Tuesday's Winners & Losers: Intel, AT&T, IBM, CNet - TheStreet

Updated from 1:16 p.m. EDT

Intel

(INTC) - Get Report

was cut to buy from strong buy at

U.S. Bancorp Piper Jaffray

by influential analyst Ashok Kumar, who cited continued demand weakness that he said will result in lower-than-expected unit growth. The news dropped the stock $4.69, or 6.3%, to $69.25.

Mergers, acquisitions and joint ventures

AT&T

(T) - Get Report

and

IBM

(IBM) - Get Report

entered into a $450 million multiyear deal million in which IBM will use several hundred thousand square feet of Internet hosting facilities in AT&T's Internet data centers to establish new e-business hosting centers.

IBM will have the service in operation by the end of this year at AT&T Internet data centers in Chicago, New York and Phoenix. By the third quarter of 2001, IBM should have capabilities at six additional AT&T centers. Also, AT&T will provide managed Internet access and service level agreements to IBM. The companies said they plan to bundle and market Web hosting systems.

AT&T was up 31 cents to $32.19 and IBM was $2.44 lower to $131.19.

CNet Networks

(CNET) - Get Report

doled out two helpings of good news to investors today.

First, the company -- which produces Internet network, radio and television programming -- announced it had received antitrust approval for its proposed acquisition of

Ziff-Davis

(ZD)

and its

ZDNet

(ZDZ)

unit.

The previously reported 50-million-share swap deal is worth about $1.6 billion. The combined venture will have 16.6 million monthly users, or 22% of all U.S. online consumers. As a result of the acquisition, Ziff-Davis and ZDNet shareholders will own about 35% of the new, combined company.

Also, CNet said it expects to report increased revenue of about $580 million in 2001 and margins of 25% for its earnings before interest, taxation, depreciation and amortization. The company previously expected about $500 million in revenue for 2001.

First Call/Thomson Financial's

15-analyst earnings estimate is 54 cents a share for CNet 2001 results.

CNet declined $2.31, or 6.8%, to $31.50, while Ziff-Davis was down 69 cents, or 6.2%, to $10.50 and ZDNet was down $1.38, or 6.9%, to $18.50.

British company

National Grid

(NGG) - Get Report

was $1.13 lower to $40.63 after it said it would buy

Niagara Mohawk

(NMK)

in a cash and stock deal worth $3 billion. Niagara ended the day up $1.88, or 13.5%, to $15.75.(Check out

coverage from

TheStreet.com/The New York Times.com

joint newsroom.)

Following the purchase of Niagara Mohawk, National Grid will be the ninth-largest electric utility in the U.S.

The acquisition, to be made through the formation of a new holding company called New National Grid, will be the company's third buy in the U.S. this year. It bought

New England Electric System

and

Eastern Utilities Associates

earlier.

Terms of the deal call for Niagara Mohawk shareholders to receive $19 a share in cash or American Depositary Shares, or a combination of both.

Niagara Mohawk has more than 1.5 million electricity customers and more than 540,000 gas customers in New York state. For the year ended Dec. 31, Niagara Mohawk posted earnings before interest, tax depreciation and amortization of $1.3 billion on sales of $4.1 billion. National Grid said it will have annual savings of $90 million following the deal.

The deal, which is expected to close by late 2001, is subject to regulatory and shareholder approval as well as resolution of "other satisfactory arrangements," including the sale of Niagara Mohawk's nuclear facilities.

It comes on the heels of several recent deals that are consolidating the power industry.

WorldCom

(WCOM)

fell $3.19, or 8.6%, to $33.75 after it said it would pay $3 billion in stock to buy

Intermedia Communications

(ICIX)

. The move will increase WorldCom's presence in the Internet hosting arena. Terms of the deal also call for WorldCom to take on $3 billion of Intermedia's debt. Intermedia jumped 37.6%, or $8.61, to $31.48. Check out earlier

coverage from

TheStreet.com/The New York Times.com

joint newsroom.

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Earnings/revenue reports and previews

Fiber-optic company

Ciena

(CIEN) - Get Report

sunk $13.78, or 6%, to $216.34 on news that it expects to take a charge of 6 cents per share in the fiscal fourth quarter due to a reorganization by one of the company's European customers.

An administration order, which is similar to a filing for reorganization, has been issued against

iaxix Limited

, and Ciena estimates that up to $28.2 million in accounts receivable currently owed may not be collected. The

First Call/Thomson Financial

consensus estimate for fourth quarter earnings was 25 cents a share.

The impact of the charge on Ciena's earnings in the quarter is expected to be about 13 cents, or 6 cents on a post-split basis. Ciena previously announced a 2-for-1 split payable Sept. 18. The company earned 19 cents per share in the previous quarter.

Trading in Ciena was halted on the

Nasdaq

at $227.88 prior to the release of the news.

Ciena has been one of the hottest Nasdaq stocks in recent weeks, due to the market's love affair with fiber optics. The stock closed at $148.69 on Aug. 4 and has rocketed upward since then.

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Analyst actions

Merck

(MRK) - Get Report

was cut to market perform from strong buy at

Banc of America

. The stock was downgraded because of a lowered expectation for future EPS growth. Merck was down about $2 to $67.14.

Upgrades

Celestica

(CLS) - Get Report

: price target UP to 100 from 84 at

UBS Warburg

. It moved up $2.69 to $84.06.

Downgrades

Newport

(NEWP)

: DOWN to outperform from buy at

ABN Amro

. Newport fell $12.06, or 7.1%, to $156.88.

PSS World Medical

(PSSI)

; price target: down to $5 from $8 at

Lehman Brothers

. It declined 24.1%, or $1.53, to $4.81.

Initiations

H Power

(HPOW)

: NEW buy; price target: $33 at Lehman. The stock lost 94 cents, to end the day at $20.06.

Micron Technology

(MU) - Get Report

: NEW buy at

SG Cowen

. Micron was off 6 cents to $78.25.

Phone.com

(PHCM)

: NEW buy at Lehman; price target: $120. The stock moved up $3.31 to $100.81.

Group Moves

Banc of America started coverage of

American Medical

(AMMD)

and

Regeneration Tech

(RTIX) - Get Report

with buy ratings. American Medical gained 38 cents to $13.25, while Regeneration Tech slid $1.38, or 9.4%, to $13.25.

SG Cowen initiated coverage of the following Internet health care companies:

  • Allscripts (MDRX) - Get Report: NEW neutral. It lost $1.50, or 5.2%, to fall to $27.63.
  • Cerner (CERN) - Get Report: NEW buy. Cerner slid 6 cents to $38.81.
  • Healtheon/WebMD (HLTH) : NEW buy. The stock was down 75 cents to $16.69.

Deutsche Banc Alex. Brown

downgraded the following newspaper publishers:

  • Gannett (GCI) - Get Report: DOWN to market perform from buy. It finished the day $1.19 lower to $56.06.
  • Knight Ridder (KRI) : DOWN to market perform from buy. The stock declined $1.63 to $54.13.
  • New York Times (NYT) - Get Report: DOWN to market perform from buy. The Times fell $1.63 to $37.94.
  • Tribune (TRB) lost 69 cents to $36 after it was cut DOWN to market perform from strong buy.

Morgan Stanley Dean Witter

cut the following transportation companies:

  • J.B. Hunt (JBHT) - Get Report: DOWN to outperform from strong buy. The stock was down 50 cents to $13.
  • M.S. Carriers (MSCA) : DOWN to outperform from strong buy. It slid 50 cents to $17.94.
  • Swift Transportation (SWFT) : DOWN to outperform from strong buy. Swift was $1.19, or 6.7%, lower to $16.63.
  • U.S. Xpress (XPRSA) : DOWN to outperform from strong buy. The stock was down 38 cents to $7.38.
  • Werner Enterprises (WERN) - Get Report: DOWN to outperform from strong buy. It lost 31 cents to fall to $13.25.

Deutsche Banc Alex. Brown initiated coverage of these Internet content providers:

Evolve

(EVLV)

,

McData

(MCDT)

and

Screaming Media

(SCRM)

. Evolve moved up $2.69, or 11.6%, to $25.94, McData rose $3.88 to $111, but Screaming Media lost $1, or 8.3%, to $11.13.

Credit Suisse First Boston

also started McData as a buy and set a 12-month price target.

Merrill Lynch

started McData as near-term accumulate and long-term buy with a 12-month price target of $118.

Deutsche Banc Alex. Brown cut ratings for these energy companies:

  • Anadarko Petroleum (APC) - Get Report: DOWN to buy from strong buy. The stock was down $1 to $65.
  • Burlington Resources (BR) - Get Report: DOWN to market perform from buy. It slid 69 cents to $38.81.
  • EOG Resources (EOG) - Get Report: DOWN to market perform from strong buy. EOG finished the day unchanged at $38.50.
  • Patina Oil & Gas (POG) : DOWN to buy from strong buy. Patina was off 38 cents to $20.94.
  • St. Mary Land (MARY) DOWN to market perform from strong buy. St. Mary edged up 31 cents to $42.81.
  • Unocal (UCL) DOWN to buy from strong buy. The stock slid 56 cents to $33.38.

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Offerings and stock actions

M-Systems

(FLSH)

rose $3.25 to $83.13 after it declared a 2-for-1 stock split. The company is an Israeli data storage company.

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Miscellany

Financier

Carl Icahn

plans to buy more than $15 million -- which is less than 10% -- of

Trinity Industries'

(TRN) - Get Report

common shares outstanding.

Trinity, which manufactures, markets and leases products in the construction, transportation and industrial sectors, said it will continue its own share repurchase program through which it has already repurchased more than 500,000 shares this quarter. The company has about 37.4 million shares outstanding.

The company's stock hasn't been near its 52-week high of $33.25, which it hit about a year ago, since last January, when it started a steady decline to its year low of $18.19 on Aug. 17. The news today of Icahn's interest was pushing the stock up. It was recently trading up $1.28, or 6.6%, to $20.78.

Trinity's chairman and CEO, Timothy Wallace, said he believes Trinity's stock is undervalued, mainly because of the rail supply industry's cyclical nature.

In August, Icahn said he would buy at least $15 million of

General Motors

(GM) - Get Report

Stock -- and that deal was announced less than a month after he announced a similar deal to acquire shares of laser eye-surgery company

Visx

(VISX)

. GM slid 19 cents to $72.94 and Visx was down 13 cents to $27.63. Check out

TheStreet.com/NYTimes.com

joint newsroom

coverage of the GM investment.

The U.S.

Federal Trade Commission

is asking

America Online

(AOL)

and

Time Warner

(TWX)

for major concessions before it will grant approval to their proposed $129 billion merger. AOL was down 56 cents to $57.19 and Time Warner lost $2.59 to $81.25.(Check out earlier

coverage from

TheStreet.com/The New York Times.com

joint newsroom.)

According to published reports, the commission has expressed concern that the companies would have too much market power in cities where Time Warner already has cable systems. The FTC wants the combined company to allow its competitors access to high-speed lines in those cities.

The Wall Street Journal

said the companies would also likely face limitations on their dealings with cable giant

AT&T

(T) - Get Report

.

In related news, AOL and

GoTo.com

(GOTO)

signed a $50 million multiyear agreement, in which GoTo's listings will be distributed on search results pages of AOL, AOL.com and Netscape Netcenter. GoTo jumped almost 20%, or $3.81, to $23.31.

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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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David A. Gaffen, Eileen Kinsella and Betsy Riley contributed to this column.