KORNER REPORT / Investing & Market Kommentary - 4
New York - Continued
Small-Capitalization Stocks
Shares of Air Methods (AIRM) dropped 9/16 to 2 1/4 after the medical transport provider said it expects a fourth quarter loss in the range of 6 to 9 cents a share, compared with a 7-cent profit in the year-earlier quarter. Analysts surveyed by First Call expected the company to earn 9 cents. The Denver provider of emergency air medical transportation services hit a 52-week low of 2 intraday.
Platinum Entertainment (PTET) , based in Downers Grove, Ill., improved 5/16, or 4.6%, to 7 1/8. The company's www.PlatinumCD.com retail music web site recorded 3.8 million hits in December. In October, when the site opened, it received 16,000 hits, and hits totaled 1.5 million in November. Platinum said it increased the number of visitors to its site through creative promotion, and spent virtually no cash resources on advertising.
Friendly Ice Cream (FRND) said late Thursday it will post an operating loss of 55 cents to 60 cents a share in the fourth quarter, while analysts' consensus estimate was for a loss of 13 cents. Friendly, the Wilbraham, Mass., restaurant company, cited higher labor and general and administrative costs. The stock fell 1, or 16.2%, to 5 3/16 and matched a 52-week low of 4 5/8 intraday.
Heartport (HPRT) , New York, rose 3/4 to 7 1/2 Friday after the company's minimally invasive heart-surgery products were featured Thursday on CNBC's program The Edge. Jim Weiss, a company spokesman, said Heartport didn't reveal anything new about it's turnaround plan, but that the show gave Heartport and minimally invasive surgery positive publicity.
TeleSpectrum Worldwide (TLSP) rallied 1 9/16, or 15.8%, to 11 7/16. The company agreed to acquire International Data Response, a private teleservices firm, for 9.2 million shares and 3 million warrants, and will refinance about $105 million of International Data's debt. Shares of TeleSpectrum, a King of Prussia, Pa., provider of telemarketing services, equaled a 52-week high of 11 1/2 intraday.
ICU Medical (ICUI) rose 3 1/4 to 18 5/8. The San Clemente, Calif., company said it expanded its supply and distribution agreement with Abbott Laboratories (ABT) for an ICU Medical product. ICU Medical designs, makes and markets disposable medical devices.
Asymetrix Learning Systems (ASYM) shed 1 1/16 to 4 7/8. Late Thursday the Bellevue, Wash., software company, partially owned by computer billionaire Paul Allen, warned that it expects a loss in the fourth-quarter in the range of 15 cents to 17 cents a share, wider than analysts estimates of a deficit of seven cents a share.
American depositary receipts of DOCData (DOCDF) fell 2 3/8 to 6 3/4. The Dutch maker of audio and multimedia compact disks said "mistakes and irregularities' in local financial reporting at its U.K. operation will force it to correct its 1998 half-year results to show significantly lower results.
Lunar (LUNR) dropped 1 7/32, or 11.7%, to 9 5/32. The Madison, Wis., company, which develops products for the treatment of metabolic bone diseases, said second-quarter net income will come in at about $730,000, which is below expectations.
Among oil and gas related, Atlantic Richfield Co. (ARC) said Friday it will take after-tax charges of $890 million in the fourth quarter stemming from asset write-offs, restructuring costs and a tax refund.
The asset write-downs, totaling $790 million, result from "investment impairments" and the expectations of lower crude prices, ARCO said. Crude prices fell sharply in 1998 to the lowest level in decades, and most analysts don't see much of a chance for a big rebound anytime soon.
In addition, ARCO will take a restructuring charge of $180 million related to the cost-reduction program announced in October. Under the program, designed to reduce annual costs by more than $500 million by 2000, ARCO will cut 1,200 employees, up from the original estimate of 900.
ARCO also plans to reduce capital spending in 1999, as previously noted in December. The company said it expects to spend $2.7 billion worldwide, down 25 percent from 1998.
Oil companies have been slashing costs and ratcheting down spending to offset the sharp decline in oil prices, improve the bottom line and shore up sagging stock prices.
Also in the fourth quarter, ARCO will record a tax-related gain of $80 million, which includes a federal refund.
Arco shares edged up 1/8 to 60 11/16.
Williams Companies is also taking pretax charges. The largest U.S. transporter of natural gas by pipeline, said it will take pretax charges totaling $133 million in the fourth quarter.
The company was expected to earn 22 cents a share before gains and charges, the average estimate of analysts surveyed by First Call Corp. It earned 28 cents in the fourth quarter of 1997.
Williams, based in Tulsa, Okla., said its central pipeline unit will take a $58 million charge for costs related to long-term natural gas supply contracts that it entered into in 1982.
Modification of an employee benefit program will result in a $30 million pretax charge. The company will also take a charge of $22 million because of losses related to businesses the company sold, and $23 million to reflect the declining value of some assets, and losses associated with natural gas and electric sales.
Williams shares closed Friday up 1/8 at $29 15/16. .
Global Marine (GLM), the Houston oil-drilling concern, slipped 1/8 to 9 1/8, after it posted fourth quarter results Friday that were weaker than forecast.
Insider trading analyst H. Phelps Salter III notes that insiders are buying at natural gas company Union Pacific Resources (UPR:NYSE). In August and early September, 12 insiders purchased a total of 36,500 shares at prices up to 14.13, the first open-market purchases in five years. The stock is currently trading around 9.
Considering that natural gas prices are at a five-year low mark, and that UPR's shares are selling at, perhaps, below the company's proven reserves, Salter wonders if a larger oil company might see an opportunity to obtain some good natural gas reserves in UPR. "No doubt, at some point," he says, "a larger oil company will find it cheaper to search for oil on the floor of the NYSE than beneath the earth's surface."
Stocks To Watch
Bell Atlantic (BEL) announced after the close of Friday trading that talks to acquire AirTouch Communications (ATI) had ended, clearing the way for Britain's Vodafone Group (VOD), which became the lone known bidder for AirTouch. Before the announcement, AirTouch shares rose 4 5/16 to close at 83 1/8. Vodafone shares rose 1 7/16 to 176, while Bell Atlantic shares dipped 7/16 to 53 3/8. Separately, Bell Atlantic late Friday sued AirTouch over a "noncompete" clause that Bell Atlantic labeled anti-consumer.
Essef Corp.'s (ESSF) previously disclosed merger talks have been terminated for unstated reasons. The swimming pool equipment maker said it's been approached by a number of interested companies over the past few years. Essef shares rose 1/2 to 21 3/4 ahead of the release.
Hudson River Bancorp (HRBT) said it plans to repurchase up to 4 percent of its shares. Shares fell 1/8 to 11 3/8 before the release.
J.P. Morgan (JPM) is set to report fourth-quarter earnings Tuesday. Analysts expect the financial firm to post a profit of 38 cents a share. Shares rose 6 3/4 to close at 108 3/4 Friday.
Reliastar Financial (RLR) announced it will take a pretax charge of $15.3 million in the fourth quarter for litigation settlement. Shares rose 5/16 to 43 11/16 before the news.
Open Market Inc. (OMKT) reported it will form a partnership with Whittman-Hart Inc. (WHIT) to deliver Internet commerce solutions to middle-market companies. The deal will enable Open Market to integrate its Internet commerce solution with existing business systems.
Trident Microsystems (TRID) posted a narrower-than-expected loss of 14 cents a share in the fiscal second quarter. Analysts expected the company to lose 20 cents in the quarter. Trident makes integrated-circuit graphics and audio products for personal computers. Shares were up 13/16 to close at 7 1/16 before the news. See Tech Report.
Baby bell US West (USW) announced it plans to sell 3 percent of its 16.5 million access lines to raise money to invest in new technologies and services. Shares of the telecommunications service provider rose 15/16 to 62 15/16 before the announcement. |
