Tuesday's Winners & Losers: Lucent, LSI Logic, Yahoo!, John Deere, OmniSky

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Updated from 1:27 p.m. EST

More trouble for

Lucent

(LU)

, which not too long ago helped rock markets by warning about missing estimates for its future earnings. Today, the company announced that it had identified a "revenue recognition issue," which affects $125 million in revenue for its fourth quarter. This represents 2 cents a share in the fourth quarter, which was previously announced to come in at 18 cents a share.

The issue was discovered as the company was wrapping up its fiscal year. Lucent Chief Executive and Chairman Henry Schacht, said in a press release this morning: "We wanted to make this public as soon as we discovered the issue. I have asked our outside auditor and our outside counsel to assist us in doing a complete review of this and any related issues. We have also informed the

Securities and Exchange Commission

of our efforts."

Additionally, the company said that it could not confirm guidance for the first quarter of 2001. Lucent said it will not comment any further on the details until its own review is completed.

This is just another in a series of shaky steps taken by Lucent this year. Just under a month ago, it ousted Chief Executive Rich McGinn, while posting a steep drop in fourth-quarter profits and cutting estimates for future quarters. The company has made a rather nasty habit of missing analyst estimates and lowering guidance, cutting estimates four times this year.

This morning,

Merrill Lynch

cut its long-term rating on the company to accumulate from buy and slashed its 2001 earnings estimate to 20 cents a share from 65 cents a share.

Lucent finished the tough day down $3.38, or 16.1%, at $17.56.

Mergers, acquisitions and joint ventures

Associates First Capital

(AFS)

said its shareholders approved

Citigroup's

(C) - Get Report

$31 billion bid for the consumer finance company. Consumer groups are fighting the deal.

Associates First Capital closed flat at $35.13, while Citigroup ended down 25 cents, or 0.5%, at $49.13.

Cree

(CREE) - Get Report

announced that it has acquired

UltraRF

, a division of

Spectrian

(SPCT)

, in a cash and stock deal. Under the deal, Cree will buy UltraRF and assume some liability in exchange for $30 million in cash and 908,000 shares. The company can replace the $30 million in cash for $30 million in stock at its own discretion.

In addition, Spectrian will sign a two-year agreement to purchase Cree's semiconductor products, while entering into a one-year joint agreement to develop products together.

Spectrian finished down $1.56, or 9.1%, at $15.63; Cree closed down $3.69, or 4%, at $88.31.

FleetBoston Financial

(FBF)

announced that it will sell $15 billion worth of low-margin assets as part of its merger with

Summit Bancorp

. Fleet ended the day up 75 cents, or 2.3%, at $34.13.

Park National

(PRK) - Get Report

and

Security Banc

have announced plans to merge. The deal is valued at $306 million. Park National settled flat at $91.25.

Shareholders of

Seagate Technology

(SEG)

and

Veritas Software

(VRTS) - Get Report

approved a deal to privatize Seagate for cash and shares of Veritas.

Seagate closed down $7, or 12.4%, at $49.5, while Veritas finished down $9.94, or 9.3%, at $97.31.

Thermo Electron

(TMO) - Get Report

will sell its wholly owned

Peek

unit for $120 million in cash and $8 million in seller debt financing to

First Atlantic Capital

, a private equity investment firm.

Thermo said First Atlantic will acquire Peek through its private equity fund,

Atlantic Equity Partners III

. The transaction is expected to close within 60 days; Thermo said it will invest the proceeds in high-growth opportunities.

Starting at the beginning of the year, Thermo started reorganizing in an effort to transform itself into one publicly traded entity focused on its core instruments business. Thermo said the company's medical products and paper recycling businesses will be spun off as dividends to its shareholders.

Thermo was down 25 cents, or 0.9%, at $27.75.

Barry Diller's back at it again. The honcho of

USA Networks

(USAI) - Get Report

announced that USA unit

Ticketmaster

and

Ticketmaster Online

(TMCS)

will become one entity, merging the online and brick-and-mortar businesses.

USA will receive 52 million Class B shares in the new entity, simply called Ticketmaster, upping its stake to 68% from 49%. Diller assumes the role of co-chairman of Ticketmaster, while retaining his post as chairman and chief executive at USA.

USA Networks finished the day down 44 cents, or 2.4%, at $17.56; Ticketmaster Online also closed down 94 cents, or 7.5%, at $11.63.

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Earnings/revenue reports and previews

C&D Technologies

(CHP)

posted third-quarter earnings of 54 cents a share, topping the two-analyst estimate of a 51 cent per share profit and the year ago 31 cent per share result. C&D Technologies finished up 25 cents, or 0.6%, at $44.63.

Dean Foods

(DF) - Get Report

warned about its second-quarter, lowering expectations to between 65 cents and 68 cents a share, citing higher costs and softening sales as primary factors. Analysts expected the company to make 82 cents a share in the second quarter. Dean Foods finished $6, or 17.8%, at $27.69.

Dominion Resources

(D) - Get Report

said it is on track to "meet or exceed" earnings targets of $3.30 a share in 2000 and $3.80 a share in 2001. The

First Call/Thompson Financial

20-analyst estimates are currently: $3.31 a share for 2000 and $3.85 a share for 2001.

Also, Dominion said it sold 6 million new common shares for about $354 million in a block trade to

Merrill Lynch

. Proceeds from the stock sale will fund the common equity portion of its Millstone nuclear station acquisition. In August, Dominion agreed to buy the station for about $1.3 billion. Dominion closed down $2.69, or 4.3%, at $59.5.

Illinois Tool Works

(ITW) - Get Report

warned that its fourth quarter would come in below estimates and the year-ago quarter, in a range between 75 and 80 cents a share. Analysts called for 81 cents a share, while the year-ago quarter was 82 cents. Full-year 2000 earnings will also miss estimates, coming in between $3.24 and $3.29 a share. The First Call/Thomson Financial estimate for the full-year 2000 was $3.30 a share. Illinois Tool Works finished up 13 cents, or 0.2%, at $56.25.

John Deere

(DE) - Get Report

announced third-quarter earnings of 30 cents a share, better than the year-ago loss of 13 cents. But that number misses the consensus estimate of 39 cents. Net income more than doubled from the year-ago period, rising to $485.5 million from $239.2 million.

The company said it expects first-quarter sales to grow by 28% over the year-ago period and by 11% for the entire year. John Deere closed up $3.13, or 8.5%, at $39.

Homer Simpson would be proud. Doughnut-maker

Krispy Kreme

(KREM)

announced third-quarter earnings of 27 cents a share, beating the First Call/Thomson Financial estimate by 3 cents. In the year-ago quarter, the company earned 20 cents a share. Income doubled to $3.9 million from $1.9 million.

The future's looking pretty good as well. Krispy Kreme said it will open 36 stores in the upcoming fiscal year, adding even more stores on top of the 10 it opened during the third quarter. It also raised fiscal 2001 and 2002 estimates. Krispy Kreme closed up 13 cents, or 0.2%, at $77.13.

Novametrix

(NMTX)

announced second-quarter earnings of 7 cents a share, exactly what it earned in the year-ago quarter. There was no consensus analyst estimate. Novametrix finished down 44 cents, or 8.3%, at $4.81.

And if you act now, they'll throw in the super chamois! Television shopping staple

Valuevision

(VVTV)

announced third-quarter earnings of 9 cents a share, better than the 8 cent estimate and the year-ago 6 cents. The company had $95.2 million in net sales, 24% better than the $76.6 million it racked up in the year-ago quarter. Now

that's

a lot of cubic zirconium!

Valuevision said it was rebranding its network with

NBC

, a deal in which Valuevision gets the right to use the

NBC

peacock and logo for the next decade. The company will be repositioned with the new theme in the spring. And in exchange, the company granted

NBC

warrants to buy 6 million shares of its stock at $17.38 a share. This represents a 44% stake of Valuevision.

In a press release hyping both earnings and the agreement, Chief Executive Gene McCaffery said the

NBC

deal would help bring immediate brand recognition and increase the company's visibility.

Valuevision finished the day down $1.75, or 9.2%, at $17.19.

Westvaco

(W) - Get Report

makes packaging, you know, things like cardboard for boxes. Well, the company announced fourth-quarter earnings of 78 cents a share, topping the 74 cent First Call/Thomson Financial estimate and the year-ago 58 cents.

Westvaco closed down 56 cents, or 2%, at $27.19.

After Monday's Close

7-Eleven

(SE) - Get Report

reported total merchandise sales of $552 million in October, but said the high price it pays for gasoline is hurting the company's gasoline margins as well as merchandise sales. 7-Eleven finished down 94 cents, or 9.6%, at $8.88.

Semiconductor and electronic components distributor

Avnet

(AVT) - Get Report

warned its results for the fiscal second quarter will fall below expectations due to a downturn in semiconductor demand. The First Call/Thomson Financial six-broker estimate was for 85 cents; the company expects to earn 75 cents to 80 cents for the quarter. Avnet closed down $3.81.

Northwest Natural Gas

(NWN) - Get Report

said it is comfortable with analyst estimates of 75 cents to 85 cents for the fourth quarter. Northwest Natural Gas closed up 31 cents, or 1.3%, at $24.63.

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Analyst actions

Morgan Stanley Dean Witter

said there is a 30% chance that Internet bellwether

Yahoo!

(YHOO)

will fall short of revenue estimates in the next several quarters as dot-com advertising slows. Currently, advertising provides 90% of Yahoo!'s revenue. Yahoo! closed down $7.19, or 14.7%, at $41.69.

Downgrades

Disney

(DIS) - Get Report

: DOWN to outperform from strong buy at

Morgan Stanley Dean Witter

, price target to $40 from $50. Disney closed down 50 cents, or 1.7%, at $29.38.

DigitalThink

(DTHK)

: DOWN to outperform from buy at

Goldman Sachs

. DigitalThink finished $4.55, or 19%, at $19.4.

News Corp.

(NWS) - Get Report

: DOWN to outperform from strong buy at Morgan Stanley. News Corp. finished down 75 cents, or 2%, at $35.38.

Omnicom

(OMC) - Get Report

: DOWN to outperform from strong buy at Morgan Stanley. Omnicom closed $4.75, or 5.7%, at $78.31.

Viacom

(VIA) - Get Report

: DOWN to outperform from strong buy at Morgan Stanley, price target to $68 from $82. Viacom was up 94 cents, or 1.8%, at $54.31.

Initiations

Active Power

(ACPW)

: NEW buy at

ABN Amro

; price target: $29. Active Power closed up 63 cents, or 3.5%, at $18.63.

Dow Chemical

(DOW) - Get Report

: NEW market perform at

Deutsche Banc Alex. Brown

. Down Chemical finished up 44 cents, or 1.4%, at $31.

DuPont

(DD) - Get Report

: NEW buy at Alex. Brown. DuPont closed down 31 cents, or 0.8%, at $41.19.

Handspring

(HAND)

: NEW buy at

Lehman Brothers

; price target: $90. Handspring closed $2.36, or 3.6%, at $62.5.

Lexent

(LXNT)

: NEW strong buy at Alex. Brown; price target: $34. Lexent $1.94, or 8.5%, $20.75.

Lyondell

(LYO)

: NEW market perform at Alex. Brown. Lyondell finished down 50 cents, or 3.5%, at $13.94.

Mellon Financial

(MEL)

: NEW outperform at Goldman Sachs. Mellon closed up $1.56, or 3.6%, to $44.75.

OmniSky

(OMNY)

: NEW buy at Lehman; price target: $26. OmniSky closed up $1.25, or 11.9%, to $11.75.

Palm

(PALM)

: NEW buy at Lehman; price target: $60. Palm closed up $3.25, or 7.6%, to $46.31.

Group Moves

Prudential Securities

raised ratings on four biotechnology firms to strong buy from accumulate:

  • Genentech (DNA) : Genentech closed up 63 cents, or 0.96%, to $66.
  • Gilead (GILD) - Get Report: Gilead closed up $3.75, or 5.8%, to $68.38.
  • IDEC Pharmaceuticals (IDPH) : IDEC closed up $9, or 5.9%, to $161.44.
  • Sepracor (SEPR) : Sepracor closed up 50 cents, or 0.8%, to $65.25.

Goldman Sachs adjusted its earnings estimates on two airline stocks:

  • Southwest Airlines (LUV) - Get Report: 2000 earnings estimate UP to $1.18 from $1.15. 2001 earnings estimate UP to $1.45 from $1.35. Southwest closed up $2.19, or 7.3%, to $32.25.
  • UAL (UAL) - Get Report: 2000 earnings estimate DOWN to $2.50 form $3.20. 2001 earnings estimate DOWN to $3.75 from $4.50. UAL closed up 44 cents, or 1.2%, to $37.50.

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Offerings and stock actions

Eclipsys

(ECLP)

announced that it will put more stock on the market. The company filed to sell 5 million additional shares, valued at $125 million based on yesterday's close. The company will use the money for working capital. Eclipsys closed down $2.88, or 11.5%, to $22.13.

PepsiCo's

(PEP) - Get Report

board authorized a buyback of $4 billion worth of stock over the next three years. The company said the new program will go into effect once the current one is completed. The one in effect now was authorized in March 1999 and is expected to be completed by early 2001. PepsiCo closed up $1.50, or 3.3%, to $46.50.

PRI Automation

(PRIA)

announced pro forma fourth-quarter earnings of 6 cents a share, much better than the year-ago 23-cent loss. The guys over at

First Call/Thomson Financial

were expecting 4 cents a share. PRI closed up 63 cents, or 3.1%, to $20.56.

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Miscellany

The litigation is over. No, unfortunately, the lawsuit in question isn't in Florida.

Intel

(INTC) - Get Report

and

Broadcom

(BRCM)

announced that they have settled the trade secret lawsuit brought by Intel and the cross-complaint brought by Broadcom. Terms of the deal were confidential, but both parties say they are happy.

Just a few months ago, the pair wasn't so friendly. Intel, when it announced its suit against Broadcom, said the company infringed on "nearly every aspect of its business." Intel's suit was very strongly worded and alleged that Broadcom lured away Intel employees and got them to disclose trade secrets. Broadcom replied with an injunction, alleging that Intel had stolen trade secrets from Broadcom. Now, despite all the tough talk, everything is settled. Intel closed up $1.50, or 3.7%, to $42.63.

LSI Logic

(LSI) - Get Report

is down a chief financial officer. Douglas Norby has left his post at LSI to become the CFO of Novalux, a privately held company. LSI closed down $5.81, or a whopping 20.2%, to $22.94.

U.S. Steel Mining

, a division of

U.S. Steel

(X) - Get Report

, closed down 25 cents, or 1.8%, to $13.31, after announcing that it is limiting deliveries of coal, due to production problems at mines in Alabama and West Virginia. The company used

force majeure

provisions in its contracts to limit its deliveries of coal. This provision allows the company to limit delivery if there are production problems beyond the company's control.

Both mines, which produced a combined 6.6 million tons of coal last year, have experienced roof problems due to geological change. U.S. Steel Mining said it was assessing the full effect of these conditions, but said they would undercut fourth-quarter earnings by $10 million to $20 million from the previous quarter.

Bebe

(BEBE)

, the clothier popular with girls who like to go nightclubbing, announced that John Parros will become the company's president and chief operating officer. Bebe closed up 25 cents, or 1.6%, to $15.75.

After Monday's Close

Biotechnology company

Chiron

(CHIR) - Get Report

will replace

Fort James

(FJ)

in the

S&P 500 at the close of trading on a date to be named later.

Neuberger Berman

(NEU) - Get Report

will take Chiron's place in the

S&P Midcap 400 Index

. Chiron closed up $2.13, or 5.6%, at $40.25.

Entegris

(ENTG) - Get Report

named Jim Dauwalter president and chief executive. Entegris finished the day up 44 cents, or 5.9%, at $7.81.

Kaiser Aluminum

(KLU)

said it is reducing the annual output rate at its Mead, Wash., smelter, which will decrease its operating capacity in the Northwest to 33% from 51%. The company will also pare jobs in the region. Kaiser finished the day up 13 cents, or 2.9%, at $4.50.

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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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