Publish date:

Tuesday's Winners & Losers: Dresdner Bank, Vodafone, FreeMarkets, NetCreations

Author:

(Updated from 3:07 p.m. EDT)

Dresdner Bank

is in talks to buy U.S. investment bank

Wasserstein Perella

in a deal that could be worth between $1.2 billion and $1.5 billion, according to

The Wall Street Journal

, citing people familiar with the matter. A deal between the two would increase Dresdner's presence in mergers and acquisitions in the U.S. Wasserstein Perella is the fifth-largest merger-and-acquisition adviser in the country, and Dresdner's investment house

Dresdner Kleinwort Benson

is No. 14.

The

Journal

reported that although merger talks are in advanced stages, price is still the sticking point.

The talks come on the heels of several major deals in financial services.

Credit Suisse First Boston

announced last month that it is

buying

Donaldson Lufkin & Jenrette

(DLJ)

. And in

July Swiss bank

UBS

agreed to buy

PaineWebber

(PWJ)

.

Donaldson Lufkin & Jenrette boosted 13 cents, to $88.88, while PaineWebber lifted six cents to $70.75.

Vodafone's

(VOD) - Get Report

(VOD) - Get Report

Airtouch unit received two formal bids for its Italian Internet unit

Infostrada

, including one of about $10 billion, according to

The Wall Street Journal

. Still, the company isn't backing away from plans to take 49.9% the unit public if the bids aren't improved, the story says, citing people familiar with the talks. The company needs cash, in part, to pay for its acquisition of

Mannesmann

.

The leading bid, a combination of cash and high-rated bonds, came from

Wind

, which is a venture of Italian state-controlled electric utility

Enel

(EN)

and

France Telecom

(FTE)

. The second offer, including a large proportion of lower-rated securities, was from

Albacom

, an Italian telecommunications company whose shareholders include

British Telecommunications

(BTY)

, Italian state-controlled oil group

Eni

(E) - Get Report

and Italian television broadcaster

Mediaset

.

The

Journal

also reported that Vodafone is talking to two non-Italian telecom companies about a bid for Infostrada.

Vodafone lifted 81 cents to $38.31; Enel gained 44 cents to $37.94; France Telecom moved down 25 cents to $112.75; British Telecommunications slid $2.38 to $114.63.

Mergers, acquisitions and joint ventures

FreeMarkets

(FMKT)

agreed to provide

Microsoft

(MSFT) - Get Report

with access to its eMarketplace, a business-to-business supply portal. Financial terms weren't disclosed.

FreeMarkets said Microsoft will use the portal to source certain services for its operations. EMarketplace is an alliance with

American Management Systems

, an information-technology consulting firm.

FreeMarkets lowered $2.75 to $75.75, while Microsoft shed 69 cents to $68.13

After Monday's Close

Medical device maker

Cyberonics

(CYBX)

said its board rejected a $480 million offer from

Medtronic

(MDT) - Get Report

, in favor of remaining independent. Cyberonics said it made a decision after consulting with adviser

Morgan Stanley Dean Witter

. Cyberonics shed $1.63, or 6.27%, to $24.31.

Genzyme General

(GENZ)

announced that it will buy

GelTex Pharmaceuticals

(GELX)

for $1 billion in cash and stock. GelTex has two drugs currently in wide use -- Welchol, a cholesterol fighting drug, and Renagel, a drug used in dialysis. Shares of Genzyme General rose 75 cents to $44.

Siebel Systems

(SEBL)

rose 31 cents to $88.69 after it said it agreed to acquire Canada's

Janna Systems

in a stock swap valued at about $975 million, boosting Siebel's software products for financial firms.

Under terms of the deal, each outstanding Janna share would be exchanged for 0.497 shares of Siebel. The deal will result in Siebel issuing up to about 11 million additional shares.

Back to top

Earnings/revenue reports and previews

Kroger

(KR) - Get Report

slipped 13 cents to $23.25 after it posted second-quarter earnings of 28 cents a share, in line with the 16-analyst estimate and up from year-ago earnings of 24 cents a share.

The company said earnings in the quarter were driven by solid performances in all divisions, and cited "combined synergy savings" of $257 million from the merger with

Fred Meyer

through the second quarter.

Kroger said it remains comfortable with the consensus earnings estimate for the fiscal year, which is currently $1.36 a share.

NetCreations

(NTCR)

dropped $8.88, or 42.5%, to $12 after it warned that it expects to miss third-quarter earnings estimates by at least a nickel. The single-analyst estimate on the stock is currently 11 cents, and the company said it's expecting earnings in the range of 4 cents to 6 cents because of lower net revenue expectations. The company's anticipating its fourth quarter to be on track. NetCreations is an email direct marketing firm.

PRI Automation

(PRIA)

dropped 16.81, or 39.4%, to $25.88 after the semiconductor industry supplier warned of lower-than-expected fourth-quarter earnings. The company, which provides automation systems and software to the semiconductor industry, said it sees fourth-quarter net excluding items, slightly above break-even. The 13-analyst estimate called for earnings of 52 cents. PRI cited manufacturing, capacity and supply chain problems as reasons for the shortfall.

The warning sparked several actions from analysts.

Credit Suisse First Boston

cut the company's 2001 earnings estimate to $1.15 from $2.20, while

Merrill Lynch

cut the company's ratings to neutral from accumulate.

Bear Stearns

downgraded it to neutral from attractive and

Morgan Stanley Dean Witter

slashed PRI to outperform from strong buy.

Tenet Healthcare

(THC) - Get Report

rose $2.69, or 8.5%, to $34.31 after it said it expects to exceed earnings expectations for its first quarter. The 23-analyst estimate is currently 44 cents a share for the quarter, which is up from year-ago earnings of 39 cents. The company attributed the increased earnings in part to strong hospital admissions trends and continued upward trends in pricing.

After Monday's Close

National Steel

(NS) - Get Report

lost 69 cents, or 16.4%, to $3.50 after it said it sees a third-quarter net loss between $1.50 and $1.60 a share, wider than the six-analyst estimated loss of 65 cents. The company citing continued weakening demand for steel brought about by high levels of steel imports into the U.S. and high inventory levels at many of its customers.

Not all earnings pre-announcements came with a dark cloud attached. Sportswear and accessory maker

Oakley

(OO)

had a sunny outlook. The company said based on current sales trends, it expects its third-quarter net sales to rise by more than $100 million, or about 40%. The company also expects higher earnings-per-share of at least 21 cents a share, better than the three-analyst estimate of 18 cents. Despite the good news, the stock fell 81 cents to $19.44.

The company earned 15 cents a share and reported net sales of $70.8 million in the same period a year ago.

Industrial products maker

Crane

(CR) - Get Report

dropped $3.44, or 13.3%, to $22.38 after it said it sees third-quarter net income in the range of mid-30 cents a share, while the four-analyst estimate calls for 50 cents. The company also said it sees 2000 net income in the range of $2.01 to $2.06 a share, including a onetime gain of 26 cents a share. The current five-analyst estimate is for $1.99.

Leggett & Platt

(LEG) - Get Report

lost $2.94, or 15.8%, to $15.63 after it said it sees third-quarter earnings between 34 and 37 cents per share, below the nine-analyst estimate of 41 cents. The company also said its full-year Earnings will be flat with 1999 results of $1.45 a share.

Solectron

(SLR)

TheStreet Recommends

rose $1.06 to $47.06 after it posted fourth-quarter earnings of 27 cents a share, a penny better than the 22-analyst estimate and up from the year-ago 17 cents a share. The company said it expects to generate sales between $4.8 billion and $5.1 billion for the first quarter of 2001 and earnings-per-share between 27 cents and 28 cents citing strong customer demand. The current 19-analyst estimate is for 27 cents.

Back to top

Analyst actions

Bear Stearns

said

Hewlett-Packard

(HWP)

could be under pressure in the near term and maintained the stock as a buy. Hewlett-Packard skidded $1.44 to $112.56.

Upgrades

Argosy Gaming

(AGY)

: UP to strong buy from outperform at

Morgan Stanley Dean Witter

. Argosy Gaming edged up 50 cents to $17.25.

Catalina Marketing

(POS)

: price target: UP to $50 from $43 at

Donaldson Lufkin & Jenrette

. Catalina Marketing lifted $1.06 to $43.63.

Goldman Sachs

(GS) - Get Report

: price target UP to $150 from $120 at DLJ. Goldman Sachs shed 69 cents to $131.31

Integrated Device Technology

(IDTI) - Get Report

: 12-month price target: UP to $125 from $100 at

Banc of America Securities

. Integrated Device Technology added 69 cents to $90.13.

Precise Software

(PRSE)

: UP to intermediate-term buy from accumulate at

Merrill Lynch

. Precise Software mounted 75 cents to $24.50.

Solectron

(SLR)

: price target UP to $60 at

Credit Suisse First Boston

. Solectron gained $1.06 to $47.06.

Downgrades

Chevron

(CHV)

: DOWN to market perform from buy at

Deutsche Banc Alex. Brown

. Chevron skidded 75 cents to $88.56.

Heller Financial

(HF) - Get Report

: DOWN to buy from strong buy at Alex. Brown. Heller Financial slipped 38 cents to $29.94

Knight Trading

(NITE)

: DOWN to buy from strong buy at

CIBC World Markets

; price target DOWN to $40 from $60. Knight Trading slid $2, or 6.3%, to $29.44.

Textron

(TXT) - Get Report

: DOWN to long-term buy from buy at

J.P. Morgan

. Textron slipped $2.06 to $53.13

Initiations

Check Point Software

(CHKP) - Get Report

: NEW accumulate at Merrill; price target: $175. Check Point Software hopped $2.69 to $140.75.

Dover Downs

(DVD) - Get Report

: NEW buy at CSFB. Dover Downs climbed 50 cents, or 5%, to $10.38

Liberty Digital

(LDIG)

: NEW strong buy at

Thomas Weisel

partners. Liberty Digital slipped 38 cents to $24.25.

O2 Wireless Solutions

(OTWO)

: NEW buy at CSFB. O2 Wireless Solutions shed $3.13, or 13.9%, to $19.25

Physiometrix

(PHYX)

: NEW buy at CIBC. Physiometrix stumbled 38 cents to $23.88

Group Moves

Goldman Sachs

added

Edison

(EIX) - Get Report

,

FPL

(FPL) - Get Report

and

Entergy

(ETR) - Get Report

to its U.S. recommended for purchase list.

Edison was up 94 cents to $25, and FPL climbed $1.50 to $60.31. Entergy popped 75 cents to $35.50.

Bear Stearns initiated coverage of these Internet companies:

  • About.com (BOUT) - Get Report: NEW buy. About.com bounced $2.50, or 7%, to $38.13.
  • Amazon.com (AMZN) - Get Report: NEW attractive. Amazon.com tacked on 31 cents to $42.69.
  • InfoSpace (INSP) - Get Report: NEW buy. InfoSpace lifted 63 cents to $40.94.
  • Lycos (LCOS) : NEW buy. Lycos added 56 cents to $66.63.
  • Yahoo! (YHOO) : NEW buy. Yahoo! climbed 69 cents to $107.

Salomon Smith Barney

downgraded these financial companies:

  • Americredit (ACF) : DOWN to outperform from buy. Americredit declined 81 cents to $27.63.
  • MBNA (KRB) DOWN to outperform from buy. MBNA edged up 81 cents to $37.63.

CSFB initiated coverage of car racing companies:

  • Championship Auto Racing Teams (MPH) : NEW buy with a price target of $35. Championship Auto Racing Teams mounted 69 cents to $24.
  • International Speedway (ISCA) - Get Report NEW strong buy. International Speedway climbed 81 cents to $36.94.
  • Speedway Motorsports (TRK) - Get Report: NEW strong buy. Speedway Motorsports hopped 50 cents to $25.75.

Morgan Stanley Dean Witter started coverage of large packaged food companies:

  • General Mills (GIS) - Get Report: NEW outperform; price target: $41. General Motors climbed 75 cents to $32.50.
  • Sara Lee (SLE) : NEW outperform; price target: $25. Sara Lee added 31 cents to $20.56.
  • Kellogg (K) - Get Report: NEW neutral; 2000 EPS, $1.63; 2001 EPS; and 2002 EPS, $1.90. Kellogg lifted 50 cents to $24.69.
  • Hershey (HSY) - Get Report: NEW neutral; 2000 EPS, $2.36; 2001 EPS, $2.65; and 2002 EPS, $2.92. Hershey moved up 94 cents to $45.13.

Back to top

Offerings and stock actions

H.J. Heinz

(HNZ)

hopped 25 cents to $37.06 after it raised its quarterly dividend on its common stock by 6.8%, to 39.25 cents from 36.75 cents.

Fast-food giant

McDonald's

(MCD) - Get Report

popped $1.13 to $29.50 after it beefed up its annual dividend 10% to 21.5 cents a share.

Patterson Energy

(PTEN) - Get Report

slid $1.38 to $34.56 after it said it's planning an offering of 3 million shares to close Sept. 15.

After Monday's Close

Sabre Holdings

(TSG) - Get Report

edged up 13 cents to $28.63 after it said it made a cash tender offer at $17.75 a share for all of the outstanding shares of

GetThere.com

(GTHR)

. The second step of the merger includes offering all remaining GetThere shareholders the same cash price paid in the tender offer.

Back to top

Miscellany

Caraustar

(CSAR)

, a packaging company, has filed a breach of contract suit against

Georgia-Pacific

(GP)

for reducing purchases.

According to Caraustar, Georgia-Pacific's cuts will force it to close a mill and result in lowered earnings estimates. Caraustar expects earnings per share to be reduced by five-to-seven cents in the third quarter. The current eight-analyst estimate calls for Caraustar to come in at 47 cents a share.

At the close, Caraustar was down 19 cents to $13.50, while Georgia-Pacific fell 25 cents to $27.

Hewlett-Packard

(HWP)

stumbled $1.44 to $112.56 after it introduced a new mainframe computer, the Superdome server, which will pump up the boxmaker's earnings and profit margins, beginning in the first fiscal quarter ending next January. The new server, unveiled today, is designed to support Internet businesses. Targeting the high-end market, the Superdome is priced at about $400,000 and will begin shipping in December.

Medical device maker

Novoste

(NOVT) - Get Report

won an important endorsement for its artery-clearing device that uses radiation to unclog blockages. A

Food and Drug Administration

advisory panel voted to recommend U.S. approval for the system. Novoste slipped $6.19, or 11.3%, to $48.25.

Back to top

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.

Back to top