Markets & Finance

TXU Chops Dividend, Shares Tumble


S&P downgraded Yahoo! (YHOO) to sell.

SWS Securities says confusion regarding final Medicare reimbursement rates for 2003 creates buying opportunity for Dianon Systems (DIAN).

Merrill Lynch upgraded Business Objects (BOBJ) to buy from neutral and has a $21.50 target.

Silgan Holdings (SLGN) sees $1.30-$1.35 3Q EPS vs. the previous forecast of $1.40-$1.60, citing lower than expected profitability levels in the plastic container business and in its White Cap joint venture.

Wampler Foods expanded a voluntary recall of cooked deli products produced at its Franconia, Pa., facility from May 1, 2002 through Oct. 11 due to concerns about Listeria. The Wampler is brand marketed by Pilgrim's Pride (CHX).

Jefferies downgraded Kindred Health (KIND) to hold from accumulate. On Friday the company said it would record about $55 million of additional costs for professional liability claims above its normal third quarter provision, and withdrew its guidance.

Banc of America says the generic Prilosec setback is an incremental positive for Abbott Labs' (ABT) Prevacid.

Salomon Smith Barney downgraded Marvell (MRVL) to underperform from in-line. Wachovia also downgraded; CIBC World cut estimates. On Friday the company said it amended its product development agreement with Intel.

Chiron (CHIR) raised the third quarter earnings per share pro forma guidance to about $0.45 vs. the previous $0.32 estimate, citing improved performance in all of its business units, and raised the 2002 earnings per share pro-forma guidance to $1.25-$1.30. S&P reiterates accumulate.

Shaw Group (SGR) posted $0.70 vs. $0.45 fourth quarter earnings per share on a sharp revenue rise. To reflect the downturn in the domestic power generation market, Shaw reduced its previous $2.72-$3.00 fiscal 2003 earnings per share guidance to $1.92-$2.08. S&P reiterates hold.

A judge ruled that Andrx (ADRX) infringed on two patents held by AstraZeneca (AZN) for its Prilosec. A judge for the Southern District Court of New York ruled that the two patents are valid until 2007. CIBC World downgraded Andrx to sector underperform from sector outperform. CS First Boston downgraded; S&P keeps its hold ranking. Meanwhile, Bear Stearns upgraded AstraZeneca, while UBS Warburg raised its target.

TXU (TXU) cut its quarterly dividend by 79% to ensure that its credit and liquidity position remains strong. Morgan Stanley reportedly downgraded to underweight. CS First Boston downgraded; S&P cut TXU to sell.

Airbus reportedly won a contract from Europe's EasyJet to supply up to 240 planes in a multi-billion dollar deal, beating out Boeing (BA). Separately, Boeing is expected to ratchet down jet production through at least 2004, according to The Wall Street Journal.

Merrill downgraded General Motors (GM) and Ford (F) to neutral from buy, citing worsening industry fundamentals, especially deteriorating car prices.

Morgan Stanley reportedly downgraded Texas Instrument (TXN) to equal-weight from overweight.

Bristol-Myers (BMY) says the FDA will not consider approval for the company's investigational compound omapatrilat (Vanlev) until Bristol-Myers conducts at least one additional clinical trial.

Eaton (ETN) posted $1.26 vs. $0.66 third quarter earnings per share on a 5% sales rise, and sees $0.90-$1.00 fourth quarter earnings per share.

Knight Ridder (KRI) posted $0.67 vs. $0.65 third quarter earnings per share (GAAP) on flat operating revenue, and thinks the current consensus for $1.14 fourth quarter earnings per share and $3.46 for 2002 is "do-able."


Steve Ballmer, Power Forward
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