Bank of America

(BAC) - Get Report

earned $2.09 billion, or $1.28 a share,in the third quarter, down from $2.18 billion, or $1.31 ashare, in the year-ago quarter. The operating resultsexclude a $1.25 billion charge to exit the auto leasing andsubprime real estate lending businesses. Analysts, on average, expected earnings of $1.25 a share. Revenue rose 5% to $8.72 billion, thanks to an increase in net interest income, but credit quality declined as the economy continued to slow. Net chargeoffs totaled $1.5 billion, or 1.65% of loans and leases, up from $435 million, or 0.43%, a year ago.

Earnings Reports & Warnings

Dime Bancorp

(DME)

reported record income of $96.9 million, or 77 cents a share, for the third quarter. Analysts were looking for income of 71 cents per share. Excluding items, Dime earned $69.4 million, or 59 cents a share, in the year-ago quarter. Dime has signed an agreement to merge with

Washington Mutual

(WM) - Get Report

.

Dynegy

(DYN)

said third-quarter earnings rose to $286 million, or 85cents a share, from $177 million, or 55 cents a share, for the same period last year. Analysts hadexpected earnings of 82 cents. Operating revenue climbed to $8.52 billion from $8.37 billion. The company now expects recurring earnings of $2.09 to $2.10 a share for 2001, up from the previous target of $2.07.

Industrial manufacturer

Eaton

(ETN) - Get Report

posted operating earnings of 66 cents a share for the third quarter, down from earnings from continuing operations of $1.07 a year ago. Sales in the quarter fell to $1.75 billion, down from about $2 billion last year. Net income before unusual items dropped to $47 million from $77 million.

Fannie Mae

(FNM)

posted operating income of$1.38 billion, or $1.33 a share, in the third quarter, topping analysts' estimates by a penny. The company earned $1.12 billion, or $1.09 a share, in the year-agoquarter. Fannie Mae, a government-sponsored company that buys loansfrom banks and other mortgage lenders and repackages them intosecurities for investors, benefited from the increase in refinancing brought on by the

Federal Reserve

's nine interest rate cuts this year. "Growth in Fannie Mae's operating earningsper share for the full year 2001 should approximate the 20.3% rate of growth reported for the nine months ended September 30," the company said in a press release. "For 2002, recent business developments have increased our confidence that we will be able to meet or exceed the mid-teens growth rates in operating EPS that have characterized the past several years."

Miscellaneous News

Steel-maker

Bethlehem Steel

(BS)

filed for chapter 11 bankruptcy protection in Manhattan, listing $4.5 billion in debts and $4.2 billion in assets. The company also said it lost $152 million, or $1.25 a share, in the third quarter.

Analyst Actions

J.P. Morgan downgraded several names in the communication integrated circuit arena to market perform from long-term buy, saying that order flow remains weak and visibility is still poor.

Altera

(ALTR) - Get Report

,

Xilinx

(XLNX) - Get Report

,

Applied Micro Circuits

(AMCC)

,

PMC Sierra

(PMCS)

and

Vitesse Semiconductor

(VTSS)

all made the downgrade list. The firm also said a revenue decline is likely in the foreseeable future. J.P. Morgan doesn't expect a stabilization in inventories until the second quarter of next year at the earliest.

Lehman Brothers lowered its rating on a group of semiconductor equipment makers, saying that the timing of a recovery continues to be pushed out. Lehman downgraded

Applied Materials

(AMAT) - Get Report

,

Asyst Technologies

(ASYT)

,

Axcelis Technologies

(ACLS) - Get Report

,

Cymer

(CYMI)

,

KLA-Tencor

(KLAC) - Get Report

,

Kulicke & Soffa

(KLIC) - Get Report

,

LTX

(LTXX)

,

MKS Instruments

(MKSI) - Get Report

,

Novellus

(NVLS)

,

PRI Automation

(PRIA)

,

Teradyne

(TER) - Get Report

,

Varian Semiconductor Equipment

(VSEA)

,

Zygo

(ZIGO)

and

Adept Technology

(ADTK)

. With the exception of KLA-Tencor, Lehman no longer recommends purchasing shares of U.S. companies in the semiconductor production equipment sector.