Markets & Finance

Sepracor Shares Plunge on Downgrade


Prudential downgraded Sepracor (SEPR) to sell from hold. On Monday the company posted a $0.63 Q1 loss vs. a $0.76 loss. Partner Janssen Pharmaceutical suspended trials for ticalopride.

USX U.S. Steel's (X) USX Marathon board authorizes management to implement a plan of reorganization in order to separate the energy and steel businesses. S&P maintains avoid. Prudential Securities raised their price target on the energy unit, USX Marathon (MRO) to $35 from $33.

Commerce One (CMRC) and Citigroup unit announced an alliance to provide a financial solution for e-marketplaces.

Albertson's (ABS) named Lawrence Johnston, former GE executive, as chairman and CEO. S&P maintains hold.

Forrester Research (FORR) posted $0.20 vs. $0.15 Q1 EPS on a 49% revenue rise. Forrester sees 20%-25% Q2 revenue and EPS growth; 20%- 25% 2001 revenue growth, and 20%-30% 2001 EPS. Pacific Crest cut the revenue estimates but maintains its buy rating.

Check Point Software (SFTW) posted $0.32 Q1 EPS on an 86% revenue rise. During a conference call, the firm said Europe sales are healthy, as were sales in Japan. Check Point says it's comfortable with 50% top-line growth rate estimate for 2001. S&P maintains buy.

Freemarkets Inc. (FMKT) says it's in talks with the SEC about classification of revenues. The company posted a $0.24 Q1 loss on a sharp revenue rise. Bear Stearns downgraded to attractive from buy. Prudential cut the rating to hold from strong buy. Dain Rauscher also downgraded. CS First Boston cut estimates.

DB Alex Brown downgraded Quanta Services (PWR) to buy from strong buy and downgraded MasTec (MTZ) to market perform from buy.

Informix (IFMX) will sell assets of its database unit, Informix Software, to IBM for $1B in cash. Informix posted $0.06 vs. $0.09 Q1 EPS from operations on a 13% revenue decline. Josephthal & Co. downgraded to hold from buy.

Starwood Hotels (HOT) posted $0.31 vs. $0.26 Q1 EPS (continuing operations) on a slight revenue rise. Starwood sees $0.58 Q2 EPS, and says it sees a greater chance of missing its $2.15 2001 guidance than exceeding it.

Avista (AVA) posted $0.61 Q1 EPS vs. a $0.28 loss on a 52% revenue rise. Avista sees $0.85-$1.10 2001 EPS.

Black & Decker (BDK) posted $0.40 vs. $0.69 Q1 EPS on a 6% sales decline. B&D sees $0.50-$0.60 Q2 EPS (before foreign exchange), and $3.10-$3.25 for fiscal 2001 (before foreign exchange).

Earthlink (ELNK) posted a $18.5M Q1 EBITDA loss 4 STARS (accumulate) 61% improvement over last year's Q1), and a $0.27 Q1 loss from operations vs. a $0.43 loss on a 34% revenue rise.

Chubb (CB) posted $0.96 vs. $0.85 Q1 operating EPS on 9% higher net written premiums.

Federal Home Loan (FRE) posted $0.96 vs. $0.81 Q1 EPS from operations (excluding adoption of SFAS) on 17% higher operational revenue. The firm cited portfolio growth, stable margins and continued credit strength.

Lockheed Martin (LMT) posted $0.23 vs. $0.12 Q1 EPS from operations despite 10% lower sales, sees sees 20%-25% sales growth for Q2, and 55%-60% growth for the second half. Lockheed reaffirmed its 2001 EPS outlook of 25%-30% increase from $1.07 in 2000 (excluding items).

Novellus Systems (NVLS) posted $0.62 vs. $0.17 Q1 EPS from operations on sharply higher revenues. S&P upgraded to hold from avoid. CS First Boston maintains buy. Tucker Anthony maintains market perform.

Compaq Computer (CPQ) posted $0.12 vs. $0.14 (adjusted for a gain) Q1 EPS on a 3% revenue decline. Compaq believes Q2 will continue to be challenging. S&P maintains hold. CS First Boston maintains hold and cut estimates.

Lucent Technology (LU) posted $0.37 Q2 loss (pro forma) from operations on 17% lower revenues. Lucent cites a significant impact by Winstar Communications and a writedown of certain equity investments. For fiscal 2002, Lucent expects a modest sequential improvement on its top line. S&P maintains hold, Salomon SB upgraded to outperform from neutral.

Costco Wholesale (COST) sees $0.22-$0.24 Q3 EPS and $0.39-$0.41 for Q4. Costco also expects $1.26-$1.30 for fiscal 2001, citing lower than expected sales trends. AG Edwards cut the fiscal 2001 estimate, Dain Rauscher also cut estimates.

Level 3 Communications (LVLT) announced an agreement with Yahoo to serve as the primary provider of bandwidth for Yahoo Broadcast.

Cheap Tickets (CTIX) posted $0.05 vs. $0.10 Q1 EPS as higher expense offset a 17% revenue rise. The company sees Q2 EPS comparable to Q2 2000, and sees $0.56-$0.58 2001 EPS.

AT&T (T) posted $0.06 vs. $0.34 Q1 EPS from operations despite a 5.4% revenue rise. AT&T noted declines in long-distance voice revenue, and sees $0.01-$0.04 Q2 EPS from operations, as well as $0.15-$0.18 cash EPS (both excluding items).

JDS Uniphase (JDSU) posted $0.14 vs. $0.11 Q3 EPS (pro forma) on a 90% rise in sales. JDS set a realignment and will reduce employment by 5,000 people (20%). JDS sees $700M Q4 sales and $0.05 Q4 EPS (pro forma). S&P maintains hold and Merrill rates near-term neutral.

Microchip Technology (MCHP) posted $0.19 vs. $0.25 Q4 EPS from operations on a 2.1% revenue decline and narrowed margins. Microchip sees $0.16 Q1 EPS on revenue of $138M. S&P maintains hold.

Kimberley-Clark (KMB) posted $0.84 vs. $0.80 Q1 EPS on 6.5% sales rise. The company sees Q2 EPS similar to Q1 due to higher energy costs. CS First Boston downgraded.

Guidant Corp. (GDT) posted $0.41 vs. $0.38 Q1 EPS on 9% sales rise (constant currency). Guidant cut the Q2 EPS guidance to $0.35-$0.39 due to uncertainties surrounding its ANCURE System and its first-generation PRIZM defibrillator field actions. .Goldman and Dain Rauscher downgraded. S&P maintains accumulate.

Kemet Corp. (KEM) posted $0.90 vs. $0.44 Q4 EPS on 31% sales rise. Kemet sees Q1 revenues down about 40% sequentially due to an inventory correction.

Viacom (VIA) posted $1.15B vs. $470M Q1 EBITDA on 90% revenue rise. Viacom sees mid-single-digit (pro forma) Q2 EBITDA growth vs. last year, and sees 20% 2001 growth to $6.2B.

Quest Diagnostics (DGX) posted $0.74 vs. $0.39 Q1 EPS on a 7% revenue rise. Quest sees 2001 EPS growing at least 50% from last year. S&P maintains accumulate.

SPX Corp. (SPW) posted $1.21 vs. $1.20 Q1 EPS from operations on 8.4% revenue rise.

Omnicom Group (OMC) posted $0.52 vs. $0.45 Q1 EPS from operations on 16% revenue rise.

Maxwell Technology (MXWL) posted a $0.27 Q4 loss vs. a $0.14 loss as a less favorable product mix and lower gross margins offset a 3.4% revenue rise. Maxwell lowered the 30% 2001 revenue growth forecast to 15%.

At Home Corp. (ATHM) posted a $0.15 Q1 loss vs. $0.01 loss (pro forma) despite a 3% revenue rise and expects Q2 revenues to be similar to Q1. At Home expects a Q2 loss of $0.16-$0.17 (pro forma). S&P maintains hold.

Stanford Micro (SMDI) posted a $0.01 Q1 loss vs. $0.02 EPS (pro forma) despite a 6.8% revenue rise.

Tupperware Corp. (TUP) posted $0.33 vs. $0.33 Q1 EPS from operations on a 4% sales rise. Tupperware sees a mid-single-digit percentage increase in Q2 net income, and a high-teen percentage increase in 2001. Raymond James upgraded to strong buy. S&P maintains hold.


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