public offering for its software business,

Roxio

, has been postponed until at least the first quarter of calendar year 2001 due to unfavorable market conditions.

Roxio, which provides digital-content management software for personalizing and storing music, photos, video and data onto recordable CDs, filed a registration statement with the

Securities and Exchange Commission

in late September. Adaptec closed flat at $11.75.

Andrx

(ADRX)

, a health care services provider, said it filed to resell 250,000 shares of its common stock, as part of its previously announced deal to buy

CTEX Pharmaceuticals

. Andrx closed down $1.81, or 2.5%, to $70.

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Miscellany

After Friday's Close

Louisiana-Pacific

(LPX) - Get Report

announced that it will indefinitely shut two of its lumber mills to adjust production with customer demand and permanently close two industrial plants to focus on higher-return facilities. The company said the closures will result in a pretax charge of $25 million to $30 million in the fourth quarter.

Louisiana-Pacific said the fourth-quarter charge is related to severance charges, closure costs and asset impairments. Louisiana-Pacific closed up 25 cents, or 3.3%, to $7.75.

Standard & Poor's

said staffing company

Robert Half International

(RHI) - Get Report

will replace

Associates First Capital

(AFS)

on the

S&P 500 index. Associates was bought by

Citigroup

(C) - Get Report

. Robert Half closed up $2.06, or 6.9%, to $32.06; Associates First was flat at $35.31; Citigroup was down $1.13, or 2.3%, to $47.81.

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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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