
Thursday's Company Report: WB, STI, DRIV, IMC, IDTC, VISX, More
Wachovia
(WB) - Get Weibo Corporation Report
shed 13 1/8, or 18.7%, to 57 1/16 after it warned investors that it would miss second-quarter and fiscal 2000 consensus estimates. The second-quarter, 18-analyst estimate expects the company to post a $1.34 profit, while the fiscal 2000 20-analyst estimate forecasts a $5.46 profit. The regional bank blamed the shortfall on rising interest rates.
Salomon Smith Barney
cut its rating on Wachovia to neutral from outperform.
Other regional banks were under pressure from the news, with
Suntrust
(STI) - Get SunTrust Banks, Inc. Report
down 4 5/16, or 7.4%, to 53 7/8, and
National City
(NCC)
dropped 1 3/16, or 6.2%, to 18.
Mergers, acquisitions and joint ventures
America Online
(AOL)
added 2 1/16 to 54 1/2 after it said it will give users mobile Internet access through Internet-ready phones from
Sprint PCS
TheStreet Recommends
(PCS)
. Sprint PCS climbed 1 5/16 to 62 7/16.
Bellsouth
(BLS)
dropped 13/16 to 46 5/8 after its Mobility DCS unit said it had awarded
Nortel
(NT)
a three-year $200 million contract to build a next- generation wireless network in the southeastern U.S. Nortel climbed 1 7/16 to 65 13/16. The network will be supplied with Nortel's S8000 GSM base transceiver stations, DMS-MSC digital mobile switching and network management equipment.
Brown-Forman
(BF.B) - Get Brown Forman Inc Class B Report
climbed 9/16 to 57 3/4 after it said it will form a joint venture with Finnish state-owned alcohol group
Altia
to market its
Finlandia Vodka
brand worldwide, according to
Reuters
.
Altia said Brown-Forman paid $83 million for a 45% stake in the newly formed group
Finlandia Vodka Worldwide
. Altia will own the other 55%.
Gallaher Group
, a London tobacco company, said it has entered a $390.5 million cash deal to buy the Russian cigarette company
Liggett-Ducat
. The terms call for Gallaher to purchase Liggett-Ducat from the
Vector Group
(VGR) - Get Vector Group Ltd. Report
, a U.S. holding company, and take on $56.4 million of Liggett-Ducat's debt as of March 31, 2001. Vector gained 1 5/8, or 10.1%, to 17 11/16.
Verizon Wireless
named
Lucent
(LU) - Get Lufax Holding Ltd American Depositary Shares two of which representing one Report
its primary supplier of network infrastructure in a deal expected to be worth up to $1.5 billion. The proposed deal will allow the largest U.S. wireless carrier to increase its coverage and capacity in key markets. Lucent lifted 3 1/16, or 5.4%, to 59 11/6.
The parties expect to enter into a purchase agreement, which will develop the existing relationships between Lucent and Verizon Wireless. Verizon is the venture that resulted from the merged U.S. wireless businesses of
Bell Atlantic
(BEL)
and
Vodafone AirTouch
(VOD) - Get Vodafone Group Plc Report
.
Separately, Lucent is reviewing a possible spinoff for its microelectronics division, which according to analysts, could be valued at more than $50 billion,
The Wall Street Journal
reported.
Motorola
(MOT)
,
Symbol Technologies
(SBL)
and
Connect Things
, an
Ericsson
(ERICY)
affiliate, agreed to invest $500 million in a new company that would add scanning technology to Web shopping over wireless and Internet-enabled products. The technology will allow Motorola and other mobile phone companies to make cable TV set-top terminals to access the Web through Symbol bar code scanning technology. Motorola moved up 1 13/16, or 5.6%, to 34 3/8, Symbol sailed up 6 3/8, or 11.7%, to 59 and Ericsson slipped 5/8 to 21 5/8.
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Earnings/revenue reports and previews
Corel
(CORL)
slipped 1/4, or 6.2%, to 3 25/32 after it warned investors it would report soft second-quarter revenue as well as a loss for the quarter. The floundering Canadian software maker said it expects revenues between $37 million and $38 million and a loss between $22 million and $24 million. The two-analyst estimate forecasted the Corel to post a second-quarter loss of 32 cents.
Digital River
(DRIV) - Get Global X Autonomous & Electric Vehicles ETF Report
, an e-commerce services provider, dropped 2 1/2, or 24.4%, to 7 3/4 after it said it saw second-quarter sales in the range of $30 million to $30.5 million, below Wall Street's forecast due to an especially slow period for its software services unit.
However, the company said it should "meet or better" the
First Call/Thomson Financial
consensus loss per share estimate of 40 cents a share for the quarter, compared to a loss of 27 cents a share in the same year-ago period.
H.J. Heinz
(HNZ)
added 13/16 to 40 7/16 after it posted fourth-quarter earnings of 63 cents a share, in line with the 12-analyst estimate and up from the year-ago 60-cent profit.
International Flavors & Fragrances
(IFF) - Get International Flavors & Fragrances Inc. Report
dropped 2 1/4, or 6.6%, to 32 after it said it expects its earnings for the second quarter and the year to be lower than expected.
The company said it anticipates sales to decline about 1% and to be comparable to 1999's sales levels. It's now expecting second-quarter earnings of the same as the year-ago 48 cents a share, which would miss the four-analyst estimate of 53 cents.
International Multifoods
(IMC)
climbed 2 11/16, or 20.4%, to 15 7/8 after it reported first-quarter earnings of 25 cents a share, in line with the four-analyst estimate and a penny better than the year-ago report.
Telecommunications company
IDT
(IDTC)
popped 3 5/8, or 12.9%, to 31 13/16 after it posted a third-quarter operating loss of 12 cents a share, well below the two-analyst estimated profit of 8 cents and the year-ago earnings of 7 cents. The loss came despite a year-over-year jump in revenue (revenue did decline sequentially), while net income benefited from an investment gain.
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Analyst actions
LTV
(LTV)
was unchanged at 2 7/8: second-quarter loss estimate WIDENED to 38 cents from a loss of 15 cents on lost sales at
Salomon Smith Barney
.
Dow component
Coca-Cola
(KO) - Get Coca-Cola Company (The) Report
was upgraded this morning to buy from outperform at
Salomon Smith Barney
. Coca-Cola popped 2 11/16, or 5%, to 55 11/16.
Upgrades
U.S. Bancorp
(USB) - Get U.S. Bancorp Report
: DOWN to maintain from buy at
A.G. Edwards
; 2000 EPS estimate down to $2.20 from $2.30; 2001 EPS view DOWN to $2.40 from $2.54. U.S. Bancorp declined 1 3/8, or 5.9%, to 21 5/8.
Business Objects
(BOBJ)
: UP to strong buy from accumulate at
Prudential
. Business Objects declined 5/16 to 91 1/2.
Conexant
(CNXT) - Get VanEck Vectors ChinaAMC SME-ChiNext ETF Report
: UP to strong buy from outperform at
Morgan Stanley Dean Witter
; price target: 100. Conexant jumped 6 1/2, or 15.6%, to 48.
Corning
(GLW) - Get Corning Incorporated Report
: price target UP to 270 from 230 at
Donaldson Lufkin & Jenrette
. Corning leaped 11 1/4 to 248 1/4.
Payless Shoesource
(PSS)
: target price UP to 68 from 60 at Prudential. Payless Shoesource edged up 1 13/16 to 54 13/16.
St. Jude Medical
(STJ)
: UP to outperform from hold at
ABN Amro
; price target: 50. St. Jude Medical bounced 1 1/2 to 42 1/2.
Visx
(VISX)
: UP to market outperformer from market performer at
Goldman Sachs
. Visx climbed 2 7/8, or 11%, to 29.
Downgrades
Flow International
(FLOW) - Get SPX Flow, Inc. Report
: DOWN to hold from buy at ING Barings. Flow International slipped 1/8 to 10 15/16.
Wrigley
(WWY)
: DOWN to hold from accumulate at Prudential. Wrigley slid 2 1/8 to 81.
Initiations
Breakaway Solutions
(BWAY) - Get BrainsWay Ltd. Report
: NEW buy at DLJ; price target: 50. Breakaway Solutions shed 1 3/8 to 34.
HCA-Healthcare
(HCA) - Get HCA Healthcare Inc. Report
: NEW strong buy at
Deutsche Banc Alex. Brown
; price target: 40. HCA-Healthcare edged up 5/8 to 28 3/4.
IDX Systems
(IDXC)
: RESTARTED as buy at
SG Cowen
. IDX Systems stumbled 5/32 to 14 21/32.
Infocure
(INCX)
: RESTARTED as strong buy at
SG Cowen
. Infocure bounced 1 3/16, or 19%, to 7 7/16.
Pactiv
(PTV)
: NEW market outperformer at Goldman Sachs. Pactiv lost 1/2, or 5.3%, to 8 13/16.
Symyx
(SMMX)
: NEW buy at CSFB; price target: 80. Symyx bounced 1 7/8, or 5.6%, to 35 1/4.
Group Moves
Banc of America
initiated coverage of several biotech companies:
- Amgen (AMGN) - Get Amgen Inc. Report at buy; price target: 82. Amgen climbed 2 1/8 to 66 7/16.
Biogenundefined at market performer. Biogen added 1/16 to 57.
Genentech (DNA) at buy; price target: 167. Genentech tumbled 3 7/8 to 137 1/2.
Gilead Sciences (GILD) - Get Gilead Sciences Inc. Report at buy; price target: 84. Gilead Sciences tacked on 1 11/16 to 64 3/8.
Idec Pharmaceuticals (IDPH) at strong buy; price target: 139. Idec Pharmaceuticals moved up 5/16 to 97 7/8.
Immunex (IMNX) at strong buy; price target: 51. Immunex mounted 3 1/16, or 8.9%, to 37 7/16.
MedImmune (MEDI) at buy; price target: 77. MedImmune bounced 1 3/16 to 65 13/16.
Prudential Securities
initiated coverage of several Web hosting firms, Internet service providers and application service providers:
- PSINet (PSIX) at accumulate; price target: 45. PSINet was unchanged 30 1/8.
Navisite (NAVI) - Get Navient Corporation Report at accumulate; price target: 66. Navisite edged up 5/8 to 45 9/16.
USInternetworking (USIX) at strong buy; price target: 42. USInternetworking added 1 13/16, or 9.8%, to 20 5/16.
Digex (DIGX) at strong buy; price target: 102. Digex advanced 3 3/8, or 5.1%, to 69 3/8.
Exodus Communications (EXDS) at strong buy; price target: 149. Exodus Communications lifted 4 3/4, or 5.3%, to 93 1/8.
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Offerings and stock actions
ICN Pharmaceuticals
(ICN)
dropped 6 13/16, or 19.9%, to 27 1/2 after it said its board approved a plan to divide the drugmaker into three publicly traded companies, one to be based in Moscow and not traded in the U.S. The firm said ICN would be the parent company and that Chairman and CEO Milan Panic will also be the chairman of the other two companies. Another company will be named Ribapharm and will encompass ICN's research and development activities, while the Moscow company will be called ICN International and will include ICN's operations in Eastern and Western Europe and the Pacific Basin.
Kansas City Southern Industries
(KSU) - Get Kansas City Southern Report
, a railroad and financial services company, popped 7 3/8, or 9.6%, to 84 1/16 after it said its board favored the spinoff of its financial services arm, which includes the
Janus
mutual fund group. According to the terms, Kansas City Southern shareholders would receive two shares of the spinoff,
Stilwell Financial
, for every Kansas City Southern share they owned as of June 28. Kansas City Southern will distribute about 222.8 million shares of the spinoff. Stilwell will trade on the
New York Stock Exchange
, under the symbol "SV".
Target
(TGT) - Get Target Corporation Report
tacked on 1 13/16 to 59 13/16 after it set a 2-for-1 stock split.
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Miscellany
Meritor Automotive
(MRA)
added 1/8 to 12 3/4 after it said it will lay off nearly 3% of its workforce and take a third-quarter, after-tax charge of about $16 million, or 26 cents a share, as part of a worldwide restructuring.
The government requested that a federal appeals court disregard
Microsoft's
(MSFT) - Get Microsoft Corporation Report
argument to suspend last week's decision to split the company, reported
The Wall Street Journal
. Microsoft moved up 1 7/8 to 72 3/8.
The British energy regulator
Ofgem
launched a formal investigation to see whether a decision by
Edison International's
(EIX) - Get Edison International Report
Edison Mission Energy unit to withdraw 500 megawatts of generating capacity from a power station in northwest England was actually market abuse. Edison was unchanged at 21 3/4.
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