Midday Movers: NBCi, AOL, EPNY, BRCM - TheStreet

NBC Internet

(NBCI)

shed 8 13/16, or 35.8%, to 15 13/16 after it warned last night it sees lower-than-expected second-quarter and 2000 revenues and wider-than-expected losses because of low advertising sales and a restructuring. The six-analyst estimated loss for the second quarter is 70 cents a share, while the seven-analyst estimate for 2000 is a loss of $2.84. The company said it expects profits after noncash expenses in 2002.

NBCi partially blamed disappointing results on "lower-than-expected sales revenues associated with a soft dot-com advertising market," which could foreshadow troubles for other Net firms that rely on consumer ad revenues. Other Internet stocks were under pressure, with

TheStreet.com Internet Sector Index

, down 2020.52, or 2.3%, to 879.56

Mergers, acquisitions and joint ventures

Adelphia Communications

(ADLAC)

added 3/8 to 44 1/4 after it said it entered a $836-million deal to purchase

GS Communications

and another Virginia cable system. According to Adelphia, the newly acquired systems would add 155,000 new subscribers to the company. The deals are expected to close in the fourth quarter of 2001.

America Online

(AOL)

dropped 1 1/4 to 51 1/2 and

Target

(TGT) - Get Report

tacked on 1 1/2 to 56 after the companies said they have agreed to a pact calling for Target to offer its merchandise on AOL shopping sites.

AOL also announced an alliance with Brazil's Banco Itau to create and market an online service to the Latin American bank's 7 million customers. Terms of the deal call for Banco Itau to become a minority shareholder of AOL Latin America upon completion of AOL Latin America's IPO. AOL was one of the most actively traded stocks on the

New York Stock Exchange

today.

Broadcom

(BRCM)

fell 4 7/8 to 142 1/8 after it said it would buy

Innovent Systems

, a radio-frequency integrated-circuits maker that develops products for the Bluetooth standard, in a stock deal valued at about $440.1 million, based on Monday's closing stock price.

Broadcom, which already owned about 13% of Innovent and has invested in the company since its inception last year, will acquire the company in exchange for 3 million newly issued Class A common shares. The deal is expected to close within 60 days. Both of the companies' boards approved the acquisition, but Innovent shareholders haven't yet voted.

Separately,

Intel

(INTC) - Get Report

and

Microsoft

(MSFT) - Get Report

said they are jointly developing a standard to use Bluetooth wireless technology in connecting cellular phones with computers. Bluetooth, which is based on a low-cost, shortwave radio link for computers and wireless communication devices, is a joint creation of several telecommunications and electronic companies, including

Nokia

(NOK) - Get Report

and

Ericsson

(ERICY)

.

Goldman Sachs Group

(GS) - Get Report

,

Merrill Lynch

(MER)

and

Morgan Stanley

(MWD)

have entered a venture to create an electronic bond trading system called

BondBook LLC

.Goldman was up 1/2 to 83 13/16, Merrill Lynch rose 1/4 to 108 3/4 and Morgan Stanley Dean Witter moved up 1/8 to 80 15/16. The venture is the first of its kind to receive joint broker/dealer support for a single electronic trading market with sizeable credit support and trading activity. Trading is set to begin in the fourth quarter of 2000 and will include investment-grade and high-yield corporate bonds and municipal bonds. The firms said that they have tapped

Putnam Investments

to serve as the chair of an external advisory board.

Separately, Goldman Sachs Group said it agreed to a $300 million pact with

Boston Consulting Group

and

General Atlantic Partners

, involving investments in online businesses of offline companies.

IFormation

will work with established companies to set up online businesses and couple new start ups with larger companies to develop e-commerce ventures.

Dutch telco

Equant

(ENT) - Get Report

is being pursued as an acquisition by

France Telecom

(FTE)

and separately by

Global Crossing

(GBLX)

, according to

The Wall Street Journal

. Equant could fetch $10 billion. Equant popped 6 1/16, or 14.3%, to 48 7/16, France Telecom slipped 15/16 to 152 and Global Crossing fell 1 1/4 to 27 3/8.

The newspaper reported that although Equant is further along in negotiations with France Telecom, preliminary talks could intensify quickly between Equant and Global Crossing because France Telecom's right to exclusive talks with Equant recently expired.

The

Nasdaq

said three electronic communications networks have signed on to its electronic market for trading exchange-listed stocks, which include those listed on the

New York Stock Exchange

. The agreement will allow

Bloomberg Tradebook

,

BRUT

and

MarketXT

to post quotes and trade within the

Nasdaq InterMarket

, formerly know as the Third Market. Nasdaq said it is currently negotiating similar deals with

Reuters

(RTRSY)

unit

Instinet

and

REDIBook

ECNS. Reuters was lately down 4 9/16 to 93 1/2.

Sykes Enterprises

(SYKE) - Get Report

, which provides vertically integrated, technology-based solutions and services worldwide, dropped 2 3/4, or 13.5%, to 17 5/8 after it said it will sell its wholly owned subsidiary

SHPS

to

Welsh, Carson, Anderson and Stowe

for $170 million. The deal calls for Sykes to receive $165.5 million in cash and to retain a 6.5% interest in SHPS going forward. Welsh, Carson, Anderson and Stowe anticipates a gain of about $92.9 million from its investment in SHPS. The agreement is subject to normal regulatory approval and is expected to be completed before the end of the month.

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Earnings/revenue reports and previews

Anixter International

(AXE) - Get Report

added 5/16 to 29 7/16 after it said it would report second-quarter earnings between 53 cents and 55 cents a share, beating the three-analyst estimate of 45 cents a share and the year-ago profit of 33 cents.

Best Buy

(BBY) - Get Report

slipped 1/16 to 58 15/16 after it posted first-quarter earnings of 34 cents a share, in line with the 16-analyst estimate and up from the year-ago 22-cent profit.

Kemet

(KEM) - Get Report

climbed 3 9/16, or 12.2%, to 32 3/4 after it said it would post first-quarter earnings that would top the four-analyst estimate of a 50-cent profit by 50%. Kemet chairman and CEO David Maguire attributed the results to solid capacity and price increases.

Pier 1 Imports

(PIR) - Get Report

dropped 5/16 to 8 13/16 after it posted first-quarter earnings of 17 cents a share, a penny better than the 14-analyst estimate and up from the year-ago 13-cent profit.

UST

(UST) - Get Report

slipped 7/16 to 16 9/16 after it warned investors that its second-quarter earnings report would be 2% below its year-ago profit, missing the seven-analyst estimate of 74 cents a share. The chewing-tobacco maker blamed the shortfall on softer premium brand sales and increased costs.

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Analyst actions

This morning, Dow component

Hewlett-Packard

(HWP)

was downgraded to market perform from buy at

Sanford Bernstein

.

The firm also lowered its earnings estimates for H-P to 81 cents from 83 cents a share for the third quarter of this year and its full-year estimate to $3.51 from $3.54 a share. Hewlett-Packard slipped 8 1/16, or 6.4%, to 117 15/16.

UBS Warburg

downgraded three oil companies --

Chevron

(CHV)

,

Occidental

(OXY) - Get Report

and

Texaco

(TX) - Get Report

-- to hold from buy.

Chevron declined 1 1/16 to 91 13/16 and Occidental lost 1/16 to 22 15/16, while Texaco stumbled 1/16 to 58 1/16.

Upgrades

CSX

(CSX) - Get Report

: UP to buy from market perform at

Deutsche Banc Alex. Brown

. CSX added 9/16 to 21 7/16.

EarthWeb

(EWBX)

: UP to strong buy at

WR Hambrecht

; price target: 25. EarthWeb popped 1 3/16, or 8.9%, to 14 7/16.

Downgrades

Allstate

(ALL) - Get Report

: fiscal 2000 earnings estimate to $2.70 from $2.80 at

Goldman Sachs

. Allstate shed 1/8 to 26 11/16.

EDS

(EDS)

: DOWN to neutral from buy at

PaineWebber

; price target to 50 from 65-70. EDS fell 1 3/16 to 41 7/16.

NBC Internet

(NBCI)

: DOWN to market outperformer from buy at

Goldman Sachs

. NBC Internet stumbled 8 15/16, or 36.2%, to 15 11/16.

Northrop Grumman

(NOC) - Get Report

: DOWN to buy from strong buy at

SG Cowen

. Northrop Grumman shed 4 3/16, or 5.5%, to 71 3/16.

Spieker Properties

(SPK)

: DOWN to outperform from recommended buy at Goldman Sachs. Spieker Properties skidded 1 5/16 to 48 7/8.

W.W. Grainger

(GWW) - Get Report

: DOWN to performer from recommended buy list at Goldman Sachs. W.W. Grainger slipped 1 to 34 3/16.

Initiations

Anesta

(NSTA)

: NEW strong buy at

Thomas Weisel

; price target: 38. Anesta hopped 1 1/2, or 8.3%, to 19 1/2.

Broadvision

(BVSN) - Get Report

: NEW outperform at

Salomon Smith Barney

; price target: 62. Broadvision stumbled 1 1/8 to 47 7/8.

CoolSavings.com

(CSAV)

: NEW strong buy at Thomas Weisel. CoolSavings.com tacked on 5/8, or 10.4%, to 6 5/8.

E.piphany

(EPNY)

: NEW buy at Salomon Smith Barney; price target: 135. E.piphany jumped 8 1/16, or 9.2%, to 95 5/16.

Internet Capital Group

(ICGE)

: NEW outperform at

Lazard Freres

; price target: 48. Internet Capital Group skidded 3 1/16, or 8.8%, to 31 1/2.

NextCard

(NXCD)

: NEW strong buy at WR Hambrecht; price target: 27. NextCard was unchanged at 10 13/16.

Nogatech

(NGTC)

: NEW buy at WR Hambrecht. Nogatech declined 1, or 20.7%, to 7.

Nordson

(NDSN) - Get Report

: NEW buy at

Credit Suisse First Boston

; price target: 62. Nordson edged up 1/8 to 50 3/8.

Pixelworks

(PXLW) - Get Report

: NEW buy at Salomon Smith Barney; price target: 29. Pixelworks skidded 2 1/8, or 9.3%, to 20 5/8.

Vignette

(VIGN)

: NEW buy at Salomon Smith Barney; price target: 64. Vignette lost 1 5/16 to 36 3/4.

US Unwired

(UNWR)

: NEW buy at CSFB; price target: 25. US Unwired skidded 11/16, or 5%, to 14 1/8.

Group Moves

    Bear Stearns' REIT analyst Ross Smotrich raised the price targets for nine of the stocks he currently covers:
  • Aimco (AIV) - Get Report raised to 46 from 44; Aimco added 5/32 to 42 1/16.
  • Archstone Communities (ASN) to 24.50 from 22; Archstone Communities climbed 1/8 to 23.
  • AvalonBay Communities (AVB) - Get Report to 45 from 40; AvalonBay lifted an 1/8 to 41 7/16.
  • Boston Properties (BXP) - Get Report to 40 from 36; Boston bounced 1/8 to 36 11/6.
  • Equity Residential (EQR) - Get Report to 50.50 from 48; Equity Residential tacked on 1/32 to 46 9/16.
  • Essex Property Trust (ESS) - Get Report to 45 from 37; Essex Property lifted 3/16 to 40 11/16.
  • Gables Residential (GBP) to 27.50 from 24; Gables Residential declined 1/16 to 25 3/8.
  • Pacific Gulf Properties (PAG) - Get Report to 24.50 from 22.50; Pacific Gulf Properties was unchanged 23 and
  • Post Properties (PPS) to 48.50 from 43.50. Post Properties tacked on 1/16 to 44 3/4.

PaineWebber initiated coverage of four personal care companies:

  • Colgate-Palmolive (CL) - Get Report at neutral; price target: 59. Colgate-Palmolive skidded 7/8 to 56 9/16.
  • Clorox (AKS) - Get Report at buy; price target: 50. Clorox tacked on 1/8 to 8 15/16.
  • Dial (DL) - Get Report at strong neutral; price target: 15. Dial declined 1/16 to 13 7/16.
  • Procter & Gamble (PG) - Get Report at attractive; price target: 66. Procter & Gamble stumbled 3/8 to 56.

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Offerings and stock actions

OpenTV

(OPTV)

lost 15/16 to 55 1/8 after it said it plans to file for a 2.25 million secondary offering of Class A ordinary shares. The shares, which are held by

News Corp

(NWS) - Get Report

affiliate,

News America

represent a 3.2% interest in the company. News Corp. fell 15/16 to 49 3/4.

Polymedica

(PLMD)

lost 1 1/4 to 33 3/4 after it set a 1 million share repurchasing program.

Zebu, a company that specializes in technology used to streamline insurance application processes, withdrew its $64 million initial public offering. San Francisco-based Zebu said it does not plan to proceed with the IPO at this time, according to

Reuters

. The offering was being managed by

Deutsche Banc Alex. Brown

,

U.S. Bacorp Piper Jaffray

and

Cochran Carnoia

, but the number of shares and their price range had not yet been disclosed. The company applied for a Nasdaq listing of "ZEBU."

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Miscellany

The

Justice Department

, along with 17 states involved in the antitrust lawsuit against Microsoft asked Judge Thomas Penfield Jackson to ignore the company's efforts to dismiss a breakup order following the ruling last week. Government lawyers also outlined plans for the appeals process and set potential target dates for imposing the ordered breakup.

Ford

(F) - Get Report

missed federal fuel-economy targets for 1999, according to

The Wall Street Journal

. A federal report said the car maker, which has said it wants to be an environmental leader in its industry, used technology to boost its cars' horsepower instead of to improve gas mileage. Ford was the only Big Three auto company that missed the federal fuel economy standards for passenger cars. Ford was down 3/8 to 49 3/4.

In an effort to regain market share,

General Motors

(GM) - Get Report

will broaden its offering of lower-priced pickups and sport-utility vehicles, the

Journal

reported. The car company, which is losing money on many of its small cars because rival foreign brands are pushing profit margins down, said it hoped less-affluent consumers will buy trucks and SUVs rather than small cars. General Motors added 13/16 to 69 13/16.

Nice Systems

(NICE) - Get Report

launched a new technology called Customer Experience Management that it said would manage customer contact centers. Reuters said the technology will be integrated into

Lucent's

(LU)

customer relationship management products as well as being used in conjunction with applications belonging to

Cisco

(CSCO) - Get Report

,

Nortel

(NT)

,

Genesys

,

eGain Communications

(EGAN) - Get Report

,

Siebel Systems

(SEBL)

and

Kana Communications

(KANA)

. Nice Systems gained 2 1/8 to 70, Lucent edged down a fraction to 58 1/4, Cisco edged up 3/16 to 62 5/16, Nortel moved up 1 11/16 to 62 3/16, eGain lost 1 3/8, or 11%, to 11 3/16, Siebel Systems rose 1 7/8 to 141 1/4 and Kana dropped 2 3/4, or 5.1%, to 51 5/8.

Philip Morris'

(MO) - Get Report

slipped 1/4 to 27 1/2 after the head of U.S. tobacco operations said he ordered the slogan in its advertising campaign for Virginia Slims cigarettes changed from "Find your voice" after being deposed by a lawyer in a class-action suit against the company, the

Journal

reported. The lawyer suggested the ad might be offensive to smokers who have throat cancer.

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