Raising Anadarko Opinion

Also: analysts' opinions on Corning and Noble Drilling

Anadarko Petroleum (APC ): Upgraded to 4 STARS (accumulate) from 3 STARS (hold)

Analyst: Ephraim Juskowicz

Anadarko posted Q1 recurring EPS of $2.58 vs. $0.24, 27% above expectations. Results were aided by a 235% surge in production, primarily reflecting Union Pacific Resources acquisitions, and a 176% increase in gas prices. S&P is raising its 2001 EPS estimate to $7.43 from $7.00, and its discretionary cash flow per share estimate from $14.51 to $15.10. These estimates might change after a May 2 modeling conference call. Anadarko's asset base provides for huge near-term and long-term production upside, and is the most impressive among the exploration & production (E&P) group. At 4.4 times estimated discretionary cash flow, the shares are attractive.

Intel Corp. (INTC ): Maintains 3 STARS (hold)

Analyst: Megan Graham-Hackett

Intel, at an analysts' meeting in New York City Apr. 26, reiterated guidance. It still sees Q2 revenues of $6.2-$6.8 billion. The company intends capital spending of $7.5 billion and R&D of $4.2 billion as it plans to emerge from the current slowdown stronger. It still sees a seasonal second half 2001 pickup. The chipmaker notes that microprocessor inventories continued to fall in early April. Despite the company's optimism, S&P believes visibility remains quite low. No change to S&P's 2001 estimate of $0.63. At 48 times the 2001 estimate, hold Intel.

Calpine Corp. (CPN ): Maintains 5 STARS (buy)

Analyst: Craig Shere Calpine posted Q1 EPS of $0.30 vs. $0.07 one year earlier, well above expectations. Equity natural gas Q1 production cost $2.40 per million BTU, vs. the NYMEX price at $7.09. With some 6,200 megawatts of new generation yet to come online in 2001, the company generated $47 million in revenue from the sale of excess equity gas to third parties. Trading generated another $129 million in revenue from sale of purchased gas. Calpine still expects qualified facilities to be paid some $270 million in outstanding California receivables. At 22 times S&P's 2002 EPS estimate of $2.50, Calpine is still trading at less than half the P/E-to-growth multiple of the S&P 500.

Corning Inc. (GLW ): Maintains 3 STARS (hold)

Analyst: Ari Bensinger The company reported Q1 EPS of $0.29 vs. $0.23 one year earlier on a 42% sales increase, a penny above its reduced guidance. But in a weak capital spending market, Corning sees full-year 2001 sales at $7.8-$8.0 billion and EPS of $0.90-$1.00, below S&P's already-reduced estimates of $8.2 billion and $1.14. Photonic technologies revenues are now seen flat, under the previous 20%-25% growth guidance. Fiber unit growth is seen at 15%-20%, with premium fiber products lower than earlier anticipated. To improve profit, Corning is cutting capital spending by 20%, lowering inventories, and eliminating 1,000 employees. S&P will update this report after the company's conference call today.

Noble Drilling (NE ): Maintains 5 STARS (buy)

Analyst: Tina Vital Noble posted Q1 EPS of $0.40 vs. $0.19 one year earlier, in line with the Street consensus. Operating income was up 45%, as margins widened. U.S. rig utilization rates were at 99%, dayrates were up 3% to $73,082. Utilization amounted to 79% for international, which accounts for about 60% of fleet; international dayrates rose 12% to $50,269. International markets are improving, particularly West Africa. S&P sees 2001 EPS at $2.21, with $3.40 projected for 2002. Although the shares trade slightly above Noble's peers at 22 times the 2001 EPS estimate, the company's accelerating prospects warrant its premium valuation.

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