Monday's Winners & Losers: Oracle, SBC Communications, Amazon, Telefonica

Author:: TSC Staff
Publish date:: Jul 3, 2000 3:30 PM EDT

Updated from 12:05 p.m. EDT

Lawrence Ellison

Oracle's

chairman and chief executive, said he will take on the additional roles of president and chief operating officer in the wake of

Ray Lane's

resignation from those positions. Lane resigned after eight years with the e-business software giant, the company said late Friday.

The announcement, made in a brief press release time-stamped 8:59 p.m. EDT, offered no explanation for the departure. Lane will remain on the company's board.

The company did not respond to a

TSC

request for comment on Lane's departure. However,

The Wall Street Journal

reported Ellison as saying that the resignation had been in the works for "a long time."

On Friday, Oracle ended up 3 3/16, or 3.9%, to 84 1/16. The stock lost those gains today, dropping 3 7/8, or 4.6%, to 80 3/16.

SBC Communications

(SBC)

was awarded final approval from the

Federal Communications Commission

for entry into the $6.2 billion long distance services market in Texas. The stock finished up 2 9/16, or 5.8%, to 46 9/16.

SBC follows

Bell Atlantic

in becoming the second regional bell to win FCC approval to offer long distance service to customers in a market where it sells long distance.

Online retailer

Amazon.com

(AMZN) - Get Report

will continue its overseas expansion plans despite concerns about its dwindling cash reserves, CEO Jeff Bezos told

The Financial Times

. The interview was posted on the newspaper's Web site late Friday.

"We're on the plan we were always on," Bezos told the newspaper.

Amazon did not return a

TSC

request for comment on the interview.

On June 23, Amazon shares fell more than 20% after

Lehman Brothers

issued a negative comment about the company's debt and

Morgan Stanley Dean Witter

Internet analyst Mary Meeker suggested that second and third quarter revenue might fall below her estimates.

Amazon nearly recovered what it lost Friday when it was down 13/16. The stock ended the day up 11/16 to 37.

Spain's biggest telecom,

Telefonica

(TEF) - Get Report

, has completed a 14 billion euro ($13.3 billion) buyout of three affiliated companies in Latin America,

The Financial Times

reported on Sunday. The paper said the company expects to take control of a fourth company later this week. Telefonica rallied up 3 3/8, or 5.3%, to 67 7/16.

Mergers, acquisitions and joint ventures

German telephone giant

Deutsche Telekom

(DT) - Get Report

is considering a $117 billion stock swap merger with

Sprint

(FON)

that could take a form similar to the deal that created

DaimlerChrysler

(DCX)

, according to an

Associated Press

report that cites a German newspaper.

The

Welt am Sonntag

, which cited unnamed sources close to talks between the two companies, said no decision would be made before July 4, according to the

Deutsche Telekom, which was off 15/16 to 55 13/16, is widely believed to be a leading candidate to merge with, or takeover Sprint after U.S. authorities axed the American company's plans to merge with

WorldCom

(WCOM)

. Sprint was 3 7/16, or 6.7%, higher to 54 7/16, while WorldCom was 3/4 lower to 45 1/8.

The Wall Street Journal

reported that U.S. Senate leaders wrote a letter to the

Federal Communications Commission

opposing a takeover by the company, saying U.S. law bars transfer of FCC licenses to companies that are more than 25%-owned by a foreign government. The German government owns 59% of Deutsche Telekom.

The

European Union Commisson

confirmed it has given conditional antitrust clearance to

BASF's

acquisition of

American Home Products

(AHP)

agrochemicals unit

American Cyanamid

. BASF ended the day up 3/4 to 41 1/8, while American Home Products was down 1/8 to 58 5/8.

The commission said the acquisition raised serious concerns for competition in the herbicide and fungicide markets, but approved of the merger because the companies agreed to divest or license out a number of products to third parties.

Cisco

(CSCO) - Get Report

and private-equity fund

Clayton, Dubilier and Rice

are leading a consortium to buy 81% of

Telecom Italia's

(TI)

telecommunications equipment unit

Italtel

for $761 million,

The Wall Street Journal

reported. The investment group said it's planning an "early" initial public offering of the group.

Clayton Dubilier will have a 50.1% stake in the company, while Cisco and Telecom Italia will each have a 19% stake. Private-equity funds

Advent International

and

Brera Capital

will own the remaining 11%.

Cisco edged up 1 1/16 to 64 5/8, while Telecom Italia slid 1/16 to 137 1/2.

Cordiant Communications

(CDA)

, up 1/4 to 28, said it will buy the business and assets of

Donino, White & Partners

, valued at as much as $30 million.

Completion of the transaction is expected to take place in July. DWP is an integrated marketing communications agency specializing in brand marketing and strategic positioning in the technology sector. Major clients for DWP include,

UUNET

, the Internet unit of

WorldCom

CDW

Kodak Digital & Applied Imaging

and

BellSouth

EGL

(EAGL)

said it will buy

Circle International

(CRCL)

for $543 million in stock, creating an international transport and logistics company. EGL fell 2 17/32, or 8.2%, to 28 7/32, on the news. Circle jumped 2 5/16, or 9.2%, to 27 7/16.

The deal calls for EGL's shareholders to own about 63% and Circle shareholders to own about 37% of the combined company's outstanding shares. Circle will be a subsidiary of EGL. It is anticipated that the merged company, with calendar 1999 combined revenue of more than $1.4 billion, will target annual earnings-per-share growth in the mid-20% range.

Emisphere

(EMIS)

agreed to a development and marketing pact for certain anticoagulants with

DuPont Pharmaceuticals

, a unit of

DuPont

(DD) - Get Report

. Financial terms of the deal were not disclosed,

but The Wall Street Journal

said Emisphere investors were displeased by how limited the pact was. Empishere said it will receive a combination of upfront fees, milestone payments and royalties.

The

Journal

said

Deutsche Bank Alex Brown

downgraded the stock to market performer from buy after the announcement. Emisphere was down 1 31/32 to 40 5/8, while DuPont rose 1 1/4 to 45.

May Department Stores

(MAY)

will acquire

David's Bridal

(DABR)

for $436 million, or $20 a share. May said the two companies share 64 markets. The news lifted David's Bridal up 8 3/16, or a whopping 70.1%, to 19 3/4, while May was up 1/2 to 24 1/2.

Siemens

said it plans to sell its total stake in its semiconductor spinoff

Infineon

(IFX)

in the medium term,

Reuters

reported.

Earlier the company said it would issue a $1.9-billion convertible bond in Infineon stock in a move to further reduce its 71% stake in Infineon following its initial public offering in March. A spokeswoman said issuing the bond is "purely a way to reduce our stake as we've always said." Infineon dropped 5, or 6.3%, to 74 1/4.

Nestle's

ophthalmic products unit

Alcon Holdings

paid $893 million, or $19 a share, to buy 40.6 million shares of

Summit Autonomous

, the unit of

Summit Technology

(BEAM)

that makes laser eye-surgery equipment. Alcon said the acquisition gave it an 86% stake in Summit Autonomous and the company said it plans to acquire the remaining shares outstanding in a second-step merger for the same price per share in cash. Summit's stock was off 3/16 to 18 11/16.

Earnings/revenue reports and previews

News that database software provider

Informix

(IFMX)

would see its second-quarter earnings in a range of 1 cent to 3 cents a share compared with its

First Call/Thomson Financial

six-analyst second-quarter estimate of 12 cents a share and its year-ago earnings of 9 cents a share, pulled the stock down 2 3/4, or 37%, to 4 11/16.

The company also said its acquisition of

Ardent Software

, completed March 1, will not add to earnings in fiscal 2000 as previously expected.

Sempra Energy

(SRE) - Get Report

, which rose 5/8 to 17 5/8, said it expects second-quarter earnings of 55 cents a share, which would exceed the six-analyst estimate of 45 cents. It also anticipates earnings of $1.95 for the year, beating the current 11-analyst estimate of $1.89 a share.

The company's

Sempra Energy Trading

unit is boosting earnings with its better-than-expected results from oil and natural gas trading activity in the U.S. and Europe.

Analyst actions

Upgrades

MGM Grand

(MGG)

: price target UP to 40 a share from 33 at

Banc of America

. MGM Grand edged up 7/8 to 33.

Spieker Properties

(SPK)

was boosted 1 11/16 to 47 11/16 on news that its 2000 earnings per share were UP to 4 from 3.93 a share and 2001 EPS to 4.50 from 4.40 by

Goldman Sachs

Downgrades

ASM Lithography

(ASML) - Get Report

was off 1 9/16 to 42 9/16 after its 2000 earnings per-share estimate was cut to 74 cents from 80 cents by

Lehman Brothers

Barrett Resources

(BRR)

was down 9/16 to 29 7/8 after its price target was lowered to 38 from 45 at

PaineWebber

Cadence Design Systems

(CDN)

: price target DOWN to 26 a share from 32 at

Credit Suisse First Boston

. Cadence was barely lower, down 1/16 to 20 7/16.

General Growth Properties

(GGP)

was up 1/8 to 31 7/8 despite its 2000 earnings per share cut DOWN to 4.50 from 4.55 at Goldman Sachs.

Suiza Foods

(SZA)

, was 1 1/4 lower to 47 5/8, after its rating was cut DOWN to hold from accumulate at

Prudential Securities

Offerings and stock actions

Oculex Pharmaceuticals

(OCLX)

(OCLX:Nasdaq) and

AllAdvantage.com

(AADV)

have asked the

Securities and Exchange Commission

to withdraw their IPOs citing recent market conditions.

Miscellany

United Healthcare

and

Humana

(HUM) - Get Report

, which ended the day up 3/8, or 7.7%, to 5 1/4, announced they would stop offering Medicare HMOs in certain markets, affecting about 140,000 elderly or disabled. The companies joined

Aetna

(AET)

Cigna

(CI) - Get Report

and

Foundation Health Systems

(FHS)

which previously announced they would stop covering Medicare members in certain areas because of inadequate federal funding,

The Wall Street Journal

reported. Aetna was up 1 to 65 3/16, Cigna was up 1 3/8 to 94 7/8, but Foundation was off 1/16 to 13 7/8.

Lockheed Martin

(LMT) - Get Report

said that it was informed by

Chase Manhattan Bank

(CMB)

that

GlobalStar Telecommunications

(GSTRF)

did not repay loans of $250 million under a revolving credit agreement that names Lockheed as a partial guarantor. Lockheed, which paid $207 million to Chase to fulfill its contact obligations, is entitled to be repaid by GlobalStar under the guarantee. Lockheed fell 1/2 to 24 5/16, while Chase was up 1 7/8 to 47 9/16. GlobalStar sunk 11/16, or 7.6%, to 8 5/16.

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.