Markets & Finance

Recoton Wins Xbox Deal


RightCHOICE Managed Care (RIT) sees $0.76-$0.78 Q2 and $2.75-$2.80 2001 EPS, and says it is positioned to achieve overall annual EPS growth of at least 20% in 2001 and 2002.

CS First Boston agreed to acquire 18.4M shares of CSFBDirect (DIR) for $6 per share cash, about $110M.

Microsoft awarded a Recoton Corp. (RCOT) unit a contract to develop and make a speech recognition-capable headset accessory product for use with Microsoft's Xbox video game system.

Compaq Computer (CPQ) expects to meet the $0.04 Q2 EPS analysts' consensus estimate. The company sees $8.4B in revenue, down 9% sequentially. S&P maintains hold. Robertson Stephens cut its price target to $18 and reiterates its buy rating.

Emerson Electric (EMR) sees an 11% decline in Q3 EPS and a mid-single-digit decline in fiscal 2001 EPS, driven by a sharp decline in sales and profit in electronics and telecom, as well as higher restructuring expense that it treats as normal "pay as you go" costs.

Comverse Technology (CMVT) sees $0.28 Q2 EPS from operations on $345M in revenue, $0.20 Q3 EPS on $330M in revenue, $0.23 Q4 EPS on $340M in revenue. It projects EPS of $1.14 for fiscal 2001 and of $1.37 for fiscal 2002. The company cites the capital spending recession and macro-economic slowdown.

Morgan Stanley downgraded Openwave Systems (OPWV) to neutral from strong buy.

Newell Rubber (NWL) sees $0.29 Q2 EPS from operations vs. previous guidance of $0.37-$0.42 EPS, and sees $1.20-$1.30 EPS for 2001 vs. previous $1.50-$1.65 EPS. S&P keeps hold. JP Morgan downgraded.

Morgan Stanley reportedly downgraded Amdocs (DOX) to outperform from strong buy.

Whirpool Corp. (WHR) sees $1.30 Q2 EPS from operations vs. consensus $1.25 estimate. S&P maintains hold.

RMH Teleservices (RMHT) raised its Q4 revenue projection to $53M from $50M, and lowered Q4 EPS guidance to $0.04 from $0.12 to reflect additional operating expenses.

Investors Financial Services (IFIN) posted $0.36 vs. $0.26 Q2 EPS on a 66% revenue rise. Dain Rauscher upgraded to strong buy from buy.

Wolverine World (WWW) posted $0.21 vs. $0.18 Q2 EPS on a 7.9% sales rise.

Merrill upgraded Infineon Technology (IFX) to near-term buy from neutral.

Chico's FAS (CHS) posted 16% higher June same-store sales and 40% higher total sales. Tucker Anthony reiterates strong buy.

Goldman removed Universal Access (UAXS) from its recommended list, and now rates market perform.

Gilat Satellite (GILTF) says its Q2 revenues and gross margin are expected to approximate its previously announced guidance.

Wabash National (WNC) sees a wider than expected $0.16-$0.35 Q2 loss, citing weak demand for new trailers, and costs associated with the start-up of a new coating, finishing process in its Tennessee facility.

Medtronic (MDT) says its InSync cardiac resynchronization system got recommendation for approval, with post-market conditions, by an FDA panel.

Pacific Sunwear (PSUN) posted a 7.4% June same store sales decline but 10.7% total sales rise, citing weak summer apparel sales. The company sees Q2 EPS at the lower end of previously stated $0.13-$0.17 range.

DoubleClick (DCLK) posted a $0.07 Q2 loss vs. a $0.03 loss (pro forma) on 20% lower revenues. The company maintains current consensus targets for the second half, which is currently a $0.09 loss per share. S&P reiterates strong buy. CS First Boston and Merrill cut their estimates.

Allstate (ALL) estimates pre-tax catastrophe losses for Q2 to be $536M; estimated catastrophe losses would add 9.7 points to the company's combined ratio for Q2, and would impact after-tax EPS by about $0.48.

Tiffany & Co. (TIF) says net sales in Q2 are tracking at about equal to prior year; assuming similar trends for the rest of July, the company expects Q2 EPS will be in the $0.23-$0.25 range.

Rational Software (RATL) posted $0.08 vs. $0.13 Q1 EPS (pro forma) as higher operating costs offset a 3% revenue rise.

Robertson Stephens downgraded Guidant Corp. (GDT) to market perform and cut its estimates. On July 10, an FDA Circulatory Systems Device Panel voted not to recommend approval of the company's Contak CD/Easytrak system.

Scios Inc. (SCIO) received an approvable letter for its New Drug Application for Natrecor, an IV treatment for patients with acutely decompensated congestive heart failure.

American Eagle (AEOS) posted 9% higher June same store sales and 37% higher total sales.

ADE Corp. (ADEX) cut 5% of its workforce. Due to the uncertain industry climate, ADE implemented additional initiatives to streamline the fundamental cost structure of the company.

Barr Labs (BRL) sees $0.49-$0.51 Q4 EPS vs. the analysts' consensus estimate of $0.43. The company cites higher than expected non-Tamoxifen sales and a better mix of sales of higher margin products.

Pepsi Bottling (PBG) posted $0.68 vs. $0.58 Q2 EPS from operations on a 7.7% revenue rise. The company raised its 2001 EPS from operations guidance to $1.84-$1.88.

According to press reports, Polaroid (PRD) is discussing a debt-restructuring plan with its bankers and is considering a voluntary bankruptcy filing. The immediate issue is a loan covenant due to expire July 12.

First Republic (FRC) will be added to the S&P SmallCap 600 Index after the close of trading on July 11, replacing Pac-West Telecom, which is being removed for lack of representation.


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