Skip to main content

Updated from 3:15 p.m.

When the going gets tough -- the tough go shopping? Frequent victim

Broadcom

undefined

, which has dropped more than $130 this month to trade within $10 of a 52-week-low, announced that it would be acquiring Israeli chip supplier

VisionTech

for 7.96 million shares of its stock, valued at $776.6 million based on Monday's closing price of $97.56. The acquisition will become the core of a new Broadcom unit, called

Broadcom Israel

.

VisionTech makes the MPEG 2 encoder chip,

Kfir-2

, which handles both video and audio and can be found in many of those boxes people have on top of the T.V.

Scientific-Atlanta

( SFA),

Pace

,

TheStreet Recommends

ReplayTV

and

Microsoft's

(MSFT) - Get Microsoft Corporation Report

WebTV

all use the Kfir-2.

The Kfir-2 has many uses: It can handle Internet protocol, enabling Web surfing and interactive video conferencing, but its most-hyped feature is Personal Video Recording, or PVR. This PVR feature, which allows for pausing live television and recording digitally, is at the heart of Broadcom's buying VisionTech.

Broadcom closed down $12.50, or 12.8%, to $85.06; Scientific-Atlanta closed down 13 cents, or 0.3%, to $43.31; and Microsoft was down $3.69, or 5.2%, to $67.

Mergers, acquisitions and joint ventures

After Monday's Close

Boeing

(BA) - Get Boeing Company Report

has sold two 747-400 freighters to

Korean Air Lines

for $380 million. The cargo planes are scheduled for delivery in 2002. Boeing closed up 13 cents, or 0.2%, to $67.50.

Rational Software

( RATL) said it signed a deal to acquire

Catapulse

, a private software company of which Rational already owns 35%. Rational Software ended the day down $6.31, or 16.5%, to $32.

RightChoice Managed Care

(RIT)

shareholders voted today to approve the reorganization of it and RightChoice's parent company, Blue Cross and Blue Shield of Missouri.

When the reorganization is complete, which could be as early as Thursday or as late as Dec. 31, Blue Cross and Blue Shield of Missouri and RightChoice will be combined into a Delaware corporation and a fully for-profit company, using the name RightChoice Managed Care, with stock continuing to be traded on the

New York Stock Exchange.

The Missouri Foundation For Health, which will be created as a result of the reorganization, will own about 80% of new RightChoice's common stock. This stock will be subject to a voting trust and divestiture agreement. Under the agreement, at least 95% of the Foundation's shares will be under the control of the new RightChoice Board on all matters except those related to any future change of control of new RightChoice.

The settlement was reached by both parties with Missouri officials to resolve litigation initiated against Blue Cross and Blue Shield of Missouri related to its continued ownership of RightChoice after its creation in 1994. RightChoice closed up $2.50, or 10.1%, to $27.38.

Back to top

Earnings/revenue reports and previews

Atlantic Coast Airlines Holdings

( ACAI), parent of Atlantic Coast Airlines and United Express, announced that fiscal 2001 earnings would come in between $2 and $2.25 a share. The company also said its fourth-quarter 2000 earnings would come in between 45 cents and 53 cents a share. Those guys at

First Call/Thomson Financial

estimate that fiscal 2001 will come in at $2.18 a share, while the fourth quarter will come in at 48 cents a share.

Then again, that's not really saying much, is it? Those numbers are vaguely in the ballpark of what the analysts had predicted. Seems like Atlantic Coast is reassuring investors that it'll be O.K. in the future. Atlantic Coast closed up $4, or 11.8%, to $38.

Central Parking

( CPC) announced fourth-quarter earnings of 19 cents a share, in line with the First Call/Thomson Financial estimate and a penny better than the year-ago quarter. The company also said fiscal 2001 profits would grow by 10% before unusual items, despite the fact that fourth-quarter revenue dropped to $176.6 million from $181 million in the year-ago period. Central Parking closed down 94 cents, or 5.4%, to $16.56.

Compaq Computer

( CPQ) stated that it was comfortable with its inventory levels and said supply constraints are easing. The statement was in reaction to a

Salomon Smith Barney

report, which said that Thanksgiving weekend sales and promotional activity for personal computers appeared soft. Compaq closed down $1.71, or 6.9%, to $23.10.

iXL Enterprises

(IIXL)

said that it plans to sell its digital media, marketing and wireless units as part of a restructuring program. That will result in cutting about 850 jobs and taking a fourth-quarter charge. The stock closed up 3 cents, or 2.9%, to $1.09.

Snap! Crackle! Pop! Restructuring charges!

Rice Krispies maker

Kellogg

(K) - Get Kellogg Company Report

this morning announced it will take a restructuring charge of $50 million to $70 million in the current quarter due to its acquisition of

Keebler

( KBL). And it made some not-so-positive comments about the first half of 2001.

Kellogg said its fourth-quarter earnings per share will only "increase modestly" because of bigger investments in its American businesses, increased competition and that dastardly and devalued euro. For these reasons, plus costs related to Kellogg's acquisition of those cute lil' cookie elves, the company said that side-by-side comparisons between the first half of 2001 and the first half 2000 would be "particularly challenging."

Also, those cute elves may find themselves in the unemployment line -- Kellogg said it expects to cut 200 to 300 jobs out of a total of 15,000 positions. Kellogg closed down $1.06, or 4%, to $25.38.

Where's the beef? Right here, pal. Right here.

The sixth-largest supermarket chain, Dutch

Koninklijke Ahold

( AHO), known as Ahold to its friends, announced third-quarter profits 56% higher than the year-ago period. The company said third-quarter earnings came in at 0.33 euro per share, better than the year-ago 0.25 euro a share and just higher than the consensus estimate.

Ahold said it expects earnings to grow by 17% to 20% in the next year, along with record sales and results expected for the fourth quarter. And with the future looking bright, Ahold has gone shopping. The company said it is buying 56 stores and 7 sites, all in America, for $178 million.

These stores were purchased from

C&C Wholesale Distributors

, which picked them up from the now-bankrupt

Grand Union

. Ahold closed up 75 cents, or 2.5%, to $30.69.

Wendy's

(WEN) - Get Wendy's Company Report

, Dave Thomas' fast-food burger chain, this morning said its 2000 earnings per share would grow 17% to 19% -- topping previous estimates of 14% to 17% gains. The company cited strong sales in North America as a major reason for upping the forecast, but it also said sales in Argentina disappointed.

You don't need to be a Spanish scholar to know that adios means goodbye. Wendy's said it would close its 18 stores in Buenos Aires, laying off 600 employees. As a result, the company said it will absorb a pretax charge of $17 million to $22 million in the fourth quarter, or 8 cents to 11 cents a share. Overall, however, the company said its growth will exceed the earlier estimates. Wendy's closed up 81 cents, or 3.2%, to $26.13.

After Monday's Close

Charles River Laboratories

(CRL) - Get Charles River Laboratories International, Inc. Report

said the company expects to exceed analyst expectations for fourth-quarter earnings. The maker of biotechnology research tools said fourth-quarter sales will end up somewhere around $72 million to $74 million, ahead of expectations for $71 million.

The company also said it should earn 9 cents to 10 cents a share for the quarter, ahead of the five-broker First Call/Thomson Financial consensus for 7 cents a share. Charles River closed down 31 cents, or 1.3%, to $23.44.

Citadel Communications

(CITC)

said it expects fourth-quarter net revenue of $92 million, up from previous guidance of $90 million. Citadel closed up 56 cents, or 5.4%, to $10.94.

Dycom Industries

(DY) - Get Dycom Industries, Inc. Report

reported earnings of 51 cents a share, beating the nine-broker consensus looking for 44 cents a share. The company also said it named Steven Nielsen as chairman, replacing Thomas Pledger, who retired. Dycom closed down $3.69, or 8.3%, to $40.56.

Back to top

Analyst actions

Chipmakers have been brutalized in November, scraping along the bottom of their 52-week trading range, sporting welts and bruises that'd make John Rambo grab the Kleenex and avert his gaze.

Yesterday,

Xilinx

(XLNX) - Get Xilinx, Inc. Report

and

Altera

(ALTR) - Get Altair Engineering Inc. Class A Report

were two of the worst, taking 18% and 12% hits, respectively, on fears that they would miss earnings.

Merrill Lynch

commented on the situation this morning, in a report addressing investor concerns. Merrill reiterated its buy rating on Xilinx, saying it would meet its revenue and earnings per share estimates for the third quarter.

But Merrill said it was "somewhat cautious" about Altera, but reiterated its accumulate rating and stood by its earnings per share forecast. "The company's lack of design wins and greater exposure to mature products puts them more at risk to an inventory correction," the firm wrote. Xilinx closed down 59 cents, or 1.3%, to $45.91; Altera closed down $1.41, or 5.2%, to $25.91.

Upgrades

Universal Health Services

(UHS) - Get Universal Health Services, Inc. Class B Report

: UP to buy from outperform at

Lehman Brothers

, named "top pick" in health care facilities sector with a new price target of $115 from $105. UHS closed up 63 cents, or 0.7%, to $92.50.

Downgrades

Chase Manhattan

( CMB): Fourth-quarter earnings estimate: DOWN to 70 cents a share from 90 cents a share at Salomon Smith Barney. 2001 earnings estimate: DOWN to $4.05 from $4.20. Chase Manhattan closed down $1.38, or 3.5%, to $38.

Cintas

(CTAS) - Get Cintas Corporation Report

: DOWN to neutral from outperform at

Morgan Stanley Dean Witter

. Cintas closed down $2.28, or 4.4%, to $50.03.

Coors

( RKY): DOWN to hold from buy at

Credit Suisse First Boston

. Coors closed down 81 cents, or 1.1%, to $75.

DeVry

(DV)

: DOWN to neutral from outperform at

Morgan Stanley Dean Witter

. DeVry closed down $2.75, or 6.7%, to $38.56.

Ann Taylor

(ANN)

: DOWN to long-term attractive from buy at Robertson Stephens and fourth-quarter earnings outlook DOWN to 66 cents from 74 cents. Ann Taylor closed down $7.88, or 20.8%, to $30.

Meredith

(MDP) - Get Meredith Corporation Report

: DOWN to neutral from attractive at Bear Stearns. Meredith closed down $1.44, or 4.5%, to $30.75.

Health Management

(HMA)

: DOWN to outperform from buy at Lehman Brothers. The stock ended the day down 19 cents, or 0.9%, to $21.19.

Gap

(GPS) - Get Gap, Inc. Report

: DOWN to accumulate from buy at Merrill Lynch. Gap closed down $1.31, or 4.8%, to $26.

Zion Bancorp

(ZION) - Get Zions Bancorporation, N.A. Report

: DOWN to immediate-term neutral from buy at Merrill Lynch. Zion closed down 31 cents, or 0.6%, to $53.69.

Beyond.com

(BYND) - Get Beyond Meat, Inc. Report

: DOWN to sell from hold at

Prudential Securities

. Beyond.com closed down 9 cents, or 20%, to 38 cents.

Cross Timbers Oil

( XTO): DOWN to hold from buy at

UBS Warburg

. Cross Timbers closed down $1.38, or 5.7%, to $22.75.

Initiations

Dover

(DOV) - Get Dover Corporation Report

: NEW neutral at Lehman Brothers; price target: $44. Dover closed down 88 cents, or 2%, to $42.75.

FreeMarkets

( FMKT): NEW buy at

Chase H&Q

. FreeMarkets closed down $4.13, or 11.6%, to $31.50.

Group Moves

Merrill Lynch downgraded a number of passive-component equipment makers to buy from neutral, saying "estimates for the next three months and beyond are at risk" in its report. Merrill also wrote "We are reducing our EPS projections for the next calendar year and would not be surprised if these new estimates still prove somewhat too optimistic."

Strong words.

Earnings per share estimates for the future were also downgraded at the following companies:

Offerings and stock actions

After Monday's Close

C.H. Robinson

(CHRW) - Get C.H. Robinson Worldwide, Inc. Report

increased its regular quarterly dividend to 5 cents a share. The stock closed down $1.50, or 2.5%, to $59.56.

Hyperion Solutions

( HYSL) said it plans to repurchase up to $100 million of its common stock. Hyperion closed up 19 cents, or 1.3%, to $14.56.

Back to top

Miscellany

We may not know who the president of the U.S. is, but we do know who the president of

AT&T

(T) - Get AT&T Inc. Report

will be.

Today, the company announced that David Dorman would be getting the nod. Previously, Dorman was the CEO of

Concert

, a joint venture between AT&T and

British Telecommunications PLC

( BTY). Gary Weis, COO and president of Concert, will take the reins as its acting CEO. The big T ended the day down 19 cents, or 1%, to $18.69; British Telecom was down $5.44, or 5.8%, to $88.

Dana

( DCN), an automotive-parts maker, said it put its U.K.-based

Quinton Hazell

unit up for sale in an effort to focus on its core businesses. Dana closed down 50 cents, or 2.7%, to $17.81.

Health Web site

drkoop.com

( KOOP) rehired

PricewaterhouseCoopers

as its independent auditor and filed for a secondary offering of 117.7 million shares.

The auditor had resigned after the company completed its private placement of $27.5 million of preferred stock and warrants in August. After talks with the company's new management team, PricewaterhouseCoopers agreed to remain as auditor through the completion and filing of the company's third-quarter financial statements and will remain for future periods.

In addition, drkoop.com said it filed two registration statements with the

Securities and Exchange Commission

, which related solely to secondary resales of its common stock. The company said it would not receive any proceeds from the resale of the securities covered by the registration statements. The company posted a wider-than-expected third-quarter loss last month and cut 33% of its work force in August. drkoop.com closed up 3 cents, or 4.6%, to 72 cents.

Genentech

( DNA) announced that it lifted a hold on enrollment of Xplair, an experimental asthma treatment. Genentech closed down $6.50, or 8.7%, to $68.50.

Pill-maker

Merck

(MRK) - Get Merck & Co., Inc. Report

announced it would be making a foray into helping companies use the Web to provide health care services. The company earmarked $100 million to create a new fund, called

Merck CapitalVentures

. It will be headed up by Per Lofberg, the company's online pharmacy boss, and focus on the distribution and delivery of pharmaceuticals and services via the Web. Merck closed up $1, or 1.1%, to $92.63.

Pier 1 Imports

(PIR) - Get n.a. Report

,

Pottery Barn's

arch-enemy, announced that it expects same-store sales to grow 7% in November, while third-quarter sales will grow by 10% to 11% in comparison to the year-ago period. Looking ahead, the company will announce finalized results of its third quarter before the market opens on Dec. 7. Pier 1 closed down $2, or 14.4%, to $11.88.

Hey. The Internet is a gamble. And online wagering company

Youbet.com

( UBET) announced some losses -- like its president and a large chunk of its workforce. The company said it would slash its work force by 29% and announced the resignation of its CEO and President A.L. Frank. Thirty-four employees got the ax. I'll wager the stock closed down 16 cents, or 13.5%, to $1.

After Monday's Close

JNI

( JNIC) said it named Neal Waddington as president and CEO. JNI ended the poignant trading day up $1.69, or 3.5%, to $49.56.

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