Markets & Finance

New Menu Could Burn Applebee's


Applebee's International (APPB) posted $0.63 vs. $0.52 Q4 EPS on a 13% total sales rise. S&P says Q1 should be hurt by higher food costs on a new menu rollout, and maintained its hold ranking on the shares.

Sun Life Financial (SLC) posted $0.50 vs. $0.38 Q4 EPS (adjusted pro forma). Sun plans to exit the direct sales force distribution business in the U.K., and to reduce its workforce by 2,000 employees to 300 by end of 2003.

Baker Hughes (BHI) posted $0.24 Q4 EPS from operations on a 16% revenue rise. AG Edwards says it is concerned about the company's profit margin and a possible market share loss in its drill bit unit. S&P maintained its accumulate rating on the shares.

Charles Schwab (SCH) says concerns about near-term corporate earnings and economic growth continued to weigh on client trading activity in January. Pacific Crest says the discount-brokerage firm's Q1 EPS estimate could be at risk.

Dain Rauscher reiterated its buy on shares of E.Piphany (EPNY).

Kaufman Bros. reiterated its strong buy on shares of ITXC Corp.(IXTC). On Wednesday the company forecasted a $0.32-$0.35 Q1 cash loss on $32 million-$34 million revenues, and posted a $0.14 Q4 cash loss.

Reliance Steel (RS) posted $0.53 vs. $0.54 Q1 EPS despite a 10% sales rise. Due to uncertain economy, the company does not expect H1 2001 results will match H1 2000, and said it is comfortable with the low-end range of 2001 EPS Street estimates.

Hovnanian Enterprises (HOV) expects Q1 EPS to significantly exceed the high end of analysts' estimates ranging from $0.15-$0.16.

Advanced Digital (ADIC) posted $0.16 vs. $0.13 Q1 EPS on a 41% sales rise. The data-storage supplier expects to see inventory reductions during the current period.

Prudential downgraded Amazon.com (AMZN) to sell from hold and cuts its price target to $9.

Warren Buffett holds a 5.7% stake in Sealed Air (SEE) co., according to an SEC filing.

CIBC World initiated coverage on Applied Micro Circuits (AMCC) with buy.

Merck (MRK) says worldwide sales of Vasotec, Pepcid and Mevacor should decline in total to about $1.8 billion-$2 billion. The drug maker expects 2001 gross margins to be about 4% lower than in 2000, and reiterated its comfort with a $3.15-$3.25 2001 EPS range.

Office Depot (ODP) posted $0.06 vs. $0.21 Q4 EPS from operations as higher costs of goods sold offset a 12% sales rise. Despite softer sales, the company remains comfortable with its $0.19-$0.22 Q1 EPS and its $0.80 2001 guidance.

Medicis Pharmaceutical says Corixa Corp.'s (CRXA) immunotherapeutic psoriasis treatment, PVAC, provides an appreciable clinical benefit in patients with moderate to severe psoriasis. Prudential downgraded its rating on Corixa to hold from strong buy.

Voicestream Wireless (VSTR) posted a $273 million Q4 EBITDA loss (adjusted) on a sharp revenue rise. The company inked a pact with AOL-Time Warner whereby AOL's features and services will be offered to Voicestream's high-speed wireless Internet customers.

CBRL Group (CBRL) posted $0.26 vs. $0.20 Q2 EPS from operations on 9.3% higher sales. The company says its current underlying Q3 revenue and cost trends could limit substantial improvement over its year-ago $0.25 EPS.

Credence Systems (CMOS) posted $0.27 vs. $0.35 Q1 EPS despite 21% sales rise. The company says sequential sales are down 44%, and says it could be two to three quarters before its excess capacity becomes fully absorbed. Goldman Sachs cut its estimates on the company.

Crown Castle (TWRS) posted $69 million vs. $47 million Q4 EBITDA on 77% Q4 revenue rise, The company sees $70 million-$74 million Q1 EBITDA on $184 million-$205 million revenue; and sees $340 million-$350 million 2001 EBITDA on $850 million-$900 million revenue.

Sharper Image (SHRP) posted $1.00 vs. $0.83 Q4 EPS on 13% same store sales rise, and 18% total sales rise.

Robertson Stephens upgraded Vitesse Semiconductor (VTSS) to strong buy from buy.

CIBC World downgraded Powerwave Technology (PWAV) to buy from strong buy. Morgan Stanley DW also reportedly downgraded its rating on the shares.

Tricon Global (YUM) posted $0.81 vs. $0.78 Q4 EPS from operations on 2% higher system sales. The company sees 2%-3% lower Q1 U.S.-blended same store sales and sees $3.18-$3.22 2001 EPS. Tricon set a $300 million additional stock buyback.

Due to additional shares issued during its merger with Union Carbide, and higher U.S. natural gas costs, Dow Chemical (DOW), sees its Q1 EPS below the previous guidance of $0.25-$0.40.

Advanced Digital (ADIC) posted $0.16 vs. $0.13 Q1 EPS on a 41% sales rise. The company expects to see inventory reductions during the current period.

NVIDIA Corp. (NVDA) posted $0.38 vs. $0.19 Q4 EPS on a 70% revenue rise.

Outback Steakhouse (OSI) posted $0.41 vs. $0.38 (pro forma) Q4 EPS on an 11% revenue rise.

Global Crossing (GX) reportedly posted a $0.70 Q4 loss from operations. Goldman Sachs reiterated its recommended list.

Scientific-Atlanta (SFA) says it was selected, as part of a consortium led by Nortel Networks, to provide technology and professional services for the network upgrade of Kabel NRW in Germany.

Ciena (CIEN) posted $0.18 vs. $0.03 Q1 EPS (adjusted) on a sharp revenue rise. The company raised its fiscal 2001 revenue growth forecast to 95%-105%. S&P maintained its accumulate ranking on the shares.

UBS Warburg initiated coverage of Salix Pharmaceuticals (SLXP) with strong buy.


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