Midday Movers: Financials, Eastman Chemical Getting Battered at Midday
A stronger-than-expected Employment Cost Index report proved painful for financial stocks, which spent a good part of this week trying to climb. American Express (AXP) - Get American Express Company Report was sliding 2 13/16 to 160 1/8, while J.P. Morgan (JPM) - Get JP Morgan Chase & Co. Report was off 3 11/16 to 121 15/16, both weighing heavily on the Dow Jones Industrial Average.
Mergers, acquisitions and joint ventures
Mannesmann
(MNNSY)
is in early talks about taking a minority stake in
AOL Europe
, the Friday edition of the
Financial Times
reported. AOL Europe is half owned by
America Online
(AOL)
and half by German media group
Bertelsmann
. While an equity stake in AOL Europe would not block
Vodafone AirTouch's
(VOD) - Get Vodafone Group Plc Report
offer, it would help Mannesmann's arguments that it could become dominant in the European Internet market, the
TheStreet Recommends
Times
said. Shares of AOL were sliding 1 7/8 while Vodafone was off 9/16 to 55 3/8.
The government has decided to postpone a decision on whether to block
BP Amoco's
(BPA)
$30 billion takeover of
Atlantic Richfield
(ARC) - Get ARC Document Solutions Inc. Report
after the companies made a new offer to divest further assets,
The New York Times
reported, citing people involved in the discussions. BP Amoco inched up 3/16 to 54 5/16 while Atlantic Richfield added 2 3/8 to 78 3/4.
The
Times
reported that the
Federal Trade Commission
had been poised to approve a staff recommendation to seek a court order to block the merger at a hearing of the FTC commissioners Friday morning. However, after a new plan was pushed forth by BP Amoco's CEO in a talk with the FTC chairman, the agency agreed to hold off the meeting until Monday to spend some time looking at the proposal, the
Times
reported.
Merger partners
Bell Atlantic
(BEL)
and
GTE
(GTE) - Get Gran Tierra Energy Inc. Report
said after yesterday's close that it has offered, as expected, to spin off most of GTE's Internet business to gain regulatory approval for their deal. Bell fell 3/8 to 57 7/8 while GTE lost 5/16 to 68 5/16.
Separately, Bell Atlantic said it won a contract worth up to $1.4 billion from the
Government Services Administration
, to provide telecommunication services to U.S. federal government agencies in the Washington area.
CBS'
(CBS) - Get CBS Corporation Class B Report
talks to buy
Chris-Craft Industries
(CCN)
, a TV station group, are intensifying again,
The Wall Street Journal
reported, citing people familiar with the matter. CBS dropped 3 5/16, or 5.3%, to 58 5/8, while Chris Craft slipped 5/16 to 74 11/16. The newspaper reported that the deal could be valued at as much as $3.5 billion. The newspaper reported that CBS, which has agreed to be bought out by
Viacom
(VIA) - Get Via Renewables Inc. Report
, is pursuing the deal on behalf of both the companies. Shares of Viacom slipped 2 7/8 to 56 3/4.
The CBS-Chris-Craft talks were also highlighted in an item in the Inside Wall Street column in
Business Week
, the column penned by Gene Marcial. Marcial wrote that CBS is getting close to a deal with Chris-Craft. The column cites Mario Gabelli, whose firm owns about 15% of Chris-Craft shares, as figuring Chris-Craft's stock would be worth at least $3.3 billion in a takeover, or $80 a share. Chris-Craft closed yesterday at 75.
Leapnet
(LEAP)
slipped 5/8 to 6 1/8 after it said it has agreed to acquire
SPR
(SPRI)
. SPR climbed 3/16 to 5 15/16.
Ziff-Davis
(ZD) - Get Ziff Davis Inc. Report
, parent of
ZDNet
(ZDZ)
, said it plans to ditch ZDNet's tracking-stock status and make it a stand-alone independent Internet company. Shares of Ziff-Davis inched up 1/8 to 18 15/16 while ZDNet was falling 13/16 to 29 1/4.
The tracking-stock structure will be scuttled by merging Ziff-Davis into a newly formed subsidiary, so that all current holders of Ziff-Davis and ZDNet stock will hold their investments through a single class of ordinary common stock. The surviving company will be renamed ZDNet Inc., and Ziff-Davis expects to complete the merger in the second quarter.
Earnings/revenue reports and previews
(
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
)
Eastman Chemical
(EMN) - Get Eastman Chemical Company Report
lost 3 3/8, or 7.9%, to 39 7/16 after it posted fourth-quarter earnings of 20 cents a share, far short of the 11-analyst estimate of 37 cents, but up from the year-ago 14 cents.
Ericsson
(ERICY)
popped 5 7/8, or 9%, to 71 1/2 after it posted net income in the fourth quarter of a little more than $730 million, up from the year-ago total of nearly $550 million. The company said it expects sales to rise by more than 20% in 2000 and substantial growth in earnings.
Gillette
(G) - Get Genpact Limited Report
lost 1 1/8 to 38 5/8 after it posted, after yesterday's close, fourth-quarter earnings of 32 cents a share, in line with the lowered 13-analyst
First Call/Thomson Financial
estimate, but down from the year-ago 39 cents. Fourth-quarter sales were $3.03 billion, down 4% from $3.17 billion in the year-ago period. Gillette said that excluding unfavorable foreign exchange rates, sales were "virtually unchanged" compared with the year-ago period.
Lockheed Martin
(LMT) - Get Lockheed Martin Corporation Report
lost 1/8 to 19 5/16 after it posted fourth-quarter earnings excluding items of 59 cents a share, in line with the 14-analyst estimate, but down from the year-ago earnings of 75 cents a share, which excludes items. In addition, Lockheed's board approved management's recommendation to cut the dividend to a quarterly payment of 11 cents a share from 22 cents, payable March 31, to shareholders of record on March 6.
TheStreet.com/NYTimes.com
joint newsroom wrote about Lockheed's restructuring plans in a story
yesterday.
WPS Resources
(WPS) - Get iShares International Developed Property ETF Report
slipped 3/16 to 25 13/16 after it posted fourth-quarter earnings of 48 cents, missing the five-analyst estimate of 51 cents, but up from the year-ago 24 cents.
In other earnings news:
Offerings and stock actions
Allegiance Telecom
(ALGX)
dropped 4 7/8 to 106 1/8 after it priced a 10 million-share offering at $105 a share.
Anadigics
(ANAD)
jumped 5 3/8, or 7%, to 82 1/2 after it said it set a 3-for-2 stock split. The company posted fourth-quarter earnings of 22 cents a share, beating the seven analyst estimate of 16 cents and up from the year-ago loss of 26 cents.
Westwood One
(WON)
climbed 7/8 to 65 7/16 after it set a 2-for-1 stock split.
Analyst actions
PaineWebber
started coverage of
Amazon.com
(AMZN) - Get Amazon.com Inc. Report
with a neutral rating and set a price target of 74. Shares of Amazon.com were stumbling 6 9/16, or 9.8%, to 60 7/16.
Banc of America
cut its rating on
Associates First Capital
(AFS)
to market performer from buy. Shares of Associates First Capital were skidding 2 1/4, or 10%, to 20 1/18.
Credit Suisse First Boston
raised its first-quarter loss estimate on
Autoweb
(AWEB)
to 49 cents a share from 37 cents. Shares of Autoweb were sliding 3/16 to 10 5/16.
Deutsche Banc Alex. Brown
upped its rating on
Bowater
(BOW)
to strong buy from buy. Shares of Bowater were hopping 3 3/8, or 6.6%, to 54 3/8.
US Bancorp Piper Jaffray
upped its rating on
Cerner
(CERN) - Get Cerner Corporation Report
to strong buy from buy. Shares of Cerner were lifting 2 15/16, or 15.4%, to 22 1/4.
Lehman Brothers
upped its price target on
Comverse Technology
(CMVT)
to 175 from 150. Shares of Comverse Technology were gaining 7 5/8, or 5.4%, to 144.
PaineWebber
rolled out coverage of
Fogdog
(FOGD)
with a buy rating and a price target of 20. Shares of Fogdog were bouncing 15/16, or 9.2%, to 11 1/16.
Bear Stearns
raised its fiscal 2000 loss estimate for
Digital River
(DRIV) - Get Global X Autonomous & Electric Vehicles ETF Report
to $1.44 a share from 66 cents. Shares of Digital River slipped 1 7/8, or 5.8%, to 30 7/16.
CSFB raised its rating on
Documentum
(DCTM)
to a buy rating and set a price target of 75.
Morgan Stanley Dean Witter
raised its rating on the stock to outperform from neutral. Shares of Documentum were tacking on 10 1/4, or 17.8%, to 67 5/8.
CSFB upped its fiscal 2000 EPS estimate on
Electroglas
(EGLS)
to $2.20 a share from $1.15. Shares of Electroglas were climbing 1 3/4, or 5.8%, to 32 1/8.
ING Barings
upped its rating on
Guidant
(GDT)
to strong buy from buy. Shares of Guidant were moving up 4 7/16, or 9.5%, to 50 3/4.
CSFB upped its price target on
Informatica
(INFA)
to 147 from 72. Shares of Informatica were losing 12 3/4, or 12.2%, to 91 1/4.
CSFB raised its fiscal 2000 loss estimate on
InterTrust Technologies
(ITRU)
to $1.08 a share from 89 cents and its fiscal 2000 loss estimate to 47 cents a share from 26 cents. Shares of InterTrust Technologies were tacking on 2 1/4 to 174 13/16.
Robertson Stephens
raised its fiscal 2000 EPS estimates on
Silicon Image
(SIMG)
to 10 cents a share and its fiscal 2001 estimates to 34 cents a share from 23 cents. Shares of Silicon Image were bouncing 8 1/4, or 10.3%, to 88.
Goldman Sachs
raised its rating on
Telecom Italia
(TI)
to market outperform from market performer. Shares of Telecom Italia were edging up 7/8 to 164.
Merrill Lynch
upped its fiscal 2000 estimates on
Transwitch
(TXCC)
to 54 cents a share from 51 cents and set a 2001 EPS estimate of 85 cents a share. Merrill also upped its long-term rating on the stock to buy from accumulate. Shares of Transwitch were mounting 6 3/8, or 13.7%, to 54 1/2.
CSFB upped its fiscal 2000 EPS estimates on
Veritas Software
(VRTS) - Get Virtus Investment Partners Inc. Report
to 74 cents a share from 65 cents.
Goldman Sachs
added the stock to its recommended list, up from its market outperform rating. Shares of Veritas Software were climbing 2 1/16 to 159 1/4.
Goldman raised its loss estimates on
Webvan
(WBVN)
to 72 cents a share from 47 cents. Shares of Webvan were adding 1 13/16, or 13.3%, to 15 1/2.
Miscellany
In addition to the CBS/Chris-Craft item in the Inside Wall Street column in
Business Week
, the column offered up a bullish piece on Veritas Software. The column cites Jay Nakahara, technology research chief for
Invesco
, who says that despite Veritas' stock surge, he thinks the stock is still underpriced. According to the column, Nakahara expects Veritas to earn $200 million, or 75 cents a share in 2000, compared to Wall Street's expectation of $193 million, or 65 cents, and he sees the stock hitting 200 this year.
Elsewhere, the column offers up a positive story on
Mail.com
(MAIL)
. Shares of Mail.com were climbing 13/16, or 5.2%, to 16 5/16.
