Midday Movers: Earnings Mania Sweeps the Market and the Numbers Are Looking Good

Author:
Publish date:

The wild and wacky world of earnings season continued this morning and, in general, things looked pretty good out there. Such industry bigwigs as

Boeing

(BA) - Get Report

,

Chase Manhattan

(CMB)

,

Donaldson Lufkin & Jenrette

(DLJ)

,

E*Trade

(EGRP)

and

UAL

(UAL) - Get Report

all posted better-than-expected earnings.

This evening, it's

America Online's

(AOL)

and

IBM's

(IBM) - Get Report

turn.

Microsoft

(MSFT) - Get Report

was falling 5 15/16, or 5.1%, to 109 3/8 after it reported second-quarter earnings of 47 cents a share, which excludes a charge, up from the year-ago 36 cents. Including the charge, net income was 44 cents. The 3-cent charge is related to the settlement of a lawsuit filed against Microsoft by

Caldera

. The

First Call/Thomson Financial

24-analyst estimate projected the company would earn 42 cents.

Also, Microsoft filed its proposed conclusions of law in the

Justice Department's

antitrust case, arguing that the findings of fact issued by

Judge Thomas Penfield Jackson

in November don't amount to an antitrust violation. Earlier today,

Merrill Lynch

raised its fiscal 2000 EPS estimate on Microsoft to $1.69 per share from $1.60 and its fiscal 2001 estimates to $1.90 per share from $1.78.

Merrill Lynch upped its rating on

Terayon Communications Systems

(TERN)

to intermediate-term buy from accumulate and raised its fiscal 2000 EPS estimate 13 cents a share from a 6-cent loss and its 2001 estimate to 40 cents from 35 cents. Last night, the company's

fourth-quarter earnings report edged out the analysts' consensus number. Shares of Terayon were hopping 16 7/16, or 20.6%, to 95 7/8.

Mergers, acquisitions and joint ventures

Cisco

(CSCO) - Get Report

was lifting 1/4 to 112 3/8 after it said it is buying privately held

Altiga Networks

of Franklin, Mass., and

Compatible Systems

of Boulder, Colo., for a total of $567 million in stock.

Chevron

(CHV)

and

Ariba

(ARBA)

said they were teaming up to create an energy/business online marketplace. Shares of Chevron were sliding 1/4 to 88 9/16 and Ariba was popping 4 13/16 to 184 3/4.

Fertilizer producer

Agrium

said it would buy the agricultural products division of

Unocal

(UCL)

for $325 million in cash, shares and debt. Shares of Unocal was skidding 5/16 to 32 7/16.

Sun International Hotels

(SIH)

was advancing 3 1/2, or 18.1%, to 22 13/16 after it reported fourth-quarter earnings of 34 cents a share, beating the nine-analyst estimate of 31 cents but down from the year-ago 38 cents. The company said it received a $24-a-share cash offer from

Sun International Investments

, which currently owns 53% of the company.

VTech Holdings

is buying

Lucent Technologies'

(LU)

consumer telephone manufacturing assets for $113 million.

Volvo Aero

and

General Electric

(GE) - Get Report

said they have entered into a military cooperation deal involving engines for F-18 fighter jets. Shares of Lucent were edging up 1 1/16 to 51 5/8 and General Electric was mounting 1 3/8 to 149 3/8.

Warner-Lambert

(WLA)

has held preliminary talks with

Procter & Gamble

(PG) - Get Report

in an effort to find a white knight to hold off a hostile bid for it by

Pfizer

(PFE) - Get Report

,

The Wall Street Journal

reported. The discussions have centered on P&G potentially buying Warner and perhaps its merger partner

American Home Products

(AHP)

, the newspaper reported, citing people familiar with the situation. The

Journal

said it wasn't clear, however, the level of P&G's interest or whether the discussions are continuing. Also, Warner and AHP have approached

Bristol-Myers Squibb

(BMY) - Get Report

about a three-way deal, but Bristol-Myers wasn't interested, the newspaper said.

Meanwhile, Warner posted fourth-quarter earnings of 55 cents a share, ahead of the 23-analyst estimate of 52 cents and up from the year-ago 40 cents. Shares of Warner-Lambert were gaining 3 1/8 to 93 1/8 and Proctor & Gamble was falling 1 5/16 to 115 1/4, while Pfizer was tacking on 1/4 to 36 3/4. American Home shares were adding 3/4 to 44 15/16 and Bristol-Myers Squibb was declining 3/8 to 64 15/16.

Earnings/revenue reports and previews

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.

)

AMR

(AMR)

, the parent of

American Airlines

, was advancing 1/16 to 59 15/16 after it posted fourth-quarter earnings of 69 cents a share, beating the 11-analyst estimate of 61 cents a share but below the year-ago earnings of $1.00.

Ask Jeeves

(ASKJ)

was jumping 7 3/8, or 7.6%, to 103 3/8 after it reported a fourth-quarter loss of 56 cents a share, narrower than the three-analyst expected loss of 63 cents, but wider than the year-ago loss of 30 cents.

Chase Manhattan

(CMB)

was climbing 3 11/16, or 5.1%, to 74 11/16 after it posted fourth-quarter earnings of $1.97 a share, well above the 20-analyst estimate of $1.32. The company also set a $5 billion stock buyback.

Citrix Systems

(CTXS) - Get Report

was mounting 5 1/16 to 157 5/8 after it posted fourth-quarter earnings of 38 cents a share, a penny better than the 10-analyst estimate and up from the year-ago 27 cents. The company said its board approved a 2-for-1 stock split.

Donaldson Lufkin & Jenrette

(DLJ)

was skidding 1/16 to 49 11/16 after it reported fourth-quarter earnings of $1.35 a share, well above the eight-analyst estimate of $1.11 and the year-ago earnings of 47 cents.

E*Trade

(EGRP)

was losing 5/16 to 27 5/8 after it reported a first-quarter loss of 15 cents a share, narrower than the 13-analyst expected loss of 21 cents and the year-ago loss of 11 cents.

FleetBoston Financial

(FBF)

was adding 1/16 to 31 15/16 after it reported fourth-quarter operating earnings of 76 cents a share, a penny ahead of the 24-analyst estimate and up from the year-ago 65 cents.

Health Care Properties

(HCP) - Get Report

was slipping 1/16 to 25 1/8 after it posted fourth-quarter funds from operations of 82 cents a share, in line with the 10-analyst estimate and a penny better than the year-ago earnings.

Hertz

(HRZ)

was mounting 1 15/16 to 51 3/8 after it posted fourth-quarter earnings of 56 cents a share, beating the 10-analyst estimate of 52 cents and the year-ago earnings of 44 cents.

Honeywell

(HON) - Get Report

was sinking 4 7/8, or 8.2%, to 54 1/8 after it reported fourth-quarter earnings of 78 cents a share, in line with the 11-analyst estimate and up from the year-ago earnings of 69 cents.

Johnson Controls

(JCI) - Get Report

was declining 11/16 to 58 1/16 after it posted first-quarter earnings of $1.06 a share, a penny ahead of the five-analyst estimate and up from the year-ago 86 cents.

Knight/Trimark Group

(NITE)

was slipping 1/4 to 38 13/16 after it reported fourth-quarter net income of 50 cents a share, which includes a 4 cent reduction in earnings related to its acquisition of

Arbitrade Holdings

. The 11-analyst estimate called for Knight/Trimark to earn 40 cents. In the year-ago period, Knight/Trimark earned 17 cents.

Sabre Holdings

(TSG) - Get Report

was sliding 1 3/8 to 46 11/16 after it reported fourth-quarter earnings of 32 cents, in line with the five-analyst estimate and up from the year-ago 19 cents.

Spyglass

(SPYG) - Get Report

was climbing 5/8 to 52 3/4 after it reported a loss of 4 cents a share, which excludes a gain and a nonrecurring charge, narrower than the three-analyst estimate of a loss of 5 cents and narrower than the year-ago loss of 11 cents.

Summit Bancorp

(SUB) - Get Report

was tacking on 1/8 to 30 1/8 after it reported fourth-quarter earnings of 73 cents a share, a penny better than the 16-analyst estimate and up from the year-ago earnings of 67 cents.

Sysco

(SYY) - Get Report

was declining 5/16 to 38 13/16 after it reported second-quarter earnings of 31 cents, in line with the three-analyst estimate and up from the year-ago 26 cents.

UAL

(UAL) - Get Report

, parent of

United Airlines

, was slipping 3/8 to 61 5/16 after it said fourth-quarter fully distributed earnings came in at $1.91 a share, excluding onetime items, well above the 11-analyst estimate of $1.75 a share. However, the company said first-quarter fully distributed earnings were expected to range between 80 cents and $1.20 a share, which would fall below the current six-analyst estimate calling for UAL to earn $1.27 in the first quarter.

US Airways

(U) - Get Report

was gaining 9/16 to 25 11/16 after it reported fourth-quarter results of a 68-cent loss, wider than the 10-analyst estimate of a 63-cent loss and down from the year-ago $1.18 profit.

Vastar Resources

(VRI)

was falling 1/16 to 59 1/8 after it posted fourth-quarter earnings of 76 cents a share, beating the 11-analyst estimate of 72 cents and the year-ago 18 cents.

Wachovia

(WB) - Get Report

was popping 1 to 67 3/8 after it reported fourth-quarter earnings of $1.30 a share, in line with the 24-analyst estimate and up from the year-ago $1.19.

Offerings and stock actions

Ocean First Financial

(OCFC) - Get Report

was adding 3/8 to 16 1/2 after it said it intends to repurchase up to 1.26 million shares, or 10% of its outstanding common stock.

Analyst actions

Warburg Dillon Read

started coverage of

Accredo Health

(ACDO)

with a buy rating and a 12-month price target of 38. Shares of Accredo were mounting 2 1/4, or 7.4%, to 32 5/8.

Merrill Lynch

placed

Biogen

(BGEN)

on its Focus One list, stating that the stock "has one of the more compelling valuations among the big cap biotechs." Shares of Biogen were moving up 4 5/16, or 5.2%, to 86 3/4.

Warburg reiterated its buy rating and price target of 70 on

Citigroup

(C) - Get Report

. Shares of Citigroup were climbing 1 7/16 to 59 7/8.

Warburg raised its 2000 earnings view on

Champion International

(CHA) - Get Report

to $4.00 from $3.50. Shares of Champion were lifting 2 3/4 to 63 3/8.

Deutsche Banc Alex. Brown

raised earnings estimates on

Delta Airlines

(DAL) - Get Report

, while it lowered earnings estimates on

Continental Airlines

(CAL) - Get Report

and

Southwest Airlines

(LUV) - Get Report

for the quarters ending March.

Delta's third-quarter estimate was upped to $1.20 a share from $1.15.

Continental's first-quarter estimate was sliced to 20 cents a share from 65 cents.

Southwest's first-quarter estimate was lowered to 15 cents a share from 20 cents.

Shares of Delta were losing 3/4 to 51 3/8 and Continental was sliding 2 1/2, or 6.4%, to 36 1/16, while Southwest was declining 1/4 to 15 1/2.

Credit Suisse First Boston

rolled out coverage of

El Sitio

(LCTO)

with a strong buy rating and a price target of 35. Shares of El Sitio were gaining 2 1/2, or 7.3%, to 36 5/8.

Banc of America

downgraded shares of

Galileo Technology

(GALT) - Get Report

to buy from strong buy.

Credit Suisse First Boston

maintained its buy rating on the stock and raised its price target to 38 from 33. After yesterday's close, Galileo posted

fourth-quarter earnings a penny better than the analyst consensus number. Shares of Galileo were slipping 7 7/8, or 26.5%, to 21 7/8.

Warburg upped its 12-month price target on

Juniper Networks

(JNPR) - Get Report

to 155 from 128. Shares of Juniper Networks were adding 1/2 to 119 9/16.

Brown Brothers Harriman

raised its rating on

Rockwell

(ROK) - Get Report

to short-term buy from neutral. Shares of Rockwell were climbing 2 1/4 to 53.

Goldman Sachs

upped

Whirlpool's

(WHR) - Get Report

1999 earnings estimate to $5.35 a share from $5.25 and its 2001 EPS estimate to $6.30 from $5.95 a share. Shares of Whirlpool were tacking on 2 9/16 to 61 7/8.

PaineWebber raised its price target on

Xilinx

(XLNX) - Get Report

to 55 from 45. Shares of Xilinx were falling 1 3/4 to 46 7/8.

Miscellany

Beyond.com

(BYND) - Get Report

was adding 1/2, or 6.3%, to 8 3/8 after it said CEO and president Mark Breier resigned and named CFO Rick Neely as interim CEO. Beyond.com announced a restructuring and said it sees charges of $2 million to $3 million in the first quarter.

An arbitrator ruled that

Caterpillar

(CAT) - Get Report

misappropriated technology intended to reduce emissions of nitrogen oxides,

The Wall Street Journal

reported. According to the story, the arbitrator concluded Caterpillar engaged in "fraudulent and deceitful conduct" when it improperly patented and sought to market clean-fuel technology for diesel engines that belonged to

A-55

, a small Reno, Nev.-based company and former joint-venture partner of Caterpillar. Shares of Caterpillar was tacking on 1/16 to 50.

FDX

(FDX) - Get Report

, parent of

FedEx

, announced it's ditching the FDX name and going to go by FedEx from now on. The company also announced a new low-cost residential delivery service,

FedEx Home Delivery

, which it plans to begin in many major U.S. markets in March. Shares of FDX were rising 3/4 to 44 15/16.

Wallace Computer Services

(WCS)

was adding on 1/8 to 16 1/16 after it said chairman and CEO Robert Cronin, 55, is immediately retiring from the company and board of directors for personal reasons. President and COO Michael Duffield will assume interim responsibilities as CEO.

The Heard on the Street column in the

Journal

took a look at the

New York Stock Exchange's

future prospects as it faces increasing competition from electronic communications networks. At a recent closed-door meeting in New York, with no Big Board officials present, a group of senior executives culled from various Wall Street firms and mutual funds discussed how the stock market's structure will evolve as a growing number of trades are done electronically by both individual investors and large brokerage firms.