Markets & Finance

Cigna Slashes Forecasts, Shares Plunge


Cigna (CI) sees $1.47 third quarter operating earnings per share, and $6.50-$6.75 for 2002 due to weak results in its Employee Health Care and the Life & Disability segments. A.M. Best lowered its debt ratings. CIBC World downgraded to sector underperform. Merrill Lynch and S&P downgraded to sell.

Duane Reade (DRD) posted $0.33 vs. $0.27 third quarter earnings per share before charges on 6% higher same store sales. S&P reiterates accumulate.

Triumph Group (TGI) posted $0.63 vs. $0.63 third quarter earnings per share on a 5.3% revenue decline, and says it is disappointed in the significant drop in aircraft build rates in the commercial and business jet markets, and the drop in passenger miles.

Merrill downgraded Noble (NE) to neutral from buy. On Thursday the company posted $0.37 vs. $0.58 third quarter earnings per share from operations on a 36% revenue decline.

AG Edwards downgraded Amerada Hess (AHC) to sell from hold. On Thursday the oil explorer posted a $1.54 third quarter loss and forecast a 9% drop in 3003 oil & gas production vs. 2002 levels.

Emulex (ELX) posted $0.19 first quarter earnings per share (pro forma) on a 34% revenue rise, and posted $0.37 first quarter earnings per share (GAAP). Emulex sees second quarter earnings per share (pro forma) of up to $0.19. S&P keeps hold. Deutsche Bank upgraded.

Digital Insight (DGIN) posted $0.05 third quarter earnings per share (GAAP) on a 38% revenue rise, and posted $0.11 earnings per share (pro forma). The company sees $0.11-$0.12 fourth quarter earnings per share (pro forma) on $34 million to $34.5 million. USB Piper and Deutsche Bank downgraded.

Gillette (G) announced that Warren Buffett will leave the board. S&P reiterates accumulate.

Navistar (NAV) widened its fourth quarter loss from continuing operations forecast to $1.05-$1.10, citing production slowdowns in its engine and truck divisions, and inefficiencies at certain facilities during protracted negotiations.

Pride International (PDE) posted a $0.04 third quarter loss vs. $0.25 earnings per share from operations. Baird downgraded to neutral from outperform.

Lockheed Martin (LMT) posted $0.66 third quarter earnings per share from continuing operations vs. a $0.20 loss (GAAP) on 5.2% higher net sales. The defense contractor sees 2002 earnings per share from continuing operations at the higher end of the $2.50-$2.55 range; and sees $2.70-$2.75 for 2003.

Amazon.com (AMZN) posted a $0.09 third quarter loss vs. a $0.46 loss on a 33% revenue rise and posted breakeven (pro forma) third quarter. Amazon sees $1.325 billion to $1.425 billion fourth quarter sales, and a 10% 2003 sales rise. S&P raised its estimate and reiterated its hold rating, but Prudential downgraded to sell from hold. USB Piper downgraded to market perform.

Citigroup (C) is planning job cuts in its investment banking and corporate banking businesses, with more than 1,000 employees to be dismissed, according to The New York Times.

P&O Princess Cruises withdrew its recommendation of a merger with Royal Caribbean (RCL). P&O will pay Royal Caribbean an agreed break fee of $62.5 million. Instead, P&O has penned a new $5.4 billion deal with Carnival Cruises.

Electronic Arts (ERTS) posted $0.34 second quarter earnings per share vs. a $0.24 loss on a 89% revenue rise, and sees $1.52-$1.60 third quarter earnings per share on $1.075 billion to $1.175 billion revenue and $2.24-$2.32 fiscal 2003 earnings per share on $2.3 billion to $2.4 billion revenue. S&P and CS First Boston raised their estimates.

Starbucks (SBUX) sees $0.15 fourth quarter earnings per share and $0.55 fiscal 2002 earnings per share (excluding a one-time charge and a captial gain), vs. the previous $0.54 guidance.

Dana (DCN) posted $0.30 third quarter earnings per share vs. a $0.05 loss from operations on a 6.9% revenue rise. Dana says it has cut its workforce by 9%. Despite the uncertain environment, Dana says it remains confident it will achieve $0.50-$0.55 second-half earnings per share.

Lehman reportedly upgraded Wyeth (WYE) to overweight from equal-weigh, and reportedly upgraded Schering-Plough (SGP) to equal-weight from underweight.

American Electric Power (AEP) posted better than expected $1.21 vs. $1.43 third quarter ongoing earnings per share, and still sees $2.85-$3.15 2002 earnings per share. The company says it is evaluating options for exiting the communications business.


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