Markets & Finance

ConAgra Recalls Beef in Bacteria Scare


ConAgra (CAG) is recalling more than 18.6 million pounds of fresh and frozen ground beef because of potential bacteria contamination.

Ericsson (ERICY) posted a narrower Q2 loss of $296 million -- meeting expectations. The Swedish mobile-phone maker will cut another 5,000 jobs to cut costs, and warned that sales of mobile phones this year will fall more than 15% from 2001 levels, down from a previous forecast of a fall of more than 10%. The company also said it would issue eight billion new shares at a discount, to raise money for new financing.

Merrill Lynch downgraded Johnson & Johnson (JNJ) after the New York Times said the FDA is conducting a criminal investigation of its Puerto Rico factory that makes Eprex, J&J's anemia drug. An employee filed a lawsuit alleging he was pressed to falsify data to cover up manufacturing lapses. J&J says the product's integrity "has never been compromised."

Ask Jeeves reportedly dropped Overture Services (OVER) as its partner in the paid search business; Ask Jeeves inked a three-year advertising deal with Google. USB Piper says the loss of Ask Jeeves is of little consequence to the company.

Minerals Technologies (MTX) says International Paper plans to talk with other suppliers as the two companies' contract is near expiry. As a result, International Paper will shorten the depreciation schedules of Mineral Tech's satellite plants. Minerals Tech cut its 2002 EPS guidance to $2.78-$2.83.

Merck (MRK) posted Q2 EPS of $0.77 vs. $0.78 a year ago.

Consolidated Energy (CNX) cut the $0.25-$0.30 Q2 EPS guidance to $0.11. ConEd says it expects the board to reduce its quarterly dividend from $0.28 to $0.14 per share. Merrill Lynch downgraded to near term and long term neutral.

Guidant (GDT) says the FDA approved an expanded indication for the company's implantable cardioverter defibrillators. Guidant posted $0.53 Q2 EPS and sees double digit sales and EPS growth for the second half. S&P and AG Edwards upgraded.

McData (MCDTA) is higher after posting a $0.02 Q2 loss vs. $0.04 EPS (pro forma) on a 5% revenue drop, and sees a $0.01-$0.02 Q3 loss. Merrill Lynch and Deutsche Bank upgraded. S&P keeps avoid.

Nicor (GAS) shares tumbled after the company said regulators are reviewing allegations that it acted improperly in reporting benefits related to its performance-based rate (PBR) program. Merrill and Goldman downgraded; S&P keeps avoid, saying the market has no patience for accounting irregularities.

UAL Corp. (UAL) posted a $6.99 Q2 loss (basic), excluding items on 19% lower operating revenue, and says its cash burn is likely to be worse in Q3, and further deteriorate in Q4. S&P reiterates avoid.

DaimlerChrysler (DCX) reportedly is being investigated by the Dept. of Justice for price fixing.

T Rowe Price (TROW) posted $0.40 vs. $0.40 Q2 EPS. S&P downgraded to hold from accumulate.

AOL Time Warner's (AOL) chief operating executive Robert Pittman resigned Thursday, and two top executives from the Time Warner side of the company were promoted to senior positions. S&P reiterates avoid; Wit SoundView downgraded to neutral from outperform.

Microsoft (MSFT) posted fourth quarter 2002 earnings per share of $0.28 vs. $0.01 a year ago, led by demand for enterprise products. Revenues jumped 10% to $7.25 billion from $6.58 billion a year ago -- beating Wall Street's expectations. Microsoft's earnings per share included a one-time investment impairment charge of $806 million; the company also warned that the "current environment remains challenging." S&P keeps accumulate.

Sun Microsystems (SUNW) posted fourth quarter earnings per share of $0.01 vs. a loss of $0.03 a year ago, marking a return to profitability for the maker of servers for networks. However, Sun's revenue fell 14% to $3.4 billion amid the tough environment for information technology spending. Bear Stearns cut estimates; S&P reiterates hold.

Goldman Sachs removed PepsiCo (PEP) from its recommended list, and now the soft-drink manufacturer as market perform. S&P reiterates buy. The company posted $0.52 vs. $0.45 Q2 EPS on a 2.3% sales rise, saying it's confident it will meet its 13%-14% 2002 EPS growth target. Pepsi set a $5 billion stock buyback.

eBay (EBAY) posted $0.19 vs. $0.09 Q2 EPS on a 47% revenue rise, and sees $0.19 Q3 EPS on revenue of $278M-$281M. Pacific Crest reportedly downgraded; CS First Boston raised estimates. S&P keeps accumulate.

Adams Harkness downgraded KLA-Tencor (KLAC) to market perform from buy.

Symbol Technologies (SBL) posted $0.04 vs. $0.03 Q2 EPS from operations despite a 7.2% revenue decline, and still sees 2002 revenue of about $1.3B, and sees EPS from operations of $0.20-$0.25. Gerard Klauer upgraded to buy. S&P keeps hold.

Photronics (PLAB) sees a $0.01 Q3 loss to $0.01 EPS on sales of $96M-$98M, or 5%-7% below a year-ago's $103M. CIBC World downgraded, citing pricing pressure and soft demand for photomasks.


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