Updated from 1:24 p.m.
Mess with the bull, get the horns.
gored some of the biggest names in technology today, downgrading
to near-term neutral from accumulate. Merrill was not only troubled about the slowing technology-related economy, it also was quite concerned about the amount of money spent on information technology. Slower corporate spending on IT, or information technology, would wreak havoc on the earnings picture at nearly every technology company.
H-P closed down 88 cents, or 2.8%, to $30.44; IBM was down $4.13, or 4.6%, to $86; and Cisco was down $5.25, or 12.6%, to $36.50.
Merrill analyst Thomas Kraemer, in his note on H-P, said that poor spending on Unix presented some fundamental risks and that there was little reward for buying stock at the current levels. He did reserve a little hope for the future. Just not much hope.
"We believe that a concerted effort by H-P to drive Linux, improve its channel relationships and continued success with color could materially improve our outlook," Kraemer said. "But we'd like to see those things happen."
Kraemer's note on IBM wasn't much better. The outlook was pretty grim, with the analyst advocating that recent economic slowdowns at Big Blue might not be the last.
"We fear that the revisions from October to November may not be the last. Absent this downturn, we would not be downgrading."
And in the wake of last night's earnings shortfall from rival
, Cisco found itself hit by a downgrade as well. Analyst Michael Ching also cited slowing IT spending, but said that Foundry's miss could be a harbinger of things to come over at Cisco. Foundry ended the day down
, lower by $17.63, or 57.6%, to $13.
"Foundry's preannouncement represents the first acknowledgement that capital spending issues are also impacting suppliers of next-generation switching solutions," Ching wrote. "We estimate that next-generation switching solutions represent about 20% of Cisco's revenue."
Mergers, acquisitions and joint ventures
bellied up to
and swallowed whole. Buffet, the big fish at investment house
, went on a pre-Christmas spending spree and bought the building materials maker for $13 a share, or $1.92 billion in cash.
"We are pleased about the opportunity to own a company with such strong market positions, leadership and financial performance," Buffett said. "Johns Mansville fits well in the Berkshire family."
This purchase comes after Johns Manville's negotiations with
Hicks, Muse, Tate & Furst
, a private group of investors, failed on Dec. 8. Johns Manville closed up $2.13, or 19.8%, to $12.88; Berkshire Hathaway was down $14,000, or 2.1%, to $66,500.
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Earnings/revenue reports and previews
said that fourth-quarter estimates would come in past 50 cents a share, not just beating Wall Street estimates, but absolutely pulverizing them. The consensus three-analyst estimate was for just 9 cents a share.
The powerful fourth-quarter came courtesy of energy deregulation. Avista's nonregulated energy trader, Avista Energy, helped boost profitability, even as its utility providers suffered due to higher energy costs. Avista closed up 69 cents, or 3.4%, to $20.75.
The real thing sees the top line growing in the fourth quarter, but the bottom line is still the real issue.
announced that volume will grow 3% in the fourth quarter, with unit case volume, a key indicator of health in the soft drink industry, growing by 4% in 2000.
Coca-Cola also announced that it felt comfortable with earnings estimates for the fourth quarter and fiscal 2000 as well as fiscal 2001.
Still, Coke's performance could be seen as troubling, since fourth-quarter volume growth did not match the full-year projection and it seems especially bad in light of
earnings warning from two weeks ago. Coke Enterprises, the major bottler of Coke products, said that European sales softened because of the effect of the weak euro, and Canadian sales were also helping drag down North American volumes. Coke closed down 50 cents, or 0.9%, to $56.25; CCE was up 31 cents, or 1.7%, to $18.75.
Fourth-quarter aches and pains have become apparent at
, a maker of ergonomic products, which announced today that earnings will come in below Wall Street expectations. The pernicious slowing economy and soft sales were touted as major reasons why revenues would come in at $59 million, pretty much flat with the year-ago period.
Earnings per share, however, were not. CompX said earnings would come in between 23 and 25 cents a share, far lower that last year's 44 cents a share and an analyst's expectation of 35 cents a share.
And now there's a new sheriff in town. Brent Hagenbuch was named president and chief executive, replacing Joseph Compofelice, who resigned in October. CompX ended the day down $2.81, or 23.6%, to $9.13.
After spilling the 15th cup of coffee into a keyboard, many cubicle dwellers know that food and technology don't mix.
is the latest to learn that lesson, announcing that second-quarter profits fell 12.6% due to costs incurred by technology investments designed to extend the shelf life of its products.
The company said second-quarter earnings were impacted by $4 million due to spending on state-of-the-art equipment, which Dean Foods said will also impact the third and fourth quarters. The company said it was comfortable with fiscal 2001 estimates, however.
Second-quarter earnings came in at 66 cents a share, less than the year-ago 68 cents, but a penny better than the analysts' 65 cent estimate. Looking at the dollar amounts tells a better story. That 12% drop in profits represents the difference between this year's $23.6 million in earnings vs. last year's $27 million. Add in the $4 million from technology-related expenses and Dean would have been in line with last year. Dean Foods closed up 94 cents, or 3.4%, to $28.75.
Despite rising fuel costs,
reported second-quarter earnings per share of 67 cents, in line with the consensus of analysts polled by
First Call/Thomson Financial
The Memphis, Tenn.-based express delivery service also forecasted results for the remainder of the fiscal year that were above analysts' estimates except for the third quarter, which were slightly below expectations.
For the second quarter ended Nov. 30, FedEx reported revenue of $4.9 billion, a 7% rise over the $4.6 billion recorded in the year-ago quarter. Operating income of $345 million and net income of $194 million represented 13% increases over the year-ago numbers.
Fuel expenses were $78 million higher than in last year's second quarter, including the benefits of hedging. These costs were offset by strong growth in volume and yield, the company said. The company's fastest-growing segment, as forecast, was international priority shipping, which showed an 11% increase in volume. Average daily volume for FedEx's new home delivery service doubled from the end of the first quarter to the end of the second, as expected.
For the third quarter, FedEx said it expects earnings per share between 35 cents and 40 cents, vs. the analysts' consensus estimate of 41 cents. For the fourth quarter, the company foresees earnings of 90 cents to $1 per share, slightly higher than the 89 cents forecast by analysts. For the full year, FedEx expects earnings of $2.65 per share, well above the $2.54 foreseen by analysts. But FedEx cautioned that its outlook "depends on a soft landing for the economy." FedEx closed down 50 cents, or 1.3%, to $37.25.
made a big noise today, laying off 44% of its work force to focus on Internet Protocol-related voice products. All in all, there will be 100 fewer employees at the company, who will see its company rolls shrink to 125 from 225. The company also said it was selling its Live Communities/MPlayer business to privately held and sinister-sounding Gamespy Industries. HearMe said the restructuring could save up to $24 million in operating expenses in 2001, while improving gross margins to between 80% and 85%.
And along with that restructuring, or rather, the reason for it, was a fourth-quarter earnings warning. The company said that losses would come in between 19 and 22 cents a share, a bigger loss than the 17 cents expected by First Call/Thomson Financial. Revenues will come in between $3 and $3.3 million, just about half of last year's $6 million revenue. The company said 2001 revenues would come in between $10 and $12 million and 2002 should come in between $25 and $28 million.
Of course, that's if the company isn't delisted on the
. Yesterday, the stock traded below $1, the set limit needed to stay trading on the Nasdaq Stock Market. If the issue stays below a buck for 30 days, then that danger becomes very, very real. HearMe's stock closed today down 3 cents, or 3.9%, to 78 cents.
After Tuesday's Close
posted fourth-quarter earnings of 60 cents a share, missing by a penny the three-analyst estimate, but up from year-ago earnings of 55 cents a share. Earnings for the full year came in at $1.85, which was in line with estimates.
The company said its elevator, janitorial and lighting divisions all achieved significant growth in fiscal 2000. ABM closed down 25 cents, or 0.8%, to $30.81.
Specialty metals producer
warned that fourth-quarter earnings will come in at 32 cents a share, well below the eight-analyst estimate of 45 cents, because of higher energy costs and the impact of a slowing U.S. economy on its commodity business. Allegheny Tech ended the day down $2.56, or 16.5%, to $13.
said it would restructure its video entertainment business and take an after-tax $350 million to $375 million charge to earnings beginning in the fourth quarter.
The Atlanta-based Baby Bell, which in May announced a deal with
, a unit of
, to expand its satellite TV services beyond the Southeast, said it will move away from that business and instead focus on its fiber optic-based video operations. The company said it had reached an agreement with
Dish Network to serve its existing residential satellite video customers beginning in January.
The move is intended to "better align" resources with the company's priorities in broadband services, including the accelerated rollout of DSL high-speed Internet services, the company said. A "significant" portion of the charge would be recognized in the fourth quarter and the remainder in 2001, the company added. BellSouth closed down 31 cents, or 0.8%, to $40.94; EchoStar was down $1.25, or 5.2%, to $22.75.
warned of lower-than-anticipated fourth-quarter revenue and earnings due to reduced spending by Internet service providers and e-commerce sites.
The San Jose, Calif.-based provider of networking systems said earnings are expected to be between 11 cents and 14 cents per share on revenue of $100 million to $110 million. Thirteen analysts surveyed by First Call/Thomson Financial expected earnings of 24 cents per share. Eleven analysts had a consensus revenue estimate of $129 million.
The company had previously reduced its fourth-quarter outlook, and said the latest reduction reflects "a shift over the last few weeks in the pattern of communications infrastructure capital spending." Foundry will provide guidance for the 2001 fiscal year when it announces year-end 2000 results on or about Jan. 16, 2001. As noted above, Foundry ended the day down
, lower by $17.63, or 57.6%, to $13.
, which makes industrial products, warned that its fourth-quarter would fall below estimates. It's now expecting earnings in a range of 42 cents to 46 cents a share, missing the current five-analyst estimate of 55 cents and below year-ago earnings of 46 cents a share.
The company also said that it expects first-quarter 2001 earnings to be 5% to 10% lower than the year earlier. However, it said full-year earnings for 2000 should still be 13% to 15% above last year's earnings of $1.81 a share. Idex closed down $1.50, or 4.5%, to $31.56.
, a provider of electronics manufacturing services, said first-quarter income rose to 24 cents a share, from 17 cents a share, excluding a charge, for the same period a year ago. The 23-analyst estimate expected the company to earn 28 cents a share in the latest first quarter.
Jabil, which is based in St. Petersburg, Fla., said "while our earnings for the first fiscal quarter were impressive on a year-over-year basis, they did not meet our sequential growth expectations. During the quarter we were faced with unanticipated shortages of certain key components that prevented us from achieving our original goals."
The company expects customer inventory adjustments to lead to an 11% sequential decline in operating income for the second fiscal quarter. Jabil is targeting a sequential operating income increase of 32% in the fiscal third quarter, a 16% sequential increase in the fourth quarter and a 33% operating income increase for fiscal 2001.
Wall Street expects Jabil to earn 28 cents a share in the second quarter and $1.16 for the year. Jabil ended the day down $6.81, or 24.5%, to $21.
Whoa! Did you say you
did indeed. The office furniture maker posted second-quarter earnings of 54 cents a share, 2 cents better than the 10-analyst estimate and up from year-ago earnings of 41 cents a share. It even went a step further to say its earnings would be in the range of 43 cents to 48 cents a share. The current nine-analyst estimate is 46 cents a share. The company said new orders and new products were the reasons for the boost. Herman Miller closed UP $1.80, or 7.9%, to $24.61.
Sneaker and athletic apparel maker
reported second-quarter earnings of 44 cents a share, meeting the 12-analyst estimate and up from year-ago earnings of 38 cents a share.
The company, which is based in Beaverton, Ore., said it is seeing "healthy growth that will help us achieve our previously stated goal of midteens earnings-per-share growth over last fiscal year." Analysts expect Nike to earn $2.36 a share for fiscal 2001. The company earned $2.07 a share in fiscal 2000. Nike also closed UP, higher by $1.56, or 3.3%, to $49.13.
, a developer of supply chain and electronic-business software, reported third-quarter earnings of 5 cents a share, excluding a noncash stock compensation gain, beating the First Call/Thomson Financial 11-analyst estimate of 3 cents a share. The company lost 9 cents a share in the year-ago period. Per-share figures reflect a 2-for-1 stock split that became effective Dec. 8. Despite beating estimates, Manugistics closed down $1.31, or 2.98%, to $42.75.
warned that its fourth-quarter earnings will come in between 5 cents and 10 cents, excluding a job cut charge. The eight-analyst estimate is currently 20 cents a share. The railroad operator said it will be hurt by a decline in car loadings due to a weak economy, as well as by high diesel fuel prices. Norfolk Southern closed up 6 cents, or 0.5%, to $13.50.
warned that its fourth-quarter loss will come in at 10 cents to 15 cents. The current First Call seven-analyst estimate is for a loss of 5 cents. The polymer services company cited continuing business slowdown for the miss. It said it remains optimistic about 2001 first-quarter earnings. PolyOne closed down 69 cents, or 12.9%, to $4.63.
, the holding company for electric utilities
United Illuminating and United Resources
, said it was cutting 2000 earnings as a result of outages at the Seabrook nuclear power plant. Outages at the plant, in which it has a 17.5% stake, will result in a charge of about 65 cents a share. UIL said 70% of the charges will be recorded in 2000, while the remaining 30% will hit 2001 earnings.
The company said it now expects earnings of $4.05 to $4.15 a share, down from an estimate of $4.25 to $4.35. The two-analyst estimate for the year is currently $4.25. UIL said it was on track to meet 2001 estimates of $4.05 to $4.25. The estimate is for $4.13 a share. UIL closed down 6 cents, or 0.1%, to $46.25.
lowered its sales and earnings expectations 10% to 20% for the fourth quarter because of customer order cancellations and extended deliveries.
The company now expects earnings to come in at a range of 96 cents to $1.08 a share. The seven-analyst estimate calls for Vishay to earn $1.20 a share. The electronic components maker earned 28 cents a share in the year-ago period.
The company, which is based in Malvern, Pa., added that fourth-quarter sales will be 5% to 7% lower than the $670 million recorded in the third quarter. Vishay also warned that, because of the softness in incoming orders, the company expects earnings for 2001 to come in below the expected 2000 totals. Analysts are calling for the company to earn $3.88 this year and $4.54 in 2001. Vishay closed down $3.75, or 20.1%, to $14.88.
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: DOWN to neutral from buy at
. Extreme closed down $17.44, or 35.9%, to $31.13.
: DOWN to buy from strong buy at
. Flagstar ended the day down $1, or 4.6%, to $21.
: DOWN to intermediate-term neutral from accumulate at Merrill Lynch; DOWN to neutral from accumulate at SG Cowen; DOWN to market perform from buy at
. As noted twice above, Foundry ended the day down
, lower by $17.63, or 57.6%, to $13.
: DOWN to accumulate at
; DOWN to neutral from accumulate at SG Cowen. As noted above, Jabil ended the day down $6.81, or 24.5%, to $21.
: DOWN to buy from strong buy at
Credit Suisse First Boston
, price target to $65 from $74. Linear Tech ended the day down $1.50, or 3.2%, to $46.
: DOWN to buy from strong buy at UBS Warburg. Muni Mae closed down 38 cents, or 1.6%, to $23.13.
: DOWN to neutral from accumulate at Merrill Lynch. Norfolk Southern closed up 6 cents, or 0.5%, to $13.50.
: DOWN to buy from strong buy at
; DOWN to accumulate at Prudential Securities, price target to $20 from $100. VerticalNet closed down 6 cents, or 1.2%, to $5.31.
: NEW hold at CSFB. Adobe closed down $6.75, or 10.6%, to $57.25.
: NEW hold at CSFB. Fiserv closed down $4.06, or 8.5%, to $43.50.
: NEW accumulate at Prudential Securities; price target: $23. Genzyme closed down $1.88, or 10.99%, to $15.19.
: NEW buy at UBS Warburg. Imclone Systems closed down $5.25, or 13.1%, to $34.88.
: NEW hold at Prudential Securities; price target: $75. Merrill closed down $1.13, or 1.8%, to $62.75.
: NEW strong buy at UBS Warburg. Tanox closed up 19 cents, or 0.5%, to $35.13.
: NEW buy at UBS Warburg. The stock closed down $1.06, or 2.5%, to $41.56.
Totally rad! CSFB started a wide array of heavy metal companies with hold ratings.
Reliance Steel & Aluminum
were the exceptions, both receiving buy ratings from analyst Scott Morrison, who gave Alcoa a price target of $43 and Reliance a price target of $34. Alcoa closed down $2.06, or 6.2%, to $31.44; Reliance was down $1.38, or 4.2%, to $31.44.
The rest were started at hold. And here they are. Rock them like a hurricane:
- AK Steel (AKS) - Get AK Steel Holding Corporation Report. AK closed down 88 cents, or 9.7%, to $8.13.
Freeport-McMoran Copper & Gold (FCX) - Get Freeport-McMoRan, Inc. Report. The stock closed up 19 cents, or 2.3%, to $8.31.
Inco (N) . Inco closed up 19 cents, or 1.2%, to $16.18.
Phelps Dodge (PD) - Get PagerDuty, Inc. Report. Phelps Dodge ended the day down $1.25, or 2.3%, to $54.
Nucor (NUE) - Get Nucor Corporation Report. Nucor closed down $2.69, or 6.8%, to $36.69.
Worthington Industries (WOR) - Get Worthington Industries, Inc. Report. Worthington closed down 44 cents, or 5.9%, to $6.94.
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Offerings and stock actions
Whatever windfalls you expected from that
dividend just turned into a soft breeze. Today, the banker halved its annual dividend to 96 cents a share from $1.92 a share, in order to generate more capital. First Union said this cut will generate $5 billion in capital over the next five years.
"Our primary goal is to execute shareholder value, and a strong balance sheet is the foundation for achieving this objective," said Ken Thompson, president and CEO. "This is a prudent step that will enable First Union to significantly improve our capital ratios over time, and it brings our dividend payout ratio back in line with industry averages."
These capital concerns over at First Union should raise a few eyebrows. Just about a month ago,
, a manufacturer of Mr. Coffee brand coffee filters and Coleman camping equipment,
defaulted on a loan and left some of the biggest names in the banking industry holding the bag. First Union was burned on the deal, along with
Bank of America
Morgan Stanley Dean Witter
. In total this trio lent $1.7 billion to Sunbeam, as fears grew that there were other bad loans out there.
And over at First Union, there might be.
, another First Union loan customer, filed or bankruptcy in mid-November.
First Union closed down $1.31, or 4.7%, to $26.81; Sunbeam was flat at 38 cents; BAC closed down $1.50, or 3.4%, to $42.75; and MWD was down 44 cents, or 0.6%, to $68.56.
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announced it filed a patent infringement lawsuit against
Fusion Medical Technologies
, alleging that three of Fusion's products use its methods in production. The three products affected are FloSeal Matrix Hemostatic Sealant, Proceed Hemostatic Sealant and FloSeal. Cohension means business too, saying it expects to spend a half million bucks on legal fees through the end of its fiscal year on June 30. Cohesion closed down 13 cents, or 2.2%, to $5.63; Fusion was down $2.16, or 39.7%, to $3.28.
announced that current president and CEO Robert Cremin will succeed Wendell Hurlbut as chairman. How about that! Esterline closed down 50 cents, or 2.3%, to $21.38.
Research in Motion
announced that it will be licensing
Code Division Multiple Access technology, or CDMA, in order to develop new products and services for cellular and digital customers. You see, RIM makes two-way wireless devices that work like a walkie talkie and are based on radio modems, not the standard digital or even cellular format. By licensing CDMA, via this multimillion dollar royalty agreement, RIM hopes to be able to expand its line into both CMDA and PCS digital networks. Research in Motion closed down $5.75, or 7.1%, to $75; Qualcomm was down $6.31, or 7.6%, to $77.13.
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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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