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FEBRUARY 16, 2004
Edited by Monica Roman Edward Breen: Tugging At Tyco  As CEO of Tyco International (TYC
), Edward Breen has one of the toughest jobs in Corporate America. But there are signs his efforts to turn around the troubled conglomerate are gaining traction. On Feb. 3, even as prosecutors wrapped up their criminal case against Tyco's disgraced former CEO, Dennis Kozlowski, Tyco reported that net income jumped a sparkling 23%, to $719 million, on a 9% increase in sales in Tyco's first fiscal quarter, ended Dec. 31. Most of the sales gain reflected the favorable impact of a falling dollar. But the far larger jump in income reflects Breen's aggressive efforts to pay down Tyco's hefty debt load and slash costs with a restructuring plan, under which the company will jettison some 50 businesses and 7,200 employees. Breen concedes he still has a "great deal of work" to do. But investors clearly think he's making progress: The earnings news drove Tyco's stock up 2.5%, to $27.80. That's near its 52-week high and up from around $15 a year ago. By William C. Symonds Avon Looks Fabulous Who needs Botox? Avon Products (AVP ) reported a 35% jump in fourth-quarter profits to $261.3 million on Feb. 3, in part because of the success of new anti-aging products such as Anew Clinical Line & Wrinkle Corrector. But a weak dollar also helped Avon put forward a prettier face to investors, as sales surged 30% in Europe and registered double-digit growth in other parts of the world. Another spur to higher sales: having more Avon Ladies on the street to market products from door to door. The company reported a 12% growth in representatives, to 4.4 million, during 2003. With more troops and hot products, Avon projects double-digit earnings and sales growth for this year, too.   What's Eating Cisco Shares Cisco Systems (CSCO ) reported solid second-quarter results on Feb. 4, but investors gave its shares a beating. They were spooked by CEO John Chambers' cautiously upbeat forecast, as well as Cisco's gains, which were weaker than some of its competitors'. Citing a jump in spending on high-end routers, Cisco's quarterly sales grew 15%, to $5.4 billion -- its highest total in three years. Due to an accounting change, however, its net profits dipped 27%, to $724 million. That, plus Cisco's projections for a traditionally tough third quarter, struck a flat note with investors, especially compared with the stellar results recently reported by rival Juniper Networks (JNPR ). Still, the 9% drop on Cisco shares on Feb. 4, to $24.08, is a blip for the stock, which has climbed 96% in the past year. DreamWorks' New Dream Pixar Animation Studios (PIXR ) isn't the only studio looking to cash in on computer-generated animated films. As first reported in the New York Post, DreamWorks SKG is considering an initial public offering of its animation unit. It has asked investment bankers J.P. Morgan (JPM ) and Goldman Sachs (GS ) to assess prospects for such a deal. DreamWorks, started by media moguls Steven Spielberg, Jeffrey Katzenberg, and David Geffen, would likely file their IPO if this year's Shrek 2 and Shark Tale are big hits. The animated unit, which would include two production facilities as well as the rights to prior hits such as Antz, Shrek, and Chicken Run, would be valued at about $3 billion, say sources. Dreamworks refused to comment. Will Oracle's Money Talk? Oracle's (ORCL ) hostile bid for rival PeopleSoft (PSFT ) isn't going away. On Feb. 4, the Silicon Valley software giant raised its offer by 33%, to $26 per share, or about $9.4 billion in cash. The move, which Oracle says is its final offer, sets the stage for a fight at PeopleSoft's shareholder meeting on Mar. 25. Oracle has nominated a five-person slate to take control of PeopleSoft's board and eliminate an antitakeover "poison pill" that stands in the way of a deal. There are other hurdles, however: Oracle is waiting on antitrust rulings from the Justice Dept. and the European Commission. Et Cetera... -- Anheuser-Busch (BUD ) reported fourth-quarter earnings of $294 million, a 9% gain. -- Eurex, the electronic European futures market, got the O.K. to open a U.S. arm. -- Hewlett-Packard (HPQ ) is buying software makers Novadigm (NVDM ) and Consera Software. Closing Bell: ICOS  On Super Bowl Sunday, ICOS (ICOS
) and partner Eli Lilly (LLY
) rolled out their new impotence pill, Cialis. Three days later, ICOS stock fell after it said Cialis' marketing costs will bring a loss of at least $192 million in 2004. Shares closed at $39.57 on Feb. 4, down 9.2% in two days.
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