Stocks to Watch Friday: Sun Microsystems, Carlton Communications, United News
Updated from 2:44 p.m. EDT
Dow component
Eastman Kodak
(EK)
reported second-quarter earnings of $1.65 a share, in line with the
First Call/Thomson Financial
nine-analyst consensus estimate, on revenue of $506 million. Kodak reported earnings of $1.52 a share at this time last year. The company said third-quarter operating earnings should be between $1.56 and $1.66 a share -- the current nine-analyst estimate was for $1.61 a share.
America Online
(AOL)
reported fourth-quarter earnings of 13 cents a share, beating the 31-analyst estimate of 11 cents and up from year-ago earnings of 6 cents a share. The more-than-doubled earnings were attributed to growth in advertising, electronic commerce and subscribers.
TheStreet.com/NYTimes.com
joint newsroom covered the AOL report in a
story this evening.
Sun Microsystems
(SUNW) - Get Sunworks, Inc. Report
reported fourth-quarter earnings of 39 cents a share, excluding gains on the sale of equity investments and an acquisition-related charge. The figure was better than the 21-analyst estimate of 33 cents and was up from year-ago earnings of 24 cents. The company said earnings were boosted by continued strong sales of its servers.
TheStreet Recommends
TheStreet.com/NYTimes.com
joint newsroom covered the Sun report in a
story this evening.
Mergers, acquisitions and joint ventures
Privately held Internet health care news company
MillenniumHealth Communications
announced that it has offered to merge with embattled Internet healthcare company
Drkoop.com
(KOOP)
for an undisclosed amount. The company said last week that a second-quarter loss would be below Wall Street estimates and that two of its top executive resigned voluntarily.
The proposed merger of
Carlton Communications
(CCTVY)
and
United News
(UNEWY)
was blocked by the boards of both media companies after realizing that the requirement to dispose of
Meridian
, one of the four leading ITV licenses, would undermine the strategy behind the merger.
After Thursday's Close
Canadian National Railway
(CNI) - Get Canadian National Railway Company Report
and
Burlington Northern Santa Fe
(BNI)
ended their plans to create North America's largest railway, citing the U.S. Surface Transportation Board's 15-month moratorium on bigrail mergers.
The
Justice Department
cleared
Clear Channel Communications'
(CCU) - Get Cia Cervecerias Unidas SA Report
$15.5 billion acquisition of
AMFM
(AFM)
, after the companies agreed to sell 99 stations in 27 markets.
Toolmaker
Kennametal
(KMT) - Get Kennametal Inc. Report
offered to pay $6.70 a share in cash for the 17% of tool distribution company
JLK Direct Distribution
(JLK)
it does not already own. Kennametal said the aggregate value of the deal would be $28.7 million in return for the minority interest of about 4.3 million JLK shares. In May, Kennametal said it would not sell the JLK unit because of unfavorable market conditions.
Back to top
Earnings/revenue reports and previews
Beleaguered
Alaska Airlines
(ALK) - Get Alaska Air Group, Inc. Report
reported second quarter-earnings of 99 cents per share, excluding charges, besting the 11-analyst estimate of 91 cents. Still, the company fell far short of the $1.59 earned at this time last year.
Archer-Daniels Midland
(ADM) - Get Archer-Daniels-Midland Company Report
reported fourth-quarter earnings of 10 cents a share, which includes a charge of 12 cents a share for the cost of products sold related to oilseed, cocoa, plant shut-downs and other items. The charge also covers abandonment costs and a separate tax gain of 10 cents a share. The eight-analyst estimate was 19 cents a share, while year-ago earnings were 7 cents a share.
Cytec
(CYT)
reported second-quarter earnings of 81 cents, beating the seven-analyst estimate of 79 cents and up from year-ago earnings of 63 cents. Also, Goldman Sachs added the company to its recommended for purchase list from market outperformer rating. The firm also raised its 2000 EPS estimate to $2.85 from $2.80 and its 2001 EPS estimate to $3.15 from $3.10.
Sears Roebuck
(S) - Get SentinelOne, Inc. Class A Report
reported second-quarter earnings of $1.11 a share, beating the
First Call/Thomson Financial
14-broker estimate for earnings of $1.05 a share and the year-ago 86-cent profit.
U.S. Steel Group
(X) - Get United States Steel Corporation Report
posted second-quarter earnings of 62 cents a share, below the 11-analyst 70 cent consensus but above the year-ago 59 cent profit.
Verizon Communications
(VZ) - Get Verizon Communications Inc. Report
issued a statement in response to recent market activity, as the stock has dropped to 44 1/4 from 57 7/16 in a month's time. The company said second quarter earnings, to be announced Aug. 8, will be consistent with prior guidance. The current
First Call/Thomson Financial
four-analyst estimate is for earnings of 77 cents a share for the quarter.
Washington Post
(WPO)
reported second-quarter earnings of $4.33 a share, falling short of the five-analyst estimate of $5.70 and down from year-ago earnings of $6.67 a share. The company said it missed estimates because it was spending more on building up new businesses this quarter.
After Thursday's Close
Agilent Technologies
(A) - Get Agilent Technologies, Inc. Report
warned investors that it would post third-quarter earnings of 18 cents to 22 cents a share, greatly missing the 11-analyst estimate of a 35-cent profit. The company blamed capacity constraints and part shortages for lagging orders. The test and measurement equipment maker also said softness in its health-care solutions and chemical analysis units helped to put a dent in earnings.
TheStreet.com/NYTimes.com
joint newsroom covered the Agilent warning in a
story this evening.
Back to top
Offerings and stock actions
Affymetrix
(AFFX)
set a 2-for-1 stock split, scheduled to be paid to shareholders Aug. 21.
Chip maker
Atmel
(ATML)
said it had approved a two-for one split, to be distributed Aug. 25. Maker of electronic and communications products
Teledyne Technologies
(TDY) - Get Teledyne Technologies Incorporated Report
filed to sell 4.1 million common shares, valued at $77.1 million, based on yesterday's closing price of 18 13/16.
After Thursday's Close
Corio
(CRIO)
was up about 30%, after its 10 million-share IPO was priced at $14 a share, which was above its price range, according to lead underwriters
Goldman Sachs
. The stock was lately 4 1/8 higher to 18 1/8.
Honeywell International
(HON) - Get Honeywell International Inc. Report
announced that it would buy back up to 40 million of its common shares, worth about $1.5 billion.
SMTC
(SMTX) - Get SMTC Corporation Report
jumped 45%, or 7 1/4 to 23 1/4 after its 11 million-share IPO was priced at $16 a share, which was at the top of its price range, said lead underwriters Lehman Brothers.
Talarian
(TALR)
rose more than 30% in its debut. Shares for its IPO were priced at $16 a share, above the estimated $12-to-$14 range, according to lead underwriters Lehman Brothers.
TranSwitch
(TXCC)
set a 2-for-1 stock split.
Variagenics
(VGNX)
shot up more than 70% on its first day. The 5 million-share IPO, priced at $14 a share, was up $10 to $24.
Back to top
Analyst actions
Donaldson, Lufkin & Jenrette
cut its fiscal 2001 earnings estimates on
America Online
(AOL)
to 61 cents a share from 71 cents a share, after AOL reported fiscal fourth-quarter 2000 earnings of 13 cents a share last night. But DLJ's estimates are on the high side -- the current 2001 consensus is 55 cents, according to
First Call/Thomson Financial
.
Merrill Lynch
responded by raising its fiscal 2001 estimates to 58 cents per share from 53 cents per share.
DLJ maintained its price target of $120 a share, and a number of other analysts reiterated strong recommendations on the Internet company.
Donaldson, Lufkin & Jenrette raised its price target on
Sun Microsystems
(SUNW) - Get Sunworks, Inc. Report
to $120 from $100 after the company's quarterly earnings call last night.
Ventro
(VNTR) - Get Venator Materials PLC Report
was cut by several analysts after its earnings report yesterday. The B2B company has been downgraded to hold from buyat
Credit Suisse First Boston
and down to buy from strong buy at Deutsche Banc Alex. Brown.
Upgrades
Apache
: UP to buy from outperform at Deutsche Banc Alex. Brown.
Bank of New York
(BK) - Get Bank of New York Mellon Corporation Report
: UP to buy from hold at Credit Suisse First Boston.
Broadvision
(BVSN) - Get BroadVision Inc. Report
: UP to strong buy from buy at
SG Cowen
.
Disney
(DIS) - Get Walt Disney Company Report
: Merrill Lynch raised Q4 earnings per share estimates to 19 cents from 16 cents, and increased 2000 estimates to 86 cents from 83 cents.
Equitable Resources
(EQT) - Get EQT Corporation Report
: UP to buy from market perform at Donaldson, Lufkin & Jenrette.
Host Marriot
(HMT)
: UP to accumulate from buy at Merrill Lynch; price target: $12.
Level 3 Communications
(LVLT)
: UP to buy from long-term buy at
J.P. Morgan
.
Macromedia
(MACR)
: DOWN to buy from strong buy at U.S. Bancorp Piper Jaffray.
Mellon Financial
(MEL)
: UP to buy from hold at Credit Suisse First Boston.
Precision Castparts
(PCP)
: UP to buy from hold at Credit Suisse First Boston; 2001 earnings per share estimate raised to $4.70 from $4.25; 2002 estimates raised to $5.40 from $4.90.
Smith International
(SII)
: UP to short-term buy from short-term accumulate at Merrill Lynch.
Station Casinos
(STN) - Get Stantec Inc Report
: UP to buy from outperform at Lehman Brothers.
Sun Microsystems
(SUNW) - Get Sunworks, Inc. Report
: UP to buy from outperform.
THQ
(THQ) - Get Tekla Healthcare Opportunities Fund Report
: UP to buy from market performer at
Banc of America Securities
.
Xilinx
(XLNX) - Get Xilinx, Inc. Report
: 12-month price target UP to 120 from 100 at
ABN Amro
. DOWN to buy from strong buy at
WR Hambrecht
, after the company reported earnings of 27 cents a share for the second quarter, ahead of the 25-cent consensus. WR Hambrecht raised earnings estimates on Xilinx, despite downgrading the stock.
Downgrades
Adaptec
(ADPT) - Get Adaptive Biotechnologies Corp. Report
: DOWN to neutral from attractive at
Bear Stearns
.
Agilent
(A) - Get Agilent Technologies, Inc. Report
: DOWN to neutral from attractive at
Bear Stearns
.
Burlington Resources
(BR) - Get Broadridge Financial Solutions, Inc. Report
: DOWN to buy from strong buy at Deutsche Banc. Alex Brown.
Complete Business Solutions
(CBSI)
: DOWN to hold at Credit Suisse First Boston.
Com21
(CMTO)
: DOWN to near-term neutral from accumulate at
Merrill Lynch
.
Computer Associates
: DOWN to neutral from attractive after the software company reported sharply lower earnings at
Bear Stearns
.
Cooper Tire and Rubber
(CTB) - Get Cooper Tire & Rubber Company Report
: DOWN to market perform from buy at Deutsche Banc Alex. Brown.
Gentex
(GNTX) - Get Gentex Corporation Report
: DOWN to buy from strong buy at Credit Suisse First Boston.
Gillette
(G) - Get Genpact Limited Report
: DOWN to buy from strong buy at Deutsche Banc Alex. Brown after the company's earnings report yesterday.
Salomon Smith Barney
lowered its price target on the company to $45 from $50.
Hasbro
(HAS) - Get Hasbro, Inc. Report
: DOWN to attractive from buy at Bear Stearns.
Mexican industrial conglomerate
IMSA
(IMY)
: DOWN to outperform from strong buy ahead of valuations at
Morgan Stanley Dean Witter
.
Interspeed
(ISPD)
: DOWN to neutral from strong buy at
U.S. Bancorp Piper Jaffray
.
Lexmark
(LXK)
: DOWN to near-term accumulate from buy at
Merrill Lynch
.
Lucent
(LU)
: 12-month price target DOWN to 75 from 90 at PaineWebber, cut its 2000 EPS outlook to $1.11 from $1.13 and its 2001 EPS outlook to $1.31 from $1.53. Also, CSFB cut its 12-month price target to 70 from 80.
Northwest Airlines
(NWAC)
: DOWN to buy from strong buy at Deutsche Banc Alex. Brown.
Sprint PCS
(PCS)
: DOWN to hold from outperform at ABN Amro.
Tower Automotive
(TWR)
: DOWN to long-term buy from buy at
J.P. Morgan
.
Initiations
Cytec Industries
(CYT)
: INITIATED recommended for purchase at Goldman Sachs.
Danaher
(DHR) - Get Danaher Corporation Report
: New buy at
Credit Suisse First Boston
.
Group Moves
Credit Suisse First Boston initiated coverage on a number of advertising/communications companies:
- Acxiom Corporation (ACXM) , buy;
Omnicom Group (OMC) - Get Omnicom Group Inc Report, hold;
Interpublic Group of Companies (IPG) - Get Interpublic Group of Companies, Inc. Report, hold;
Harte-Hanks (HHS) - Get Harte-Hanks, Inc. Report, buy;
True North Communications (TNO) , buy;
Catalina Marketing (POS) , buy
Back to top
Miscellany
Financial services giant
Citigroup
(C) - Get Citigroup Inc. Report
named Robert Lipp, head of its consumer arm, to join Chairman and Chief Executive Sanford Weill and former U.S. Treasury Secretary Robert Rubin in its office of the chairman. Lipp fills a spot vacated by retired Co-Chairman John Reed.
After Thursday's Close
Boeing
(BA) - Get Boeing Company Report
said it received orders for eight widebody 777 jetliners from unidentified buyers, but announced cancellations of four earlier 777 orders.
Reuters
said eight 777s at list prices would cost about $1.4 billion, but said customers usually get a discount of 25% or more.
Celera Genomics
(CRA)
President Craig Venter told
Reuters
it's considering developing vaccines that coax the immune system to step up its attack on tumors. The company currently sells genetic information to drug companies and universities.
Constellation Energy
(CEG)
said the
Maryland Court of Appeals
lifted the stay blocking the restructuring of its utility subsidiary,
Baltimore Gas & Electric
, according to
Reuters
. The ruling allowed the company to cut electric rates 6.5% retroactive to July 1, when other Maryland utilities cut their rates.
Interstate Bakeries
(IBC)
said rumors are untrue that it's being acquired by
Grupo Bimbo
.
Palm
(PALM)
will replace
3Com
(COMS)
in the
S&P 500 after the close of trading July 27. 3Com is spinning of its 94.3% interest in Palm to its shareholders. 3Com will replace
Burlington Industries
(BUR)
in the
S&P MidCap 400 Index
. Burlington is being taken off the list because of lack of representation.
Salton
(SFP)
said it will lay off 470 employees between October and December at its Toastmaster manufacturing facility in Macon, Mo. The facility, which makes toasters and toaster oven broilers, will be converted into a distribution center, with about 70 employees retained for the transition.
Also, the company agreed to give
QVC
the rights to sell
George Foreman's
endorsement of seasoned steakburgers. Terms allow for George Foreman to appear on QVC to promote sales of the steakburgers, the George Foreman Grill and other George Foreman-branded products.
TelCom Semiconductor
(TLCM)
said its current president Bob Gargus was appointed chief executive. Gargus replaces Phillip Drayer, who will continue as chairman of the company.
Back to top
