Markets & Finance

MetLife Misses Targets


After the close of trade Monday, insurance and financial services giant MetLife (MET) posted 47 cents earnings per share vs. 44 cents for the first quarter. Excluding an after-tax net investment loss, and before an accounting change, MetLife reported 62 cents earnings per share -- missing analysts' estimates by three cents. Revenues rose 5% to $8.38 billion.

After the close of trade Monday, online health-information company WebMD (HLTH) named Roger Holstein as its new CEO, with former chief executive Martin Wygood leaving the post but retaining the chairman title. Separately, WebMD reported 10 cents (pro forma) earnings per share, a penny better than analysts' estimates. Revenues rose 3.9% to $234.7 million. Also, WebMD reaffirmed 2003 estimates but says results may be in the lower end of its guidance.

The FDA granted AstraZeneca (AZN) approval for Iressa for the treatment of advanced non-small-cell lung cancer. The news boosted the drug sector higher.

Pharmacy services company Accredo Health (ACDO) dismissed Ernst & Young as auditors, and says it will seek damages in connection with auditing used by E&Y. Earlier Accredo posted third-quarter earnings per share (excluding a charge) of 37 cents, vs. 22 cents, on a sharp revenue rise. Accredo posted a loss of 37 cents per share in the third quarter on a GAAP basis. It upped its guidance to 58 cents to 60 cents for fiscal 2003 earnings per share (including a charge), and $1.32 to $1.34 (excluding a charge). Accredo also sees $1.53 to $1.58 fiscal 2004 earnings per share. Raymond James and S&P upgraded.

Hewitt Associates (HEW) sank after posting 24 cents second-quarter earnings per share. Because the company operated as a private partnership prior to June 2002, there's no comparable second quarter 2002 figure. The human resources outsourcing and consulting firm posted 26 cents second quarter core earnings per share. Hewitt sees 12% to 14% fiscal 2003 revenue growth, excluding two recent transactions.

Oak Technology (OAKT) agreed to be acquired by chipmaker Zoran (ZRAN) in a deal valued at $358 million, including $100 million in cash. Terms: 0.2323 shares of Zoran stock and cash in an amount equal to $1.78 for each Oak Technology share held. The total consideration represents $5.88 per share.

Scotia Capital downgraded Electronic Data Systems (EDS) to sector perform from sector outperform.

American Airline parent AMR Corp. (AMR) says in an 8-K filed on Friday that it had $1.8 billion cash, and $19.8 billion of net debt; market participants see the news as evidence AMR has a cash buffer.

Legg Mason upgraded Swift Transportation (SWFT) to buy from hold.

Jefferies downgraded Endo Pharmaceuticals (ENDP) to hold from buy on valuation.

Fairfax Financial (FFH) posted 10.60 Canadian dollars (including a pre-tax gain of C$140 million) vs. C$0.46 first quarter EPS on a 17% revenue rise.

Aquantive (AQNT) posted 3 cents first quarter EPS vs. a 6-cent loss (GAAP) on a sharp revenue rise. It sees 2 cents to 4 cents second quarter EPS, and 16 cents to 22 cents for 2003.

Scotia Capital downgrades Cox Communications (COX) shares fell after the cable operator posted 5-cents first-quarter loss per share, vs. 22 cents earnings per share, as higher expenses offset a 16% revenue rise. Cox sees 14% to 15% 2003 revenue growth, and expects to turn free cash flow positive for the first time. S&P reiterates hold.

La Jolla Pharmaceuticals (LJPC) shares climbed on heavy volume. La Jolla says based on talks with the FDA, it plans to submit a new drug application for its lupus drug candidate, Riquent.

Raymond James upgraded AmeriTrade (AMTD) strong buy from outperform, and upgraded ETrade (ET) to outperform from market perform.

Oxford Health Plans (OHP) shares jumped after the company posted first-quarter earnings per share of 86 cents (including 32 cents one-time charge), vs. 78 cents a year ago, on a 15% revenue rise. Its EPS beat analysts' estimate, and the health insurer raised its outlook for 2003. Goldman Sachs raised its estimates.

LendingTree (TREE) agreed to be acquired by USA Interactive (USAI) in a $626 million to $734 million deal. Terms: 0.6199 USA Interactive share for each LendingTree share. S&P keeps strong buy on USA Interactive.

Aircraft manufacturer and defense contractor Boeing (BA) is under investigation by the Justice Department for alleged use of documents on rival Lockheed Martin's rocket project in 1996, which both companies competed for but Boeing ultimately won. An inquiry is underway that could suspend or bar Boeing from future military work, according to The Wall Street Journal. S&P reiterates strong buy.

Theater system maker Imax (IMAX) posted 7 cents, vs. 6 cents (excluding a one-time gain), first-quarter earnings per share from continuing operations on a 8.6% revenue rise. Analysts had been expecting an average of 3 cents earnings per share.

Prudential upgraded Union Pacific (UNP) to buy from hold.

UBS Warburg downgraded Avnet (AVT) to neutral from buy on valuation.

J.P. Morgan upgraded grocery chain Safeway (SWY) to overweight from underweight.

Tyco 's (TYC) accounting woes may not be over. Notably, Tyco should restate past financial results, a more severe step than taking a one-time pretax charge, according to The Wall Street Journal.

Micros Systems (MCRS) agreed to acquire Datavantage Corp., a provider of information-technology solutions, for a combination of cash and stock in the amount of about $52 million.

AOL Time Warner's (AOL) largest shareholder will oppose re-election to the board of retiring chairman Steve Case, and two other directions at an annual meeting on May 16, according to The Wall Street Journal.

Internet brokerage firm TradeStation (TRAD) raised the 20 cents 2003 earnings per share guidance to 25 cents, assuming no improvement in market conditions. TradeStation says if conditions improve, it expects a further rise in earnings.

BioMarin Pharmaceuticals (BMRN) posted 36 cents first-quarter loss per share, vs. 51 cents loss, from continuing operations on an 8.5% rise in revenue from BioMarin/Genzyme.

OSI Systems (OSIS), which makes X-ray screeners for airports as well as medical patients, posted 24 cents, vs. 17 cents, third-quarter earnings per share on a 39% revenue rise.

Winn-Dixie Stores (WIN) COO Frank Lazaran will be promoted to president and CEO on July 26, 2003, replacing CEO Allan Rowland who will retire.

Regeneron Pharmaceuticals (REGN) posted 68 cents first-quarter loss per share, vs. 58 cents loss, despite a sharp revenue rise.


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