Updated from 2:14 p.m.
announced a turnaround plan for its troubled American unit,
The carmaker said in a statement that the plan "is comprised of a number of measures aimed at cutting costs and boosting revenues. It is designed to improve financial performance and market position, and to lay the foundation for sustained positive results in the future. The plan involves six specific action areas. Four focus on reducing costs; material management; plant management; fixed cost management and restructuring operations. Two focus on enhancing revenues: revenue management and product strategy."
The plan, much of which has already been
announced, calls for a workforce reduction of 12,000 employees by midyear and a total loss of 19,300 jobs by the end of this year. The company said it was also cutting material costs by more than 5%. The company also said it would launch the Jeep Liberty and new Dodge Ram this year. These and other changes should result in an operating loss in the range of $2 billion to $2.5 billion.
For 2002, the plan calls for 4,200 more job cuts and further plant cost reductions as well as the launch of the new Dodge Viper, which is expected to break even for the full year. By the end of 2003, the automaker anticipates it will have achieved its workforce and material costs reductions, and the launching of the new Dodge Durango and medium-duty pickup truck, which should translate into an operating profit of more than $2 billion.
In total, the "turnaround plan" aims to generate additional benefits through annual savings and profit improvements of $3.1 billion in 2001, rising to $5.7 billion in 2002 and $8.1 billion in 2003.
Also, Mitsubishi Motors announced that it will cut 14% of its 65,000 employees and close one car plant as part of a restructuring plan by its main shareholder, DaimlerChrysler. Additionally, it's set a target of 15% in material cuts by 2003 in an aim to reduce production capacity by 20%. Well, it's a wordy plan, anyway. DaimlerChrysler closed down 68 cents, or 1.4%, to $48.12.
Mergers, acquisitions and joint ventures
ESC Medical Systems
will buy the operations of Coherent Medical Group from
for about $203 million in cash, notes and stock. ESC ended the day up $3.94, or 23.9%, to $20.44; Coherent closed up $2.81, or 6.5%, to $45.81.
After Friday's Close
said it now plans to pay for its acquisition of
with $77 million in cash instead of stock, as it previously announced in November.
Abgenix said the decision was based on a
Securities and Exchange Commission
ruling about the timing of a registration statement for stock issued in connection with the deal. Abgenix closed up $7.19, or 23.7%, to $37.50.
entered into a definitive agreement to acquire
in a stock deal.
ASI, a provider of human resources administration and compensation consulting services, will operate as part of Aon Consulting Worldwide. The transaction is subject to regulatory and ASI shareholder approval but is expected to be completed within the next 90 days. The proposed acquisition is not expected to have a material impact on Aon's earnings per share in 2001.
Donald C. Ingram, chairman and chief executive officer of Aon Consulting Worldwide, stated: "By adding ASI's capabilities, we will greatly strengthen our human resources outsourcing and compensation consulting services."
Aon is a holding company for insurance brokerage, consulting and insurance underwriting subsidiaries. Aon closed up 49 cents, or 1.5%, to $33.63; ASI closed up $1.88, or 15.3%, to $14.13.
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Earnings/revenue reports and previews
raised 2001 revenue projections on its Renagel treatment by almost 10% to a range of $120 million to $130 million. The drug controls blood phosphate levels for dialysis patients. Genzyme General closed up $6.73, or 8.1%, to $89.56.
reported lower fourth-quarter earnings in line with analysts' expectations, as same-store sales for the period dropped 3%. Nevertheless, the No. 2 home improvement retailer raised its bottom-line projections for calendar 2001 and said it expects to open between 115 and 120 new stores during the year.
The Wilkesboro, N.C., company posted fourth-quarter earnings of 37 cents a share, down from 39 cents a share, in the same period last year. Twenty analysts polled by
First Call/Thomson Financial
expected fourth-quarter earnings of 37 cents a share.
Fourth-quarter sales for the 14-week period ending Feb. 2, 2001 increased 19.9% to $4.5 billion, compared with $3.8 billion in sales for the 13-week period ending Jan. 28, 2000.
Lowe's said it expects earnings of $2.45 to $2.50 a share for the year ending Feb.1, 2002, compared with fiscal 2001 earnings of $2.11 a share, which it reported this morning. Analysts polled by First Call expected 2002 earnings of $2.40 a share. Lowe's closed up $4.33, or 7.9%, to $58.91.
After Friday's Close
warned that earnings per share for the third quarter of fiscal 2001 are expected to be significantly below consensus estimates.
Brian Parke, Unifi's chief executive officer, said that, "based on current volumes and our existing cost structure, net per-share performance from normal operating activities for the third quarter of fiscal 2001 is projected to be a net loss in the range of 30 cents to 35 cents per share. Obviously, with these less-than-acceptable results and the expectation that some of these volumes will not return, we are currently evaluating several aggressive consolidation and cost reduction plans."
First Call/Thomson Financial's three-analyst estimate projected a loss of 1 cent a share. Unifi closed down 98 cents, or 12.6%, to $6.80.
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analyst Dan Niles cut 2001 earnings estimates on two chipmakers, citing a decline in pricing and profit margins. It cut memory chipmaker
earnings per share, or EPS, to 35 cents from $1.25.
estimates were lowered to $1.80 from $2.20 a share.
In a research note, Niles wrote "Much of the equipment bought over the past six months is only starting to ramp to full capacity. The supply situation will likely get worse in the first half, while demand looks sluggish at best, with large inventory levels in the supply chain."
Niles also wrote that his firm believes the bottom will be reached only in the third quarter or fourth quarter. Micron closed down $2.25, or 6%, to $35; Cypress was up 25 cents, or 1.2%, to $22.05.
to buy from accumulate. The firm also lowered estimates on Nokia and three of its competitors, saying that while European telecom equipment makers are near a bottom, there is still downside risk on the horizon.
The company lowered Nokia's EPS estimate for 2001 to 79 cents from 88 cents and 2002 EPS to $1 from $1.23.
2001 EPS were lowered to 17 cents from 20 cents and its 2002 EPS to 34 cents from 43 cents.
2001 EPS were cut to $1.49 from $1.70 and its 2002 EPS to $1.77 from $2.20.
2001 EPS were chopped by 14% and its 2002 EPS by 8%.
Lehman also cut Nokia's 2001 EPS estimate to 79 cents from 84 and its 2002 EPS estimate to 99 cents from a range of $1.01 to $1.06. Nokia closed up $1.41, or 6.6%, to $22.75; Ericsson was up 25 cents, or 3%, to $8.50; Alcatel was down 22 cents, or 0.5%, to $40.43.
: UP to strong buy from buy at
. Allegiance closed up $1.31, or 6.7%, to $20.94.
: 12-month price target DOWN to $40 from $45 at
Credit Suisse First Boston
. The firm also lowered estimates because evidence is mounting "that the U.S. economy is having a worse-than-expected impact on technology companies."
The firm reduced Cisco's July quarter's EPS to 13 cents from 14 cents, which changed its 2001 estimate to 60 cents from 63 cents. Also, CSFB lowered its 2002 EPS estimate to 75 cents from 79 cents. Cisco closed down 94 cents, or 3.5%, to $26.06.
: March quarter DOWN to a loss of 1 cent from a profit of 12 cents and 2001 EPS view DOWN to 50 cents from 80 cents at Merrill. Motorola closed down 36 cents, or 2.2%, to $15.89.
: DOWN to hold from buy at CSFB. Roadway Express closed down $1, or 3.6%, to $27.
: DOWN to hold from buy at
. Also, CSFB started the company as a hold. WPP closed up $1.75, or 2.9%, to $62.38.
: NEW buy at CSFB. Lexent closed down 69 cents, or 7.1%, to $9.06.
: NEW buy at
; price target: $80. Mercury closed up $2.31, or 3.3%, to $72.38.
: NEW buy at CSFB; price target: $48. NTL closed down 38 cents, or 1.4%, to $27.35.
: NEW intermediate-term accumulate and long-term buy at Merrill. 2001 EPS estimate is $1.30 and 2002 EPS estimate is $1.65, while the 12- to 18-month price target is $30 a share. Seitel closed up 52 cents, or 2.9%, to $18.47.
CSFB starts coverage on three electronics manufacturing companies:
- Celestica (CLS) : NEW strong buy. Celestica closed up $1.95, or 3.8%, to $53.85.
SCI Systems (SCI) : NEW buy. CSI closed down 88 cents, or 3.7%, to $22.95.
Solectronundefined: NEW buy. Solectron closed up 15 cents, or 0.5%, to $29.65.
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Offerings and stock actions
said its board doubled the number of shares it would repurchase to 8 million from the previously announced 4 million. The pork producer said that it had already bought back about 3.7 million shares under the plan. Smithfield closed down $1.33, or 4.2%, to $30.25.
raised its quarterly dividend to 20 cents from 17 cents. Also, the stock was downgraded by
. Starwood closed down $2, or 5.9%, to $32.10.
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announced that it will record a restructuring charge and will cut jobs. It also announced that it named John Hammergren president and chief executive, effective April 1.
The drug distributor and health care information technology company said the charge will come from restructuring its iMcKesson unit. The company didn't disclose the amount of the charge or the number of jobs that would be eliminated. McKesson closed up $1.08, or 3.4%, to $32.54.
After Friday's Close
Sega of America
for allegedly failing to pay for about $2.2 million worth of Dreamcast consoles.
Sega, which announced in January that it was bailing on producing game hardware to focus on software, filed the suit in Superior Court in San Francisco, alleging the retailer failed to pay $2.2 million of a $25.9 million bill for consoles shipped since 1999. Kmart closed up 21 cents, or 2.3%, to $9.40.
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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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