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Updated from 4:04 p.m. EDT

)

The No. 1 manufacturer of semiconductor equipment,

Applied Materials

(AMAT) - Get Applied Materials, Inc. Report

, posted a fiscal third-quarter 70-cent profit, besting the 28-broker forecast by 2 cents and exceeding the year-ago 31-cent result. Additionally, Applied Materials reported an 83% surge in sales. The chipmaker's earnings are widely viewed as a proxy for the wider tech sector.

UBS Warburg

cut its price target to 90 from 115. Shares fell 2 7/8 to 69 1/4.

Retailing giant

Gap

(GPS) - Get Gap, Inc. Report

posted second-quarter earnings of 21 cents a share, a penny ahead of the 22-analyst estimate and down from the year-ago earnings of 22 cents. The company warned its third-quarter results could fall to or below the 35 cents it earned in the year-ago period if current business conditions continue. Gap lost 4 1/2, or 14.3%, to 27.

After the announcement,

Bear Stearns

cut its rating on Gap to attractive from buy and

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TheStreet Recommends

Deutsche Banc Alex. Brown

cut Gap to market perform from buy.

TSC's

Katie Hobson

has been keeping an eye on

developments in the Gap as well as in the broader

retail sector.

Kmart

(KM)

edged up 1/16 to 7 1/4 after it reported second-quarter earnings, posting results of 5 cents a share, excluding a charge for strategic actions. The number was in line with the 16-analyst estimate, but down from year-ago earnings of 26 cents a share.

Also, the retailer said it planned to invest close to $2 billion in infrastructure improvements over the next two years in an effort to boost earnings and store operations.

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Mergers, acquisitions and joint ventures

Amazon.com

(AMZN) - Get Amazon.com, Inc. Report

lost 7/16 to 30 7/16 and

Toys R Us

(TOY)

was unchanged at 17 3/8 after the companies said they will create a co-branded online toy and video-game store to be launched in the fall. Amazon said it would get warrants to buy up to 5% of Toys R Us.

Car rental company

Avis

(AVI)

added 15/16 to 24 11/16 after it said it closed its deal to create a joint venture with France's

BNP Paribas

and used proceeds from the deal to retire $1 billion in term debt. Under the transaction, announced in April, BNP agreed to pay $800 million in cash for 80% interest in the joint venture, which will offer car fleet management and leasing services to firms. Avis' board also authorized a stock buyback plan of up to $100 million worth of common stock.

British Airways

(BAB) - Get Invesco Taxable Municipal Bond ETF Report

edged up 7/16 to 58 7/8 and

KLM

(KLM)

climbed 1 1/2, or 5.5%, to 28 5/8 after the companies said they have agreed to extend their exclusivity period for talks, saying the talks have been constructive and that important progress has been made. British Airways and KLM said a business rationale for a potential merger exists and that they have allowed for several more weeks of talks.

Warburg Pincus

said it will invest $400 million in

Lucent

(LU)

spinoff

Avaya

. For the investment, Warburg Pincus will receive Avaya participating preferred stock, which can be converted into about 5% of Avaya common stock, and a place on Avaya's board. Lucent lost 1/2 to 40 7/8.

Progenics Pharmaceuticals

(PGNX) - Get Progenics Pharmaceuticals, Inc. Report

lost 1 to 22 1/2 and

Pharmacopeia

(PCOP)

dropped 1 5/8 to 36 1/2 after the companies announced the initiation of two new collaborative programs to discover orally active antiviral agents. The programs are in addition to an existing collaboration signed between the two companies in March.

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Earnings/revenue reports and previews

Atlantic Medical

(MME)

moved down 1/2 to 14 5/8 after it posted second-quarter earnings of 19 cents a share, beating the 10-analyst estimate by a penny and exceeding year-ago earnings of 11 cents a share.

Bowne

(BNE)

, a provider of document-management services, gained 11/16, or 7.8%, to 9 9/16 after it announced second-quarter earnings of 30 cents a share, topping the two-analyst estimate of a 26-cent result and improving upon year-ago earnings of 35 cents a share.

Crown Castle International

(TWRS)

tacked on 2 1/64, or 5.8%, to 36 49/64 after it posted a second-quarter loss of 43 cents a share, wider than the four-analyst estimate of 39 cents and the year-ago loss of 22 cents.

Flowers Industries

(FLO) - Get Flowers Foods, Inc. Report

rose 1/4 to 21 1/4 after it reported second-quarter earnings of 6 cents a share, missing the nine-analyst estimate by a penny, but up from the year-ago loss of 28 cents a share. The company's struggle to turn around its Mrs. Smith's frozen pies division was blamed for the miss.

ICG Communications

(ICGX)

plummeted 7 11/16, or about 54%, to 6 9/16 after the company revised downward its outlook for 2000 and 2001 results.

Donaldson Lufkin & Jenrette

cut the stock to market perform from buy.

Informix

(IFMX)

rose 5/32 to 4 27/32 after it announced a restructuring designed to streamline its operations and said it expects to take a related charge of $75 million to $90 million in the third quarter. The Internet software-maker also said it expects additional charges of $10 million to $15 million during the transition period of corporate realignment, which is expected to last through the first half of 2001. Additionally, Informix said it will begin its repurchase of 6.4 million shares on Aug 14.

Integrated Electrical Services

(IEE)

, a provider of electrical contracting, lost 1/8 to 5 7/16 after it posted fiscal third-quarter earnings of 25 cents a share, in line with the four-analyst estimate but below the year-ago's 39 cents.

Lands' End

(LE) - Get Lands' End, Inc. Report

lost 2 1/4, or 7.4%, to 28 3/16 after it posted a second-quarter loss of 6 cents a share, missing the 10-analyst estimate by 13 cents and significantly down from year-ago earnings of 14 cents. The company called the loss for the quarter "unexpected and disappointing." Based on sales trends earlier in the quarter, Lands' End had already lowered its outlook.

The company, which is reportedly seen as a potential buyout target, said overall sales trends in the quarter were weaker than expected, with flat sales in its core business segment and specialty business segment. But the Internet sales were 70% higher compared to last year, and sales in the international business segment -- comprising operations in Japan, the United Kingdom and Germany -- were up about 2% from last year.

Home-furniture manufacturer

La-Z-Boy

(LZB) - Get La-Z-Boy Incorporated Report

lost 13/16 to 15 3/4 after it posted first-quarter earnings of 21 cents a share, beating the five-analyst estimate by one cent but below the year-ago 25-cent profit. Although La-Z-Boy beat analysts' revised forecast, net income fell 2%, hurt by a slowdown in the furniture industry.

Lone Star Steakhouse & Saloon

(STAR) - Get iStar Inc. Report

slipped 7/32 to 8 17/32 after announcing it would take a charge of about $350,000, or a penny a share, in the third quarter related to restaurant closures. Lone Star said the move won't have "significant impact" on its financial position or operations.

Mattel

(MAT) - Get Mattel, Inc. Report

moved up 1/16 to 10 9/16 after it said it expects about $100 million in lost sales in the second half of 2000 because of a worldwide shortage of computer chips. Jill Krutick, an analyst with

Salomon Smith Barney

, told

Reuters

that the lost sales translate to about 5 cents a share in the second half of 2000.

Modis Professional Services

(MPS)

posted second-quarter earnings of 13 cents a share, beating the 10-analyst estimate by a penny, but down from year-ago earnings of 27 cents a share. Modis was up 1/2, or 6.9%, to 7 3/4.

NetZero

(NZRO)

, a provider of free Internet access, posted pro-forma losses of 25 cents a share, narrower than the six-analyst expectation of a 29-cent loss. The stock edged up 7/32 to 5 11/32 on the news.

The company added more than 900,000 registered users in the June quarter, bringing its total number of users to nearly 5 million at the fiscal year end and representing more than a 315% increase during the past year.

TheStreet.com

took a

look at NetZero's business in an earlier story.

Six Flags

(PKS)

posted second-quarter earnings of 12 cents a share, missing the seven-analyst estimate of 20 cents. The year-ago earnings of 15 cents included items. The company said its results were hurt by unseasonably rainy weather and lower temperatures than usual during the quarter. Investors punished Six Flags, which fell 1 3/16, or 7.9%, to 13 7/8.

Music and video retailer

Trans World Entertainment

(TWMC) - Get Trans World Entertainment Corporation Report

reported second-quarter earnings of 14 cents a share, beating the five-analyst estimate of 11-cent earnings and the year-ago 11-cent outcome. Still, the stock slipped 27/32, or 7.7%, to 10 5/32.

Trigon Healthcare

(TGH) - Get Textainer Group Holdings Limited Report

reported second-quarter earnings of 80 cents, excluding realized gains and losses and a one-time favorable tax benefit, beating the 14-analyst estimate by 2 cents. Because of the one-time tax benefit, there is no comparable year-ago figure. Its year-ago earnings excluding realized gains and losses was 49 cents a share. Trigon was down 1 3/4 to 55 1/8.

Unwired

(UNWR)

moved up 3/16 to 15 3/16 after it posted a second-quarter loss of 21 cents, narrower than the single-analyst estimate of a loss of 25 cents and wider than the year-ago loss of 2 cents.

Vintage Petroleum

(VPI)

stated second-quarter earnings of 72 cents a share, besting the 17-analyst estimate of 68 cents and the year-ago 9-cent result. It inched up 1/8 to 19 3/4.