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Still Hold Corning

Corning (GLW): Maintains 3 STARS (hold)

Analysts: Ari Bensinger, Richard Stice

The optical-fiber maker expects pro-forma Q3 EPS of $0.02-$0.06, and a pro-forma loss per share in Q4. The Street's consensus was $0.12 EPS and $0.09 EPS, respectively. Corning plans to idle the bulk of worldwide optical fiber manufacturing beginning in late October. Operations will resume in 2002 as business conditions improve. Corning will take $1 billion in charges during the remainder of 2001. S&P is putting their estimates of Corning under review. However, with shares trading at only a slight premium to the book value, S&P would hold Corning for an eventual upturn in demand.

Dell Computer (DELL): Maintains 3 STARS (hold)

Analyst: Megan Graham Hackett

The computer maker reaffirmed Q3 guidance during an analysts meeting Thursday. Dell still sees revenues at $7.2-$7.6 billion, and EPS of $0.15-$0.16. S&P is maintaining the $0.15 estimate. Dell notes its quick response to logistic issues and increased sales to affected government agencies and companies helped to minimize the Sept. 11 impact on Q3 results. Dell says personal computer pricing is aggressive but within expectations, and notes U.S. sales are on track with consumers and public sales are "robust" as the company gains share. S&P is keeping the fiscal 2002 (Jan.) estimate of $0.65. With shares trading at an intrinsic value of $22-$24, based on S&P's discounted cash flow analysis, S&P says hold Dell.

Gilead Sciences (GILD): Reiterates 4 STARS (accumulate)

Analyst: Frank DiLorenzo

An FDA advisory committee backed approval of Viread to treat HIV patients that have received prior therapy. The company expects FDA approval by end of 2001, with Viread being marketed for the treatment of patients that have developed resistance to current drugs. Separately, Gilead sees a possible filing for FDA approval of Adefovir to treat hepatitis C by mid-2002, and a European filing for Cidecin antibiotic by the end of 2002 or early 2003. The company sees a loss of $1.16 in 2001 and a $0.34 loss in 2002, with EPS of $0.54 in 2003. Based on a discounted cash flow analysis, S&P still considers Gilead undervalued.

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