Updated from 1:20 p.m.
European markets cheered Thursday after
( MOT) said its earnings growth remains on target even though it sees first-quarter sales coming in lower than previously expected. Nokia closed up $3.15, or 14.5%, to $24.95.
Shares of the cell-phone giant were rallying about 10% overseas, helping to give a reprieve to the beleaguered telecom sector that's lately been whipped by
negative news from Nokia competitors
( ERICY) and
( ERICY). A first-quarter earnings
warning from Ericsson had triggered rumors that Nokia, too, would guide down its profit outlook, though a contingent of observers
believed otherwise. Concerns about Nokia's financial health were a drag on European markets yesterday.
Motorola closed down 8 cents, or 0.6%, to $14.41; Ericsson was down 6 cents, or 1.1%, to $5.78.
Now the complete picture can be painted. Nokia today said it is "likely to reach" earnings per share of about 0.19 euro (17 cents) for the first quarter, "in line with its earlier statements." Still, the mobile-phone giant lowered its sales growth estimates to 20%, down from its previous guidance of 25% to 30% growth. According to earnings tracker
First Call/Thomson Financial
, 17 analysts expect first-quarter earnings of 17 cents a share, compared with 18 cents a share a year ago.
Finnish-based Nokia also estimated the full-year 2001 mobile-phone market size at 450 million to 500 million units, "due to the slower growth and more difficult market conditions during the first months of the year," it said in a prepared statement. "We feel confident about our strengths and our performance during the early months of the year. Despite the more difficult market conditions, we have been able to show good progress. We expect to see solid growth for the first quarter as a whole, with better-than-anticipated margins."
This economic downturn has been marked by rising inventories. Nokia this morning said its inventory levels were "lower than at year end" and that it continues to achieve a strong positive cash flow from its operations for the current quarter. Nokia said it would give guidance for the second quarter when it reports its first-quarter financial results on April 20.
Mergers, acquisitions and joint ventures
( CRA) said Thursday that
has signed a multi-year subscription agreement to use Celera's databases for genomic research.
The Norfolk, Conn., company, which announced it published the initial interpretation of the human genome sequence last month, did not disclose any financial terms of the deal, but said Arena researchers will use Celera's integrated database products, bioinformatics systems, and other discovery tools in genomics research. Celera closed down $1.20, or 3.3%, to $35; Arena was flat at $18.13.
After Wednesday's Close
said it plans to buy privately held
for $62 million in stock.
PowerSchool, which has 160 employees, provides Web-based student information systems for schools, which helps administrators and teachers manage student records and give parents real-time access to track their children's progress. Apple closed down 75 cents, or 3.7%, to $19.69.
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Earnings/revenue reports and previews
American Eagle Outfitters
( AEOS) posted fourth-quarter earnings of 68 cents a share, beating the 19-analyst estimate of 65 cents a share and up from year-ago earnings of 51 cents a share. The company said profit rose 32% thanks to strong holiday sales.
The youth apparel retailer said its latest shipment of spring offerings is performing well, and it expects to meet first-quarter estimates of 18 cents a share. American Eagle closed up $2.44, or 9.4%, to $28.50.
Investors scared off by the wild and wicked swings in the market have
( SCH) saying its stock trading activity dropped 31% in February from a year ago. The bright spot: The company racked up $8.5 billion in new assets.
The San Francisco-based brokerage this morning said its daily average trades slowed to 179,000 during the first nine days of March and that the company was continuing its "expense management efforts." These previously announced moves include reducing advertising expenses, new products and service developments. In this climate of ongoing news about staff cutbacks, Schwab this morning said it cut more than 850 full-time positions by the end of February and is "assessing the appropriate level of staffing, facilities and systems capacity reductions in each of our client and support enterprises."
The slowing economy and the recent market turbulence have hit the brokerage industry with full force,
dragging down their stocks. Financial stocks have also been pummeled by ongoing weakness in Japanese equities and banking woes. Schwab two days ago hit a 52-week low of $16. Charles Schwab closed up 86 cents, or 5.1%, to $17.90.
said third-quarter earnings were flat, meeting analysts' expectations. Heinz also announced cost-cutting measures in its tuna and pet food operations.
The Pittsburgh-based maker of Heinz ketchup, StarKist tuna and Ore-Ida french fries said it had earnings before special items of $227.4 million, or 65 cents a share, in the period ended Jan. 31, compared with $227.2 million, or 63 cents, a year earlier. The company warned earlier this month that earnings in the second half of the year would be hurt by weaker tuna prices and the rising cost of natural gas.
The company announced the streamlining of its pet and tuna lines, closing a Puerto Rican tuna fish production center, consolidating all pet-food production in Bloomsberg, Pa. and telling investors that more asset sales could be in the works. Heinz's European supply chain is also due for restructuring, with the company vowing to centralize operations there.
A grand total of 1,900 jobs will be lost as a result of the initiatives, which the company said will result in savings of $25 million next year. By 2004, Heinz estimates cost savings could amount to $60 million annually. Heinz closed up 49 cents, or 1.2%, to $41.35.
will take a pretax charge of about $40 million in its 2001 fourth quarter to cover costs and asset write-downs related to its efforts to improve efficiency and productivity.
The efforts include closing a manufacturing plant in Ohio and two depots as well as other closures the company previously announced. In all, the company, which makes infection control products, will reduce its workforce by about 300 to 350 employees.
Fourth-quarter earnings, excluding the charge, are expected to be in line with the First Call seven-analyst estimate of 16 cents a share, but, including the charge, the company expects to report a net loss for the quarter. These expected results compare to last year's fourth-quarter earnings of 1 cent a share, excluding a pretax charge of $39.7 million, and a net loss of 36 cents a share inclusive of that charge.
The consolidation efforts coupled with typical seasonal downturn in revenue during its first quarter will result in earnings for the fiscal year 2002 first quarter in the range of 5 cents a share compared to fiscal year 2001 first-quarter results of 1 cent a share. The four-analyst estimate for the quarter is currently 12 cents a share. Steris ended down $3.37, or 19.2%, $14.15.
After Wednesday's Close
( CNF) expects first-quarter 2001 earnings to be well below those of the first quarter of 2000. The company estimates current quarter results to be in the range of 22 cents to 27 cents a share because its core transportation businesses are each experiencing substantial tonnage and revenue declines as a result of a continuing slowdown of the U.S. economy. The
First Call/Thomson Financial
13-analyst estimate is currently 54 cents a share.
CNF President and CEO Gregory Quesnel said that the slowdown was first noted late in the third quarter of 2000 and has become more pronounced in each successive month through February. He said March is traditionally the strongest month of the quarter. So far, however, March overall has been as disappointing as January and February, he said.
CNF expects to announce its first-quarter results on April 18; the stock closed down $3.37, or 19.2%, to $14.15.
widened its expected first-quarter loss to 28 cents to 30 cents a share. The First Call six-analyst estimate for the first quarter is currently a loss of 23 cents a share. The company said it will implement spending reduction programs immediately.
CoSine did say that it expects second-quarter revenue to improve 15% to 20% over the first quarter. The five-analyst estimate is for a loss of 22 cents a share.
The company blamed delayed acceptances of networks in trial and a general slowdown in telecom spending. CoSine closed down $1.25, or 22.7%, to $4.25.
Dollar Tree Stores
said it expects first-quarter earnings to fall 5 cents below Wall Street's estimates due to snow-induced store closings and lower store traffic.
The discount retailer said it expects to earn 9 cents a share for the quarter, below the 13 cents it earned in the year-ago period. Fourteen analysts polled by First Call were expecting the company to post earnings of 14 cents a share.
The company said it anticipates comparable-store sales to fall slightly, with total sales checking in at $385 million for the quarter. "We are disappointed in first-quarter sales, which have been adversely affected by a high number of snow-related store closings," the company said in a statement. "Additionally, we are mindful of a slowdown in customer traffic due to a slower economy, and we are taking steps to manage inventory levels and control costs."
The company said it also expects comparable-store sales to fall in the second quarter from the year-ago period, with sales returning to normal in the second half of the year. Dollar Tree's stock closed down $6, or 24.8%, to $18.19.
( MIR) lowered first-quarter earnings estimates to between 10 cents and 13 cents a share and revenue to a range of $105 million and $115 million. The First Call eight-analyst estimate for first-quarter earnings is currently 18 cents a share, while revenue was expected to come in at $138.5 million.
The revised revenue results marks a sequential decline from the fourth quarter of 12% to 20%.
Second-quarter revenue is expected to be between $100 million and $110 million and earnings are anticipated at 8 cents to 10 cents a share. First Call's estimates were for revenue of $149.4 million and earnings of 17 cents a share.
"The long-term prospects for broadband deployment on a worldwide scale continue to offer exciting growth potential, but inventory issues that our customers have recently publicized and a slowing U.S. economy have persuaded us to revise our financial guidance for the first quarter of 2001," said Armando Geday, GlobeSpan's president and CEO. GlobalSpan closed down $4.25, or 17.3%, to $20.38.
( MIR) increased its first-quarter and full-year earnings guidance Wednesday, nearly doubling Wall Street's first-quarter expectations thanks to an increase in gas marketing volumes and its power business' strong performance in the Western United States.
For its first quarter ending March 2001, Mirant said it expects to earn 46 cents to 48 cents a share, up from the 16 cents to 18 cents previously forecast on Jan. 19. According to First Call, six analysts were expecting the company, which is based in Atlanta, to earn 22 cents a share. In the year-ago period, Mirant earned 28 cents a share.
For the full-year, Mirant expects to report earnings of $1.55 to $1.60 a share, up from the $1.15 to $1.20 a share previously forecast. Eleven analysts surveyed by First Call were estimating the company would earn $1.20 a share. In the same period a year ago, Mirant posted earnings of 98 cents a share.
The power provider said its full-year projections reflect its ongoing acquisition of 80% of government-owned
Jamaica Public Service Company
. Mirant closed up $4.78, or 19.1%, to $29.84.
( SSCC) warned that its first-quarter profits would fall below the First Call seven-analyst estimate of 15 cents a share because of soft demand for corrugated packaging in the current economy, high energy costs and economic downtime at mills.
Trading was halted on the stock from about 3 p.m. EST until 3:46 p.m. EST because of the news. The stock closed down 25 cents, or 1.9%, to $12.88.
said that it expects first-quarter EPS of 11 cents to 12 cents and revenue to be in a range of $230 million to $235 million. Both figures are lower than previously anticipated. The First Call eight-analyst estimate for its first-quarter earnings is currently 17 cents a share.
The company cited delays in new and existing client programs resulting from the downturn in the economy, and lower-than-expected revenue from
for its decrease in earnings. The earnings miss was attributed to the margin impact of a lower revenue base from "underutilization" of some customer interaction centers.
The company announced that its board had named Kenneth Tuchman interim chief executive officer, replacing Scott Thompson, who resigned. TeleTech closed down $5.06, or 35.8%, to $9.06; Verizon was up $1.15; or 2.5%, to $48.05.
said earnings for its fiscal third quarter beat Wall Street's expectations, and the company said fourth-quarter results would be in line with analyst forecasts.
The software maker said it earned $9.2 million, or 25 cents a share. Five analysts polled by First Call were expecting the company to post earnings of 23 cents in the quarter, up from 21 cents it made in the year-ago period. Revenue totaled $38 million, with $28.7 million of that coming from software.
Looking forward, Verity said it expects fourth-quarter revenue to rise 8% to 12% to $41 million to $42.5 million, with earnings per share at 24 cents to 27 cents. Analysts are calling for earnings of 25 cents in the fourth quarter, and 92 cents for the full year. Verity expects earnings of 91 cents to 94 cents for the year, with revenue between $144.8 million and $146.3 million. Verity closed up $1.75, or 7.6%, to $24.69.
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Bankers got rocked yesterday, hit by a Molotov cocktail of fear and loathing.
, an international credit rating agency, raised red flags about the state of 19 Japanese banks.
made negative comments about German banks as foreign markets sold off. Then American markets opened, and skittish investors sold bank stocks by the fistful.
Analysts rushed to look into banking and financial stocks after yesterday's close, picking through the rubble to see how a Japanese banking crisis could impact America's biggest banks.
According to a note from Goldman Sachs analyst Lori Applebaum, American banks should be fine. "U.S. banks had total Japanese exposures
in loans and derivatives of roughly $25 billion or just 1% of total assets, with most of this exposure with multinational banks," she wrote.
Bank of America
is one of her highest-rated bank stocks, put on the much-heralded U.S. recommended for purchase list. Bank of America closed today up 50 cents, or 0.97%, to $52.25.
American banks don't seem to have a great deal of exposure to a Japanese credit deterioration, but what about the lingering psychological effects of a worldwide banking crisis?
Credit Suisse First Boston
Henry Dickson, who agreed that American banks had only a modest exposure to Japanese credit woes, said perception could be a problem. But overall, Dickson said that irrational fears could lead to a buying opportunity.
"We think the recent decline represents an opportunity to invest in some of our group's stronger performers," he said. "The greater risk seems to be economic risk and perception risk. To the extent, the concerns about Japanese banks create a Fed bias for a larger rate cut, that would at least provide some downside support and be good for the longer term investment case."
Communications software got a boost from CSFB analyst Susan Passoni today. The analyst told investors that fundamentals within the industry were still solid, despite the larger economic downturn in the economy. Citing a 65% drop in communication software stocks from their 52-week highs, Passoni recommended that investors look into a pair of names.
The move comes one day after communications software company
( CMVT) hit the ground with a splat despite announcing solid earnings and raising growth forecasts. Comverse closed down $4.50, or 6.7%, to $62.50.
Goldman Sachs did not like what it heard, cutting the company's rating to market outperform and removing it from the U.S. recommended for purchase list. Essentially, Goldie didn't think Comverse's higher guidance was good enough to warrant an upswing in its stock.
But CSFB defended Comverse and the communications software business. Comverse was called a buy, while
was listed as a strong buy, down 38% from its high and up 20% from its low. Passoni called both companies "compelling" because of their strong cash balances and ties with big clients. Amdocs closed down $3.66, or 6.2%, to $55.26.
: UP to buy from hold at
. Allergan closed up $2.22, or 3.3%, to $70.22.
: UP to strong buy from hold at UBS Warburg. Allergan closed down 25 cents, or 1.4%, to $18.31.
: DOWN to market outperform from U.S. recommended for purchase list at Goldman Sachs. AudioCodes closed down $1.19, or 11.9%, to $8.81.
: DOWN to long-term buy from intermediate-term buy at
J.P. Morgan Chase
. Avistar ended the trading day down $1.19, or 54.3%, to $1.
: DOWN to long-term buy from intermediate-term buy at J.P. Morgan Chase. As noted above, CoSine closed down $1.25, or 22.7%, to $4.25.
( MIR): DOWN to buy from strong buy at
. Also as noted above, GlobeSpan closed down $4.25, or 17.3%, to $20.38.
: DOWN to hold from strong buy at
. Nvidia closed up $2.81, or 4.9%, to $59.88.
: DOWN to buy from strong buy at CSFB. PPL closed down $1.25, or 2.8%, to $42.73.
: DOWN to buy from strong buy at
. As noted above, TeleTech closed down $5.06, or 35.8%, to $9.06.
Advanced Fibre Communication
( AFCI): NEW strong buy at
; price target: $32. The stock closed flat at $16.63.
: NEW neutral at
; price target: $60. Alltel closed up 22 cents, or 0.4%, to $53.69.
: NEW accumulate at
. Avaya closed up 15 cents, or 1.2%, to $13.
Next Level Communications
( NXTV): NEW market perform at Lehman Brothers. Next Level ended the day down 63 cents, or 7.7%, to $7.50.
( RSTN): NEW strong buy at Merrill Lynch. Riverstone closed down 34 cents, or 4.1%, to $8.
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Offerings and stock actions
( NXTL) unit, Nextel International, discontinued its IPO due to market conditions.
Last month, the company increased the number of Class A common shares to be offered to 60 million from 45.5 million and lowered the estimated price range to $10 to $12 a share from $16 to $18 a share. Nextel closed down 88 cents, or 5.98%, to $13.75.
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, the world's largest chipmaker, said Thursday it is temporarily suspending construction of a $2.2 billion expansion at a plant in Ireland, citing cost-cutting needs in a "very difficult" year.
reporting from Europe, the Santa Clara, Calif., company said it will lay off about 1,400 construction workers, but that the project would be resumed next year, with all the workers back on site by mid-2002.
Intel also reportedly said it would not be cutting back on the overall investment in its "state-of-the-art factory" and that it was already "way ahead on the construction schedule." Intel plans to spread out the $2 billion investment over a longer period of time.
Tangled deep in the tech slowdown, the chipmaker has faced glut of problems, including a revenue shortfall that it
warned about last week. And today's news follows yesterday's
announcement that Intel plans to reorganize its communications product group and its network communications group into one business unit. The company, which started cutting spending earlier this quarter with a hiring freeze, also admitted there could be cost savings from the move. Intel also said last week said it would cut 5,000 jobs through attrition by the end of 2001. Intel closed down 56 cents, or 1.9%, to $28.50.
( NCOG) and
NCO Portfolio Management
confirmed their Baltimore collection center, which houses historical Creditrust documents, was the subject of a search conducted by the
Federal Bureau of Investigation
In a press release today, NCO Group said the search warrant related to alleged pre-bankruptcy activities of Creditrust prior to its February merger with NCO Group. NCO Group said a
representative confirmed that neither NCO Group nor NCO Portfolio Management is a subject of the investigation.
NCO Portfolio Management, which represents the combined entity of NCO Group's Portfolio Funding unit and Creditrust, is 63%-owned by NCO Group. The NCO Group-Creditrust merger was made in conjunction with Creditrust's plan of reorganization, which was approved by the U.S. Bankruptcy Court on Jan. 18. Under the plan, all Creditrust creditors will be paid in full in cash, including accrued interest.
NCO Group sells accounts receivable management services. NCO Portfolio, which focuses on buying and managing debt portfolios, trades on the over-the-counter Bulletin Board. NCO Group's stock closed down 56 cents, or 1.8%, to $31.38.
After Wednesday's Close
( KM) said its president and chief operating officer, Andrew Giancamilli, had resigned and that Mark Schwartz would be his replacement, effective immediately.
Giancamilli, who has been with the company for six months, left to pursue other opportunities. Schwartz joined the company in September as executive vice president of store operations. Kmart closed up 4 cents, or 0.5%, to $8.76.
said Wednesday it will close a plant in Santa Cruz, Calif., and lay off 600 employees as part of a cost reduction program.
The Santa Cruz plant, which manufactures semiconductors used in computer hard disk drives, will close in phases through 2001. Texas Instruments will consolidate manufacturing primarily in its existing Texas plants in Dallas and Houston.
In late February, the chipmaker
warned a second time of lower-than-expected revenue in the first quarter. It cited weakening demand and higher inventories as factors in the shortfall. Texas Instruments closed down 3 cents, or 0.1%, to $31.48.
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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