Markets & Finance

Network Appliance Skids


Network Appliance (NTAP) shares skidded after the data storage company posted fourth quarter EPS of $0.04 (pro forma), vs. $0.02 a year ago, as lower total operating costs offset 9.2% revenue decline. S&P keeps hold, while Robertson Stephens says it remains cautious on the shares.

Merrill downgraded Dynegy (DYN) to near-term and long-term neutral from strong buy. S&P cut estimates, and maintained an avoid recommendation, saying the shares were down on fears credit concerns will translate into reduced earnings power.

Schering-Plough (SGP) reportedly says, in a first quarter 10Q filing, the FDA's Office of Criminal Investigation in Puerto Rico is conducting a preliminary investigation into one or more of drugmaker's products.

Abbott Labs (ABT) says it has been informed by the FDA that its Lake County diagnostic manufacturing operations will be found not in conformity with Quality System Regulation. S&P and Merrill Lynch downgraded the shares.

John Rigas resigned as chairman and CEO of Adelphia Communications (ADLAE). S&P maintained its avoid opinion on the shares, while Salomon Smith Barney downgrades to neutral. Trading in the stock was halted all day.

Computer Sciences (CSC) shares moved solidly higher after the company posted fourth quarter EPS of $0.82, vs. $0.22 loss per share, on 5.1% higher revenue. Salomon Smith Barney upgraded the shares to outperform from neutral. S&P maintains its hold rating.

Applied Materials (AMAT) reported second quarter earnings of $0.03 per share, a penny better than the consensus estimate. Revenues fell 45.9% from a year ago to $1.16 billion, while new orders rose 51% to $1.69 billion from the first fiscal quarter of 2002. The chip equipment maker sees $1.2 billion to $1.3 billion in third quarter revenues. Goldman Sachs and CS First Boston raised estimates, while S&P maintains a hold recommendation.

Hewlett-Packard (HPQ) reported second quarter EPS of $0.25, a penny below the consensus estimate. Revenue fell 16% to $10.62 billion. The company says it is not counting on a meaningful improvement in IT spending until 2003.

Photronics (PLAB) reported $0.08 vs. $0.32 second quarter EPS despite a 2.5% revenue rise. S&P maintains accumulate.

Boron LePore (BLPG) agrees to be acquired by Cardinal Health (CAH). Terms: $16 cash per BLPG share.

b>Gerber Childrenswear (GCW) agrees to be acquired by Kellwood Co. for a combination of cash and stock valued at $6.85 per share.

Merrill named Universal Health (UHS) its Focus 1 stock of the week.

Bear Stearns downgraded QLogic (UHS) to neutral from attractive.

Salomon Smith Barney upgraded News Corp. (NWS) to buy from outperform. On May 14, the company posted $0.18 vs. $0.12 third quarter earnings from operations per American Depositary Receipt.

Microsoft (MSFT) reduced the price of its Xbox to $199.99. CS First Boston says the price cut is positive, and not a concern for fiscal 2003 estimates. The firm reiterated its strong buy ratingon Microsoft.

Marvel (MVL) posted a $0.10 first quarter loss per share (basic), vs. a $0.37 loss, on a 34% sales rise. It sees $1.00-$3.00 second quarter EPS, and $2.00-$4.00 for 2002.

Federated Department Stores (FD) reports first quarter EPS of $0.43, vs. $0.42 a year ago, despite 2.9% lower sales. The retailer sees $0.50-$0.60 second quarter EPS.

Abercrombie & Fitch (ANF) reported first quarter EPS of $0.23, vs. $0.20, on 19% sales rise. The retailer raised second quarter EPS guidance to $0.26. Prudential upgraded the stock to buy from hold, while Wachovia raised estimates. S&P kept its hold recommendation.

BEA Systems (BEAS) reported first quarter EPS (pro forma) of $0.06 on 13% lower revenue. Wachovia cut estimates, while S&P kept hold.

Abgenix (ABGX) discontinues clinical development of ABX-IL8 for psoriasis. The company currently has no plans to conduct further clinical studies involving ABX-IL8. Robertson Stephens says it would be buyers on today's weakness.

Merrill reportedly upgrades AOL Time Warner (AOL) to near term buy, maintains long term strong buy.

Computer Associates (CA) reported fourth quarter loss per share of $0.41 (GAAP basis), vs. $0.71 loss, on 5.6% higher revenues. The company sees breakeven-$0.01 first quarter EPS on $770-$775 million in revenues, $0.10-$0.13 fiscal year 2003 EPS on $3.2-$3.26 billion in revenues.


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