Updated from 3:48 p.m. EDT
Health insurer
Aetna
(AET)
slid 6 15/16, or 10.4%, to 59 11/16 after it warned its second-quarter earnings will miss estimates because of higher medical costs and more hospital visits by the people it covers. The Connecticut-based insurer plans to release earnings on Aug. 4, and said it sees profits between 85 cents and 95 cents a share, well below the 16-analyst estimate of $1.20.
Aetna said it plans to implement premium increases on health-plan business renewing in the fourth quarter and also said it may exit markets and products that do not meet financial or strategic goals.
The stock's rating was cut to neutral from outperform at
Salomon Smith Barney
. Salomon recommended buying shares of other health insurers, however, saying that Aetna's second-quarter profit warning shouldn't apply to the rest of the sector. Additionally, Aetna's price target was also downgraded to $80 from $95, while its second-quarter earnings per share estimate was lowered to $0.90 from $1.19 at
Prudential Securities
.
Merrill Lynch
(MER)
lost 2 31/32 to 129 despite posting a 34% increase in second-quarter profit, because of a rise in trading profits and fees from managing money for investors. The brokerage posted earnings of $2.01 a share, well above the 10-analyst estimate of $1.70, and up from the year-ago $1.57.
Merrill has beaten expectations every quarter since October 1998, when it posted a third-quarter loss for laying off 3,400 people amid global financial turmoil. The company also announced a 2-for-1 stock split.
Mergers, acquisitions and joint ventures
ABN Amro
(ABN)
slipped 3/8 to 23 1/4 and
KPN Telecom
(KPN)
dropped 2 1/16 to 43 1/4 after the companies said they will set up a joint venture offering Internet-based financial services to consumers. The companies will invest 150 million to 250 million euros in the venture, which will be called Money Planet.
British telecommunications firm
Cable & Wireless
(CWP)
slipped 1/8 to 56 1/4 after it said it bought five Internet-related firms as part of a $100 million expansion program in Europe. The companies acquired include French firm
Pictime
, Germany's
Point of Presence
, Dutch companies
Widexs BV
and
Impact Group
and Spain's
Eaisa Group
.
U.S.-based high speed Internet provider
Excite@Home
(ATHM) - Get Report
edged up 1/8 to 19 11/16 and European cable operator
United Pan-Europe Communications
(UPCOY)
added 7/16 to 30 1/8 after the companies said they would take an 86% stake of new Web group
Excite Chello
. Excite@Home chairman and CEO George Bell told a London news conference that U.S. cable pioneer John Malone, who runs
Liberty Media
(LMGA)
, will also take a small stake in a new Internet venture with Dutch-based ISP
chello broadband
. Liberty Media lost 1/4 to 24 11/16.
TheStreet.com/NYTimes.com
joint newsroom wrote about the merger in an earlier
story.
Citigroup
(C) - Get Report
climbed 5/16 to 66 11/16 and
America Online
(AOL)
lost 2 3/4 to 60 1/4 after the companies said they formed an online personal finance alliance.
Georgia-Pacific
(GP)
plans to raise $3 billion or more by selling off parts of its operations, which may help the company avoid antitrust problems since its merger with
Fort James
(FJ)
will make it the No. 1 tissue-paper business in the world, according to
The Wall Street Journal
. Georgia Pacific slipped 29/32 to 25 3/16.
TheStreet.com/NYTimes.com
joint newsroom wrote about the merger in an earlier
story.
China's
Huaneng Power
will take over
Shandong Huaneng Power
(HNP) - Get Report
for about $700 million. When the merger is complete, Shandong will cease to exist and will be delisted from the
NYSE
. Shandong Huaneng lost 1/16 to 14 3/8.
Motorola
(MOT)
moved down 1/2 to 37 5/8 after it and
MasterCard International
said they will work together to develop a standard for wireless purchasing. The companies said the new technologies will allow consumers to pay for goods and services over a Motorola Internet phone or other wireless devices using their MasterCard.
PNC Financial
(PNC) - Get Report
edged up 1/16 to 50 1/2 after it said it retained investment firm Salomon Smith Barney to explore the sale of its mortgage company, which has a portfolio of $85 billion.
The company said the scale requirements for the mortgage business are increasing as the industry's consolidation accelerates. PNC's president and chief executive, James E. Rohr, said the capital commitment required for PNC to continue to succeed in the business would be "significant." Funds from the sale of the unit would go into furthering PNC's growth in areas such as asset management, private banking, global funds services and treasury management.
Ticketmaster
, a division of
USA Networks
(USAI) - Get Report
, announced that it has bought the majority of the assets of
Essential Data Control Systems
including its
Fan Loyalty System
, for an undisclosed amount. USA Networks slipped 3/8 to 21 1/2 .
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Earnings/revenue reports and previews
C.R. Bard
(BCR)
lost 15/16 to 48 15/16 after it reported second-quarter earnings of 65 cents a share, which includes a legal settlement and a gain from asset dispositions totaling about 6 cents a share after tax. The 12-analyst estimate was 65 cents a share and year-ago earnings were 55 cents.
Copper Mountain Networks
(CMTN)
plummeted 29 1/2, or 23.9%, despite announcing second-quarter earnings of 24 cents per diluted share, beating the eight-analyst estimate of 23 cents, beating its year-ago earnings of 5 cents.
Coca-Cola Enterprises
(CCE)
edged up 31/32, or 5.6%, to 18 7/16 after it posted second-quarter earnings of 30 cents a share, ahead of the 15-analyst estimate of 28 cents.
Dana
(DCN)
slipped 7/32 to 22 3/4 after it reported second-quarter earnings of $1.01 a share, beating the 13-analyst estimate by a penny. It was down from year-ago earnings of $1.14 a share, which includes about $5 million innonrecurring after-tax expenses.
Diamond Offshore Drilling
(DO) - Get Report
rose 2 1/8, or 6.2%, to 36 5/8 despite saying it faces penalties of up to $6.1 million under an agreement with
BP Amoco
(BPA)
to modify the contract covering the Ocean Confidence deep-water drilling rig. The modification provides for an extension of the delivery to Dec. 1 from July 1. The company said the late delivery will reduce revenue payments.
Internet content delivery provider
Digital Island
(ISLD)
shed 6 9/16, or 14.7%, to 38 1/16 after it posted third-quarter losses of $1.51 a share, ahead of the 11-analyst estimate of a $1.56 loss and the year-ago $3.96 loss.
Additionally, Digital Island announced that it would acquire
SoftAware Networks
, an e-commerce content service company, for $450 million in cash and stock. The acquisition adds more than 500 clients and brings Digital Island's total client base to over 900 worldwide.
Extensity
(EXTN) - Get Report
dropped 2 3/4, or 6.6%, to 38 3/4 after it posted second-quarter losses of 34 cents a share, ahead of the three-analyst 37-cent loss estimate.
Freeport McMoran
(FCX) - Get Report
lost 1/32 to 8 5/8 after it posted a second-quarter loss of 12 cents a share, in line with the nine-analyst estimate and down from the year-ago earnings of 12 cents. The company said the loss was the result of lower copper and gold sales resulting from delayed shipments because of bad weather affecting its port in Irian Jaya, Indonesia, and higher costs of production, partly resulting from a landslide at its giant mining operation in that country.
General Motors
(GM) - Get Report
gained 7/16 to 60 13/16 after it reported second-quarter earnings of $2.93 a share, better than the 17-analyst estimate of $2.82 and the year-ago $2.66.
Information Holdings
(IHI) - Get Report
dropped 1 11/16, or 5.3%, to 30 5/16 after it said its second-quarter earnings would meet analysts' expectations, but its revenue would be about 10% below Wall Street's estimates. A five-analyst consensus predicted second-quarter earnings of 7 cents for the company, up a penny from a year ago.
Legg Mason
(LM) - Get Report
lost 15/16 to 53 1/8 after it reported first-quarter earnings of 60, which includes a charge of 3 cents a share, related with the acquisition of
Perigee
. The four-analyst estimate was 60 cents a share and the year-ago earnings were 52 cents.
Minntech
(MNTX) - Get Report
moved down 1 1/8, or 14.5%, to 6 5/8 after it announced that it expects earnings in its fiscal first quarter to fall below analysts' expectations due to a decline in revenues. The company, which makes dialyzer reprocessing technologies, said it expects earnings to be between a loss of two cents a share to a gain of two cents a share.
Philip Morris
(MO) - Get Report
moved up 7/16 to 24 1/16 after it reported second-quarter earnings of 95 cents a share, in line with the seven-analyst estimate and up from the year-ago 84 cents. The company said it is in an excellent position to meet its yearly growth targets.
Schlumberger
(SLB) - Get Report
sailed up 3 11/32 to 75 11/16 after it posted second quarter earnings of 27 cents a share, a penny better than the 31-analyst estimate and the year-ago 16 cents a share. Excluding goodwill amortization, the company earned 31 cents in the latest quarter and 19 cents in the year-ago period.
Time Warner
(TWX)
lost 1 11/16 to 87 1/2 despite posting second-quarter normalized earnings, excluding charges, of 11 cents a share, above the 16-analyst estimate of 8 cents and in line with the year-ago earnings of 11 cents, which excludes gains.
Additionally, Time Warner announced plans to restructure its partnerships in its Road Runner cable Internet service to allow multiple service providers quicker access to the high speed pipeline.
Wells Fargo
(WFC) - Get Report
lost 1 5/16 to 42 1/16 after it posted second-quarter earnings of 63 cents a share, in line with the 24-analyst estimate and up from the year-ago 55 cents. The company said excluding amortization of goodwill and nonqualifying core deposit intangible, earnings in the latest quarter were 73 cents.
Whirlpool
(WHR) - Get Report
lost 4 11/16, or 8.7%, to 49 3/8 after it reported second-quarter earnings of $1.66 a share, in line with the eight-analyst estimate and up from the year-ago $1.30. The company warned it expects 2000 earnings to be modestly short of the current eight-analyst estimate of $6.86, while still showing 20% to 25% growth from last year.
Yellow Corp.
(YELL)
was unchanged at 15 1/4 after it reported second-quarter earnings of 92 cents a share, which includes a 34-cent-a-share gain from its Yellow Freight System unit's sale of real estate property in New York. The figure also includes a loss of 6 cents a share from expenses of its Internet transportation venture, Transportation.com. The four-analyst estimate was 58 cents a share and the year-ago earnings were 52 cents a share.
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Offerings and stock actions
Inhale Therapeutic Systems
(INHL)
was unchanged at 95 1/2 after it set a 2-for-1 stock split.
TransGenomic
(TBIO) - Get Report
jumped 9, or 60%, to 24 after it priced its 4.48 million-share IPO at $15 a share, above range.
Specialty jewelry retailer
Zale
(ZLC)
added 15/16 to 41 1/16 after it said its board had approved a $50 million stock buyback beginning Aug. 1.
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Analyst actions
This morning,
Morgan Stanley Dean Witter
upgraded Dow component
Caterpillar
(CAT) - Get Report
to outperform from neutral. Caterpillar popped 2 9/16, or 6.3%, to 37 3/4.
Upgrades
Cepheid
(CPHD)
: NEW strong buy at
Prudential Securities
. Cephid hopped 1, or 5.5%, to 19.
Dell
(DELL) - Get Report
: UP to strong buy from buy at
SG Cowen
. Dell declined 3/8 to 53 3/16.
Next Level
(NXTV)
: price target UP to 150 from 120 at
Credit Suisse First Boston
. Next Level sank 9 1/16, or 7.2%, to 116 1/2.
Sanmina
(SANM) - Get Report
: price target UP to 120 from 90 at Credit Suisse First Boston, UP to 135 from 115 at
Donaldson Lufkin & Jenrette
and UP to 120 from 95 at Prudential. Sanmina edged up 1/4 to 97 1/4.
Downgrades
Eastman Kodak
(EK)
: DOWN to outperform from buy at Salomon Smith Barney. Salomon said it didn't see Kodak's second-quarter earnings suffering, but that possible drops in film pricing could hurt earnings in the second half of this year and early 2001. Kodak will report its earnings on Friday. Eastman Kodak stumbled 2 1/32, or 3.3%, to 58 15/16.
Foodstuffs company
General Mills
(GIS) - Get Report
earnings estimates: DOWN to $1.73 from $2.20 for 2001 and to $2.04 from $2.42 for 2002 at Goldman Sachs. Goldman Sachs reiterated its market perform rating on the company, however. General Mills announced plans Monday to buy Pillsbury from British food and beverage group
Diageo
(DEO) - Get Report
. General Mills shed 1/8 to 34 7/8.
Fort James
(FJ)
: DOWN to neutral from attractive at
Bear Stearns
. Fort James lost 5/8 to 32 3/8.
Georgia-Pacific
(GP)
: DOWN to market outperform from buy list at
Goldman Sachs
. Georgia-Pacific fell 27/32, or 3.3%, to 25 1/4.
Heidrick & Struggles
(HSII) - Get Report
: DOWN to neutral from attractive at
PaineWebber
. Heidrick & Struggles slipped 1 3/16 to 68 3/4.
PanAmSat
(SPOT) - Get Report
: DOWN to market performer from long-term buy at
J.P. Morgan
; price target lowered to 45 from 63. The stock was also cut to buy from strong buy at SG Cowen. PanAmSat skidded 2 9/16, or 6.5%, to 36 3/8.
Rohm & Haas
(ROH)
: 2000 EPS estimate DOWN to $1.90 from $2.35. Rohm & Haas declined 13/16 to 27 7/8.
Mexico's Televisa
(TV) - Get Report
: DOWN to buy from strong buy at
UBS Warburg
. Mexico's Televisa was unchanged at 68.
Initiations
Accelerated Networks
(ACCL)
: NEW buy at CSFB. Accelerated Networks stumbled 7 5/8, or 12.2%, to 54 9/16.
Aflac
(AFL) - Get Report
: NEW buy at J.P. Morgan; price target: 66. Aflac shed 1 9/16, or 3.1%, to 48 5/8.
Black & Decker
(BDK)
: NEW near-term accumulate, long-term buy at Merrill Lynch; 12- to 18-month price target: 54. Balck & Decker shed 17/32 to 38 15/16.
SmartDisk
(SMDK)
: NEW near-term accumulate at Merrill Lynch. Smart Disk hopped 2 3/4, or 8%, to 37.
Group Moves
Bear Stearns initiated coverage of the offshore oil and gas drilling industry, saying the sector is in the early stages of a three- to five-year upturn:
- Diamond Offshore Drilling (DO) - Get Report: NEW buy, 12-month price-target: 50. Diamond Offshore climbed 2 1/8, or 6.1%, to 36 5/8.
Global Marine (GLM) : NEW buy, price target: 40. Global Marine bounced 1 5/16 to 28 3/8.
Pride International (PDE) : NEW buy, price target: 32. Pride International lifted 5/8 to 22 3/4.
Rowan (RDC) : NEW buy, price target: 40. Rowan tacked on 1 to 28 5/8.
ENSCO International (ESV) : NEW attractive, price target: 45. Ensco International edged up 15/16 to 36 15/16.
Noble Drilling (NE) - Get Report: NEW attractive, price target: 50. Noble Drilling hopped 1 5/8 to 43 9/16.
R&B Falcon (FLC) - Get Report: INITIATED attractive, price target: 28. R&B Falcon bounced 1 1/4, or 5.7%, to 22 7/8.
Transocean Sedco (RIG) - Get Report: NEW attractive, price target: 60. Transocean Sedco moved up 2 3/4, or 5.5%, to 52 3/8.
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Miscellany
Ceridian
(CEN) - Get Report
mounted 1 15/32, or 6.3%, to 24 11/16 after it said it plans to split itself into two separate publicly traded companies, one comprising its human resources and transaction-processing business and the other its media research firm Arbitron. The company said it expects to take a special charge in the fourth quarter of about $25 million to $30 million to cover the cost of a split and restructuring.
Office Depot
(ODP) - Get Report
climbed 1/4 to 6 5/8 after it said it named Bruce Nelson as CEO, replacing David Fuente.
Photomask supplier
Photronics
(PLAB) - Get Report
declined 2 7/8, or 9.3%, to 28 after it said it named Constantine Macricostas as CEO and James MacDonald as president.
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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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As originally published, this story contained an error. Please see
Corrections and Clarifications.
