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Thursday, November 12, 1998
"That which has always been accepted by everyone, everywhere, is almost certain to be false." -- Paul Valery
Meditrust Splits in Two
Two REITs are better than one, according to Meditrust Companies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MT)") else Response.Write("(NYSE: MT)") end if %>. The real estate investment trust (REIT) announced plans this morning to separate its two major business operations, healthcare and lodging, into two individual REITs. The firm's healthcare financing unit will be spun off to shareholders sometime in late calendar 1999. The remaining business, which includes the La Quinta Inns line of hotels, will retain the company's paired-share REIT status, even though revised federal regulations have prompted former paired-share compatriot Starwood Lodging <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HOT)") else Response.Write("(NYSE: HOT)") end if %> to ditch that format for a plain vanilla corporation structure.
Meditrust has decided to shake up some of its other operations as well, saying non-strategic assets such as its golf-related real estate interests and its Santa Anita Racetrack will be divested as part of a $1 billion asset-reduction plan. The proceeds from the asset sales will be used to pay down about $525 million of the company's outstanding debt. Capital spending will also be reined in, with no new La Quinta Inns planned for 1999. Over in the healthcare segment, the company will continue to look for solid investments in senior-living and long-term care facilities as well as medical office buildings next year.
Meanwhile, the company also reported Q3 funds from operations of $0.60 per share, down from the $0.66 per share posted last year and short of the First Call mean estimate of $0.67 per share. As part of the restructuring, the company said it logged one-time charges of $248 million in Q3, which will be followed by an additional $200 million in charges in Q4.
News to Go
Internet portal and software company Netscape Communications Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCP)") else Response.Write("(Nasdaq: NSCP)") end if %> agreed to acquire privately held website services firm AtWeb Inc. in exchange for 3.36 million Netscape shares. Netscape said the deal will allow it to integrate more than 600,000 websites into its Netcenter portal.
Agricultural technology and life sciences company Monsanto Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTC)") else Response.Write("(NYSE: MTC)") end if %> announced it will issue about $4 billion in equity and debt over the next few weeks to fund its recent acquisitions in the seed market. The company also said it will do away with between 700 and 1,000 jobs as part of restructuring, which is expected to result in $400 million to $600 million in pre-tax Q4 charges.
The Semiconductor Industry Association (SIA) forecasted a 9% pickup in computer chip sales in calendar 1999 to $133.4 billion, followed by expected 15.2% and 18.2% gains in 2000 and 2001, respectively. Sales of dynamic random access memory (DRAM) chips, such as those made by Micron Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MU)") else Response.Write("(NYSE: MU)") end if %>, are expected to rise 25% in 1999, while microprocessor sales are forecasted to post an 8.4% gain next year.
High-end department store retailer Nordstrom <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NOBE)") else Response.Write("(Nasdaq: NOBE)") end if %> reported Q3 EPS of $0.27, beating last year's $0.23 and topping the First Call mean estimate of $0.26. However, net sales only grew by a scant 0.4% in the period to $1.09 billion. The company added that posting advances in Q3 same-store sales will be "a challenge."
Craftsman tool maker Danaher Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DHR)") else Response.Write("(NYSE: DHR)") end if %> will be added to the Standard & Poor's 500 Index to replace Stone Container Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STO)") else Response.Write("(NYSE: STO)") end if %>, which is merging with fellow packaging products maker Jefferson Smurfit Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JJSC)") else Response.Write("(Nasdaq: JJSC)") end if %>. Electric and natural gas utility holding company DPL Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DPL)") else Response.Write("(NYSE: DPL)") end if %> will take Danaher's place on the S&P MidCap 400 Index.
Earnings Announcements:
Advanced Communications Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ACSC)") else Response.Write("(Nasdaq: ACSC)") end if %> -- fiscal Q4 EPS: $0.20 vs. $0.13 (excluding charges) last year; Estimate: $0.20
Advanced Lighting Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADLT)") else Response.Write("(Nasdaq: ADLT)") end if %> -- fiscal Q1 EPS: $0.01 vs. $0.15 last year; Estimate: $0.10
Congoleum Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CGM)") else Response.Write("(NYSE: CGM)") end if %> -- Q3 EPS: $0.43 (before charges) vs. $0.22 last year; Estimate: $0.34
Dimon Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DMN)") else Response.Write("(NYSE: DMN)") end if %> -- fiscal Q1 EPS: loss of $0.19 (excluding gain) vs. gain of $0.45 last year; Estimate: gain of $0.05
IMS Health <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RX)") else Response.Write("(NYSE: RX)") end if %> -- Q3 EPS: $0.40 vs. $0.33 last year; Estimate: $0.40
Intimate Brands <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBI)") else Response.Write("(NYSE: IBI)") end if %> -- Q3 EPS: $0.16 vs. $0.14 last year; Estimate: $0.16
Pacific Gateway Exchange <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PGEX)") else Response.Write("(Nasdaq: PGEX)") end if %> -- Q3 EPS: $0.29 vs. $0.17 last year; Estimate: $0.29
PalEx Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PALX)") else Response.Write("(Nasdaq: PALX)") end if %> -- Q3 EPS: $0.10 (before charges) vs. $0.05 last year; Estimate: $0.17
Star Telecommunications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: STRX)") else Response.Write("(Nasdaq: STRX)") end if %> -- Q3 EPS: $0.09 vs. $0.02 last year; Estimate: $0.09
Superior Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUPR)") else Response.Write("(Nasdaq: SUPR)") end if %> -- Q3 EPS: $0.33 (before charges) vs. $0.28 last year; Estimate: $0.33
Teligent <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TGNT)") else Response.Write("(Nasdaq: TGNT)") end if %> -- pro forma Q3 EPS: loss of $1.49 vs. loss of $0.63 last year; Estimate: loss of $1.45
Trans World Entertainment Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TWMC)") else Response.Write("(Nasdaq: TWMC)") end if %> -- Q3 EPS: $0.13 vs. $0.03 last year; Estimate: $0.10
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Brian Graney (TMF Panic), Writer
Jennifer Silber (TMF Amused), Editor
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