Updated from 3:01 p.m. EDT

Verizon Communications

(VZ) - Get Report

, the company formed by the merger of

Bell Atlantic

and

GTE

, said profits rose by 7.5% in the latest quarter and said it expects revenue to grow about 8% to 10% a year. Still, the latest result of 72 cents, excluding a gain, was below the three-analyst estimate of 83 cents.

The company said earnings adjusted for one-time events and excluding

Genuity

(GENU)

were 81 cents. Verizon said it sees 2000 earnings in the range of $2.90 to $2.94, below the current 12-analyst estimate of $3.15.

Verizon also said that it will merge its DSL business with

Northpoint

( NPNT) and make an $800 million cash investment in Northpoint. Verizon said it will own 55% of the new Northpoint, which will be traded as a separate company.

The "Heard on the Street" column in the

Wall Street Journal

reported this morning that discrepancies over revenue and customers have arisen at

Lernout & Hauspie

(LHSP)

, a speech technology company.

According to the story, the L&H's Korean sales jumped to 42% of revenue in the fourth quarter of 1999, while in the first quarter of this year, sales surged to more than half of revenue. But some companies that have been identified as Korean customers have denied doing business with Lernout & Hauspie, while others say their reported patronage levels were inflated.

Lernout & Hauspie acknowledge they made initial misrepresentations about customers, but it disputes other accounts by Korean companies and say Korean revenue figures are accurate. The stock fell in preopen trading in response to the news.

The company said it firmly believes that statements attributed to its Korean customers are misquoted or factually incorrect, and that other information appearing in the article, including its customer list, is distorted.

Mergers, acquisitions and joint ventures

Avnet

(AVT) - Get Report

and

Arrow

(ARW) - Get Report

were part of a consortium led by

Schroder Ventures'

funds that agreed to pay about $2.35 billion, including the assumption of debt, for the

VEBA Electronics Group

from Germany-based

E.ON

.

Also today, Avnet posted fourth-quarter earnings of $1.48, beating the six-analyst estimate of $1.44 and the year-ago 76 cents.

British food giant

Diageo

(DEO) - Get Report

is holding talks with

Bacardi

over a joint bid for

Seagram's

(VO) - Get Report

spirits business. According to a

Reuters

report, Diageo is hoping to thwart a bid from competitor

Allied Domecq

.

Dynegy

(DYN)

agreed to pay a total of $903 million for the 500 megawatt-generating Danskammer Power Plant from

CH Energy Group's

(CHG)

Central Hudson Gas & Electric and the 1,200 megawatt-generating Roseton Power Plant from

Consolidated Edison

(ED) - Get Report

and

Niagara Mohawk Holdings'

( NMK) Niagara Mohawk Power unit. Both plants are about 50 miles north of New York City.

EarthLink

(ELNK)

, the No. 2 internet service provider in the U.S., agreed to buy

IBS Interactive's

(IBSX)

consumer dial-up business for cash, based on the total number of subscribers who remain with EarthLink.

IBS, which expects to report a second-quarter loss on the sale, said it expects to use the proceeds primarily to pay off bank debt assumed in its March acquisition of

Digital Fusion

. The divestiture of IBS consumer dial-up business is the final step of the company's strategic plan to concentrate entirely on its consulting e-business services. In July, IBS said it would merge with

Infonautics

and

First Avenue Ventures

to create a new company called Digital Fusion.

FirstEnergy

( NTLI) will acquire all of

GPU's

( GPU) outstanding shares of common stock for about $4.5 billion in cash and FirstEnergy common stock. Terms of the merger agreement call for FirstEnergy also to assume about $7.4 billion of GPU 's debt and preferred stock. The combined company will have an equity value of around $8.5 billion, based on FirstEnergy's closing stock price of $26.94 on Friday.

TheStreet.com/NYTimes.com

joint newsroom wrote about the merger in an earlier

story.

A

Morgan Stanley Dean Witter

( MWD) unit and

NTL

( NT) will take a 49.9% stake in cable operator

Noos

from

France Telecom

(FTE)

for $1.22 billion, the

Journal

reported.

Mobile phone company

Nokia

(NOK) - Get Report

announced plans to buy

DiscoveryCom

, a company that helps communications companies install and run DSL services, for $220 in Nokia stock.

Ralcorp

( RAH), which makes private-label cookies and cereals, and

Agribrands

(AGX) - Get Report

will enter into a merger-of-equals transaction, creating a company with about $2.3 billion in sales, substantial cash flows and the borrowing capacity needed to accelerate Ralcorp's growth in private-label foods. Terms of the agreement will let Ralcorp shareholders exchange one Ralcorp share for a share of the newly formed company or receive $15 a share in cash. Agribrand shareholders will be allowed to exchange one Agribrand share for three shares of the new company, or receive $39 a share in cash.

Viant

( VIAN) and

Loudcloud

formed a strategic pact to offer Internet infrastructure services to digital businesses. The agreement calls for Viant to work with its corporate clients to prepare and transition their Web sites to Loudcloud's operational environment,

Reuters

reported. Financial terms of the deal were not disclosed.

After Monday's Close

Dominion

(D) - Get Report

said it will pay

Northeast

(NU)

$1.3 billion in an all-cash deal for its Millstone nuclear station. The company said the deal is expected to close by April 2001 and will add 5 cents to its earnings in both the first and second years of ownership.

Novartis'

(NVS) - Get Report

CIBA Vision unit extended its $758 million tender offer for

Wesley Jessen VisionCare's

( WJCO) outstanding common stock. About 48% of the shares have already been tendered in the offer.

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Earnings/revenue reports and previews

Barr Laboratories

( BRL) posted fourth-quarter earnings of 44 cents a share, ahead of the six-analyst estimate of a 42-cent profit and the year-ago 37-cent result.

Brinker International

(EAT) - Get Report

, which operates such restaurants as

Chili's

and

Macaroni Grill

, posted fourth-quarter earnings of 54 cents a share, a penny above the 15-analyst estimate and up from year-ago earnings of 40 cents a share.

Clayton Homes

(CMH)

reported fourth-quarter earnings of 27 cents, in line with the six-analyst estimate, but down from year-ago earnings of 36 cents a share.

Dial

(DL) - Get Report

warned it will not meet earnings expectations for 2000. The current 11-analyst estimate is for 77 cents. Dial also announced the resignation of CEO and Chairman Malcolm Jozoff and CFO Susan J. Riley. Dial named board member Herbert Baum, president of

Hasbro

(HAS) - Get Report

as CEO, while controller Jack Tierney was named acting CFO.

Dollar General

(DG) - Get Report

reported second-quarter profits of $39.3 million or 12 cents a diluted share, in line with the 14-analyst expectation and the year-ago result. Net income fell 5.5% from a year ago after the discount retailer changed its merchandise to include more seasonal items.

Equity Residential

(EQR) - Get Report

posted second-quarter results of $1.25, beating the 15-analyst $1.21 estimate and the year-ago $1.11 earnings.

Foundation Health Systems

(FHS)

posted second-quarter earnings of 32 cents a share, besting the 16-analyst 31-cent estimate and the year-ago 26-cent result.

IMC Global

( IGL) reported second-quarter earnings of 25 cents a share, beating the nine-analyst estimate of 21 cents, but down from year-ago earnings of 47 cents a share. The company said its third-quarter earnings will be hurt by output cuts, weaker prices and the higher costs of raw materials.

Indian software-services company

Infosys

(INFY) - Get Report

was up about 17% after rising on the Bombay index about 12% on speculative bidding amid market talk that a large U.S. fund was among the bidders,

Reuters

reported. Priya Rohira, an analyst at

Pranav Securities

, said she expected the company to maintain its robust earnings growth over the next quarters after a 100% rise in first-quarter profits. The report also said the company's earnings will benefit from a weakening rupee.

Metromedia Fiber Network

( MFNX) posted a second-quarter loss of 17 cents, narrower than the four-analyst consensus of 25 cents, but wider than the year-ago loss of 3 cents.

Pennzoil-Quaker State

(PZL)

reported second-quarter earnings of 23 cents a share, beating the three-analyst estimate of 21 cents and in line with year-ago earnings.

Performance Food Group

(PFGC) - Get Report

reported second-quarter earnings of 47 cents a share, in line with the nine-analyst estimate and up from year-ago earnings of 39 cents a share.

PSINet

(PSIX)

posted a second-quarter loss of $1.12 a share, narrower than the 16-analyst estimate of $1.33. The year-ago loss of 51 cents, includes a gain.

Staples

(SPLS)

said it expects its Internet unit to report a narrower-than-expected loss and post a profit ahead of schedule, according to

The Wall Street Journal

.

After Monday's Close

Acuson

(ACN) - Get Report

, which makes medical diagnostic ultrasound systems, reported second-quarter earnings of 5 cents, missing the five-analyst estimate of 8 cents and down from the year-ago earnings of 17 cents a share. The company attributed lower earnings to price erosion in the domestic cardiology market and the stronger dollar, which affected its international results. Acuson, which is expecting strong revenue growth in the third and fourth quarters, said international orders and revenue were higher than last year when measured in local currency.

ReliaStar

(RLR)

reported second-quarter earnings of 72 cents a share, missing the 11-analyst estimate of 85 cents and the year-ago 81 cents.

StarMedia

(STRM) - Get Report

CEO Fernando Espuelas said his company could break even before analysts' estimates for the fourth quarter of 2002. Espuelas told

Reuters

that he sees acquisitions as a powerful way to increase the company's reach and platforms.

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Analyst actions

Donaldson Lufkin & Jenrette

started

Cisco

(CSCO) - Get Report

,

Nortel Networks

(NT)

and

Tellabs

( TLAB) with buy ratings.

Upgrades

Furniture Brands

(FBN)

: UP to strong buy from buy at

First Union

.

Parker Hannafin

(PH) - Get Report

: UP to attractive from neutral at

PaineWebber

.

May Department Stores

( MAY): UP to buy from hold at

ING Barings

.

Trimble Navigation

(TRMB) - Get Report

: UP to strong buy from buy at

Banc of America

; price target: 54.

Downgrades

Applied Science

(ASTX)

: DOWN to attractive from buy at Paine Webber; price target down to 20 from 35.

Garden.com

(GDEN) - Get Report

: DOWN to market neutral from buy at

W.R. Hambrecht

.

Masco

(MAS) - Get Report

: DOWN to buy from strong buy at Banc of America.

National Computer Systems

(NCS) - Get Report

: DOWN to market perform from strong buy at

Thomas Weisel

.

Initiations

Baxter International

(BAX) - Get Report

: NEW buy at ING Barings.

Commnuity Health Systems

(CYH) - Get Report

: NEW buy at

UBS Warburg

; price target: 28.

GlobeSpan

(GSPN)

: NEW outperform at

Morgan Stanley Dean Witter

; price target: 175.

Guess?

(GES) - Get Report

: NEW strong buy at

CIBC

. Price target: 27.

Network Engines

(NENG)

: NEW buy at DLJ; price target: 50.

Pain Therapeutics

(PTIE)

: NEW buy at Thomas Weisel; price target: 26.

Sunrise Telecom

(SRTI)

: NEW buy at CIBC. Price target: 55.

True North

( TNO): NEW strong buy at Banc of America; 12-month price target: 65.

Group Moves

Salomon Smith Barney

lowered its ratings and target prices on several hard-disk drive and component stocks based on a recent turn for the worse in the second-half outlook. Salomon said it believes it will take longer than previously expected for the industry to fundamentally improve. Salomon also initiated coverage of one general technology stock.

  • Hutchison Technology (HTCH) : DOWN to neutral speculative from buy; price target down to 16.50 in 12 months from 40 in 18 months.
  • Maxtor (MXTR) : DOWN to outperform from buy; price target: down to 7 from 16.
  • Orbotech (ORBK) - Get Report: NEW outperform; price target: 105.
  • Read-Rite( RDRT): DOWN to outperform from buy; price target down to 5.50 in 12 months from 8 in 18 months.
  • Quantum (HDD) price target: DOWN to 9.50 in 12 months from 15 in 18 months.

Banc of America

initiated coverage of seven beverage companies:

  • Anheuser-Busch (BUD) - Get Report: NEW buy; price target: 92.
  • Coca-Cola (KO) - Get Report: NEW buy; price target: 72
  • Coca-Cola Enterprises (CCE) NEW strong buy; price target: 25.
  • Coors( RKY) NEW buy; price target: 75.
  • Pepsi (PEP) - Get Report NEW buy; price target: 52.
  • Pepsi Bottling Group( PBG) NEW strong buy; price target: 37.
  • Whitman (WH) - Get Report NEW strong buy; price target: 19.

Back to top

Offerings and stock actions

America Online Latin America

( AOLA), a joint venture between

America Online

(AOL)

and Venezula's

Cisneros Group

, priced its IPO of 25 million shares at $8 a share, the bottom of its revised price range. The company will trade on the Nasdaq under the ticker "AOLA." Shares were lately edging up 13/16, or 10.2% , to 8 13/16.

TheStreet.com/NYTimes.com's

joint newsroom wrote about the IPO in a

story Monday.

Also,

AT&T's

(T) - Get Report

own Latin American subsidiary filed with United States regulators to sell 35 million shares in an offering that could raise as much as $543 million. The company did not specify a price range and said the offering wouldn't be made public until after completion of its merger with

FirstCom

(FCLX)

, which is expected to be finished by Aug. 31. The company said it will trade on the

Nasdaq

under the ticker "ATTL."

Biopharmaceutical company

Immune Response

(IMNR)

said its previously announced public offering of 2.4 million common shares will be sold at $6 a share.

McData

, a unit of data-storage equipment company

EMC

(EMC)

, raised its IPO of 12.5 million shares to $24 to $26 a share from $19 to $21. The company is expected to debut on the Nasdaq under the symbol "MCDT."

Albany Molecular Research

(AMRI)

said its board approved a 2-for-1 stock split to be paid on Aug. 24 to shareholders of record at the close of business today.

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Miscellany

Armstrong Holdings

(ACK)

named Michael Lockhart to succeed George Lorch as chairman and chief executive, effective immediately. The company said Lorch, who was named chairman emeritus, will remain on the board until December and will be an adviser to Lockhart and the board until January, when he will become a consultant for the company for two years. Lockhart previously was chairman and chief executive of

General Signal

. Also, COO Frank Riddick was given the additional role of president.

CMGI

( CMGI) said it is considering takeovers of European Web companies, including Internet service providers that would help it drive extra visitors to its AltaVista portal. The company, which has more than $2 billion in cash, is looking in large European markets such as France, Britain and Germany, according to its European president, who spoke to

Reuters

.

The

New York Stock Exchange

suspended trading of

El Paso Energy Partners'

(EPN)

preference units and plans to apply to the Securities and Exchange Commission to delist the issue. The NYSE will not suspend the listing of El Paso's common units. The exchange normally considers suspending and removing an issue if the number of specialized securities owned by the public falls below 100,000. El Paso had fewer than 77,000 units remaining.

Cardiovascular-device maker

Guidant

( GDT) has received approval from the

Food and Drug Administration

to market a dual-chamber pacemaker/defibrillator system to treat ventricular heart rhythms.

Market research and polling firm

Harris Interactive

(HPOL)

dropped all federal charges against

America Online

(AOL)

related to its July 31 lawsuit. The suit contended that Harris' name was unfairly and arbitrarily placed onto Mail Abuse Prevention System's "realtime blackhole" list of companies accused of electronic mail abuse.

Harris Interactive said Mail Abuse Prevention System's action prompted a block on Harris corresponding with many of its registered subscribers. As part of the agreement, AOL restored Harris' communication capabilities with its respondents who have AOL addresses. Also, AOL changed its ISP from AboveNet.com to another ISP that is not affiliated with Mail Abuse Prevention System. The companies said litigation against the remaining defendants in the case will continue.

Also, a report in the

Journal

said computer experts are warning of a flaw in AOL's Netscape browser software that lets hackers retrieve files from a computer or office network after a user opens an e-mail or visits a Web site.

Lowe's

(LOW) - Get Report

will phase out the purchase of wood products from endangered forests.

Onyx Pharmaceuticals

(ONXX)

surged last week after positive publicity about its clinical trials for an experimental therapy for head and neck cancer. The gains continued today after the firm's CEO announced plans for a new anti-cancer trial by late next year.

Sagent

(SGNT)

named Ben Barnes president and CEO. Barnes was formerly general manager of

IBM's

(IBM) - Get Report

Global Business Intelligence Solutions unit and a member of the company's senior management group.

After Monday's Close

Ameritrade

(AMTD) - Get Report

said its CEO Tom Lewis resigned for personal reasons. Lewis joined the company as co-CEO in March 1999, but assumed full control of the job two months ago. He originally shared the job with founder and Chairman J. Joe Ricketts, who will take on the title again until a replacement is found.

TheStreet.com/NYTimes.com's

joint newsroom wrote about the move in a separate

story.

Standard & Poor's

said

Keyspan Energy

( KSE) will replace

New Century Energies

(NCE)

in the

S&P 500.

New Century is being acquired by

Northern States Power

(NSP) - Get Report

, though the deal is still awaiting approval.

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