Markets & Finance

Sealed Air Deflates on Trial News


Shares of Sealed Air (SEE) plunged Tuesday. The company said it will seek an appeal of a court decision that says post-1998 claims should be included at the company's September, 2002 trial of fraudulent transfer claims against Sealed Air. S&P reiterates accumulate.

Medical-device maker Guidant (GDT) will buy privately held Cook Inc. for $3 billion, which may give Guidant access to Cook's experimental drug-coated stent technology. S&P reiterates its buy rating.

Morgan Stanley upgraded JDS Uniphase (JDSU) to overweight, citing liquidity, competitive position and valuation.

Affiliated Computer (ACS) posted $0.49 vs. $0.33 Q4 EPS on 56% higher revenues. S&P reiterates buy.

Biogen (BGEN) and Celtech Group plc announced that two Phase III studies of their experimental drug, CDP 571, did not meet their goals for patients with moderate-to-severe Crohn's disease. S&P maintains sell.

Gadzooks (GADZ) says July sales are trending significantly lower than expected. The company sees $23.5 million to $24.2 million July sales, $76.1 million to $76.8 million Q2 sales, and breakeven to a $0.04 loss for Q2.

Banc of America downgraded Sylvan Learning (SLVN) to market perform from buy.

Alpharma (ALO) posted $0.20 vs. $0.29 Q2 EPS despite a 30% revenue rise and lowered its $1.09 2002 EPS estimate to $0.90, citing lowered estimates for Animal Health and the U.S. Generics businesses. Banc of America downgraded to market perform from buy.

Embrex (EMBX) posted $0.19 vs. $0.22 Q2 EPS on flat sales and notes the impact from an overabundance of all types of meat in the U.S. poultry industry. Embrex revised its revenue growth and pre-tax income growth estimates for the next few years to 10%-20%.

AOL Time Warner (AOL) and AT&T agreed to temporarily suspend the registration rights process associated with AT&T's stake in Time Warner Entertainment for a short period so that they and Comcast can pursue talks of an alternative deal.

Eclipsys (ECLP) posted a $0.07 Q2 loss vs. $0.03 EPS (GAAP) on a 9.6% revenue drop. JP Morgan downgraded to market perform from long-term buy.

Prosecutors are demanding that ImClone Systems (IMCL) ex-CEO Samuel Waksal serve seven to 10 years in prison on insider-trading charges, according to The Wall Street Journal.

OM Group (OMG) posted $0.89 vs. $0.83 Q2 EPS on sharply higher sales, and sees $0.89-$0.94 Q3 EPS, and $3.60-$3.68 for 2002.

FreeMarkets (FMKT) posted $0.10 vs. $0.17 Q2 EPS (excluding items) despite a 19% revenue rise, and sees $0.02-$0.04 Q3 operating EPS, and $0.04-$0.06 Q4 operating EPS. Goldman downgraded to market peform from market outpeform, and Morgan Stanley cut estimates and downgraded to equal-weight from overweight.

Standard & Poor's Rating Services lowered Corning's (GLW) long-term and short-term corporate credit ratings to BB+, one notch below investment grade, citing depressed conditions and poor prospects for recovery in the company's core fiber segment. Moody's Investors service also lowered its debt rating on Corning to below investment grade, or junk status. Morgan Stanley downgraded Corning to underweight from equal-weight.

Fresh Del Monte (FDP

posted $1.18 vs. $0.77 Q2 EPS on a 4.8% sales rise.

Annuity & Life (ANR) will delay its Q2 earnings release. As announced July 25, the company is reviewing implementation of FAS 133; in addition, it says it will report a loss on its Transamerica Re annuity contract.

Coach (COH) posted $0.19 vs. $0.10 Q4 EPS on a 30% sales rise, and sees at least $180 million in Q1 fiscal 2002 sales, and $0.18 EPS. The maker of luxury handbags also sees $805 million to $830 million fiscal 2003 sales, and $1.13-$1.15 EPS.

International Multifoods (IMC) will sell its foodservice distribution business to a unit of Wellspring Capital Management for $180 million cash, and expects the divestiture to reduce fiscal 2003 EPS by up to $0.40. The company sees $1.50-$1.60 fiscal 2003 from continuing operations.

Anheuser-Busch (BUD) will form an alliance with Tsingtao Brewery Co. in China, increasing its ownership level in Tsingtao.

Rent-A-Center (RCII) posted $1.22 vs. $0.74 Q2 EPS on a 12% revenue rise, and sees $1.06-$1.10 Q3 EPS.

Rudolph Technology (RTEC) posted $0.04 vs. $0.25 Q2 EPS on 43% lower revenues, and sees $0.05 Q3 EPS. The company expects total revenue for 2002 to exceed industry growth averages. S&P upgraded to hold from avoid.

CSG Systems (CSGS) lowered its $1.90-$2.05 2002 EPS forecast to $1.44-$1.57, citing tightened spending by telecom providers. CSG will cut its workforce by about 10%.


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