Network Appliance Skids

Adelphia CEO resigns; Hewlett-Packard, Applied Materials, and Computer Sciences report quarterly earnings; plus more of today's stocks in the news

Network Appliance (NTAP ) shares skidded after the data storage company posted fourth quarter EPS of $0.04 (pro forma), vs. $0.02 a year ago, as lower total operating costs offset 9.2% revenue decline. S&P keeps hold, while Robertson Stephens says it remains cautious on the shares.

Merrill downgraded Dynegy (DYN ) to near-term and long-term neutral from strong buy. S&P cut estimates, and maintained an avoid recommendation, saying the shares were down on fears credit concerns will translate into reduced earnings power.

Schering-Plough (SGP ) reportedly says, in a first quarter 10Q filing, the FDA's Office of Criminal Investigation in Puerto Rico is conducting a preliminary investigation into one or more of drugmaker's products.

Abbott Labs (ABT ) says it has been informed by the FDA that its Lake County diagnostic manufacturing operations will be found not in conformity with Quality System Regulation. S&P and Merrill Lynch downgraded the shares.

John Rigas resigned as chairman and CEO of Adelphia Communications (ADLAE ). S&P maintained its avoid opinion on the shares, while Salomon Smith Barney downgrades to neutral. Trading in the stock was halted all day.

Computer Sciences (CSC ) shares moved solidly higher after the company posted fourth quarter EPS of $0.82, vs. $0.22 loss per share, on 5.1% higher revenue. Salomon Smith Barney upgraded the shares to outperform from neutral. S&P maintains its hold rating.

Applied Materials (AMAT ) reported second quarter earnings of $0.03 per share, a penny better than the consensus estimate. Revenues fell 45.9% from a year ago to $1.16 billion, while new orders rose 51% to $1.69 billion from the first fiscal quarter of 2002. The chip equipment maker sees $1.2 billion to $1.3 billion in third quarter revenues. Goldman Sachs and CS First Boston raised estimates, while S&P maintains a hold recommendation.

Hewlett-Packard (HPQ ) reported second quarter EPS of $0.25, a penny below the consensus estimate. Revenue fell 16% to $10.62 billion. The company says it is not counting on a meaningful improvement in IT spending until 2003.

Photronics (PLAB ) reported $0.08 vs. $0.32 second quarter EPS despite a 2.5% revenue rise. S&P maintains accumulate.

Boron LePore (BLPG ) agrees to be acquired by Cardinal Health (CAH ). Terms: $16 cash per BLPG share.

b>Gerber Childrenswear (GCW ) agrees to be acquired by Kellwood Co. for a combination of cash and stock valued at $6.85 per share.

Merrill named Universal Health (UHS ) its Focus 1 stock of the week.

Bear Stearns downgraded QLogic (UHS ) to neutral from attractive.

Salomon Smith Barney upgraded News Corp. (NWS ) to buy from outperform. On May 14, the company posted $0.18 vs. $0.12 third quarter earnings from operations per American Depositary Receipt.

Microsoft (MSFT ) reduced the price of its Xbox to $199.99. CS First Boston says the price cut is positive, and not a concern for fiscal 2003 estimates. The firm reiterated its strong buy ratingon Microsoft.

Marvel (MVL ) posted a $0.10 first quarter loss per share (basic), vs. a $0.37 loss, on a 34% sales rise. It sees $1.00-$3.00 second quarter EPS, and $2.00-$4.00 for 2002.

Federated Department Stores (FD ) reports first quarter EPS of $0.43, vs. $0.42 a year ago, despite 2.9% lower sales. The retailer sees $0.50-$0.60 second quarter EPS.

Abercrombie & Fitch (ANF ) reported first quarter EPS of $0.23, vs. $0.20, on 19% sales rise. The retailer raised second quarter EPS guidance to $0.26. Prudential upgraded the stock to buy from hold, while Wachovia raised estimates. S&P kept its hold recommendation.

BEA Systems (BEAS ) reported first quarter EPS (pro forma) of $0.06 on 13% lower revenue. Wachovia cut estimates, while S&P kept hold.

Abgenix (ABGX ) discontinues clinical development of ABX-IL8 for psoriasis. The company currently has no plans to conduct further clinical studies involving ABX-IL8. Robertson Stephens says it would be buyers on today's weakness.

Merrill reportedly upgrades AOL Time Warner (AOL ) to near term buy, maintains long term strong buy.

Computer Associates (CA ) reported fourth quarter loss per share of $0.41 (GAAP basis), vs. $0.71 loss, on 5.6% higher revenues. The company sees breakeven-$0.01 first quarter EPS on $770-$775 million in revenues, $0.10-$0.13 fiscal year 2003 EPS on $3.2-$3.26 billion in revenues.

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