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Ticker-Tape Parade: Merck Warns, Gap Sets Job Cuts

Symantec warning drags Network Associates lower. Washington Mutual reportedly enters talks with Dime.
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(Updated from 7:37 a.m. ET)

Pharmceutical giant


(MRK) - Get Merck & Co., Inc. Report

announced that slower-than-expected sales for arthritis-fighting drug


would result in lower-than-expected second-quarter and fiscal 2001 earnings. The company now expects second-quarter earnings to come in between 77 cents and 79 cents, with 2001 EPS between $3.12 and $3.18. That's lower than the 81 cents a share expected by analysts for the second quarter and the $3.20 a share for 2001.

Earnings Reports & Warnings:



announced a third-quarter loss of 26 cents, worse than analysts' expectations of a 24-cent loss and the year-ago profit of 47 cents.

Bed Bath & Beyond

(BBBY) - Get Bed Bath & Beyond Inc. Report

matched analysts' estimates by posting first-quarter earnings of 10 cents a share. The company said it was comfortable with second-quarter and full-year earnings estimates. Bed Bath & Beyond expects second-quarter EPS of 18 cents and full-year EPS of 72 cents.

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said it expects second-quarter EPS to come in at 7 cents, with fiscal 2002 EPS at 43 cents. Analysts expect 4 cents in the second quarter and 44 cents for the full year. The company posted a first-quarter loss of 2 cents a share, beating estimates by a penny.

DMC Stratex


warned its first-quarter would come in with a loss between 4 cents and 8 cents a share, worse than the 2-cent loss expected by analysts.



warned that second-quarter EPS would be between 26 cents and 30 cents, missing the 33-cent analyst estimate.

Micron Technology

(MU) - Get Micron Technology, Inc. Report

posted a third-quarter loss from continuing operations of 50 cents a share, including a charge to write down its inventory. Analysts expected a 15-cent loss. But on a per-share basis, the charge totaled about 40 cents, according to the company, meaning that Micron's results came in better than Wall Street expected because analysts exclude most charges in their estimates.

ON Semiconductor


said second-quarter revenue would be off 12% to 15% from the first quarter and the loss for the period would be 35 cents to 40 cents a share. Analysts expected a loss of 12 cents.

Silicon Valley Bancshares

(SIVB) - Get SVB Financial Group Report

warned that second-quarter EPS would come in between 45 cents and 50 cents, lower than the 56 cents expected by analysts.

Mergers & Acquisitions:

General Electric

(GE) - Get General Electric Company Report


GE Capital

announced the purchase of Britain's

National Mutual

for 570 million pounds, or $805.9 million.


(IPG) - Get Interpublic Group of Companies, Inc. Report


European Commission

approval for its purchase of

True North Communications



Washington Mutual

(WM) - Get Waste Management, Inc. Report

is in talks to buy New York-based

Dime Bancorp


for about $5 billion,

The Wall Street Journal


Miscellaneous News:

Extreme Networks

(EXTR) - Get Extreme Networks, Inc. Report

announced that Chief Financial Officer Vito Palermo is leaving the company.


(GPS) - Get Gap, Inc. Report

will reduce its 10,000-worker office staff by 5% to 7% through attrition, elimination of open positions and layoffs, primarily at headquarters.



said CFO and Vice Chairman George MacKenzie will be retiring, effective July 1.

Midway Games


announced it will no longer make coin-operated arcade games and instead will focus on the home video gaming market.


(UPS) - Get United Parcel Service, Inc. Class B Report

announced that a 1999 IRS tax ruling against the company was overturned. The appeals court sent the case back to tax court.

Watson Wyatt

(WW) - Get WW International, Inc. Report

priced a 2.95 million share offering at $22 a share.

On the Analyst Front:

Applied Biosystems


was downgraded to hold from buy by

Credit Suisse First Boston



(EXPE) - Get Expedia Group, Inc. Report



, a pair of online travel sites, had their 2001 EPS estimates raised by

Goldman Sachs


Gap was downgraded to market perform from buy at

Robertson Stephens


General Motors

(GM) - Get General Motors Company Report

was downgraded to market underperform from market perform at

Banc of America Securities



(SYMC) - Get Symantec Corporation Report

was downgraded to market outperform from buy at

Salomon Smith Barney

, which also lowered fiscal 2002 and 2003 EPS estimates.

Today's Earnings:

There are no major earnings releases due out today.

Doug Kass' Required Reading:

An editorial called "

I Love the E.U." by Thomas Friedman in

The New York Times

. (Registration required.)

On the Economic Lookout:

There are no major economic data due out today.

In Overnight Activity:

Symantec fell 24.6% in after-hours trading after announcing that first-quarter EPS would be between 39 cents and 47 cents, much lower than its previous guidance that EPS would be between 62 cents and 67 cents. Analysts were looking for EPS of 65 cents.

Network Associates


, a competitor to Symantec, fell 13.3% because of its rival's warning.

Research in Motion


gained 9.2% after

meeting second-quarter estimates. Revenue rose to $77 million from the year-ago $27.1 million.

For an extended take on late-night action, be sure to take a gander at

The Night Watch.

Sources & Definitions:

All analyst EPS estimates are from earnings tracker Thomson Financial/First Call, unless otherwise noted. All economic forecasts are from


, unless otherwise noted. All times are Eastern, always. After-hours quotes courtesy of Instinet, unless otherwise noted.