Updated from 12:35 p.m.
The embattled market has been inundated with earnings warnings of late, but at least one company had something fresh to say.
Cash is flowing at
, a fact that has put a bit of spring back in Bernie Ebbers' step.
Presenting today at the
Global Communications Investor Conference in New York, the CEO of the nation's No. 2 telecom outfit said that business remains strong. Though Ebbers offered few details, his comments soothed investors who worried that WorldCom was poised to slash earnings and sales guidance.
Without offering specifics about the first quarter, Ebbers confirmed current estimates, which have the company making 26 cents a share, according to estimates from
First Call/Thomson Financial
. "We showed last quarter that we're not going to miss" earnings estimates, Ebbers said, referring to the company's as-expected fourth-quarter showing. "But we're not revising upward at this point."
"We're positioned to have a good 2001 and a better 2002," Ebbers said. "What we've seen so far of 2001 is very exciting." WorldCom closed up $1.25, or 8.2%, to $16.44.
And this might be good news for
, depending on how you see it. The company said today it's looking at strategic alternatives for its optical fiber unit, which includes possibly selling the unit. Today's announcement by the fiber-cable provider confirms
published reports that surfaced earlier this month.
The optical fiber unit that is on the selling block grew more than 60% in fiscal 2000 and executives described its performance as "stellar," Lucent said. The unit is in the midst of a $1 billion expansion program, part of which will enlarge its fiber manufacturing facility in Norcross, Ga. Lucent also recently opened a fiber cable manufacturing facility in Campinas, Brazil, to serve Latin America and the Caribbean.
Among those thought to be interested in bidding for the company are
Lucent said it plans to determine the fate of the optical fiber unit within a few months. The stock closed down 23 cents, or 2%, to $11.02; Corning was down 65 cents, or 2.6%, to $23.95; Alcatel was down $1.09, or 2.9%, to $35.93; JDS was up 13 cents, or 0.5%, to $24.56.
Earnings/revenue reports and previews
Some retailers and companies that produce consumer durables matched the usual slew of earnings warnings with more optimistic news.
stood by Wall Street estimates for the third fiscal quarter, but said earnings could take a bath for the entire year. The maker of bleach and other household products is comfortable with estimates of 44 cents a share for the third quarter, as listed by First Call. But Clorox, which is based in Oakland, Calif., lowered guidance for the entire year. Clorox closed up $1.52, or 4.8%, to $33.01.
posted fiscal third-quarter earnings that beat Wall Street estimates by a penny and said it is on track to produce double-digit earnings growth for the full year. General Mills closed down 84 cents, or 1.9%, to $43.30.
, citing lower sales due to consumer concerns over the European beef supply, slashed its earnings estimates for the first quarter this morning.
The fast-food giant's new estimates are 4 cents to 5 cents lower than previous forecasts, however, McDonald's also said it expects to return to double-digit earnings growth for the remaining nine months of the year as concerns about European beef diminish and weakened economies around the world perk up. McDonald's closed down 25 cents, or 0.9%, to $27.55.
Delta Air Lines
in warning about its first quarter. The Egan, Minn., carrier said earnings will fall short of Wall Street's expectations due to the weakening economy and a decline in corporate business travel.
For its first quarter ending March 31, Northwest expects to report a loss of $130 million to $150 million, or $1.55 to $1.80 a share, excluding one-time items, sharply higher than the 59 cent a share loss consensus estimate of 11 analysts surveyed by
First Call/Thomson Financial
. In the year-ago period, the air carrier lost 51 cents a share.
Earlier this month, Northwest faced a looming strike by mechanics as
contract talks stalled, but
intervened with an executive order preventing a strike for 60 days.
On Tuesday, Delta
warned its earnings would fall short of Wall Street forecasts in the first quarter, citing a reduced flight schedule, the weaker economy and customers wary of a possible pilot strike. Northwest Airlines closed down 94 cents, or 4.5%, to $19.75; Delta was down $1.59, or 3.8%, to $39.87.
reported fourth-quarter earnings that beat Wall Street's slightly lowered estimates by 2 cents, even though its
same-store sales slid 1% compared with a 2% increase in the year-ago period.
The company cited a "difficult external environment" and cautioned it may lower its 2001 guidance. Ross Stores closed down 69 cents, or 3.3%, to $20.13.
said its fourth-quarter earnings beat analysts' estimates by a penny and announced plans to repurchase up to $100 million of its shares. Talbots was down 90 cents, or 2%, to $43.70 for the day.
The retailer and catalog seller of women and children's clothing earned $33 million, or 51 cents a share, up from $15.3 million, or 24 cents a share, in the year-ago period. Fifteen analysts polled by First Call/Thomson Financial expected Talbots to earn 50 cents a share.
also beat the Street by a penny in the fourth quarter. Nevertheless, the retailer said growth would falter in the first half of its current fiscal year.
The retailer, which sells kitchen equipment and other housewares, earned $44.5 million, or 79 cents a share, compared with $48.7 million, or 82 cents a share, in the year-ago period. Eighteen analysts surveyed by First Call offered a consensus estimate of 78 cents. Williams-Sonoma closed up $2.45, or 9.3%, to $28.77.
After Tuesday's Close
posted fourth-quarter earnings Tuesday that beat Wall Street's estimates. Revenue and same-store sales both showed gains for the period. The department-store chain said it earned $178.5 million, or 52 cents a share, up from the $120.6 million, or 36 cents a share, in the year-ago period. Twenty-one analysts polled by
First Call/Thomson Financial
were calling for the company to earn 50 cents in the quarter.
Revenue for the 14-week quarter increased to $2.223 billion, from $1.608 billion during the comparable 13-week period last year. Net sales increased 33.8% over the prior year's quarter on a 13-week basis. Same-store sales jumped 12.5%.
The company also announced 2001 and 2002 expansion plans to open 130 new stores, in cities including Boston, Houston and Austin and El Paso, Texas. In 2003, the company plans to expand to Los Angeles.
In other stories covered by
Comverse Technology Beats Forecasts;
CMGI Meets Expectations but Posts Big Charge;
Saks Fourth-Quarter Meets Analysts' Expectations;
STMicroelectronics Expects to Meet First-Quarter Estimate;
Severe Weather Trims MetLife Earnings.
warned that it expects its fiscal fourth-quarter revenues to fall 15% from the third-quarter results. The company, which makes robotics for the manufacture of semiconductors, also said it was trimming its workforce by 17%. Asyst Tech closed down 38 cents, or 2.9%, to $12.63.
Harry Potter's publisher,
, reported earnings of 10 cents a share, topping the 8 cent estimate held by six analysts, according to First Call/Thomson Financial, and beating the year-ago's 6 cent result. The company's revenues rose to $433 million from 315 million a year ago. Scholastic closed up 50 cents, or 1.2%, to $42.13.
warned that the weak economy will cause a sales decline of between 6% and 9%, causing earnings to fall to between 58 cents and 62 cents a share from 66 cents a share a year ago, but still roughly in line with the First Call estimate of 60 cents a share. Stanley Furniture closed down 81 cents, or 3.1%, to $25.56.
warned that it expects first-quarter earnings to fall far below analysts' expectations. Citing a decline in shipments from the West Coast, Swift said it expects earnings to be about 10 cents short of expectations. Currently, the 11 analysts polled by First Call expect the company to earn 12 cents a share. Swift Transportation closed down $1.56, or 9.6%, to $14.69.
, a manufacturer of business forms, computer labels, machine ribbons, computer hardware and other office products, reported earnings of 42 cents for its fiscal second quarter, in line with the single-analyst estimate, according to First Call/Thomson Financial. Wallace Computer closed down 28 cents, or 1.6%, to $17.50.
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Credit Suisse First Boston's
note to investors this morning contained a few telling omens.
For one, the brokerage started covering
, rating the once-popular Internet name at hold. Analyst Anthony Lorenzo said earnings estimates and price targets for the company were under review, but did say that second-quarter revenue declined from the previous quarter and CMGI's $1 billion or so in cash will last for another 27 months. CMGI closed down 63 cents, or 16%, to $3.28.
And over at
, a 4-year-old stabbing has cost the company its chief operating officer. "Yesterday, Nortel announced that COO Clarence Chandran will take a six to 12 month medical leave of absence to recover from recent surgeries to address complications arising from a June 1997 stabbing in Singapore," wrote analyst James Parmelee, who said that CEO John Roth will pick up his duties. Unfortunately, that's pretty much par for Nortel's course this year. Not long ago, the company pretty much warned that 2001 would be a total washout. Nortel closed down $1.11, or 6.7%, to $15.37.
Elsewhere in the tech world, CSFB reiterated a strong buy rating and $170 price target on
, which closed at $59.13 yesterday. Analysts cited new partnerships as a major factor in the continued support. Veritas closed up 56 cents, or 0.95%, to $59.69.
continued to talk up the entertainment sector, especially the rock 'em-sock 'em, roller-coaster and chili-dogs sector. You know -- amusement parks. Stuart Linde, Lehman's analyst, reiterated his strong buy rating on
, calling the company "recession-proof." Six Flags closed down 47 cents, or 2.3%, to $19.78.
Other strong-buy rated companies in the note included
, which runs Avis Rent-A-Car, AmeriHost Inn, Days Inn, Howard Johnson, Ramada and Super 8. Oh, and Jackson-Hewitt tax preparation services. Analyst Jeff Kessler raised his six to nine month price target on the stock to $20 from $25. Cendant closed down 21 cents, or 1.5%, to $14.22.
Rounding out the batch of Lehman items was a reiteration of a strong buy for
Equity Office Products
, with the analyst flatly stating, "this is a compelling investment." For those of you with the "play at home" version -- Equity Office owns about 400 office buildings, including the landmark
Chicago Mercantile Exchange
building. Equity closed down 12 cents, or 0.4%, to $29.27.
And, like the Clampetts, Lehman was into black gold. It initiated coverage on three oil-tanker companies, starting
at buy and
at market perform, while recommending an overweight position in the sector based on attractive valuations. Lehman also liked big oil companies, citing
as strong buys.
Frontline ended the day down 56 cents, or 3.3%, to $16.56; Teekay closed down 86 cents, or 2.1%, to $41.19; OMI was down 35 cents, or 5.1%, to $6.55.
Pulling a switcheroo on its U.S. recommended for purchase list,
Atlantic Coast Airlines Holding
-- out with the old, in with the new. Comverse was taken off the list and rated at market outperform, while Atlantic Coast was added to the list from its market outperform rating.
Comverse closed down $3, or 4.3%, to $67; Atlantic Coast Airlines Holding was up $1, or 4.97%, to $21.13.
Goldie also dropped its rating on three companies, dropping
2001 earnings per share estimate to $2.20 from $2.25 after the insurer said that terrible weather would impact earnings. Wall Street's consensus is $2.24 a share.
2001 earnings target was dropped to $2.61 from $2.64, while
, which recently said it was comfortable with 2001 estimates, was cut to 53 cents from 57 cents. The new Bristol target is much higher than Wall Street's consensus of $2.42, while Vail's earnings forecast was dropped to consensus.
MetLife closed down $2.93, or 9.3%, to $28.75; Bristol Myers-Squibb was down $2.11, or 3.5%, to $58.89; and Vail Resorts was down 3 cents, or 0.1%, to $20.67.
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After Tuesday's Close
, a Virginia-based financial services company announced tonight that CEO Thomas Baker has resigned. Chief credit officer Richard Saunders was tapped by the company to serve as interim CEO. Guaranty Financial closed up 38 cents, or 5.2%, to $7.63.
announced tonight that it has recalled its meatless corn dogs (that's right, meatless), when it was learned that the corn dogs, under the "Loma Linda" and "Morningstar Farms" brands contained genetically created corn products not approved for human consumption. Kellogg's closed down 52 cents, or 1.9%, to $27.08.
announced that Pamela Kirby has been named the company's new CEO. Quintiles closed down 63 cents, or 3.8%, to $15.75.
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