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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (21627)	9/15/1999 12:15:00 PM
From: Susan Saline	Respond to of 43080

PPDI is down in sympathy with CVD, so should be good for a reversal see bolded paragraph Wednesday September 8, 6:46 pm Eastern Time Covance drops on profit warning, pulls down peers NEW YORK, Sept 8 (Reuters) - Shares of Covance Inc. (NYSE:CVD - news) tumbled on Wednesday after the No. 2 drug development services firm warned of lower earnings, pulling down its peers as investors feared slowing growth in the sector. In afternoon trading, Princeton, N.J.-based Covance was down about 32 percent at $10-1/2 on the New York Stock Exchange, making it the top percentage loser of the day. Late Tuesday, Covance said it anticipates third quarter and full 1999 earnings to be below analyst estimates because of revenue shortfalls in its business that carries out Phase III clinical trials for drug makers and in its central laboratory. The company further explained on Wednesday that it lost clinical trial contracts not because of an industry wide decline in demand but because it managed its services through separate units instead of one unit, as its competitors do. The company said it is revamping its operations into one unified structure, as preferred by customers. Investors, however, read the profit warning as a potentially industry wide ailment, and sold shares of Covance as well as others in the sector, said analysts. In afternoon trade, shares of Quintiles Transnational Corp (Nasdaq:QTRN - news), the largest U.S. firm which runs clinical trials and other research services for pharmaceutical firms, were down $1 at $33 on Wednesday, and since Tuesday have shed about 10 percent of their value. ''Investors have concluded that (Covance's profit warning) suggests a potential shift away from outsourcing,'' said Edward Keaney, managing director at Volpe Brown Whelan & Co. ''The Covance announcement doesn't portend an earnings disaster,'' Keaney added. Shares of Pharmaceutical Product Development Inc. (Nasdaq:PPDI - news), the third largest outsourcing firm, were also down on Wednesday, about 15 percent, or 3-9/16, at 19-1/2 in heavy volume. ''It is not our belief that industry fundamentals have suddenly collapsed,'' Pharmaceutical Product Development (PPD) Chief Executive Fred Eshelman told Reuters. ''We are comfortable with analyst estimates for the 1999 third quarter,'' he added. Wilmington, N.C.-based PPD is expected to earn $0.29 for the third quarter, according to First Call Corp. In its announcement Tuesday, Covance said it anticipates earning about $0.21 per share for the third quarter -- five cents shy of analysts' consensus. For the full year it expects to earn between $0.91 to $0.93 per share, missing Wall Street estimates of $1.00.