Markets & Finance

S&P Lowers Tyco Debt Rating


S&P lowered its debt ratings on Tyco (TYC) and placed the company on CreditWatch. Tyco says it sent a letter to a Wall Street Journal editor calling Monday morning's article false, malicious, and said that the company's acquisitions were indeed disclosed. Earlier, the newspaper said the company disclosed it spent about $8 billion in the past three fiscal years on over 700 acquisitions that were never publicly announced, which raised questions about its financial disclosures. Prudential cut targets.

Banc of America says Cephalon (CEPH) is weak as investors apply the "cockroach theory" to accounting associated with its recently formed joint venture. BoA believes any impact is fully discounted, and recommends purchase.

Amazon.com ( AMZN) may not have as many liquid assets to cover its

obligations as investors think, according to press reports.

Enterasys Network (ETS) delayed the Aprisma spin-off; and also delayed the release of fourth quarter results in order to review a $4M sales contract. The company says the SEC is investigating them and their affiliates. S&P rates hold. Lehman, CS First Boston and Salomon downgraded.

Shares of Elan Corp. (ELN) declined further. The company posted $0.56 vs. $0.45 fourth quarter EPS from operations on 15% revenue rise, and cut the 2002 EPS guidance to $1.55-$1.65.

Priceline.com (PCLN) posted $0.01 fourth quarter GAAP loss vs. $0.62 loss on 3% revenue rise, and higher gross profit. Priceline sees breakeven to $0.02 first quarter EPS (pro forma) on $260M-$290M revenue.

Merrill downgraded Calpine (CPN) to near term neutral from strong buy, and long term buy from strong buy. UBS Warburg downgraded to buy from strong buy.

Nextel (NXTL) unit failed to make $41M payment on senior redeemable notes due 2010. The interest payment was due Friday.

AT&T Wireless (AWE) is among wireless companies trading lower in sympathy with concerns raised by Nextel unit's failure to pay its debt.

Williams (WMB) is prepared to expand planned asset sale program, if required, issue equity, regarding its commitment to address concerns about potential obligations tied to Williams Communications. S&P keeps hold.

CS First Boston says investors' fear that other network equipment companies may need to scrub their Asian channel sales, which could cause weakness in Extreme Networks (EXTR) and Foundry Netoworks (FDRY).

Moody's reportedly cuts Vaya's (AV) senior debt rating.

Medi-Hut (MHUT) is lower as a New York Post columnist Christopher Byron questioned the possibility that its rapid growth has been generated, in part at least, by undisclosed business ties to one of its own employees.

Right Manage (RMCI) posted $0.39 Q4 EPS, and says it is comfortable with $1.64-$1.80 2002 consensus estimates. Janney Montgomery downgraded to accumulate. Janney earlier Monday reiterated buy.

PDI Inc. (PDII) says the fee for service agreement between PDI and Bayer will be terminated effective April 15 vs. the expected date of

Aug. 31. As a result, PDI says 2002 EPS will be reduced by about $0.25-$0.30.

Lowe's Cos. (LOW) says due to better than anticipated weather and the resilient consumer, it expects fourth quarter same store sales in excess of previous guidance of 3%-5%; and expects to exceed $0.22-$0.24 fourth quarter EPS guidance.

KLA Tencor (KLAC) Goldman upgraded semiconductor equipment stocks and added KLA to its recommended list.

Bruker Daltonics (BDAL) received a contract for its novel RAPID remote detectors for chemical defense, and says the total contract value exceeds $1M, which has been financed by the U.S. Dept. of Defense Foreign Military Financing program.

Riverstone Network (RSTN) says it has not been notified that it part of SEC investigation related to Enterasys; Riverstone has no reason to believe it will be made party to proceedings. USB Piper upgrades to outperform from market perform.

ABN Amro downgraded Ciena (CIEN) to hold from add.

Hewlett-Packard (HWP) says it will exceed previous guidance for the first quarter, due to an uptick in consumer demand in both PCs, imaging, and printing solutions, and now expects revenues up moderately over the fourth quarter.


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