Wednesday's Winners & Losers: Elantec, Kent, Support.com, Macromedia, Linux

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Updated from 10:30 a.m.

General Motors

(GM) - Get Report

beat analyst forecasts for earnings in the fourth quarter, but the automaker reported that fourth-quarter profits dropped sharply due to declining demand in the U.S. and continued losses in Europe.

The company reported earnings of $1.15 a share, beating the 17-broker

First Call/Thomson Financial

consensus by 3 cents. Earnings fell to $609 million, down from $1.3 billion in the year-ago time period. For the previous period, earnings were $1.95 a share, when sales of automobiles were peaking. As the

Federal Reserve has tightened credit and energy prices have risen sharply, consumers have pared back their spending on big-ticket items like automobiles.

General Motors cut jobs in the United States and Europe in 2000 and is also phasing out the Oldsmobile brand. The company reported charges of $520 million for the quarter to cover costs of the Oldsmobile phase-out and job cuts. The company reported an after-tax gain of $1.13 billion as a result of the previously announced sale of its

Hughes Electronics

(GMH)

unit to

Boeing

(BA) - Get Report

.

GM closed down 88 cents, or 1.6%, to $54.88; Hughes closed down 10 cents, or 0.4%, to $26.60; and Boeing was down $2.25, or 3.7%, to $58.75.

General Electric

(GE) - Get Report

said it earned $3.59 billion, or 36 cents a share, in the fourth quarter, exactly what analysts were expecting.

A year earlier, GE earned $3.09 billion, or 31 cents a share. GE's revenue climbed 6.5% to $34.98 billion from $32.86 billion a year ago.

The company said its power generation business is seeing record-level demand, its aircraft engine division is maintaining its global market share above 50% and its NBC unit is attracting the key demographic of adults 18 to 49 years old.

In a statement, Chairman Jack Welch said, "The strength of our long-cycle businesses combined with our ongoing initiatives -- globalization, Six Sigma, product services and e-business -- and our new leadership give us enormous confidence that 2001 will be another record year of double-digit earnings increases.''

GE closed down 69 cents, or 1.5%, to $46.69.

Check out TSC stories on other big names that reported last night:

Applied Micro Circuit Earnings Beat Expectations

Handspring Blows Past Expectations

Walloping Expectations, Juniper Sees Telecom Slowdown as 'Self-Inflicted'

Novellus Systems Meets Fourth-Quarter Estimates

RF Micro Devices Hits Lowered Target, Warns on Next Quarter

Teradyne Misses Estimates by a Penny, Sees First-Half Slowdown

Mergers, acquisitions and joint ventures

One

billion

dollars!

NetIQ

(NTIQ)

snapped up

WebTrends

(WEBT)

for a deal it valued at $1 billion in stock. The deal values WebTrends at just under half the value of a single share of NetIQ. That's about $36 a share based on NetIQ's closing price of $75 yesterday. NetIQ closed down $13.75, or 18.3%, to $61.25; WebTrends was down $4.13, or 12.6%, to $28.75.

The New York Times

entered into an agreement with Internet-based delivery firm

Kozmo.com

. The newspaper, which is published by

New York Times

(NYT) - Get Report

, and the delivery firm will launch a four-week program in which Kozmo customers will be able to order the Times at newsstand price and have it delivered in as little as an hour. The orange-bagged messengers will deliver the paper in nine cities, including Chicago, New York and Washington, D.C. New York Times' stock ended the day up 81 cents, or 1.97%, to $42.

WorldCom

(WCOM)

said it received

Federal Communications Committee

approval for its acquisition of

Intermedia Communications

(ICIX)

.

The acquisition includes a 55% equity stake and 94% voting stake in

Digex

. Minority shareholders in Digex sued five directors, WorldCom and Intermedia to block the merger. WorldCom closed up $1.19, or 5.6%, to $22.50; Intermedia closed up $1.69, or 10.9%, to $17.13.

After Tuesday's Close

Cypress Semiconductor

(CY) - Get Report

said it will pay $125 million in cash for

International Microcircuits

, which specializes in timing technology integrated circuits. Cypress closed up $1.94, or 8.2%, to $25.44.

Macromedia

(MACR)

announced that it will merge with

Allaire

(ALLR)

in a stock deal worth $360 million.

The deal is expected to add to Macromedia's earnings in its 2002 fiscal year.

Speaking of earnings, Macromedia reported its third-quarter results today. It posted earnings of 29 cents a share, 2 cents better than the 11-analyst estimate and up from year-ago earnings of 15 cents a share. But the stock ended the day down $13.69, or 31.1%, to $30.31; Allaire closed up 56 cents, or 7.1%, to $8.50.

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Earnings/revenue reports and previews

Bank One

(ONE) - Get Report

reported an unexpected fourth-quarter loss Wednesday as it boosted the amount of money it sets aside to cover bad loans.

The big bank said it posted a loss of $512 million, or 44 cents a share. Analysts had expected the company to earn 45 cents a share, according to

First Call/Thomson Financial

.

Included in the loss was a $1 billion pretax increase in the company's allowance for loan losses, which increased the quarter-end loan-loss reserve to 2.36% from 1.75% at the third quarter's end. In addition, the Chicago-based Bank One said it took a $200 million pretax charge for "occupancy and fixed asset decisions," a $225 million pretax increase in the reserve for auto-lease residual losses, a $100 million pretax charge for miscellaneous balance sheet adjustments and operational errors, and a $50 million pretax charge for incremental severance.

"These short-term results are absolutely unacceptable to our shareholders -- and to Bank One management," James Dimon, chairman and chief executive officer, said in a statement. "The fourth-quarter results reflect the decisive actions we have taken as the result of our ongoing intensive review of businesses, systems, operations and the balance sheet, as well as the deterioration of the economy and credit quality. We have dramatically increased our loan-loss reserve, reduced expenses by more than $500 million annually, assembled an excellent management team and rededicated our efforts to serve customers and reward shareholders."

Bank One closed down 31 cents, or 0.8%, to $38.

Delphi Automotive Systems

(DPH)

announced that fourth-quarter earnings came in at 36 cents a share, topping a lowered estimate by 4 cents, but missing last year's 48 cents a share by a country mile.

The auto-parts maker had warned in the middle of December that earnings would come in between 31 cents and 35 cents a share, while the consensus analyst forecast was 44 cents a share. The analysts then reacted accordingly and dropped their estimates, which Delphi just barely beat. So don't be too excited about today's earnings release. Delphi's fourth-quarter revenues slipped 5% from a year ago. Delphi closed down 63 cents, or 4.3%, to $14.06.

The paint and drapes are nice and all, but

Ethan Allen Interiors

(ETH) - Get Report

still doesn't look that pretty. The company announced second-quarter earnings of 58 cents a share, beating the analyst estimate by a penny. Still, that's not better than last-year's earnings of 59 cents a share. Going forward, Farooq Kathwari, its chairman and chief executive, said that 2001's earnings per share data will be pretty much in line with 2000's. So consider this quarter's results to be a harbinger of quarters to come. The stock closed down 44 cents, or 1.2%, to $35.44.

First Tennessee National

(FTN)

announced fourth-quarter earnings of 55 cents a share, beating the First Call/Thomson Financial estimate by 2 cents and the year-ago quarter by 7 cents. First Tennessee ended the day up 6 cents, or 0.2%, to $30.

J.P. Morgan Chase

(JPM) - Get Report

said operating profit sank 65% in the latest quarter, roughly in line with the company's December

guidance .

Fourth-quarter earnings were 37 cents a share, down from $1.09 a share in the year-ago period, as losses on venture capital investments and a slowdown in trading revenues weighed on the newly merged firm. The consensus estimate from First Call/Thomson Financial was for 45 cents. Operating income was $763 million, down sharply from $2.2 billion in the prior year.

Like a number of other firms with investment banking operations, J.P. Morgan Chase has felt the impact of a slowdown in capital markets activity and underwriting opportunities. In addition, its venture capital arm uses an accounting method that is more sensitive to fluctuations in market value. The unit, now known as J.P. Morgan Partners, had a loss of $92 million in private equity investments in the latest quarter.

The bank also took a merger charge of $1.25 billion, and a charge of $1.23 billion in one-time gains. Including these items, the bank earned 34 cents a share compared with a pro forma $1.10 in the year-ago period. JPM closed down 19 cents, or 0.4%, to $53.

Knight Trading

(NITE)

said it earned $35.3 million, or 28 cents a share, in the fourth quarter, which was better than analysts expected.

The firm was expected to earn 22 cents a share, according to First Call/Thomson Financial. In the year-earlier period, the company earned $60.3 million, or 47 cents a share. Revenue fell 11% to $251.3 million from $281.7 million a year earlier. Knight is a market-maker, meaning that it trades stocks and at times takes one side of the trade itself to maintain orderly markets.

"We believe that the market correction kept many self-directed individual investors on the sidelines or in larger-cap, defensive stock issues throughout the fourth quarter," Kenneth Pasternak, chairman and CEO, said in a statement. "This mix of stocks -- for which Knight posts lower revenue capture per share -- negatively impacted our revenue for the quarter. These pressures were partially overcome by our unique trading methodology and our diverse client base and product offerings, resulting in a solid fourth quarter despite these challenging market conditions." Knight Trading closed up 38 cents, or 1.9%, to $20.

Metris

(MXT)

, a Minnesota-based credit card company, said its fourth-quarter earnings came in at 52 cents a share, a penny better than the analyst estimate and much better than the year-ago 39 cents a share. Going forward, the company said it was comfortable with first quarter and full-year 2001 estimates. Metris closed down $1.19, or 3.97%, to $28.75.

Tyco International

(TYC)

makes all sorts of stuff, like diapers and fiber optic cables and sprinklers. And today, the company said it would be making more of something else -- money. The company announced first-quarter earnings of 57 cents a share, a penny better than analyst estimates and better than the year-ago 46 cents. Tyco also said it was comfortable with 2001 estimates. Tyco closed down $1.19, or 1.99%, to $58.44.

After Tuesday's Close

Elantec Semiconductor

(ELNT)

posted first-quarter earnings of 37 cents a share, 2 cents better than the six-analyst estimate and up from year-ago earnings of 13 cents a share.

The circuitmaker said it expects earnings of 38 cents a share for its second quarter, which would beat the current six-analyst estimate for the quarter. Elantec closed up $10, or 24.7%, to $50.50.

Kent Electronics

(KNT)

reported third-quarter earnings of 33 cents a share, in line with the five-analyst estimate and up from year-ago earnings of 18 cents a share. Including a gain of $18 million, or 62 cents a diluted share, on the sale of

K*Tec Electronics

and a $355,000 loss from discontinued operations, the company made 94 cents a share. Kent closed up $3.31, or 17.2%, to $22.56.

Linear Technology

(LLTC)

reported second-quarter earnings of 34 cents a share, a penny better than the 14-analyst estimate and up from year-ago earnings of 20 cents a share. Linear Tech closed up $7.56, or 14.3%, to $60.50.

M.D.C. Holdings

(MDC) - Get Report

posted fourth-quarter earnings of $1.80 a share, beating the five-analyst estimate of $1.69 and up from year-ago earnings of $1.17 a share. The stock ended the day down $1.30, or 3.4%, to $37.25.

Quest Diagnostics

(DGX) - Get Report

said it expects fourth-quarter earnings to come in between 57 cents and 58 cents and its full-year earnings for 2001 to come in between $3.10 and $3.20 a share. The eight-analyst estimates are currently 58 cents a share for the fourth quarter and $2.97 for the full year. Quest closed down $6.63, or 6.4%, to $96.88.

VA Linux Systems

(LNUX)

, which develops software and products for the Linux computer operating system, lowered its revenue and earnings expectations for its fiscal second quarter because of overall economic weakness.

The company said revenue will come in between $43 million and $50 million -- well below the four-analyst estimate of $60 million. The loss for the quarter, excluding noncash charges, are expected to be in the range of 24 cents to 28 cents, much wider than the five-analyst estimate for a loss of 11 cents. Linux closed down $2, or 21.9%, to $7.13.

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Analyst actions

Last night,

Intel

(INTC) - Get Report

beat lowered fourth-quarter estimates by a smidge, posting earnings of 38 cents a share, a penny better than analyst estimates. Its revenue came in at $8.7 billion, exactly what was expected.

The results were not impressing anyone, though, not after a flurry of preannouncements and warnings have chilled Wall Street's outlook on the economy. Intel was one of the bigger companies to issue a warning, which weighed heavily on the minds of analysts, who are paid to figure out how much money these behemoths will be pulling in.

And the latest humdrum earnings release from Intel won't help things much, not with the chipmaker also saying first-quarter revenue will decline about 15% due to a worldwide economic slowdown and seasonal issues.

TheStreet.com

wrote more about the

earnings announcement in a separate story, while the analysts made their picks this morning. Intel ended the day down 88 cents, or 2.8%, to $30.50.

  • Merrill Lynch cut Intel's 2001 earnings estimate to $1.17 a share from $1.41 a share, while adjusting its revenue forecast to $36 billion from $38.1 billion.
  • Credit Suisse First Boston cut its 2001 earnings estimate to $1 a share from $1.45.
  • Goldman Sachs cut its 2001 estimate to $1.05 a share from $1.40.
  • Prudential Securities cut its 2001 estimate to $1.02 from $1.55.

Intel wasn't alone. Other tech names were also on the receiving end of analyst scissors.

Morgan Stanley

clipped

Compaq's

(CPQ)

2001 earnings outlook to $1 from $1.19 while

Dell

(DELL) - Get Report

was trimmed to 86 cents from $1.07 a share. Compaq closed up 92 cents, or 5.2%, to $18.67; Dell was up $1.19, or 5.5%, to $22.69.

Upgrades

eBay

(EBAY) - Get Report

: UP to buy from market perform at

Deutsche Bank Alex. Brown

. eBay closed down 56 cents, or 1.3%, to $43.25.

Support.com

(SPRT) - Get Report

: UP to strong buy from buy at CSFB. Support.com closed up $2.38, or 19%, to $14.88.

Downgrades

Burlington Resources

(BR) - Get Report

: DOWN to market perform from buy at

Lehman Brothers

. Burlington closed down $3.75, or 7.1%, to $49.25.

Commerce One

(CMRC)

: DOWN to long-term accumulate from long-term buy at

Robertson Stephens

. Commerce One closed down $1, or 4.4%, to $21.94.

Emerson Electric

(EMR) - Get Report

: DOWN to hold from buy at CSFB. Emerson closed down $2.69, or 3.5%, to $74.88.

Genuity

(GENU)

: DOWN to outperform from strong buy at Morgan Stanley. Genuity closed down 72 cents, or 14%, to $4.41.

Home Depot

(HD) - Get Report

: DOWN to hold from strong buy at

Prudential Securities

. Home Depot closed down $2.50, or 5.1%, to $46.38.

Linux

(LNUX)

: DOWN to neutral from buy at

W.R. Hambrecht

. Linux, as noted above, closed down $2, or 21.9%, to $7.13.

Macromedia

(MACR)

: DOWN to neutral from buy at Merrill. As noted above, the stock ended the day down $13.69, or 31.1%, to $30.31.

Netopia

(NTPA)

: DOWN to long-term accumulate from long-term buy at Robertson Stephens. Netopia closed down 53 cents, or 8.3%, to $5.88.

USInternetworking

(USIX)

: DOWN to near-term neutral from near-term accumulate at Merrill. USInternetworking closed down 84 cents, or 16.7%, to $4.22.

Initiations

Art Technology Group

(ARTG)

: NEW market outperform at Goldman Sachs. Art Tech closed up $2.92, or 13.2%, to $24.98.

New Focus

(NUFO)

: NEW buy at CSFB. New Focus closed up $6.63, or 17.5%, to $44.50.

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Offerings and stock actions

If you own one share of

Christopher & Banks

(CHBS)

, now you own a little bit more. The company announced a three-for-two stock split, which will take place on Feb. 12. C&B closed up $1.38, or 4.2%, to $34.13.

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Miscellany

The future at

FutureLink

(FTRL)

won't be so peachy for about 8% of its staff. That's because the company, which provides server-based applications services -- enabling software to be deployed from a central location -- announced it would be laying off 8% of its 660 person workforce in order to break even by the end of 2001. Time to tighten the old belt. FutureLink closed down 47 cents, or 30%, to $1.09.

After Tuesday's Close

Ever-troubled

Lernout & Hauspie

(LHSPQ)

has a new leader. The company named Philippe Bodson CEO. The stock closed up 17 cents, or 9.2%, to $2.02.

Palm

(PALM)

, a provider of handheld computing devices, said its chief technology officer, Bill Maggs, has resigned, according to a published report.

Maggs will continue to consult with Palm, based in Santa Clara, Calif., from outside the company while he pursues other mobile Internet ventures. No replacement for Maggs has been named, the report indicated. Palm closed up $1.19, or 4.5%, to $27.75.

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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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