Updated from 1:03 p.m.

Sawtek

(SAWS)

announced that its second-quarter profit results came in lower than expected, falling 26%; it cited a decrease in demand for its products. The Orlando, Fla.-based Sawtek supplies companies such as

Motorola

(MOT)

and

Nokia

(NOK) - Get Report

with electronic components that enhance the quality of wireless phone transmissions.

Sawtek posted second-quarter earnings of 22 cents a share, as compared to 29 cents a share in the year-ago period. The company guided analysts' estimates downward back in February when it warned that lower-than-expected orders would cause it to fall short of forecasts for the quarter.

Shares of Sawtek closed up $1.86, or 13.1%, to $16.04; Motorola was up $1.50, or 13%, to $13; and Nokia was up $1.33, or 5.5%, to $25.50..

Mergers, acquisitions and joint ventures

Office-equipment maker

Pitney Bowes

(PBI) - Get Report

announced it will acquire London-based

Danka Services International

in a cash deal totaling $290 million.

Shares of the Stamford, Conn.-based company closed up 97 cents, or 2.9%, to $34.78.

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Earnings/revenue reports and previews

Software developer

Hummingbird

(HUMC)

has trimmed its second-quarter estimates for the second time in a month, citing a severe weakening in demand for its products.

The Canadian-based firm is expecting revised earnings per share to fall between 16 cents and 18 cents a share, as compared to the previously reported 33 cents to 37 cents a share. Analysts were expecting the troubled software company to post earnings of 34 cents a share.

Shares of Hummingbird closed down $2.36, or 10.7%, to $19.64.

Standard Commercial

(STW)

, a tobacco and wool merchant, said it expects to post higher earnings for 2001, citing cost-cutting measures and improved trading conditions.

The North Carolina-based company said it expects to report earnings of $1.45 a share as compared to the previously forecast number of $1.20 a share. According to a three-analyst consensus, the company was expected to earn $1.23 a share.

Shares of Standard Commercial closed up $2.76, or 23.9%, to $14.31.

Western Digital

(WDC) - Get Report

, a maker of PC hard drives, said it expects a narrower-than-expected loss for its fiscal third quarter, citing stronger revenues.

The Lake Forest, Calif.-based company said it expects to post a third-quarter loss in the range of 4 cents to 6 cents a share, as compared to the previously reported loss of 7 cents to 10 cents issued in January. Analysts were expecting the company to post a loss of 8 cents a share.

Shares of Western Digital traded up 63 cents, or 15.6%, to finish at $4.67.

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Analyst Actions

Motorola

(MOT)

has taken the

Lucent

(LU)

express lately, dropping 23% on Friday on fears that it, too,

faces a severe liquidity problem. The mobile-phone maker refuted the notion that it had a liquidity crisis and the stock rallied back yesterday and today.

As noted above, Motorola closed up $1.50, or 13%, to $13. But despite the rally and Motorola's comments,

Merrill Lynch's

Michael Ching said the company's credit rating was indeed at risk and likely to be reduced. Lucent closed up 47 cents, or 6.96%, to $7.22.

"On the heels of Motorola's recent preannouncement, both

S&P

and

Moody's

placed Motorola on negative credit watch. We believe that Motorola's credit rating will likely be lowered, which will increase the company's borrowing costs."

As a result of the credit situation, Ching changed his risk rating on the stock, calling it an above-average risk instead of an average risk. With a credit-rating change possibly in the works, Ching feels that it's more dangerous to buy the stock. That said, he maintained his overall accumulate rating because of attractive valuation levels. Motorola's price-to-earnings ratio is currently around 20.

Ching also cut

Qualcomm's

(QCOM) - Get Report

risk rating, calling the company a high risk instead of an above-average risk due to a volatile stock price. Qualcomm closed up $3.56, or 7.9%, to $48.80.

The mobile-phone business is in a major transition year as businesses face high handset inventory levels and declining demand for portable yakking devices. According to Ching, Qualcomm will not be affected by the handset inventory problem, having divested its manufacturing operations three years ago.

But, according to the analyst, CDMA technology sales will be affected, even though the company has moved towards intellectual property licensing. Despite having no handset inventory to speak of, concerns are mounting that Qualcomm's CMDA chipset inventory is building -- something that will certainly affect the top and bottom line.

"Qualcomm is somewhat insulated from the worst effects of the weaker handset market, including a slowdown in European business and manufacturing capacity adjustments," he wrote. "However, we still believe CDMA handset expectations for 2001 are optimistic. We maintain our earnings per share estimates, although there may be risk to our revenue forecasts."

If You Could See Us Now

Lehman Brothers

analyst Felicia Kantor assumed coverage of the cruise industry and essentially shrugged, rating the two biggest players at neutral.

Royal Caribbean

(RCL) - Get Report

was started at market perform, while

Carnival

TST Recommends

(CCL) - Get Report

was initiated at market perform, down from the previous buy rating. Royal Caribbean closed down 4 cents, or 0.2%, to $22.15; Carnival was up 8 cents, or 0.3%, to $27.75.

Kantor's view is that the same poor economic climate that's curbing corporate spending will eventually affect the prospects for vacationers, because ordinary folks will be less likely to go away on vacation. She thinks high-end luxury cruises are likely to falter, possibly dragging down the less-luxurious premium and contemporary cruises. The industry, which rallied significantly in 1999 only to fall 70% in three months in 2000, continues to face pressure. Carnival recently warned on March 21, telling Wall Street that first-quarter profits fell 25% from the previous year.

"Despite Carnival's relatively low valuation and status as a market leader, we believe that the current stock price does not reflect the risk of downward earnings revisions in the second half of the year," Kantor said.

And already, both companies have felt the pain. After rallying in the first three months of the year, a vicious March selloff vaporized any gains. Royal Caribbean is off 12% year-to-date. Carnival is off 2.3%.

Merrill Slashes Insurance Estimates to Rock-Bottom! That's -- IN-SANE!

In the 1980s,

Crazy Eddie

screamed about drastically reduced prices, frothing like

Ted Turner

without the meds, hooting that his sales weren't just crazy -- they were IN-SANE!

Merrill Lynch's Edward Spehar took a page out of the Crazy Eddie playbook, trimming back his estimates on six insurance companies. New 2001 earnings estimates were doled out to

Nationwide

(NFS)

,

Hartford

(HIG) - Get Report

,

Lincoln National

(LNC) - Get Report

,

John Hancock

(JHF)

,

American General

(AGC) - Get Report

and

MetLife

(MET) - Get Report

, taking Spehar's already-low estimates to rock bottom valuations.

Nationwide was on its side today as it closed up 52 cents, or 1.4%, to $36.57; Hartford was down $1.49, or 2.5%, to $57.23; Lincoln National was down 53 cents, or 1.2%, to $42.75; John Hancock was down $1.40, or 3.9%, to $34.95; American General was up 63 cents, or 1.5%, to $42.75; and MetLife was flat at $29.95.

"We were close to the lowest estimate on the Street for the companies with the most exposure to the stock market (Nationwide, Hartford, Lincoln National and John Hancock) even prior to the reduction," he wrote. "We are now the lowest estimate in each case."

Spehar lowered estimates on those four insurance names and two others because of the disruptive effect the stock market will have on companies that count on equities to add to the bottom line. In his opinion, consensus estimates have been slow to come down. Insurers with equity exposure have seen estimates dropped by 3%. In comparison, estimates for the

S&P 500

are down 14%. According to the analyst, expect a glut of analyst revisions to come after the first quarter is over.

"We believe that consensus estimates will be reduced after first-quarter results are reported," he wrote, "at least partially because we expect cautionary comments from management."

Here's a roundup of those estimate reductions:

* Estimates courtesy of

Thomson Financial/First Call

.

A Quick Roundup of the Rest

Upgrades

Public Service Enterprise Group

(PEG) - Get Report

: UP to strong buy from buy at Lehman Brothers. The stock closed up $1.39, or 3.2%, to $44.95.

Initiations

SureBeam

(SURE)

: NEW buy at

Credit Suisse First Boston

, NEW buy at Merrill Lynch. SureBeam closed down 28 cents, or 3.1%, to $8.76.

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Miscellany

Ramtron

(RMTR)

, a maker of semiconductor memory devices, announced that it has trimmed 17% of its workforce and will take a one-time $300,000 restructuring charge for the second quarter. The company said the restructuring is part of a larger plan to accelerate product development and reduce operating costs.

The Colorado-based Ramtron said the move will "position Ramtron to capitalize on the eventual recovery of the semiconductor industry." Ramtron closed down 10 cents, or 2.7%, to $3.55.

Systems engineering conglomerate

TRW

(TRW)

announced the retirement of its executive vice president and chief financial officer, Carl Miller. Miller plans to leave his post as soon as a suitable successor can be found.

TRW shares traded up $1.40, or 4.1%, to finish at $35.90.

Esterline Technologies

(ESL)

, an aerospace and defense outfit, said it has trimmed its workforce by 17% and it expects second-quarter results to fall short of analysts' expectations.

The Washington-based company expects profits for the second quarter to fall between 35 and 40 cents a share. According to analysts polled by

Thomson Financial/First Call

, the company was expected to post second-quarter earnings of 44 cents a share.

The downsizing move affected 100 people employed at the company's Illinois and California plants. Shares of Esterline finished down $4.90, or 22.1%, to $17.30 at the end of regulation trading.

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