Stocks to Watch Thursday: J.C. Penney, Symmetricon, Nortel, Chinadotcom
Updated from 3:14 p.m. EDT
The most recent addition to the
S&P 500,
JDS Uniphase
(JDSU)
, posted fourth-quarter earnings of 14 cents, beating the 28-analyst estimate by 2 cents and up from year-ago earnings of 6 cents. The company said it expects fiscal 2001 revenue growth of 90%, which factors in the recently absorbed
E-Tek Dynamics
and is based on fiscal 2000 combined revenue of $1.7 billion.
In a conference call, the company announced it will spend $700 million on capital projects in 2001 as part of its effort to increase unit production by 400% in the next 18 months. JDS Uniphase recently announced a bid for fellow fiber-optics component maker
SDL
(SDLI)
, valued at $41 billion at the time.
JDS Uniphase also received a fresh round of ratings noise after it posted fourth-quarter results that beat estimates.
Merrill Lynch
raised estimates for 2001 EPS to 69 cents from 61 cents and 2001 EPS view to 90 cents.
Deutsche Banc Alex. Brown
TheStreet Recommends
lifted its 2001 EPS view to 68 cents from 61 cents and its 2002 EPS view to $1.01.
Credit Suisse First Boston
reiterated JDS as a buy.
TheStreet.com/NYTimes.com
covered the company's earnings in a
story Wednesday evening.
Amazon.com
(AMZN) - Get Amazon.com, Inc. Report
reported a second-quarter loss of 33 cents, beating the 29-analyst estimate of a 35-cent loss, but higher than the year-ago loss of 26 cents, a 32% increase in losses.
Answering critics who say the e-commerce giant will run out of money before the year's end, Amazon.com
CFO Warren Jensen
said the company had $908 million on hand at the end of the quarter and should have more than $1 billion by Dec. 31. Today,
SG Cowen
downgraded Amazon to buy from strong buy.
PaineWebber
cut its 2001 EPS view to a loss of 66 cents from a loss of 42 cents.
Donaldson Lufkin & Jenrette
begged to differ, saying it maintained the giant online retailer as a top pick.
Robertson Stephens
cut Amazon to long-term attractive from buy, while
Prudential Securities
cut its rating to hold from strong buy and lowered its price target to 40 from 80.
Tuesday, Amazon announced that its president and COO,
Joseph Galli
, had resigned to become chief executive and president of
VerticalNet
(VERT)
, which also reported second-quarter results Wednesday. VerticalNet recorded a loss of 23 cents a share, besting the 24-analyst estimate of a 30-cent loss. The company reported a loss of 10 cents a year ago.
TheStreet.com/NYTimes.com
covered the company's earnings in a
story Wednesday evening.
Mergers, acquisitions and joint ventures
Multibank holding company
BB&T
(BBT) - Get BB&T Corporation Report
will buy
FCNB
(FCNB)
in a stock swap worth $226.5 million. The exchange ratio for the deal is fixed at 0.725 BB&T share for each FCNB share. The transaction, expected to close in the first quarter of 2001, will be accounted for using the pooling-of-interests method.
Hong Kong-based Internet firm
Chinadotcom
(CHINA)
is putting $10 million into a new Chinese joint venture and aims to expand the outlay to $100 million by the end of next year, CEO Peter Yip said.
Cisco
(CSCO) - Get Cisco Systems, Inc. Report
said it plans to make its 15th acquisition this year by buying
NuSpeed Internet Systems
, through a stock swap worth $450 billion.
In a press release, Cisco said it will take a charge of 3 cents a share for research and development expenses related to the transaction. The acquisition will allow Cisco to offer customers the ability to converge data and storage networks into one system.
Corning
(GLW) - Get Corning Inc Report
said it had ended preliminary discussions with
Nortel
(NT)
exploring the potential combination of Nortel's optical-components business with Corning. Roger Ackerman, Corning chairman and chief executive, said his company will continue to have a close working relationship with Nortel.
ABN Amro
raised Nortel Networks to top pick from buy.
Separately, Nortel announced it won a two-year $200 million contract from
Fibernet
(FTGX)
MP3.com
(MPPP)
announced an agreement with British record company
EMI Group
that lets MP3 use EMI's songs in its My.MP3 Web database, according to a
Reuters
report. A U.S. District Court ruled in April that MP3.com's database violated copyright law, forcing the company to seek settlements with record labels or face court penalties.
Security software firm
Symantec
(SYMC) - Get Symantec Corporation Report
said it will acquire
AXENT Technologies
(AXNT)
in a stock swap valued $975 million. Under terms of the deal, which is billed as a way to create a new leader in Internet security for enterprise customers, AXENT shareholders will receive 0.5 of a Symantec share for each AXENT share held.
After Wednesday's Close
InfoSpace
(INSP) - Get Inspire Medical Systems, Inc. Report
, which provides infrastructure and services to businesses, agreed to buy
Go2Net
(GNET)
in a transaction valued at about $4.02 billion.
Under terms of the deal, InfoSpace will issue 1.82 of its own shares for each share of Go2Net, which values Go2Net shares at $86.91, a 43% premium to its closing price of 60 9/16 on the
Nasdaq Stock Market
today. The deal will give InfoSpace a combined base of nearly two million merchants.
Separately, InfoSpace posted a second-quarter loss of 1 cent, narrower than the 13-analyst expected loss of 6 cents but down from the year-ago earnings of 2 cents.
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Earnings/revenue reports and previews
CSX
(CSX) - Get CSX Corporation Report
reported second-quarter earnings of 26 cents a share, beating the nine-analyst estimate by a penny. The company's year-ago earnings were 53 cents a share, but that figure includes revenue and earnings from Sea-Land's international container-shipping business, which was sold to
Maersk Line
in December 1999. Results also include a gain of 8 cents a share on the June 1999 sale of CSX 's Grand Teton Lodge.
Franklin Resources'
(BEN) - Get Franklin Resources, Inc. Report
posted third-quarter earnings of 58 cents, beating the 11-analyst estimate by a penny and up from year-ago earnings of 49 cents a share. Last night, the company's Templeton Management subsidiary said it would offer to pay about $95 million for all outstanding shares of Canadian mutual-fund company
Bissett & Associates Investment Management
.
National Fuel Gas
(NFG) - Get National Fuel Gas Company Report
reported third-quarter earnings of 36 cents a share, missing the seven-analyst estimate of 41 cents, but up from year-ago earnings of 30 cents a share. The company said it took an $8.3 million after-tax charge to earnings for the quarter as a result of a rise in natural gas prices.
Reliant Energy
(REI) - Get Ring Energy, Inc. Report
reported second-quarter earnings of 76 cents a share, well above the 14-analyst estimate of 58 cents and the year-ago 43 cents. The electric utility and energy services company said it plans to separate its operations into two publicly traded companies, dividing its regulated and unregulated businesses. The move is an attempt to satisfy Texas electric restructuring law, which calls for the state electric market to open to full competition Jan. 1, 2002.
Martha Stewart Living
(MSO)
posted second-quarter earnings of 12 cents a share, beating the six-analyst estimate of 7 cents and the year-ago pro forma 8 cents. The company said it expects to beat the 2000 EPS view of 24 cents.
Finnish telecom equipment maker
Nokia
reported April-June pretax profit rising 62% on a year-over-year basis to $1.34 billion, at the top end of a
Reuters
poll. The company said, however, that it expected third-quarter EPS to be lower than the second quarter but at least equal to the level achieved in the third-quarter of 1999, due to the timing of new product introductions.
Nokia's CEO said he was confident and that the overall prospects of the company are unchanged, but that didn't prevent
Morgan Stanley Dean Witter
from cutting Nokia to outperform from strong buy and reducing its target to 65 euros from 75.
Donaldson Lufkin & Jenrette
cut Nokia to buy from top pick.
Banc of America
cut Nokia to buy from strong buy.
Primedia
(PRM)
posted a second-quarter loss of 13 cents a share, which included a gain of $17.5 million. The three-analyst estimate was for a loss of 19 cents, while the year-ago loss was 12 cents.
Williams Communications
(WCG) - Get WellCare Health Plans, Inc. Report
posted a second-quarter loss of 1 cent a share, which includes a gain of 29 cents a share. The five-analyst consensus was for a loss of 46 cents a share, while the year-ago loss was 31 cents a share.
WorldCom
(WCOM)
reported second-quarter earnings of 46 cents a share, in line with the 18-analyst estimate and up from the year-ago 44 cents. The company said it expects 2000 communications services revenue growth to be at the low end of its previous growth forecast of 13.5% to 15.5%.
After Wednesday's Close
Amgen
(AMGN) - Get Amgen Inc. Report
reported second-quarter earnings of 28 cents a share, which beat the 21-analyst estimate by a penny and was up from year-ago earnings of 25 cents a share. The company attributed the higher earnings to solid sales of its anemia drug Epogen.
Flextronics
reported second-quarter earnings of 37 cents a share, beating the 19-analyst estimate of 34 cents and the year-ago 19 cents. The Singapore-based company also set a 2-for-1 stock split.
Halliburton
(HAL) - Get Halliburton Company Report
, which yesterday lost its chairman and CEO, Dick Cheney, to presidential candidate Texas Gov.
George W. Bush
, who picked him to be his potential vice president. Halliburton reported second-quarter earnings of 17 cents a share, which beat the 22-analyst estimate, but was down from year-ago earnings of 19 cents a share.
Today,
Deutsche Banc Alex. Brown
raised the stock to buy from market perform.
RARE Hospitality
(RARE) - Get Ultragenyx Pharmaceutical, Inc. Report
reported second-quarter earnings of 43 cents a share, beating the six-analyst estimate of 38 cents and up from year-ago earnings of 30 cents. Also, the company's board approved of a 3-for-2 stock split.
Sealed Air
(SEE) - Get Sealed Air Corporation Report
reported second-quarter earnings of 47 cents a share, besting the 13-analyst estimate by a penny. The company's year-ago earnings were 40 cents a share, after preferred dividends of $17.9 million.
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Analyst actions
Upgrades
Burlington Northern
(BNI)
: UP to market outperform from market perform at
Goldman Sachs
.
Hershey
(HSY) - Get Hershey Company Report
: UP to market outperform from market perform at Goldman Sachs.
Norfolk Southern
(NSC) - Get Norfolk Southern Corporation Report
: UP to market outperform from market perform at Goldman Sachs.
PPL Corp.
(PPL) - Get PPL Corporation Report
: UP to buy from neutral at
PaineWebber
; price target: 36.
Tommy Hilfiger
(TOM)
: UP to buy from hold at CSFB; price target: 18.
Verisign
(VRSN) - Get VeriSign, Inc. Report
: price target UP to 210 from 50 at
Merrill Lynch
.
UnumProvident
: UP to top pick from buy at DLJ.
Downgrades
Applebee's
(APPB)
: DOWN to neutral from strong buy at
Morgan Stanley Dean Witter
.
Finova
(FNV) - Get Franco-Nevada Corporation Report
: DOWN to hold from outperform at
ABN Amro
.
MarketWatch.com
(MKTW)
: price target DOWN to 50 from 85 at DLJ.
MicroStrategy
(MSTR) - Get MicroStrategy Incorporated Class A Report
: DOWN to hold from accumulate at
Prudential Securities
.
SkyWest
(SKYW) - Get SkyWest, Inc Report
: DOWN to outperform from strong buy at Morgan Stanley Dean Witter; Goldman Sachs removed the stock from its recommended for purchase list.
Initiation
NetEase.com
(NTES) - Get NetEase Inc. Report
: NEW near- and long-term buy at
Merrill Lynch
.
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Offerings and stock actions
Applied Molecular Evolution
(AMEV)
was jumping about 50% to 28 9/16 in late morning trading after the stock was priced at $19 a share. The company's technology is used to develop new drugs as well as improve existing drugs. The IPO is being handled by
CIBC World Markets
,
PaineWebber
and
SG Cowen
.
McKesson HBOC
(MCK) - Get McKesson Corporation Report
said its board approved a program to buy back up to $250 million of its shares.
Paradigm4
, a wireless data software firm, withdrew its $125 million IPO because terms in the marketplace weren't "sufficiently attractive" to go ahead with the offering. The company had applied for a Nasdaq listing under the symbol PFOR.
Power-One
(PWER)
, a maker of power conversion products, said its board approved a 2-for-1 stock split.
Symmetricom
(SYMM)
set a 3-for-2 stock split.
After Wednesday's Close
Tyco's
(TYC)
Bermuda-based unit
TyCom
(TCM)
sold more than 61.1 million shares at $32 a share, above the estimated price range of $26 to $30 a share in its IPO. TyCom provides undersea fiber-optic network cable and services.
UnionBanCal
(UB)
raised its stock repurchase by another $100 million of its common stock. The company repurchased $100 million in common stock between December 1999 and July 2000.
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Miscellany
Bear Stearns'
(BSC)
business of processing stock trades will take a hit early next year as it stands to lose business from its biggest customer
Lehman Brothers
(LEH)
,
The Wall Street Journal
reported. Lehman, which funnels between 10% and 20% of all trades processed by Bear, plans to unveil its own processing system, according to the story.
Ford
(F) - Get Ford Motor Company Report
will announce today that it plans to improve the fuel economy of its fleet of sport-utility vehicles by 25% over five years, according to
The Wall Street Journal
.
The
Journal
said the move was described by environmentalists as the most significant environmental move by an automaker in years. Aside from improving technology, Ford's attempt to reach its goal by introducing new vehicles, including a version of its Escape compact SUV that will run on both a gasoline engine and an electric motor, the report said.
Allen Questrom, chairman and chief executive of
Barneys New York
, has been named chairman and CEO of Texas-based
J.C. Penney
(JCP) - Get J. C. Penney Company, Inc. Report
, which operates
JCPenney Stores
, the
Eckerd Drug Store
chain and the JCPenney catalog and Internet retailing businesses. Questrom succeeds James Oesterreicher, effective Sept. 15.
PaineWebber
raised J.C. Penney to buy from attractive and lifted its target to 25 from 20. However, PaineWebber lowered its 2000 EPS view to $1.30 from $1.41.
Microsoft
(MSFT) - Get Microsoft Corporation Report
asked the Supreme Court to send its appeal of antitrust violations back to a federal appeals court. The 30-page appeal urged the court to avoid "the onerous task of sifting through a large and complex record and forgoing the many benefits of intermediate appellate review." Also, it said, "Indeed, the number of and nature of the errors below militate strongly in favor of review by the court of appeals."
The
Associated Press
said the company hopes to have its case heard in the federal appeals court because that court has reversed Jackson's decisions on Microsoft-related matters twice in the past.
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