WorldCom Drags Down Telecoms

Rock-Tenn tumbles on flat results; Dynamics Research drops after posting slightly higher profit; plus more of today's stocks in the news

Rock-Tenn (RKT ) posted $0.34 vs. $0.34 Q2 EPS on a 5.3% sales drop and sees $0.34-$0.38 Q3 EPS, and $1.50-$1.60 for fiscal 2002.

Dynamics Research (DRCO ) posted $0.17 vs. $0.17 Q1 EPS on a 1.2% revenue rise and cut the 2002 guidance to $0.88-$0.92 EPS from continuing operations on $200M-$205M revenue. BB&T Capital says weakness is overdone, and reiterates strong buy.

Neopharm (NEOL ) fileed for arbitration to resolve a dispute with Pharmacia concerning unnecessary delays in development programs for LEP, LED. First Albany downgraded to neutral from buy.

Merrill downgraded General Cable (BGC ) to near term neutral from buy and maintains long-term strong buy.

Salomon SB upgraded McKesson (MCK ) to buy from outperform.

Robertson Stephens cut estimates on AOL Time Warner (AOL ) and lowered the $32 12-month price target to $24.

JDS Uniphase (JDSU ) CS First Boston expects an excess inventory overhang to persist into mid-calendar 2003, and cut estimates.

CIBC World downgraded BEA Systems (BEAS ) to hold from buy.

MSC.Software (MNS ) sees a $0.08 Q1 loss on lower than expected revenue of $66M.

Gerard Klauer and HC Wainwright downgraded Impath (IMPH ). On Friday the company posted $0.29 Q1 EPS and forecast 25%-30% 2002 operating EPS growth.

Goldman downgraded AK Steel (AKS ) and CS First Boston cut estimates. On Friday the company posted a $0.38 Q1 loss vs. $0.12 loss (pro forma) as higher maintenance costs offset a 1.1% revenue rise.

Ericsson (ERICY ) posted a SEK 4.5B Q1 loss (adjusted) vs. a SEK 4.2B loss on a 26% sales drop, and sees an operating loss for 2002, with plans to return to profitability at some point in 2003. CS First Boston expects to cut ests after a 9:00 am EDT call.

WorldCom (WCOM ) cuts 2002 guidance to EBITDA of $7B-$7.5B on revenue of $21B-$21.5B, citing lower voice volumes. Salomon SB, Goldman, USB Piper, and JP Morgan downgraded. S&P maintains sell.

Lucent Tech (LU ) posted a $0.20 Q2 loss vs. a $0.41 loss (pro forma) as lower costs offset a 34% revenue decline. Given the continued market uncertainty, Lucent is not providing top line guidance for Q3.

3M (MMM ) posted $1.23 vs. $1.16 Q1 EPS from operations despite a 6.6% sales drop, and sees $4.80-$5.10 2002 EPS from operations (assumes positive $0.12 impact due to cessation of goodwill amortization).

Lexmark International (LXK ) posted $0.53 vs. $0.60 1Q EPS despite a 6.3% revenue rise, and sees $0.56-$0.66 Q2 EPS. S&P maintains hold.

Alliant Energy (LNT ) posted $0.05 vs. $0.45 Q1 EPS (adjusted) on a 25% operating revenue decline, and cuts $2.45-$2.65 2002 EPS guidance to $2.10-$2.30.

Micron Tech (MU ) will buy Hynix's memory business for 108.6M Micron shares. Micron also will invest $200M in Hynix in return for a 15% equity stake in Hynix's continuing non-memory businesses.

Northrop Grumman (NOC ) says the US Navy awarded it a $1.37B construction contract to construct the eighth ship of USS Wasp (LHD 1) class of multipurpose amphibious assault ships.

Dominion (D ) will discontinue plans to build a coal-fired power station in Upshur County, West Virginia.

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