Elan, Superior Financial, WorldCom, and more
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13:01 ET Advancers
Accredo Health (ACDO) rose more than 6 percent after the company reported second-quarter results that exceeded expectations, due to an increase in revenue across all of its core businesses, and raised its outlook for the year. The provider of contract pharmacy services said net income of for the quarter ending December was $7.22 million, or 27 cents a share, an increase over $4.17 million, or 16 cents a share recorded in the same period a year ago. Total revenue for the period rose 41 percent over last year to $160.2 million. Analysts surveyed by Thomson Financial/First Call had been expecting earnings of 23 cents a share on revenue of $147.4 million, on average. For fiscal 2002, Accredo expects EPS of $1.40 to $1.50 on revenue of $760 million to $780 million, above current consensus analyst views of 99 cents and $600.7 million, respectively.
Bruker Daltonics (BDAL) leapt more than 4 percent after the Billerica, Mass., life sciences products firm said it has received a contract for its novel RAPID remote detectors for chemical defense. The company said the pact, which worth roughly $1 million, is being financed by the U.S. Department of Defense Foreign Military Financing program.
CryptoLogic (CRYP) rose more than 6 percent after the Toronto supplier of Internet gaming and e-commerce software reported fourth-quarter earnings of $3.7 million, or 25 cents a share, down from its year-ago equivalent profit of $4.1 million, or 27 cents a share. Excluding a $1.3 million write-down related to an insurance claim, the company earned $4.2 million, or 29 cents a share, in the latest quarter, a penny aheadof the average estimate of analysts polled by Thomson Financial/First Call. Revenue rose 15 percent in the latest three months to $11.2 million from $9.7 million in the same period a year earlier. Looking ahead, CryptoLogic forecast earnings of $2 million, or $2.5 million, or 15 to 19 cents a share, on revenue of $8.5 million to $9.5 million in the first quarter. The company said earnings would drop on a sequential basis in the first quarter due to credit card issuers no longer accepting online gaming transactions, higher expenses from the launch of new bingo and poker products, and a drop in interest income due to declining rates. For fiscal 2002, CryptoLogic forecast earnings of $17 million to $20 million, or $1.27 to $1.49 per share, on revenue of $45 million to $50 million. Analysts polled by Thomson Financial/First Call are currently looking for earnings of 35 cents a share, and $1.48 per share, in the first quarter and full year 2002, respectively.
Hewlett-Packard (HWP) gained more than 2 percent after the company said it expects to exceed previous fiscal first quarter forecasts, citing an up-tick in consumer demand for both PCs and printers. The company now anticipates reporting revenue for the quarter ending January that is "up moderately" from the sequential fourth-quarter, after saying in mid-November that revenue would be "down slightly." Earnings are projected to come in "substantially above" the current consensus quarterly view of 16 cents a share.
Lowe's Cos. (LOW) got a boost of more than 2 percent from news that it expects same-store sales for the fourth quarter to beat its previous guidance for an increase of 3 to 5 percent. In addition, the Wilkesboro, N.C., home improvement retailer forecast that earnings for the period would top the current outlook for a profit of 22 to 24 cents a share. Lowe's cited "better than anticipated weather and a resilient consumer, combined with our merchandising and operations focus" for the strong results. The company is scheduled to report its fourth-quarter results on Feb. 15. Analysts polled by Thomson Financial/First Call are currently looking for a profit of 23 cents a share in the period.
Right Management Consultants (RMCI) gained more than 7 percent after the Philadelphia consulting firm reported fourth-quarter earnings of $6.3 million, or 39 cents a share, up from a profit of $2.5 million, or 17 cents a share, in the same period a year earlier, and 4 cents ahead of the average estimate of analysts polled by Thomson Financial/First Call. Revenue rose in the latest three months to $96.8 million from $48.1 million in the year-ago period. The company attributed the strong revenue growth to its career transition business, which benefited from continued corporate layoffs. Looking ahead, Right Management said it's comfortable with Wall Street expectations for a profit of $1.64 to $1.80 per share on revenue of $340 million in full year 2002.
SpeechWorks (SPWX) rose more than 9 percent after the Scottsdale, Ariz., speech recognition technology firm formed a strategic alliance with Microsoft (MSFT) . Financial terms weren't disclosed. The companies plan to integrate their products with SpeechWorks configuring its speech technologies to support the Speech Application Language Tags specification, and to work with Microsoft's .NET platform.
Sulzer Medica (SM) added more than 6 percent after the Zurich-based medical device firm said Sunday that a term sheet for hip and knee implant litigation related to its Sulzer Orthopedics unit was signed by all involved parties and submitted to a U.S. District Court judge. Sulzer said that its contribution under the sheet comes to $725 million, $425 million of which would be paid in cash with the remaining $300 million in financial instruments.
Synopsys (SNPS) advanced more than 5 percent after the Mountain View, Calif., provider of electronic design automation products said it expects earnings before goodwill to come in around 26 cents a share on revenue of roughly $175 million to $176 million, in line with the average estimates of analysts polled by Thomson Financial/First Call. The company said these results are preliminary. Synopsys also reaffirmed its earnings before goodwill target of at least $2 per share for fiscal 2002, reflecting its proposed mergers with Avant (AVNT) and IKOS Systems (IKOS) .
3Dlabs (TDDD) soared more than 20 percent after the Sunnyvale, Calif., graphics technology firm unveiled the Wildcat III 6210 and the Wildcat III 6110 graphics accelerator products. The company said that the products will be available in Hewlett-Packard (HWP) workstations x2100 and x4000 with Intel (INTC) Pentium 4 and Xeon processors.
Walgreen Co. (WAG) jumped more than 4 percent after the company said that January same-store sales jumped 10.7 percent. Total sales for the month rose 17.2 percent to $2.38 billion from $2.03 billion in the same period a year earlier. Pharmacy sales rose 21.3 percent in total. On a same-store basis, pharmacy sales jumped 16 percent.
Decliners
Amazon (AMZN) fell more than 7 percent after The Wall Street Journal's "Heard on the Street" column questioned the company's liquidity, saying it may not have as many assets to cover its obligations than investors believe.
AT&T Wireless (AWE) lost more than 9 percent in midday action. The drop follows the company's heavy advertising during the Super Bowl on Sunday of its controversial "mLife" commercials, which prompted a restraining order from MetLife (MET) last week. MetLife alleged that the campaign could confuse consumers and dilute its brand. Reuters reported Friday that the companies resolved their differences, saying that AT&T Wireless agreed withdraw its application for a federal trademark for "mLife" and MetLife withdrew its temporary restraining order. AT&T, which says "mLife" refers to 'mobile,' said Friday afternoon that MetLife's claims were "utterly without merit."
Ciena (CIEN) dropped more than 9 percent after analyst Kenneth Leon at ABN-Amro lowered his rating on the stock to "hold" from "add," given that a number of its larger competitors have issued weak outlooks for the next quarter. He has also increased his 2002 loss estimate to 26 cents a share from 13 cents a share, and has cut his 2003 earnings-per-share forecast to 7 cents from 13 cents. "Absent profitability in 2002, we believe management will have to capitulate and take necessary cost cutting to achieve breakeven," Leon said in a note to clients.
Elan (ELN) plunged more than 40 percent after the company reported fourth-quarter earnings that met expectations, but indicated that 2002 results would fall short due to the later-than-expected introduction of new products. Net income for the quarter ending December was $8.5 million, or 2 cents a share, down from income of $54 million, or 15 cents a share recorded in the year-earlier period. Excluding charges related primarily to asset write-downs, earnings for the quarter ending December were 56 cents a share, matching the average analyst forecast compiled by Thomson Financial/First Call. Revenue for the period rose 15 percent to $487.6 million. For 2002, the pharmaceutical company is forecasting earnings of $1.55 to $1.65 on revenue of $2 billion to $2.1 billion. Analysts polled by Multex had been expecting earnings of $2.35 per share on revenue of $2.33 billion.
Enterasys Networks (ETS) plummeted more than 54 percent after releasing a deluge of bad news. The company has decided to delay the planned distribution of shares of its Aprisma Management Technologies unit. The news follows the company's announcement on Friday that it would delay the release of its results for the fourth quarter and full fiscal year to complete a review of issues related to the terms of a $4 million sales contract. Enterasys said that its management discovered the issues on Jan. 31, and that the contract was recorded by its Asia Pacific operations. In addition, the company disclosed that it's being investigated by the Securities and Exchange Commission. Enterasys said it plans to fully cooperate with the probe. The company also said that sales in North America and Europe, which typically represent roughly 80 percent of its total sales, met internal expectations for the fourth quarter. However, sales in Latin America were about $7 million below internal expectations due to the timingof certain sales. As for its Asia-Pacific operations, Enterasys said that it won't able to estimate the amount of revenue from these operations until the issues are resolved but added that anticipated weakness in this area has been previously disclosed.
Millenium Cell (MCEL) fell more than 12 percent after the Eatontown, N.J., hydrogen technology firm reported a fourth-quarter adjusted loss of $3.5 million, or 13 cents a share. The results were in line with the average estimate of two analysts polled by Thomson Financial/First Call. In the same period a year earlier, the company lost $2.1 million, or 8 cents a share, on an adjusted basis.
Orbotech (ORBK) dropped more than 7 percent after the Israeli provider of electronics manufacturing products and services reported a fourth-quarter loss before items of $700,000, or 2 cents a share, down from a profit of $22.7 million, or 70 cents a share, in the same period a year earlier, and 3 cents below Wall Street's consensus expectation for earnings of a penny a share. Including items, Orbotech lost $21.7 million, or 68 cents a share, in the latest quarter. Revenue dropped 44 percent in the latest three months to $58.9 million from $105.9 million in the same period a year earlier. The company said its latest results reflect ongoing uncertainty in the electronics industry worldwide. It believes these conditions will persist through the first half of 2002. In light of this environment, Orbotech said it reduced its workforce in the fourth quarter and that it plans to reduce both employee and management salaries in the first quarter. Also, the company invested $7 million in three private Israeli firms through its corporate venture fund.
PDI Inc. (PDII) tumbled more than 10 percentafter the company said Bayer Pharmaceuticals will terminate its fee-for-service agreement with the company effective Apr. 15 leading PDI to lower its forecasts for 2002 earnings and revenue. The product-detailing program was originally set to expire Aug. 31. PDI doesn't expect the early termination to have a material effect on its first quarter, but anticipates full-year 2002 revenue to be reduced by approximately $20 million to $25 million and earnings to be cut by 25 to 30 cents a share. Bayer noted that the decision to terminate early was not a performance-related one.
Priceline.com (PCLN) fell more than 14 percent after the company reported a fourth-quarter loss of $1.3 million, or 1 cent a share, compared with losses of $25 million, or 15 cents a share in the same period a year ago. On a pro forma basis, which excludes restructuring and other special charges, the provider of name-your-own-price Web services recorded net income of $3.3 million, or a penny a share, while analysts surveyed by Thomson Financial/First Call had been expecting breakeven results. Revenue for the quarter ending December rose 3.1 percent over last year to $235.3 million, above forecasts of $225.5 million. For the first quarter of 2002, Priceline expects low retail airline pricing to continue. The company is targeting breakeven to a profit of 2 cents a share, on revenue of $260 million and $290 million, compared with current expectations of 2 cents a share and $299.4 million, respectively. For all of 2002, the company said it is "comfortable" with current EPS expectations of 12 cents of share.
Riverstone Networks (RSTN) sank more than 11 percent as investors reacted to news that Enterasys Networks (ETS) is being investigated by the Securities and Exchange Commission. Both Riverstone and Enterasys were spun out from the former Cabletron Systens. The company said in a press release Saturday that has not been notified that it is part of any investigation by the SEC and that it has no reason to believe it will be made party to the probe. Riverstone noted that it is not affiliated with Enterasys and that it has been operating with its own management and board since its IPO in February 2001. USB Piper Jaffray came out in defense of the company, raising its rating on the shares to "outperform."
Superior Financial's stock (SUFI) dropped more than 12 percent before trading in the shares was halted. The company said its board of directors have recommended a "thorough review of accounting practices" under the tenure of the company's recently terminated controller. In particular, the company is looking into a recent non-recurring technology conversion expense of approximately $1.7 million, or 19 cents a share. The bank holding company said it would delay the release of its full-year 2001 earnings report until a review by its outside auditors, Ernst & Young, is completed. Excluding one-time items, the company is anticipating 2001 earnings to be $1.40 to $1.45 per share, below the average analyst forecast compiled by Thomson Financial/First Call of $1.47. For 2002, Superior is "comfortable" with the range of current consensus analyst expectations.
Tyco International (TYC) lost more than 9 percent due to lingering questions about its accounting practices. The latest storm of doubt was prompted by a Wall Street Journal article that contends the company didn't disclose certain acquisitions. Tyco also said it would buy back all of $4.5 billion of its commercial paper in an effort to eliminate uncertainty about its ability to finance the recently announcedreorganization. The company said it would draw down on its existing bank facilities to fund the purchases. L. Dennis Kozlowski, Tyco's chairman and chief executive, said the increased interest costs would reduce earnings by up to 2 cents a share during fiscal 2002, but flexibility and liquidity would be enhanced.
Williams Communications (WCG) sank more than 26 percent after the company reported a fourth-quarter loss of $372 million, or 76 cents a share, compared with a loss of $546.6 million, or $1.18 a share recorded in the same period a year ago. Excluding one-time charges, net losses were 52 cents a share, narrower than average analyst loss forecast compiled by Thomson Financial/First Call of 57 cents a share. Revenue for the period rose 28 percent over last year to $330.3 million, driven primarily by its network services business. The broadband company noted that on Jan. 29, its bank group said they believed the company to be in default under the existing credit agreement, but the company said that it "strongly disagrees." Nevertheless, Williams Comm. has agreed to submit by Feb. 25 a comprehensive restructuring plan to de-leverage its balance sheet. "In developing this plan, Williams Communications, in consultation with financial and legal advisors, is considering various possible restructuring alternatives," the company said in a press release. "However, successful execution of the options currently envisioned does not include seeking bankruptcy court protection or the substantial dilution of equity security holders."
WorldCom (WCOM) fell more than 17 percent in midday action. Earlier in the session, the stock plumbed a 52-week low of $7.76. The shares have been under pressure of late after reports surfaced, most recently on The Financial Times' Web site, that CEO Bernie Ebbers could be facing |
