Markets & Finance

Royal Dutch Drops on Reserve Changes


Royal Dutch Petroleum (RD) has elected to restate its historical proven hydrocarbon booked reserves by 20%, a move that will change important comparator statistics for the oil and gas producer. Merrill downgraded to neutral from buy. SG Cowen downgraded to neutral from buy.

UTStarcom (UTSI) sees $1.87 to $1.92 2004 earnings per share (GAAP), vs. the previous guidance of $1.92 to $1.95, due to revised share calculation. The broadband-equipment maker says it sold 12.1 million shares to Banc of America. S&P downgraded to hold.

Vital Images (VTAL) lowered its fourth-quarter estimates to a loss per share of 1 cent to 4 cents, including a tax benefit, on $5.1 million to $5.4 million in revenue -- below analysts' expectations. Separately, the maker of 3D medical imaging software agreed to acquire HInnovation. Pacific Growth downgraded to equal-weight, from overweight.

Pulte Homes (PHM) says preliminary net new-home orders for the fourth quarter were 8,465 homes, a 31% increase over last year. Raymond James reiterated its strong buy rating.

Citigroup reportedly upgraded automation-software maker Autonomy (AUTN) to buy from sell.

Morgan Stanley upgraded lodging group Extended Stay America (ESA) to overweight from equal-weight.

Second Bancorp (SECD) agreed to be acquired by Sky Financial (SKYF) in a $321 million deal. Terms: 1.26 Sky Financial shares for each Second Bancorp share.

Aluminum producer Alcoa (AA) posted better-than-expected 39 cents fourth-quarter earnings per share from continuing operations, vs. a 17 cents loss on a 9% revenue rise.

SG Cowen upgraded Redback Networks (RBAKD) to outperform from underperfom.

Ford Motor (F) anticipates increased profit for 2004 to range from $1.20 to $1.30, excluding items. Ford says achievement of these goals will move the auto maker closer to meeting its mid-decade annual pre-tax goal of $7 billion, excluding items.

IBM Corp. (IBM) received a Wells Notice from the Securities and Exchange Commission in connection with the SEC's investigation of Dollar General (DG), a customer of IBM's Retail Stores Solutions unit. Dollar General says the SEC staff is considering recommending that the SEC bring civil injunctive action against the company for alleged violations of federal securities laws in connection with their restatement of financials for fiscal 1998-00. S&P reiterates buy on IBM.

Merrill downgraded SBC Communications (SBC) to sell from neutral, citing valuation and margins pressure in the wireline business.

Morgan Stanley reportedly downgraded Lucent Technologies (LU) to equal-weight from overweight.

Deutsche Bank downgraded AT&T (T) to sell, saying the long-distance carrier's stock price doesn't reflect deteriorating business fundamentals.

Barnes & Noble (BKS) posted 6% higher same-store sales for the nine-week holiday period, and 9.9% higher total sales. The bookseller inked a deal to take private Barnesandnoble.com at $3.05 cash per share.

ImcClone Systems (IMCL) achieved a milestone in its license agreement with Merck KGaA for the development of cancer drug Erbitux outside of North America. This triggers a $5 million equity milestone payment; upon payment, ImClone issued 127,199 share to Merck KGaA.

MedImmune (MEDI) announced the departure of CFO Gregory Patrick.


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