Markets & Finance

Guidant Slides on FDA Panel Rejection


Salomon SB notes shares of Comverse Technology (CMVT) are down sharply, and says there's a buying opportunity.

Guidant Corp. (GDT) says the FDA Circulatory Systems Device Panel voted not to recomend approval of the company's Contak CD/Easytrak system.

The FDA requested more data from Genentech (DNA) and its partner Novartis (NVTS) on Xolair for the treatment of allergic asthma. S&P downgraded to hold. Shares of Tanox Inc. (TNOX), one of the development partners along with Novartis, are sharply down on the news.

UBS Warburg reiterates buy on AT&T (T). On Monday the company completed its AT&T Wireless separation, and said it has no current plans to sell its broadband business, but will evaluate the Comcast proposal. CNBC says John Malone resigned from the AT&T board Monday.

Verisign Inc. (VRSN) and Microsoft (MSFT) entered an alliance in which Verisign will provide authentication and security technologies support for future .NET offerings. S&P maintains hold.

Getty Images (GETY) sees $0.30-$0.32 Q2 ATCF per share on revenue of about $115M, which is about 4% below the low end of the company's previous revenue guidance. Getty will cut its workforce by 300.

Tivo Inc. (TIVO) affirmed its previously announced Q2 and fiscal 2002guidance. DB Alex Brown is skeptical pending further details.

Questar Corp. (STR) sees $0.31-$0.35 Q2 EPS, below the consensus estimate of $0.37. Prudential downgraded to hold from buy.

Gadzooks Inc. (GADZ) sees a$0.06-$0.10 Q2 loss on a 7%-9%

same-store sales decline, and $0.95-$1.10 fiscal 2002 EPS. Tucker Anthony downgraded to market perform from buy.

Robertson Stephens raised the estimates and reiterates strong buy on AmeriCredit (ACF).

Merrill upgraded Vail Resorts (MTN) to near-term buy from neutral.

Value City Department Stores (VCD) received a $275M offer for its Shonac, DSW

Shoe Warehouse and Filene's Basement units from Schottenstein Corp., which owns about 54% of Value City.

Triton Energy (OIL) agreed to be acquired by Amerada Hess (AHC) via a $45 cash tender offer per Triton share. The deal has a total value of about $3.2B, including debt assumption of about $500M.

Corning Inc. (GLW) warned for the second half of the fiscal year and sees earnings below the consensus estimate of $0.38. Corning will discontinue its common stock dividend, close three Photonic Technologies plants and take a $5.1 billion charge in Q2. The chemical concern also will be cutting 1,000 jobs. On Monday, Standard & Poor's cut the company's senior debt rating to A- from A.

Shaw Group (SGR) posted $0.42 vs. $0.23 Q3 EPS on sharply higher sales.

Limited (LTD) will sell its Lane Bryant unit to Charming Shoppes (CHRS) for $335M, consisting of $280M cash and $55M in Charming Shoppes stock.

Inamed Corp. (IMDC) sees $0.42-$0.44 Q2 EPS from operations on lower than expected revenue of $62.6M. S&P maintains hold.

Neon Systems (NESY) sees a $0.24-$0.27 Q2 loss on $6M-$6.2M in revenue.

Meristar Hospital (MHX) estimates Q2 RevPAR to decline between 5.5%-6% vs. previous guidance of slight decline. As a result, Meristar cut the Q2 FFO gudiance to $1.13-$1.15.

Felcor Lodging (FCH) cut the Q2 guidance to $0.94-$0.96 FFO, citing the economic slowdown and a sharp decline in business travel.

Linens 'n Things (LIN) sees $0.11-$0.12 Q2 EPS on 3.6% lower same store sales.

Ferro Corp. (FOE) sees $0.30-$0.32 Q2 EPS on essentially flat sales from ongoing operations.

Xerox (XRX) will eliminate the payment of its common stock dividend.

Mentor Graphics (MENT) expects to meet or exceed the $0.25 Q2 EPS consensus estimate, but says Q2 bookings were weak. S&P downgraded to hold.

Phoenix Technology (PTEC) sees lower than expected $31M-$32M Q3 revenue,

and a $0.07-$0.09 loss, citing continued softness in orders

from OEM customers in the PC industry.

Factory 2-U Stores (FTUS) sees $0.04-$0.05 Q2 EPS on a 2%-4% decline in same store sales, and posted 5.5% lower June same store sales. UBS Warburg and CIBC World downgraded. Wedbush maintains buy and slashed the target.

Aspect Medical (ASPM) sees flat Q2 sequential revenue growth, and a $0.24 Q2 loss (high end of previously stated $0.19-$0.24 loss range), citing a difficult environment for hospital customers.

Newport Corp. (NEWP) affirmed Q2 guidance of $0.32 EPS on $95M-$100M in revenue and sees $1.10-$1.15 2001 EPS. Given the concern with a steep decline in new orders received, the company says it will implement staff reductions and other cost containment programs.

Gadzooks (GADZ) sees a $0.06-$0.10 Q2 loss on 7%-9% same store sales decline, and $0.95-$1.10 EPS for fiscl 2002.

Questar Corp, (STR) sees $0.31-$0.35 Q2 EPS, below the consensus estimate of $0.37.

Autonomy Corp. (AUTN) sees $0.01-$0.02 Q2 EPS, slightly ahead

of consensus.

Serological Corp. (SERO) says it has been added to the Russell 2000 Index.

Infosys Tech (INFY) posted $0.30 vs. $0.20 Q1 earnings per ADS on a 63% revenue rise, and sees $131M-$134M Q2 revenue, $0.29-$0.30 Q2 EPADS, $530M-$545M fiscal 2002 revenue, and $1.24-$1.27 EPADS.

Protective Life (PL) will sell its Dental Benefits Division to Fortis, Inc. in a $300M deal.


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