Midday Movers: Lucent Showing a Little Life, Boston Scientific Suffering After Downgrade
Lucent Technologies
(LU) - Get Lufax Holding Ltd American Depositary Shares two of which representing one Report
was lately inching up 13/16 to 52 13/16 after an earnings warning yesterday sent the stock reeling in after-hours trading.
The company
shocked Wall Street when it announced it expects first-quarter earnings to fall below estimates. The telecommunications-equipment giant attributed the shortfall to flat revenue growth caused by changes in customer purchasing habits, lower software revenue and lower-than-expected gross margins. The company said it expects to report earnings in the range of 36 cents to 39 cents a share, compared with 48 cents a year ago. The 29-analyst estimate from
First Call/Thomson Financial
was for 54 cents. Lucent said it expects revenues to be in the range of $9.8 billion to $9.9 billion, flat with the year-ago period.
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Lucent (LU)
The expected shortfall marked a sharp departure from the company's excellent earnings track record. Until now, Lucent has beat earnings forecasts in every quarter since it was spun off from
AT&T
in 1996. Further,
Lehman Brothers'
TheStreet Recommends
decision yesterday morning to up the stock's target price to 95 from 90 looked like an odd move by late afternoon. Today, a number of firms announced ratings or earnings estimate changes on the stock.
This morning, Lehman downgraded the stock, as did
Salomon Smith Barney
.
Merrill Lynch
cut Lucent to near-term neutral from accumulate but maintained a long-term buy rating, while
SG Cowen
cut the stock to neutral from buy.
Credit Suisse First Boston
cut its first-quarter EPS view to 36 cents from 55 cents.
For additional coverage of Lucent's earnings
warning, check out a separate story from the
TheStreet.com/NYTimes.com
joint newsroom. Also see
TheStreet.com's
past coverage of
Lucent, including an in-depth look at the company's
accounting practices.
Mergers, acquisitions and joint ventures
Ericsson
(ERICY)
popped 3 3/8, or 6%, to 59 15/16 after it said it is selling its
Private Radio Systems
operations to
Com-Net Critical Communications
of Pennsylvania for an undisclosed sum.
McLeodUSA
(MCLD)
, rose 7/16 to 53 after it said it is buying
Splitrock Services
(SPLT)
, a data communications provider, for about $1.7 billion in stock. Shares of Splitrock sailed up 4 5/8, or 21%, 26 5/8.
Seagram's
(VO) - Get Vanguard Mid-Cap ETF Report
added 1/8 to 48 13/16 after its
Universal Music Group
unit and
RealNetworks
(RNWK) - Get RealNetworks Inc. Report
set a strategic pact which will enable digital music from Universal's collection of artists to be played on RealNetworks'
RealJukebox
. Under the pact, UMG and RealNetworks will team up in online and offline digital music marketing activities. Shares of RealNetworks jumped 11 3/4, or 10.4%, to 124 3/4
U S West
(USW)
slipped 3/16 to 64 15/16 after saying it has taken a minority equity stake in Internet services concern
Netpliance
.
Wal-Mart
(WMT) - Get Walmart Inc. Report
is going hard core into e-tailing. Wal-Mart and Silicon Valley-based venture capital firm
Accel Partners
said they're joining forces to form
Wal-Mart.com
, a Palo Alto, Calif.-based, independent concern that they intend to take public. Shares of Wal-Mart rose 1 3/4 to 65 3/8.
Analyst actions
Boston Scientific
(BSX) - Get Boston Scientific Corporation Report
lost 1 1/16 to 24 11/16 after
Warburg Dillon Read
cut its rating to hold from strong buy citing competitive concerns.
Merrill raised its price target on
Circuit City
(CC) - Get Chemours Company (The) Report
to 80 from 60.
Deutsche Banc Alex. Brown
started coverage of three Internet healthcare companies.
Drugstore.com
(DSCM)
rose 1 1/4 to 31 13/16 after it was rated buy with a price target of 43.
Healtheon/WebMD
(HLTH)
gained 7/16 to 34 1/2 after it was rated a buy with a price target of 42 and
PlanetRx.com
(PLRX) - Get Pliant Therapeutics Inc. Report
popped 1 5/8, or 10.5%, to 17 1/4 after it was rated a strong buy with a price target of 30.
ING Barings
raised its rating on
Du Pont
(DD) - Get DuPont de Nemours Inc. Report
to hold from sell. Shares added 1/2 to 72.
Morgan Stanley Dean Witter
raised its rating on
Dynegy
(DYN)
to strong buy from outperform and set a price target of 50 on the stock. Dynegy inched up 49/64 to 28 7/8.
Exodus Communications
(EXDS)
climbed 3/4 to 87 1/8 after
Wit Capital
started coverage with a buy rating.
Warburg Dillon Read
initiated coverage of
FDX
(FDX) - Get FedEx Corporation Report
with a hold rating. Shares lost 1 1/2 to 45 3/4.
Goldman Sachs
downgraded
Noble Drilling
(NE) - Get Noble Corporation plc Report
to market outperformer from its recommended list.
Morgan Stanley Dean Witter upgraded Germany's
SAP
to outperform from neutral. SAP hopped 10 3/4, or 24%, to 55 1/2.
PaineWebber
upped its rating on
Tiffany
(TIF) - Get Tiffany & Co. Report
to attractive from neutral.
Robertson Stephens
raised its fourth-quarter earnings estimates to $1.08 from 88 cents. Tiffany tacked on 3 13/16 to 80 13/16.
Merrill downgraded
Weyerhaeuser
(WY) - Get Weyerhaeuser Company Report
to intermediate-term neutral from accumulate. Merrill kept its long-term rating at buy. Weyerhauser slipped 1 7/8 to 72 1/4.
Miscellany
Shares of
Ancor
(ANCR)
were sliding 12 13/16, or 23%, to 43 1/4 on no particular news whatsoever.
Ticketmaster Online-CitySearch
(TMCS)
climbed 5/16 to 33 1/2 after it named John Pleasants president.
The Inside Wall Street column in
Business Week
this week spotlights
Maxtor
(MXTR)
, whose stock could be hot soon because the company is poised to unveil a variety of Web-enabling and Linux storage server products and because a major PC maker is said to be in talks to buy
Hyundai's
36% stake in the company. Maxtor is a hard disk drive provider for PCs. Shares of Maxtor climbed 15/16, or 13.3%, to 8.
Two other stocks garner bullish mention in the column:
True North Communications
(TNO)
, the world's sixth-largest ad agency, and
@plan
(APLN)
, which some analysts say is undervalued. True North added 7/8 to 43 1/8, while shares of @plan added 1/2 to 12 5/8.
