Updated from 1:40 p.m.
You can go ahead and buy shares of
-- at least that's what
Holly Becker is saying today.
One of the early bears in the analyst community about the company's stock, Becker changed her rating on the CEO-less Web portal to buy from market perform, citing the company's low valuation. Yesterday, Yahoo! closed at $12.44. In early morning trading, her call was moving the stock almost $2 higher.
"We believe estimates are finally low enough, and valuation is much more reasonable with the stock at less than $13," Becker wrote. "Also, we think the downside on the stock is protected by takeover potential."
Indeed, Yahoo!, which recently said goodbye to CEO Tim Koogle, is seen as a prime takeover candidate because its once-gigantic
market cap now sits at a svelte $7 billion. Possible suitors are seen coming from the entertainment industry, similar to what happened last year that led to
AOL Time Warner
has a more sober outlook on the company. He recently
Commentary section that Yahoo! won't start looking attractive until it trades below $5 a share. Well it didn't go there today. Yahoo! closed up $2.81, or 22.6%, to $15.25.
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Earnings/revenue reports and previews
said it beat Wall Street's earnings estimates for the first quarter, despite a drop in demand, lower metal prices and increased energy costs.
The aluminum producer said it earned $404 million, or 46 cents a share, in the first quarter. Fifteen analysts polled by
Thomson Financial/First Call
were expecting the company to post earnings of 43 cents in the period. Alcoa earned $347 million, or 47 cents a share, in the year-ago quarter. Revenue grew to $6.18 billion from $4.51 billion in the same period last year.
Alcoa said a decline in demand from certain end-markets, lower metals prices and increased energy costs hurt its first-quarter earnings, but the losses were partially offset by cost-cutting initiatives and the positive impact from acquisitions. The company also said it has curtailed production at various sites and sold several small noncore businesses, which added 2 cents a share to the bottom line. Alcoa closed up $1.95, or 5.5%, to $37.50.
restated its reported earnings and revenue for the third and fourth quarters, citing a change in the accounting for software licensing transactions and other revenue recognition issues.
The troubled Internet messaging services company revised its third-quarter revenue downward to $35.3 million. Critical Path had previously reported revenue of $45 million for the quarter. The company also more than doubled its losses, revising the bottom line to a loss of $18.6 million, or 30 cents a share, excluding charges. Critical Path originally reported a loss of $8.7 million, or 14 cents a share.
The fourth-quarter figures also underwent major revisions as the new revenue total fell $9.7 million short of the previous report. The new revenue figure is $42.3 million, down from the top line of $52 million the company originally posted. The revised loss came to $23.3 million, or 33 cents a share. Critical Path had reported a loss of $11.5 million, or 16 cents a share. Critical Path closed flat at $1.53.
PacifiCare Health Systems
on Thursday reaffirmed its earnings expectations for the first quarter and full year, offering projections that would easily exceed Wall Street's consensus forecast for both periods.
The managed health care services company said it still expects to make 35 cents a share in the first quarter and $2.94 for the year.
Analysts polled by Thomson Financial/First Call are expecting the company to earn 27 cents in the quarter and $2.28 for the year. The company earned $1.94 in the year-ago first quarter and $4.51 for last year. PacifiCare also said its membership enrollment guidance hasn't changed. The company plans to report first-quarter earnings May 2. PacifiCare closed up $2.13, or 8.9%, to $26.06.
T. Rowe Price
said Thursday that first-quarter earnings would be "moderately below" last quarter's level and that growth is unlikely to exceed an annual rate of 1% during the first half.
The Baltimore-based investment adviser blamed the slowdown in performance on sharp declines in the equity markets and the resulting drop in the firm's assets under management.
In the fourth-quarter of 2000, T. Rowe Price earned 43 cents a share. Speaking to stockholders at the company's annual meeting, Chairman George A. Roche did not specify how much below that level first-quarter earnings would be. The consensus of 13 analysts surveyed by Thomson Financial/First Call was for earnings of 41 cents a share. In the first quarter of last year, T. Rowe Price earned 58 cents a share.
Roche said the outlook for the rest of the year is "mixed," with a sluggish economy dampening consumer spending, but with falling interest rates boosting financial markets. "We do not predict the market, but believe most of the decline has been experienced," he said.
He told shareholders that expenses would be managed carefully and would be lower this year than they were last year. T. Rowe closed up $2.44, or 8.5%, to $31.
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Christopher Winham upped his rating on
Black & Decker
to market outperform from market perform, just because its stock has gotten so cheap in the past month. Winham put a $45 price target on the stock.
"Strong housing markets, improving consumer confidence and aggressive new product launches from Black & Decker give us some optimism for second-half results, although the pace of recovery likely will be slower than previously expected," he wrote to investors. Black & Decker closed up $1.61, or 4.4%, to $38.49.
, maker of videogames like the bone-crunching Madden football series, was clipped by overeager investors in yesterday's session.
Credit Suisse First Boston's
Heath Terry told investors this morning that the 9% drop created a nice buying opportunity for today.
"We believe the misinformation reported by the
and spread by other media outlets yesterday has created a buying opportunity," he wrote. "We expect that shares will quickly regain the ground lost after this story was reported and we encourage investors to use this opportunity to buy shares of EA. Therefore, we reiterate our strong buy opinion and our $70 price target."
The story in the
Xbox could be delayed, sparking a selloff. Investors overreacted a bit before Microsoft came out and denied that its video game console, for which EA makes software, was off track for a fall release. Electronic Arts closed up $2.36, or 4.9%, to $50.73; Microsoft was up $4.81, or 9.3%, to $56.75.
You should stop hiding.
Joe Osha downgraded
Advanced Micro Devices
to a neutral rating, telling investors that they can no longer hide out in chipmakers that make their money from the computer industry.
Despite a nasty fall in the past few weeks, Micron, previously rated a buy, and AMD, previously at accumulate, have had a decent year. AMD is up 57% so far, while Micron is up 4%. In comparison, the
fell 14% year to date. Chipmakers have risen on hopes of a recovery in the computer market.
Osha said chip prices stayed firm through February and March, supporting the idea that chipmakers would recover early. But Merrill's analyst is unconvinced that the trend is strong enough to warrant more buying of chipmaker stocks.
"However, some of the improvement we've seen can be ascribed simply to inventory restocking efforts, following a dramatic drawdown late last year and early this year," he wrote. "We've said that we needed to see a convincing demand follow-through to support continued intermediate-term optimism for the stocks. Our checks, and comments from our Asia Pacific semiconductor analyst Dan Heyler, do not suggest that we're getting that follow-through."
Looks like another analyst is calling for tough times in the semiconductor sector. Micron Tech closed up $3.80, or 10.98%, to $38.40; AMD closed up $2.28, or 10.99%, to $23.02.
: UP to intermediate-term accumulate from intermediate-term neutral at Merrill Lynch. BlackRock closed up $1.54, or 4.8%, to $33.54.
Park Place Entertainment
: UP to market outperform from market perform at Goldman Sachs. The stock closed up 25 cents, or 2.6%, to $10.
Horace Mann Educators
: DOWN to hold from buy at Credit Suisse First Boston. Horace Mann Educators closed up 11 cents, or 0.7%, to $16.70.
: DOWN to hold from buy at Credit Suisse First Boston. Kroger closed down $1.56, or 6.4%, to $22.99.
: NEW hold at Credit Suisse First Boston; price target: $28. Energizer closed up 11 cents, or 0.4%, to $25.11.
Potash of Saskatchewan
: NEW market outperform at Goldman Sachs. And the Academy Award for Coolest Named Public Company goes to Potash of Saskatchewan, which ended the trading day up $1.69, or 2.9%, to $59.70.
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, both units of
, resigned from the
National Association of Broadcasters
, a nonprofit organization of U.S. radio and television stations and broadcast networks.
In a press release Wednesday, the companies said they both have been calling for the elimination of the national broadcast ownership cap, along with other restrictions. A spokesman for CBS said that the NAB board met Wednesday "and reaffirmed its commitment to a 35% ownership cap." He stated that the announcement was the main reason for the withdrawal from the organization.
The companies said they will continue to work with others in the industry to ensure free over-the-air television and radio stand on an "even footing" with competitors. "It has now become clear that we cannot remain within an organization that is actively working against those objectives," the statement said. Viacom closed up $2.89, or 7.1%, to $43.35.
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By the Numbers
The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.
Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.
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