Stocks to Watch Thursday: Consolidated Papers, J.C. Penney, Kmart, Federated Department Stores

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Publish date:

Updated from 3:01 p.m. EDT

The FBI in Los Angeles announced that it has someone in custody who is connected to the

Emulex

(EMLX)

hoax press release that sent the stock plummeting Friday.

Visteon

(VC) - Get Report

said its third-quarter earnings will be 12 to 14 cents a share lower because of

Ford's

(F) - Get Report

decision to cut production for tire replacement efforts.

Intel

(INTC) - Get Report

filed a patent infringement lawsuit against

Broadcom

(BRCM)

, charging that "nearly every aspect" of the communications chipmaker's business violates one or more of Intel's patents. In the suit, Intel alleges that Broadcom "carefully crafted a plan" to build its business using Intel's technology.

Gap

(GPS) - Get Report

said August

same-store sales dropped 14% from last year amid retail uncertainties. Gap CFO Heidi Kunz said it continues to see risks for the rest of the year.

The stock was cut to hold from buy at

Credit Suisse First Boston

.

PaineWebber

said it had deleted Gap from its highlighted stocks list and dropped its rating to neutral from buy.

Mergers, acquisitions and joint ventures

AT&T Latin America

(ATTL)

, which provides communications in five Latin American countries and began trading yesterday, announced it has agreed to acquire $46.5 million of high-speed international capacity from

Global Crossing

(GLBX)

.

Cisco

(CSCO) - Get Report

said it will buy Pixstream in a stock deal worth $369 million. Cisco said it sees a one-time charge from the deal, which will be no more than 2 cents a share.

Sprint PCS

(PCS)

said it will sell phones in

Target's

(TGT) - Get Report

U.S. stores.

Separately, Target said it expects earnings to decline in the third quarter as same-store sales rose a lower-than-expected 2.5% in August.

Splash Technology

(SPLH)

and

Electronics for Imaging

(EFII) - Get Report

said they will merge. Electronics will pay $10 cash for each share of Splash.

Earnings/revenue reports and previews

Abercrombie & Fitch

(ANF) - Get Report

said August same-store sales fell 3%.

Ann Taylor

(ANN)

said August same-stores sales rose 3.7%.

Best Buy

(BBY) - Get Report

said second-quarter same-store sales were up 5.1%.

Costco

(COST) - Get Report

said August same-store sales rose 8%.

Federated Department Stores

(FD)

said August same-store sales rose 1.1%.

Kmart

(KM)

said August same-store sales rose 2.8%.

J.C. Penney

(JCP) - Get Report

said August same-store sales were down 4.5%, which could hurt its third-quarter estimates.

Limited

(LTD)

said August same-store sales rose 6%.

Pacific Sunwear

(PSUN)

said August same-store sales fell 2.5%, and said it sees third-quarter earnings below its target of 46 cents if current trends continue.

The stock was cut to hold from buy at CSFB.

Sears

(S) - Get Report

said August domestic same-store sales were up 5.6%.

Wal-Mart

(WMT) - Get Report

said August same-store sales rose 5.7%.

After Wednesday's Close

American Eagle Outfitters

(AEOS)

said August same-store sales rose 9.1%.

Micros Systems

(MCRS)

posted a fourth-quarter loss of 45 cents a share, larger than the three-analyst estimate of a loss of 17 cents and down from the year-ago earnings of 58 cents. The company said the loss, which it attributed to a slowdown in sales of information technology, includes a $4.3 million pre-tax charge related to bad-debt expense and the discontinuance of a product line.

York International

(YRK)

warned that it expects third-quarter earnings to be below 67 cents a share, which it reported in the same period a year ago. The single-analyst estimate for the quarter is 90 cents a share.

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Analyst Actions

Upgrades

Corinthian Colleges

(COCO)

: 18-month price target UP to $67 from $40 at

Credit Suisse First Boston

, 2001 EPS view UP to $2 from $1.85, NEW 2002 EPS estimate of $2.46.

Lexmark International

(LXK)

: UP to buy from neutral at

Salomon Smith Barney

, price target UP to $85 from $55.

Metris

(MXT)

: UP to market outperform from market perform at

Goldman Sachs

.

Downgrades

United Airlines parent

UAL

(UAL) - Get Report

: 2000 EPS view DOWN to $6.25 from $8.25 and 2001 EPS DOWN to $7.75 from $9 at Goldman Sachs.

Scient

(SCNT)

: DOWN to buy from strong buy at

First Union

.

Seagram

(VO) - Get Report

: DOWN to attractive from buy at

Bear Stearns

.

SuperGen

(SUPG)

: DOWN to hold from strong buy at Prudential Securities.

Viant

(VIAN)

: price target DOWN to $30 from $50 at

Lehman Brothers

.

Initiations

Akamai

(AKAM) - Get Report

: NEW buy at

Wit Soundview

.

Calpine

(CPN)

: NEW market performer at

J.P. Morgan

.

ChipPAC

(CHPC)

: NEW buy at CSFB; price target: 24.

Emulex

(EMLX)

: NEW outperform at Salomon; price target: 125.

Oceaneering International

(OII) - Get Report

: NEW buy at Lehman; price target: 25.

i2 Technologies

(ITWO)

: NEW buy at

ABN Amro

.

Westvaco

(W) - Get Report

: NEW outperform at Salomon; 12- to 18-month price target: $41.

Group Moves

Sanford C. Bernstein

cut 2001 earnings forecasts for

Coca Cola

(KO) - Get Report

and

Coca-Cola Enterprises

(CCE)

and revised its outlook on soft drink companies based on summer sales and currency weakness.

  • Coca-Cola: 2001 EPS DOWN to $1.75 from $1.79 reflecting weakness in the euro.
  • Coca-Cola Enterprises: 2001 EPS DOWN to 66 cents from 69 cents.

Deutsche Banc Alex. Brown

cut ratings to buy from strong buy on Internet consulting and services companies:

ABN Amro

initiated coverage of oil service companies:

PaineWebber

commented on two energy companies:

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Offerings and stock actions.

Insmed

(INSM) - Get Report

said it is planning to offer 4 million to 5 million shares in the fourth quarter.

Lattice Semiconductor

(LSCC) - Get Report

set a 2-for-1 stock split.

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Miscellany

AT&T

(T) - Get Report

CEO C. Michael Armstrong is seriously considering a "dramatic restructuring that could include selling off AT&T's residential long-distance business," according to a report in

The Washington Post

amid disappointment with the value of his company.

Consolidated Papers

(CDP)

said its CEO Gorton Evans will retire Oct. 31.

Ford's

(F) - Get Report

problems continue, with Venezuela's consumer protection agency recommending that the public prosecutor investigate the automaker and

Bridgestone/Firestone

for "suppressing information and negligence." The Venezuelan watchdog also wants Ford to reinforce the suspensions of its Explorer line of sport utility vehicles.

General Electric

(GE) - Get Report

unit

GE Medical Systems

said it has created a new information technologies arm to help health care providers better manage clinical information and images to help improve performance and patient care.

Sallie Mae

(SLM) - Get Report

will cut 1,700 employees, or 25% of its workforce, as part of operations integration following its recent acquisition of

USA Group

. The cuts, which will be made over the next 15 months, result from major servicing functions moving to a common technology platform and the elimination of redundant corporate functions.

Waste Management

(WMI)

said it will sell its services operations in Hong Kong and Mexico.

After Wednesday's Close

Advanced Micro Devices

(AMD) - Get Report

said Larry Hollatz, the head of its PC processors group, had resigned to pursue other interests. The company said its president and COO, Hector de J. Ruiz, will assume Hollatz's duties as acting group head.

DuPont

(DD) - Get Report

said its

Pioneer Hi-Bred International

subsidiary president and CEO, Jerry Chicoine, plans to retire Dec. 31.

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