Markets & Finance

Elan Denies Accounting Cover Up


Elan PLC (ELN) rejected a report that says it stands out for its accounting, which some are questioning. Friedman Billings reiterates buy. S&P keeps hold. Elan says policies regarding joint ventures and business are fully disclosed in SEC filings.

SPX Corp. (SPW) S&P says rumor mill suggests many reasons for the stock decline, including possible asbestos liability at one of its units; certain accounting questions that hurt Tyco on Tuesday. S&P maintains hold.

Darden Restaurants (DRI) says January same-restaurant sales at Red Lobster unit rose 15%-16%, 11%-12% at Olive Garden.

Lazard upgraded Honeywell (HON) to buy from hold.

Digital Insight (DGIN) climbed after posting $0.04 4Q EPS vs. a $0.19 loss (pro forma) on a 49% revenue rise. The company sees $0.02-$0.03 2002 EPS on $30.0M-$30.5M revenues. JP Morgan upgraded to buy from long term buy.

Dresdner Kleinwort downgraded Qwest Communications (Q) to hold from add.

Biovail (BVF) S&P downgraded to hold from buy. saying the specialty-drug group is weak amid valuation concerns, accounting and tax issues, and generic threats.

Tyco International (TYC) slid after chairman Dennis Kozlowski and CFO Mark Swarz sold more than $100M in Tyco stock last year by returning it to the company, despite public comments that they rarely, if ever, sold Tyco shares, according to press reports.

Crossmann Communities (CROS) soared on news it will be acquired by Beazer Homes in a $603M deal. Terms: $17.60 cash, and 0.3498 Beazer share, with stock component subject to adjustment based on collar. At Beazer's Tuesday's closing price, Crossman is valued at $46.11 per share.

AOL Time Warner (AOL) posted $0.33 vs. $0.28 fourth quarter cash EPS on 3.9% revenue rise, and sees 5%-8% 2002 revenue growth, and 8%-12% EBITDA growth. Total profit fell to a loss of $0.41 vs. a $0.25 loss. The Internet and media company also took a $1.7 billion write-down of some investments.

Salomon lowered Williams (WMB) estimates and target. On Tuesday the company delayed 2001 results pending assessment of its contingent obligations related to Williams Communications. S&P maintains hold. Company shares are trading lower.

Mentor Corp. (MNTR) rose after posting $0.41 vs. $0.30 third quarter EPS on 28% revenue rise. Adams Harkness raised the target.

Dresdner Kleinwort downgraded Qwest Communications (Q) to hold from add. On Tuesday the company posted a $0.07 fourth quarter loss vs. $0.16 EPS (pro forma), and cut the $4.2B-$4.3B 2002 capital expenditure forecast to $4B-$4.2B. Qwest is trading lower.

PCSA Airgate (PCSA) dropped after posting a $1.68 first quarter loss vs. a $2.64 loss despite sharply higher revenues, and sees $8M-$10M EBITDA from operations. CIBC World says first quarter net is disappointing and cut estimates.

CNET Networks (CNET) is higher after it posted a $0.10 fourth quarter loss (adjusted) vs. $0.09 EPS on a 41% revenue drop. Goldman downgraded to market perform from market outperform.

CompuCredit (CCRT) dove after posting $0.12 vs. $0.24 fourth quarter EPS (preliminary, before non-cash adjustments). The company continues to cautiously view opportunities for 2002, but will not grow at expense of credit quality or liquidity.

Renaissance Learning (RLRN) shot up after posting stronger EPS of $0.23 vs. $0.18 for the fourth quarter on 20% higher revenues. CS First Boston upgraded to buy from hold.

JP Morgan downgraded Century Aluminum (CENX) to market perform from long term buy. Shares of the company are lower.

Exult (EXLT ) is slightly higher after saying it is confident it will be profitable for third quarter 2002. Goldman added to recommended list, was rated market outperform.

ChevronTexaco (CVX) fell after saying it is considering a bid for either Phillips Petroleum (P) or Conoco (COC) in an effort to break up their proposed $17.1B merger, according to press reports.

AT&T (T) is down slightly. The telecom posted $0.05 vs. $0.24 fourth quarter EPS from continuing operations on a 9.5% revenue drop. AT&T sees $0.02-$0.05 first quarter 2002 EPS from continuting operations, including amortization benefit of SFAS No. 142.

Guidant (GDT ) rose after posting $0.47 vs. $0.41 fourth quarter EPS (adjusted) on an 11% sales rise. UBS Warburg says Guidant has a deal with the FDA that could enable approval of Contak CD later in the first quarter, and maintains hold.

Veritas (VRTS) fell sharply after it posted $0.15 vs. $0.19 fourth quarter EPS (before amortization expenses) as higher operating costs offset aslight revenue rise. S&P maintains hold.

Level 3 Communications (LLL) dropped after posting $1.06 vs. $0.89 fourth quarter EPS on a 27% revenue rise.

Anadarko Petroleum (APC) is down. The company restated third quarter EPS to include $1.7B in charges due to and error in calculating impairment of book value of U.S. oil/gas properties.

Intersil Corp. (ISIL) slid after posting weaker $0.12 vs. $0.18 fourth quarter EPS on 7.2% revenue rise. S&P maintains hold.

Kraft ( KFT) rose after posting stronger $0.32 vs. $0.24 fourth quarter EPS (pro forma). Kraft sees $2.00-$2.05 2002 EPS. S&P maintains buy.

Idec Pharmaceutical (IDPH) slid after posting $0.16 vs. $0.12 fourth quarter EPS on 78% revenue rise. S&P maintains accumulate.

Delph Financial (DFG) skidded after announcing plans for reserve strengthening, primarily related to excess workers' comp business, that will result in a $1.26 per share charge to 2001.

Celgene (CELG) falls after posting $0.08 vs. $0.05 fourth quarter EPS on 51% revenue rise. It set a goal for 2002 Thalomid sales of $110M-120M.

Tommy Hilfiger (TOM) drops after posting $0.41 vs. $0.47 third quarter EPS on higher expenses and flat revenues. Tommy notes the lower than expected effective tax rate and sees $0.40 fourth quarter EPS, with $1.55-$1.75 fiscal 2003 EPS.

Owens-Illinois (OI) is down after posted $0.18 vs. $0.12 fourth quarter EPS on 1.4% sales rise, and sees year-over-year comp sales in 2002 benefiting from moderating energy prices and a less volatile foreign exchange.


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