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Philip Morris Issues Downbeat Outlook; Brenneman Won't Join Compaq

Philip Morris

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told analysts at a New York meeting that volume and profits from its international tobacco business will not meet full-year expectations. Second-quarter volume is expected to drop 6% and full-year volume is expected to drop 4%. The company cited the impact of duty-free sales and a weak euro. The company said it sees full-year earnings at $3.30 a share, 2 cents below the 12-analyst

First Call

forecast but above the year-ago $3.17.


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President and COO Greg Brenneman said he will no longer vie for the open CEO post at




wrote about Compaq's CEO search this afternoon before the announcement.



reported that



is expected to formally announce early tomorrow morning rumored plans to buy Compaq's


Internet assets.

Japanese traders were treated to mixed economic news this morning in Tokyo. The May

jobless rate

slipped to 4.6% from 4.8%. Economists polled by the

Nihon Keizai Shimbun

expected the rate to climb to 4.9%. But the May

industrial output index

fell by 0.5% against expectations of a 1% gain.

In other postclose news (earnings estimates from First Call; earnings reported on a diluted basis unless otherwise specified):

Earnings/revenue reports and previews



posted third-quarter earnings of 49 cents a share, in line with the five-analyst estimate and above the year-ago 42 cents.


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reported second-quarter earnings of 69 cents a share, topping the five-analyst prediction by 1 cent and moving ahead of the year-ago 37 cents.

Citing long-distance pricing erosion and the loss of a U.K. wholesale customer,


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warned it sees second-quarter earnings coming in 6 cents to 8 cents below the 11-analyst forecast for 28 cents a share. The company, which made 26 cents in the year-ago quarter, also said its board continues to mull over



unsolicited takeover bid.

Metro One Telecommunications


said it sees second-quarter earnings of a penny a share, which would fall below both the six-analyst forecast of 11 cents and the year-ago 8 cents. Metro One attributed the warning to increased staffing and infrastructure costs.

Newport News Shipbuilding


upped its second-quarter net earnings estimate by 40 cents, to 92 cents a share. The company said it will post a $25 million pretax gain in the second quarter related to its terminated merger agreement with

Avondale Industries

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and the settlement of insurance claims on completed contracts. The single-analyst estimate calls for operating earnings of 51 cents vs. the year-ago 45 cents.


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said its second-quarter earnings likely will fall short of the five-analyst forecast for 58 cents a share but that it probably will meet full-year expectations for $2.12. PG&E told a Houston energy conference that a rate increase the company applied for probably won't be granted until the third quarter.

Seagate Technology


said its fourth-quarter results will miss estimates due to weak disk-drive demand and continued falling prices. The company sees quarter earnings of 32 cents to 37 cents a share, below the 11-analyst outlook for 49 cents but above the year-ago 9 cents.



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said it's voluntarily recalling 703,000 1996-1998 model-year Ford Contour and Mercury Mystique cars due to a possible problem with the headlight switch wiring harness connector.

SBC Communications


will pay $1.3 million to settle an investigation by the

Federal Communications Commission

into the company's merger with

Southern New England Telecommunications