An early morning wake-up call came in the form of an earnings warning from

Cypress Semiconductor

(CY) - Get Report

. The company now expects second-quarter revenue of $175 million to $185 million, down 29% to 33% from the previous quarter. The company reported revenue of $262 million in the first quarter, and had previously forecast a top line of $200 million to $210 million for the current quarter.

Cypress said that "business conditions have not materially improved in the market segments that we serve." The company said its "near-term goal is to endure this severe decline without losing any money. We will continue to evaluate market conditions and provide our investors a more comprehensive update at our earnings release conference call scheduled for July 19, 2001."

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Earnings/revenue reports and previews

Valero Energy

(VLO) - Get Report

raised its earnings guidance for the current fiscal second quarter. The company now expects earnings to exceed $4 a share, whereas it had previously guided estimates to between $3.25 and $3.75 a share.

"The fundamentals in our business remain very strong. Refined product margins and discounts for our key sour crude feedstocks have improved to record levels during the second quarter," the company said in a press release. "We expect that the underlying strength in market fundamentals plus the benefits from our capital improvements over the last year will contribute to a record second half of the year and another great year in 2002."

After Friday's Close

Nanophase Technologies

(NANX)

on Friday lowered its second-quarter and full-year revenue forecasts, blaming the shortfall on the cancellation of a proposed relationship with a European company.

Nanophase said it expects second-quarter revenue of $1.1 million and $1.2 million. Revenue for the full year will come in $2 million to $2.5 million less than the $10 million it had previously forecast for the year.

Trikon Technologies

(TRKN)

, a semiconductor production equipment company, said Friday that it expects to lower its quarterly operating costs by 10% through a cost-cutting initiative, including a workforce reduction.

The plan calls for cuts in expenditures and payroll costs. The company said it will reduce its headcount by 12%, mostly from temporary and contract personnel used for manufacturing.

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Mergers, acquisitions and joint ventures

Reports this morning indicated that pharmaceutical producers

Bristol-Myers Squibb

(BMY) - Get Report

and

Bayer

(BAYZY)

are interested in acquiring the drug-making arm of

DuPont

(DD) - Get Report

for between $7 billion and $8 billion. DuPont is spinning off its pharmaceutical arm as part of a restructuring plan set out last December to focus more on its core chemical production.

DuPont executives will meet tomorrow to discuss the potential sale, according to reports.

After Friday's Close

After the close of the markets Friday,

American Electric Power

(AEP) - Get Report

said it completed its purchase of the stock of

Houston Pipe Line

, an intrastate natural gas pipeline unit of

Enron

(ENE)

. The deal, which was announced in January, includes inventory and a 30-year prepaid lease related to the operation of the Bammel Storage Facility. American Electric will raise the needed $726.6 million needed for the transaction by issuing a noncontrolling, preferred equity interest to private investors.

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Miscellany

Computer hardware maker

Hewlett-Packard

(HWP)

and

Pitney Bowes

(PBI) - Get Report

said Monday morning that they had settled a lawsuit brought against H-P by Pitney Bowes in 1995 involving print technology patents. The litigation was settled without an admission of patent infringement, but H-P will pay Pitney Bowes $400 million in cash. H-P will record a pretax charge for that amount in the fiscal second quarter, which was previously reported on May 16. Hewlett-Packard will have to revise its numbers as a result of the charge. The two companies also said they will enter a technology licensing agreement.

After Friday's Close

StarMedia Network

(STRM) - Get Report

appointed Enrique Narciso its president, effective immediately. The media company, which targets Spanish- and Portuguese-speaking audiences, said Narciso will be responsible for managing the company's operations and executing its global strategy.

Jack Chen, StarMedia's former president, will now serve as vice chairman of the company's board. He will retain responsibility for overseeing the company's strategic development.

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