Infobeat - Full Closing Bell banner Wednesday, July 22, 1998
America Online Inc. (AOL)
AMERICA ONLINE INC. is expected to announce on Wednesday morning it signed a marketing deal with cyberspace broker AMERITRADE HOLDING CORP, industry sources said. The deal follows agreements last month under which three Internet brokers agreed to pay AOL $25 million each for the privilege of being displayed on the Internet company's popular personal finance site for two years. The deals marked a big price hike over what brokers previously paid AOL and showed the growing value of prime cyberspace real estate. (Reuters 06:08 PM ET 07/21/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555179203-d6a>
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Citicorp (CCI)
Late yesterday, CITICORP said its EPS in the 2Q would have increased 19 percent instead of the actual 10 percent they rose if the impact of Asia was excluded. "We had 10 percent EPS growth and seven percent earnings growth but remember within those numbers, Asia is down about 22 percent," Executive Vice President and Principal Financial Officer Thomas Jones told an analyst conference call. "Of course we offset that. And we also absorbed the acquisition of the AT&T Universal Card, That cost us $44 million after-tax this quarter." (Reuters 01:29 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555185042-368>
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Citicorp (CCI)
Credit Suisse First Boston said it cut its rating on CITICORP to buy from strong buy. Further details were not immediately available. (Reuters 09:36 AM ET 07/22/98)
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Citicorp (CCI)
Travelers Group Inc. (TRV)
After market close, CITICORP said 98.1% of its shareholders have voted in favor of the proposed merger with TRAVELERS GROUP INC, according to a company spokesman. As reported, the stockholders of Citicorp and Travelers in separate special meetings Wednesday voted to approve the combination of the two companies in a merger of equals to form Citigroup. (BusinessWire)
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Computer Associates Intl. (CA)
COMPUTER ASSOCIATES reported late Tuesday that net income rose 25% and revenues climbed 18% in the June quarter, but warned that results may slow over the next several quarters. The business software maker said it was concerned about the ripple effect economic turmoil in Asia was having on its corporate customers and potential near-term harm to its business. It also said some customers were deferring software purchasing decisions as they focus on fixing Year 2000 date-change issues, especially on mainframe computers. (Reuters 05:26 PM ET 07/21/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555178670-0df>
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Computer Associates Intl. (CA)
Goldman Sachs said it lowered its rating on COMPUTER ASSOCIATES INTL. to market underperform from market perform. (Reuters 10:12 AM ET 07/22/98)
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Computer Associates Intl. (CA)
Four Wall Street brokerages cut their ratings on COMPUTER ASSOCIATES INTL., a day after CA warned that it faced continued impact from the turmoil in Asia and purchasing delays. Bear Stearns cut the business software maker to neutral from buy, while Prudential cut its rating to hold from buy, sources at each firm said. Merrill said it cut its near term-rating on CA to neutral from accumulate, but said it kept its long-term rating at accumulate. The brokerage also cut its fiscal 1999 year estimate to $2.27 per share from $2.42 previously. Donaldson Lufkin reduced its rating to market perform from buy, market sources said. (Reuters 09:59 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555190503-152>
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Computer Associates Intl. (CA)
Hambrecht & Quist cut its rating on shares of COMPUTER ASSOCIATES INTL. to hold from buy, following the company's warning of lower revenue growth, especially in its mainframe business segment. Lowered fiscal 1999 earnings estimate to $2.30 per share from $2.42 and fiscal 2000 to $2.67 from $2.85. Said company is seeing weakness in the Asia/Pacific region, is having difficulty closing larger multi-year contracts, is suffering from deferred information technology spending by customers and has some long-standing licensing deals that preclude its participation in other markets. (Reuters 12:50 PM ET 07/22/98)
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Computer Associates Intl. (CA)
Defying a wave of downgrades on COMPUTER ASSOCIATES INTL, BT Alex. Brown analyst Chris Mortenson said he maintained his "buy" rating on the stock even as he cut CA revenue and earnings estimates. "We are maintaining our "buy" investment rating given our belief that CA remains a premier software vendor and that management will get the business back on track over the next 2 (to) 3 quarters," Mortenson said. He cut his estimate for the third quarter ending December to 61 cents per share from 68 cents previously. The revenue estimate was cut by $100 million to $1.325 billion. (Reuters 02:11 PM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555193250-7cd>
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Duke Energy Corporation (DUK)
DUKE ENERGY said its PanEnergy Exploration and Production (Peru) Ltd affiliate signed a license agreement with Perupetro SA, giving the company sole rights to explore for natural gas and oil in Blocks 40 and 41 in the central region of Peru. Blocks 40 and 41 cover some 2 million acres, Duke said. PanEnergy is the operator in a similar exploration project in Peru's Block 85, which comprises approximately 390,000 acres in the country's central region. Perupetro is the state-owned entity with technical and administrative oversight of the country's hydrocarbon assets. (Reuters 12:53 AM ET 07/22/98)
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Duke Energy Corporation (DUK)
DUKE ENERGY reported 2Q EPS of $0.76 vs. $0.43 last year, on revenues of $4.01 bln. vs. $3.11 bln. in 1997. Analysts' mean estimates were $0.68, according to First Call. (Reuters 10:06 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555190572-916>
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IBM (IBM)
IBM remains cautious in its outlook for the second half because of the negative impact of the Asia crisis, pricing pressures in personal computers and components, and weakness in foreign currencies, its CFO said. Speaking to analysts in a conference call after the release of IBM's second-quarter earnings, Douglas Maine said International Business Machines Corp. had completed some important product transitions, specifically in mainframes and PCs, that had weighed down results in recent quarters. (Reuters 07:13 PM ET 07/20/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555165561-2d9>
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IBM (IBM)
IBM is expected to announce that it has named Mike Braun to head its recently restructured consumer unit, replacing James Firestone, industry sources said. Earlier in the day, XEROX CORP said Firestone, the former general manager of IBM's consumer divsion, would become President of Xerox's Channels Group, which markets Xerox products to office superstores and through other outlets. An IBM spokesman later confirmed the moves. (Reuters 12:24 PM ET 07/22/98) For the second part of the story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555192751-58d>
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IBM (IBM)
Software company Lotus Development Corp is still bullish about the Asia Pacific market despite Asia's economic crisis, a senior company official said. "We are still showing revenue growth. Things have begun to slow as one might expect, given the Asian economic crisis but...we remain bullish," Alex Neihaus, Lotus's director of marketing, Asia Pacific, told Reuters in a telephone interview. Lotus is a unit of IBM. The economic situation had redoubled Lotus's efforts to target small and medium-sized companies in the region as it made "even better business sense," Neihaus said. (Reuters 07:35 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555188885-789>
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IBM (IBM)
IBM said that distributors have begun assembling all key components of its commercial PCs, a major shift aimed at slashing the build-up of excess inventory by IBM. The new system is meant to avert a replay of the glut of unsold corporate PCs that clogged the market earlier this year at IBM and other PC makers, setting off a price war that has strangled IBM's overall corporate earnings growth this year. IBM said it has authorized two of its 16 current resale distributors -- CompuCom Systems Inc. and InaCom Corp. to assemble all PC parts, including Intel processors -- in IBM PCs, custom configured to customer orders. (Reuters 01:44 AM ET 07/22/98) Full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555185198-9fa>
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Intel Corporation (INTC)
Late yesterday, the Bolivian government said INTEL CORP was studying the possibility of investing $500 million in the South American country. According to official sources, two executives of the world's largest semiconductor company made the announcement after visiting with Bolivian President Hugo Banzer. The sources said Bolivia was among eight other Latin American countries that Intel was considering as a possible site for a factory. No further details were immediately available. (Reuters 01:48 AM ET 07/22/98)
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Intel Corporation (INTC)
AAVID THERMAL TECHNOLOGIES INC stock was cut in half on news of decreased demand from INTEL, although Aavid expects its third quarter earnings to match its year-ago figure of 25 cents a share. Intel was Aavid's largest customer during the second quarter, accounting for net sales of about $15 million or about 28% of Aavid's total net sales of $54.3 million. Sales to Intel will be "down but not gone" in terms of value and revenue during the third quarter, a company spokesman told Dow Jones. (Reuters 05:41 PM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555195612-09e>
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Intel Corporation (INTC)
INTEL CORP said it bought more than an 8% stake in graphics developer EVANS AND SUTHERLAND COMPUTER CORP and the two companies agreed to accelerate development of high-end graphics and video subsystems for Intel-based workstations. Intel paid $24 million for the stake and purchased warrants that could be used to raise its interest in Evan & Sutherland to 11.3 percent, the companies said. Intel purchased nonvoting shares of Evans & Sutherland, the statement said. "Evans & Sutherland will develop boards and components for Intel architecture-based workstations that will deliver high-end graphics with outstanding high-end video support," the statement said. (Reuters 11:17 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555191313-cff>
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Lucent Technologies (LU)
Late yesterday, JNA Telecommunications Ltd said that its board of directors unanimously recommended the A$3.75 per share takeover bid from LUCENT TECHNOLOGIES in the absence of a higher offer. (Reuters 08:31 PM ET 07/21/98)
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Lucent Technologies (LU)
LUCENT TECHNOLOGIES reported 3Q EPS of $0.32 vs $0.17 on revenues of $7.2 bln vs $6.3 bln last year. Analysts' mean estimates were $0.27, according to First Call. (Reuters 08:08 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555189315-599> and full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555189470-c64>
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MCI Communications Corporation (MCIC)
CSX CORP said it awarded MCI COMMUNICATIONS CORP a five-year, $350 million contract to manage CSX's data and voice communications networks. Under the terms of the deal, MCI will work with CSX in designing and managing the CSX communications network from CSX's data center in Jacksonville, Fla., and MCI's Network Operations Center in Cary, N.C. (Reuters 10:16 AM ET 07/22/98)
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Mellon Bank Corp (MEL)
Late yesterday, MELLON BANK CORP said its 2Q earnings rose 14 percent to $0.81 per diluted share or $215 million, bolstered by growth in fee-related revenues. The bank, which recently turned down a takeover offer from Bank of New York Co. Inc., said fee revenues reached $712 million in the 2Q, up from $540 million in the year-ago quarter and the $698 million in the 1Q. (Reuters 11:04 PM ET 07/21/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555183037-959>
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Mellon Bank Corp (MEL)
MELLON BANK CORP is set to take control of Britain's Newton Investment Managers, the Financial Times newspaper reported. The cash deal, due to be announced this week, values the privately held fund group at 170 million pounds ($279 million), the paper said. Mellon Bank will take control of 75 percent of the company with an option to buy the rest in four years. Stewart Newton, founder of the fund management group, and executives and employees of Newton will keep 25 percent, it said. The paper said Royal Bank of Scotland, the only other significant shareholder in Newton, was understood to have agreed to sell its one-third stake for 56 million pounds ($92 million). The paper said Newton has 12.5 billion pounds ($20.5 billion) in assets under management. (one pound = $1.6435) (Reuters 01:43 AM ET 07/22/98)
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Merck And Co. Inc. (MRK)
ABN-AMRO said pharmaceuticals analyst James Keeney cut his rating on MERCK AND CO. INC. to hold from buy, citing disappointment with sales of new products and the company's failure to match 2Q earnings expectations. Merck's 2Q per-share earnings fell one cent short of consensus estimates for a third consecutive quarter.Combined sales of three new drugs, baldness drug Propecia, angina drug Aggrastat and asthma drug Singulair, generated combined revenues of $60 mln, which was 35% below Keeney's forecast of $92 mln. (Reuters 10:41 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555190928-ecb>
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Merck And Co. Inc. (MRK)
Gruntal & Co said pharmaceuticals analyst David Saks on lowered his rating on MERCK AND CO. INC. to buy from strong buy, citing concerns about the growth outlook of the company beyond the year 2001 and disappointment over 2Q earnings. He was disappointed Merck's 2Q per-share earnings fell one cent short of Wall Street expectations and that management provided earnings guidance of lower growth rate assumptions for 1998 "toward the low end of the 14% to 17% range." (Reuters 12:26 PM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555192147-a23>
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Merck And Co. Inc. (MRK)
MERCK AND CO. INC. whose shares were pounded after the giant drugmaker reported 2Q earnings below Wall Street expectations, suffered new blows as investors continued to fret over disappointing earnings data, analysts said. (Reuters 02:26 PM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555193374-340>
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Microsoft Corporation (MSFT)
MICROSOFT CORP said it expected an 85% slump in its Indonesian sales this year. "If you talk to anyone about IT in Indonesia, they say the contraction is anywhere from 65% to 85%, depending on what market segment they are in," said Andy Khoo, Microsoft's director of business development for South Asia. "For Microsoft ourselves, against a five-year plan that we started two years back, we are now seeing a contraction of about 85% on the original five-year plan and last year we expected a contraction of 50%," he said. (Reuters 05:47 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555187711-a4b>
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Motorola Inc. (MOT)
Late yesterday, MOTOROLA INC introduced an expanded line of telecommunications products, ranging from wireless phones, pages and two-way radio. The announcements follow a realignment by the company last month to position all of it communications businesses under one business entity - Communications Enterprise - to beter meet customer needs. Motorola said it has developed more compact and lighter digital phones that allow for longer communication. The company said it will introduce TDMA (Time Division Multiple Access), and CDMA (Code Division Multiple Access) digital StarTAC cell phones at 800 megahertz (MHz) later this year. (Reuters 12:08 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555184065-ffc>
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Pfizer Inc. (PFE)
Gold Coin (Malaysia) Bhd said a distribution agreement it recently signed involving the sale of male impotence drug Viagra will boost sales by about 10% in the current fiscal year ending December 31, 1998. Gold Coin confirmed that a subsidiary had signed in June a memorandum of understanding with PFIZER INC. for the distribution of all its products in Malaysia from July 1. Gold Coin said the product has yet to complete the registration for sale in Malaysia. (Reuters 01:44 AM ET 07/22/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555185188-4bf>
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Telecommunicaoes Brasileiras Sa (TBR)
Late yesterday, seventy-six bidders formally registered to take part in next week's privatization of Brazilian telephone company TELECOMMUNICAOES BRASILEIRAS SA, the National Development Bank (BNDES) said. The investors registered with the Rio de Janeiro stock exchange before a deadline earlier, a BNDES spokeswoman said. (Reuters 05:58 PM ET 07/21/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555185317-058>
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Telecommunicaoes Brasileiras Sa (TBR)
Late yesterday, the Brazilian government was pleased with the number of bidders registered to take part in the sale of the TELECOMMUNICAOES BRASILEIRAS SA, Communications Minister Luiz Carlos Mendonca de Barros said. "We are very satisfied and we confirm our expectation that we will make 16 billion reais ($13.9 billion) at the auction," Mendonca de Barros told reporters at the headquarters of the National Development Bank (BNDES), the agency that oversees Brazil's privatization program. The Brazilian government has set a base price of 13.4 billion reais ($11.6 billion) for the 12 units of Telebras up for auction -- three fixed-line units, eight cellular units and long-distance and international carrier Embratel. (Reuters 08:20 PM ET 07/21/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555180514-ead>
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Telecommunicaoes Brasileiras Sa (TBR)
New 12-in-one ADRs for TELECOMMUNICAOES BRASILEIRAS SA are getting a cold shoulder from analysts and fund managers. They told Reuters the new umbrella ADRs -- American Depositary Receipts -- grouping the dozen spinoffs from Telebras' July 29 privatization were less attractive than having ADRs in the individual companies. Although the umbrella ADRs were praised for giving investors more options, analysts decried the cost of swapping the current Telebras ADRs for the new issues and a lack of liquidity and flexibility. (Reuters 10:32 PM ET 07/21/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555182536-f0a>
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Telecommunicaoes Brasileiras Sa (TBR)
Brazilian regional finance chiefs Tuesday renounced plans to retroactively charge a tax on telephone start-up charges, which if approved could have hurt the upcoming sale of TELECOMMUNICAOES BRASILEIRAS SA, a spokesman for the Finance Ministry said. But the government has cleared Brazil's 27 states to start charging the so-called ICMS tax on telephone charges from June 30, the spokesman said. (Reuters 01:34 AM ET 07/22/98)
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Telecommunicaoes Brasileiras Sa (TBR)
Deutsche Bank Securities said it lowered its rating on TELECOMMUNICAOES BRASILEIRAS SA to hold from buy. In a research note, Deutsche said investors will initially hold the unit when the company privitizes next week rather than trading the new stocks directly due to its higher liquidity and and lack of information about the new holdings. "There will initially be potential for 'mispricing' the value of the new holdings, thus creating investment opportunities." On a 12-month view, advises to switch into the new holdings. (Reuters 11:52 AM ET 07/22/98)
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Travelers Group Inc. (TRV)
Late yesterday, AT&T CORP said it named TRAVELERS GROUP INC. Chairman Sanford "Sandy" Weill to its board of directors. Weill, a renowned deal maker, built Travelers into a leading financial services companies through a series of acquisitions. Travelers is now set to merge with Citicorp in a $70 billion deal, the largest marriage in corporate history. Weill will join existing AT&T board members such as Chevron Corp. Chairman Ken Derr, Kodak Chairman George Fisher and Johnson & Johnson Chairman Ralph Larsen. Weill's appointment increases AT&T's board to 12 members. (Reuters 12:02 PM ET 07/21/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555176415-638>
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Dow Jones 30 Industrials (DJIA)
MARKET NEWS: Wall Street ended lower Wednesday after investors reeled from a one-two punch of bad earnings and a warning from Fed chief Alan Greenspan about an inevitable market correction. The Dow closed at 9129 points, off 61, or 0.67%. On the New York Stock Exchange, declining issues led advancers by nearly two-to-one in heavy trading s also an excuse to skim off some market froth after last week's record-breaking advance. The tech-heavy Nasdaq closed at 1970 points, off nine. The Standard & Poor's 500-stock index shed one point to close at 1164. In his semi-annual Humphrey-Hawkins testimony, Greenspan warned that Asia's turmoil has not stabilized, and a sharp correction in stocks was inevitable. The long bond ended off 10/32 to yield 5.68%. For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555194991-d46>
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