<% ' AvantGo:MarketClose %>DJIA 8495.03 +123.06 (+1.47%) S&P 500 1085.93 +17.84 (+1.67%) Nasdaq 1757.19 +19.84 (+1.14%) Value Line ndx 838.64 +10.96 (+1.32%) 30-Year Bond 106 14/32 +21/32 5.08% Yield<% ' AvantGo:End %>
<% ' AvantGo:Heroes %>The NBA season is still in dry dock, but at least one man is already working hard to follow in Michael Jordan's footsteps. Radio and TV network operator CBS Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBS)") else Response.Write("(NYSE: CBS)") end if %> said President and COO Mel Karmazin will replace Chairman and CEO Michael Jordan (no, not him, but notice who runs that website) when the chief retires, a move expected by year end. CBS stock ran up $2 5/8 to $28 today after broadcasting break-even (before a $68 million charge) Q3 operating EPS this morning, beating the $0.02 per share operating loss of a year ago and the $0.01 per share loss projected by analysts. The charge, taken to "streamline" CBS's TV operations, may help clear CBS's picture. Although the company's cable networks -- The Nashville Network and Country Music Television -- led the 15% TV revenue growth, Karmazin said reductions in its cost structure combined with improved ratings at the CBS Television Network "will enable the Network to become a positive contributor to the Company's future cash flows."
Broadband network equipment developer Antec Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ANTC)") else Response.Write("(Nasdaq: ANTC)") end if %> shot up $5 1/4, or 43.3%, to $17 3/8 on yesterday's after-market news that AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> signed a contract to buy the Cornerstone cable telephony system from Antec and Arris Interactive, a joint venture Antec has with Northern Telecom <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NT)") else Response.Write("(NYSE: NT)") end if %>. AT&T is buying the system for installation in Tele-Communications Inc.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCOMA)") else Response.Write("(Nasdaq: TCOMA)") end if %> cable network households, as AT&T is acquiring TCI for stock originally valued at $48 billion. The contract's initial order, for $50 million in Cornerstone technology, will be delivered immediately. The pact could mean up to $900 million in total sales for Antec and Arris Interactive, as the first shipment covers only 2 million of TCI's 17 million total cable homes. The deal could provide an exponential financial boost for Antec, whose revenues last year totaled $480.1 million. Nortel's stock got a slight boost of its own today, rising $2 1/8 to $41 3/4. For more on Nortel, see a synopsis of the company's Q3 Conference Call.
QUICK TAKES: Online book and music retailer Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> swung up $9 7/16 to $126 1/2 after it sent out its Q3 results last night, posting a pro forma operating loss of $0.49 per share (excluding acquisition-related and ongoing amortization charges). For the quarter, net cash flow from operations was virtually neutral... Drug company Pharmacia & Upjohn <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PNU)") else Response.Write("(NYSE: PNU)") end if %> popped up $2 13/16 to $50 5/8 after saying that surging U.S. prescription sales helped boost Q3 EPS to $0.41 (before one-time items), better than last year's $0.35 and even with Street projections... Tobacco and food giant RJR Nabisco Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RN)") else Response.Write("(NYSE: RN)") end if %> climbed $1 5/8 to $27 15/16 as Duff & Phelps Credit Rating said there's increased speculation about a potential spin-off of Nabisco Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NA)") else Response.Write("(NYSE: NA)") end if %>. Nabisco itself added $1 3/8 to $37 1/8.
Big Blue wasn't blue today, as IBM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBM)") else Response.Write("(NYSE: IBM)") end if %> shares moved ahead $2 9/16 to $148 3/4 after the company unveiled a personal computer priced at $599 in its efforts to gain market share in the low-priced PC category... Casual attire retailer Gap Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPS)") else Response.Write("(NYSE: GPS)") end if %> zipped up gains of $3 7/8 to $59 after announcing a 3-for-2 stock split payable Nov. 30 and a plan to buy back up to 30 million pre-split shares... National Car Rental, Alamo Rent-A-Car, and AutoNation USA used car superstore parent Republic Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RII)") else Response.Write("(NYSE: RII)") end if %> drove up $1 9/16 to $16 11/16 after saying "strong growth in all divisions" helped Q3 EPS to $0.38, a dime better than last year... Space and information systems company Orbital Sciences Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ORB)") else Response.Write("(NYSE: ORB)") end if %> shot up $2 9/16 to $33 3/8 after saying it has won a five-year launch services contract with NASA that could be worth as much as $400 million.
Multi-user computer systems and equipment maker Data General <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DGN)") else Response.Write("(NYSE: DGN)") end if %> rose $3 1/16 to $16 1/16 after snapping a two-quarter run of unprofitable results with fiscal Q4 EPS of $0.07, outperforming the Street's expected $0.04 loss. Its Clarion storage systems revenues were up 18% sequentially, and the company is quickly moving away from dependence upon Hewlett Packard <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %>, according to analysts. Storage systems maker Storage Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STK)") else Response.Write("(NYSE: STK)") end if %>, which is a Data General re-seller, moved up $2 5/8 to $32 5/16 while enterprise storage systems company EMC Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EMC)") else Response.Write("(NYSE: EMC)") end if %> climbed $3 3/8 to $65 3/4... Savings and loan holding company First Coastal Bankshares <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FCBK)") else Response.Write("(Nasdaq: FCBK)") end if %> deposited gains of $2 to $21 1/2 after agreeing to be acquired by Centura Banks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBC)") else Response.Write("(NYSE: CBC)") end if %> for stock worth $117 million, or $23.50 per share, a 21% premium to First Coastal's close yesterday.
Instant photographic imaging products maker Polaroid Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PRD)") else Response.Write("(NYSE: PRD)") end if %> rose $3 3/8 to $27 3/8 after The Wall Street Journal's "Heard on the Street" reported that private investor Joseph Harrosh, who has taken a 5.3% stake in the company, has a history of making investments right before a takeover or a jump in the stock... Biosciences information and research products company Perkin-Elmer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PKN)") else Response.Write("(NYSE: PKN)") end if %> moved up $5 7/16 to $84 9/16 after saying it will meet its financial goals for fiscal 1999 and is evaluating "strategic alternatives" for its analytical instruments business. The company reported Q1 EPS of $0.35 (before charges), $0.03 ahead of estimates... Long-distance telecommunications firm Tel-Save Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TALK)") else Response.Write("(Nasdaq: TALK)") end if %> chattered ahead $1 3/8 to $8 5/8 after it announced it will resume a plan, suspended in September, to buy back up to $300 million of its stock and other securities.
Semiconductor fabrication systems maker Applied Materials <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMAT)") else Response.Write("(Nasdaq: AMAT)") end if %> moved up $1 1/4 to $35 7/16 after yesterday announcing that Cirent Semiconductor, a joint venture between Lucent Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %> and Cirrus Logic <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CRUS)") else Response.Write("(Nasdaq: CRUS)") end if %>, has chosen Applied's Endura Vectra IMP system to deposit the titanium liner and titanium nitride barrier layers of aluminum interconnect structures for Lucent's 0.25 micron generation logic devices at its Orlando plant... Laser vision correction products manufacturer and former Daily Double VISX <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VISX)") else Response.Write("(Nasdaq: VISX)") end if %> gained $7 1/2 to $49 1/2 after saying Q4 earnings momentum continues to be strong and it doesn't expect the outcome of the recent U.K. patent lawsuit to have any material effect on earnings. BancBoston Robertson Stephens gave VISX a "buy" rating with a price target of $68 per share.
Biotechnology firm Genzyme <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GENZ)") else Response.Write("(Nasdaq: GENZ)") end if %> jumped $2 3/4 to $42 9/16 after being named a Merrill Lynch "Focus 1 Selection" with a 12-month price target of $52 a share in the wake of licensing its p53 gene therapy patent rights to Schering-Plough <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGP)") else Response.Write("(NYSE: SGP)") end if %>, which could mean more than $40 million in fees and royalties for Genzyme... Magazine, books, and recorded music publisher Reader's Digest Association <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RDA)") else Response.Write("(NYSE: RDA)") end if %> flipped ahead $1 7/8 to $20 5/16 after it said full-year 1999 results are expected to show "modest improvement" over 1998 levels. Fiscal Q1 EPS was $0.02, up from an $0.05 loss last year and beating the market's projected $0.01 loss... Management software developer Micromuse <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MUSE)") else Response.Write("(Nasdaq: MUSE)") end if %> grabbed $2 to close at $16 1/2 after late yesterday reporting fiscal Q4 EPS of $0.05, compared with a net loss of $0.50 last year and beating analysts' projections by $0.02.
Earnings Movers
Chiron Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CHIR)") else Response.Write("(Nasdaq: CHIR)") end if %> up $1 7/8 to $22 7/8; Q3 EPS: $0.19 (excluding charges) vs. loss of $0.11 last year; Estimate: $0.14
Gilead Sciences <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GILD)") else Response.Write("(Nasdaq: GILD)") end if %> up $1 3/4 to $28; Q3 EPS: $0.58 loss vs. $0.35 loss last year; Estimate: $0.65 loss
Humana Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HUM)") else Response.Write("(NYSE: HUM)") end if %> up $1 3/4 to $18 1/8; Q3 EPS: $0.32 (before charges) vs. $0.27; Estimate: $0.32
WellPoint Health Networks <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WLP)") else Response.Write("(NYSE: WLP)") end if %> up $9 11/16 to $71 15/16; Q3 EPS: $0.95 (excluding tax benefit) vs. $0.79 last year; Estimate: $0.95<% ' AvantGo:End %>
<% ' AvantGo:Goats %>After losing nearly $3 yesterday following an apparently strong Q3 earnings report, Safeskin <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SFSK)") else Response.Write("(Nasdaq: SFSK)") end if %>, a leading manufacturer of powder-free, disposable synthetic gloves for hospitals and other medical personnel, was skinned for a $3 1/4 loss to $21 1/2 today. The plunge came after Salomon Smith Barney analyst Melissa Wilmoth cut her rating from "buy-high risk" to "neutral-high risk" and lowered her FY99 EPS target to $1.22 from $1.29. Of paramount concern was the third quarter surge in accounts receivable and inventories, which appeared worrisome in light of continued evidence of higher-than-expected inventories at distributors. "These concurrent trends are a classic sign of potential trouble," noted Wilmoth in a research update. However, investors might want to take a closer look at this very high return on capital business and decide on their own whether the concern today was warranted.
Contract pharmaceutical research outsourcer and consulting firm Parexel International Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRXL)") else Response.Write("(Nasdaq: PRXL)") end if %> tumbled $15 3/16, or 41.9%, to $21 1/16 after reporting fiscal Q1 EPS of $0.22 versus $0.18 a year ago, which was $0.02 shy of the Street's mean estimate. The company blamed the shortfall on lower business authorizations compared to prior quarters and start-up costs for some large clinical programs. As a result, the company said its earnings and revenue growth in Q2 will be in the 20% to 25% range, with growth in fiscal 1999 coming in between 25% and 30%. According to reports, analysts were expecting growth rates above 30% in the near-term. Other contract researchers got hit today as well. Kendle International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KNDL)") else Response.Write("(Nasdaq: KNDL)") end if %> dropped $2 3/4 to $25 and Quintiles Transnational Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QTRN)") else Response.Write("(Nasdaq: QTRN)") end if %> slid $5 3/4 to $42 1/4.
QUICK CUTS: Managed healthcare and insurance services outsourcer Concentra Managed Care <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CCMC)") else Response.Write("(Nasdaq: CCMC)") end if %> dropped $1 1/2 to $10 1/2 after reporting Q3 EPS of $0.26, which was lower than the $0.29 the company guided investors to expect in an earnings warning last month... Fiber optic telecommunications components and laser-based chip inspection equipment maker Uniphase Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UNPH)") else Response.Write("(Nasdaq: UNPH)") end if %> was burned for a $6 7/8 loss to $48 after reporting fiscal Q1 EPS of $0.24, which was in line with the Street's mean estimate. However, the company said sales of its Ultrapoint semiconductor wafer inspection product fell during the quarter by an unspecified amount... Year 2000 and information technology consultant Syntel Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SYNT)") else Response.Write("(Nasdaq: SYNT)") end if %> lost $2 to $13 13/16 following downgrades from Hambrecht & Quist and BancBoston Robertson Stephens.
Printer and office machine supplies distributor Daisytek International Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DZTK)") else Response.Write("(Nasdaq: DZTK)") end if %> wilted $7 1/8 to $16 after reporting fiscal Q2 EPS of $0.30 (excluding acquisition-related charges), which was in line with the Street's mean estimate. The company said the growth of its U.S. operations continues to slow, leading to a "cautious" outlook for the next two quarters... Wireless communications and application-specific integrated circuit (ASIC) maker Mitel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MLT)") else Response.Write("(NYSE: MLT)") end if %> sank $2 15/16 to $7 15/16 after reporting fiscal Q2 EPS of $0.18 (excluding charges), down from the $0.21 earned a year ago but in line with the IBES mean estimate... Veeco Instruments <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VECO)") else Response.Write("(Nasdaq: VECO)") end if %> slipped $2 to $29 after SoundView Technology Group cut its rating on the supplier of data storage and chip metrology tools to "buy" from "strong buy."
Ultrasound medical diagnostic equipment provider Acuson Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ACN)") else Response.Write("(NYSE: ACN)") end if %> was knocked down $4 1/16 to $15 after reporting Q3 EPS of $0.15, flat with last year's results and a penny below the Street's estimate... Healthcare management software firm Eclipsys Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ECLP)") else Response.Write("(Nasdaq: ECLP)") end if %> slid $2 3/4 to $23 1/8 after agreeing to acquire rival Transition Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TSIX)") else Response.Write("(Nasdaq: TSIX)") end if %> in a stock swap valued at about $270 million. The deal is expected to add to Eclipsys' earnings starting in fiscal 1999. Transition Systems picked up $1 3/4 to $10 3/8... Catalog retailer Lands' End <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LE)") else Response.Write("(NYSE: LE)") end if %> dropped $1 to $17 after saying its president and CEO and its vice chairman of sales have both resigned. The company said former Home Shopping Network president and COO David Dyer will assume the president and CEO roles.
Semiconductor and electronic components storage and automated handling products maker Peake International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PEAKF)") else Response.Write("(Nasdaq: PEAKF)") end if %> sank $1 7/16 to $8 5/8 after reporting fiscal Q2 EPS of $0.23, missing the Street's mean estimate of $0.30... Store brand over-the-counter drugs and personal care products maker Perrigo Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRGO)") else Response.Write("(Nasdaq: PRGO)") end if %> slipped $1 1/8 to $7 5/8 after pre-announcing a fiscal Q1 loss between $0.15 and $0.18 per share due to losses at its Russian unit and certain software start-up costs. The IBES mean estimate called for earnings of $0.12 per share... Medical malpractice insurance provider MMI Companies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MMI)") else Response.Write("(NYSE: MMI)") end if %> lost $2 7/8 to $15 15/16 after saying poor results from its fee and consulting businesses and additions to its insurance reserves will result in a Q3 operating loss between $0.70 and $0.80 per share, missing the Street's estimate of a $0.45 per share profit.
Information technology consultant Renaissance Worldwide <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: REGI)") else Response.Write("(Nasdaq: REGI)") end if %> was knocked back into the Middle Ages today, falling $4 13/16, or 33.8%, to $9 7/16 after saying it will increase spending in fiscal Q4 for new staff members, causing some analysts to worry about the firm's near-term earnings outlook. Warburg Dillon Read lowered its rating to "hold" from "buy"... International PC and computing products distributor Ingram Micro <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IM)") else Response.Write("(NYSE: IM)") end if %> slid $4 1/8 to $45 3/4 after reporting Q3 EPS of $0.40, beating estimates by a penny. However, the company reportedly said in its conference call that gross margins are coming under pressure due to increased price competition in Europe. Rival Tech Data Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TECD)") else Response.Write("(Nasdaq: TECD)") end if %> lost $4 3/4 to $40 1/16 in sympathy.<% ' AvantGo:End %>
FOOL
ON THE HILL
An Investment Opinion
by
Alex Schay
Food for Thought
<% ' AvantGo:FOTH %>Hershey Foods Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HSY)") else Response.Write("(NYSE: HSY)") end if %>, maker of popular Halloween "treats" like Mr. Goodbar, Jolly Ranchers, Twizzlers, Hershey's Kisses, and Reese's Peanut Butter Cups, was left in investors' back pockets today, melting $13/16 to $66 5/16. Today's move came on the heels of a Merrill Lynch downgrade to "near-term neutral" from "accumulate," while Warburg Dillon Read reiterated its "sell" rating. Hershey's shares dropped 6% yesterday on a warning that increased milk prices and other costs may hurt the firm's Christmas season and Q4 results.
Earnings concerns have plagued both Kellogg <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: K)") else Response.Write("(NYSE: K)") end if %> and Nabisco <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NA)") else Response.Write("(NYSE: NA)") end if %> over the last couple months, while Bestfoods <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOF)") else Response.Write("(NYSE: BOF)") end if %>, Ralston-Purina <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RAL)") else Response.Write("(NYSE: RAL)") end if %>, and Wrigley <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WWY)") else Response.Write("(NYSE: WWY)") end if %> are all beset with questions surrounding their international exposure. These and other "scientifically formulated" bits of evidence about languishing food stocks have this columnist wondering whether or not things are getting stale in the packaged foods business (always keeping an eye out for good businesses available at cheap prices)? I know, I know, it's not a very profound question, and generalizations about the brand name packaged food companies are dangerous -- but here's what I dug up today. (It's more interesting than you might think.)
Taking a look at the popular S&P Foods Index this year, it's clear that investors are facing something new in the segment:
S&P Foods Return
(year to date)
'97-'98 11.42%
'96-'97 31.91%
'95-'96 21.20%
'94-'95 20.61%
Bestfoods 6.993% Campbell Soup 11.066%
Conagra 6.693% General Mills 5.057%
Heinz 9.447% Hershey Foods 4.280%
Kellogg 6.047% Quaker Oats 3.724%
Sara Lee 12.587% Ralston-Purina 4.424%
Unilever 21.496% RJR Nabisco 4.122%
Wrigley 4.279%
Growth In Growth In Real Stock Price Performance
S&P 500 S&P Food GDP S&P S&P Relative Stock
Year Earnings Earnings Growth 500 Food Outperformance
1975 (10.5%) 15.4% (0.8%) 31.6% 48.3% 16.7%
1981 3.6% 8.8% 1.8% (9.7%) 20.9% 30.6%
1982 (17.7%) (3.1%) (2.2%) 14.8% 32.9% 18.1%
1985 (1.7%) 4.1% 3.2% 26.3% 59.8% 33.5%
1986 0.9% 26.4% 2.9% 14.6% 4.9% 20.3%
1990 (4.3%) 19.1% 1.0% (6.6%) 8.6% 15.2%
1991 (10.3%) 19.7% (1.2%) 26.3% 32.6% 6.3%
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
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