AOL Shares Drop as Ad Outlook Dims

Navistar posts a loss; Merck affirms double-digit earnings growth for core drug business; plus more of today's stocks in the news

AOL Time Warner (AOL ) sees 2002 EBITDA growth at the low end of the 5%-9% range on a 5%-8% total revenue rise, and expects advertising and commerce revenue for its America Online unit to decline 40%-50% in 2003. S&P and Jeffries keep hold.

Navistar (NAV ) posted a 98 cent fourth quarter loss vs. 19 cents earnings per share as higher costs offset a 12% sales rise. The trucking company sees a first quarter loss of $1.45-$1.55. S&P reiterates sell.

Merck (MRK ) still sees double-digit 2003 earnings per share growth for its core pharmaceutical business and will give detailed guidance for 2003 on Dec. 5. Merrill upgraded to neutral from sell; earlier today, Merrill downgraded from buy to sell.

Bear Stearns and Lehman cut their estimates on IDEC Pharmaceutical (IDPH ).

S&P upgraded Flextronics (FLEX ) to buy from accumulate.

DRS Technologies (DRS ) filed to offer 4.75 million shares. Thomas Weisel believes any price weakness caused by near-term deal dilution should be viewed as a buying opportunity.

Barclays (BCS ) sees 2002 profit before tax at the lower end of consensus. Bear Stearns downgraded to peer perform from outperform.

Sunrise Assistive Living (SRZ ) is in talks with Marriott relating to a possible purchase by Sunrise of Marriott's Marriott Senior Living Services unit. Raymond James downgraded to underperform.

1-800 Contacts (CTAC ) inked a pact with Vistakon, a Johnson & Johnson unit, to become an authorized retailer of Vistakon contact lenses. McDonald Investments upgraded to aggressive buy from buy, and raised the 80 cents 2003 earnings per share estimate to $1.10. Robotti & Co. keeps buy.

Standard Micro (SMSC ) gave Intel notice of its termination of a chipset pact. The company sees 16% third quarter revenue growth, and 25%-30% fourth quarter revenue growth. RBC Capital cut to sector perform. Needham cut estimates, while S&P keeps hold.

American Woodmark (AMWD ) posted $1.09 vs. 95 cents second quarter earnings per share on a 15% sales rise, and says gross margins were lower year over year due to fixed overhead costs and temporary operating inefficiencies. The company sees $1.00-$1.05 third quarter earnings per share.

Numerical Technologies (NMTC ) announced the resignation of president and CEO Larry Hollatz. Adams Harkness downgraded to market perform from buy.

Corixa (CRXA ) and GlaxoSmithKine say the FDA returned the cancer drug Bexxar to active review status after the FDA reviewed and requested additional information about the drug.

Nokia (NOK ) reportedly issued a cautious 2003 forecast for mobile phone and networks markets. The company still sees a challenging market conditions for wireless networks equipment with sales falling 20% in 2002 and 10% in 2003.

Ford Motor (F ) reaffirmed guidance for a slight fourth quarter profit, and 2002 earnings per share of 40 cents, excluding unusual items (vs. S&P's 44 cent estimate). Ford says November U.S. vechicle sales are down 17%; the company cut fourth quarter North American production by 25,000 vehicles.

PetSmart (PETM ) posted 14 cents vs. 5 cents third quarter earnings per share on a 9% same store sales rise, and 9.8% total sales rise -- beating analysts' estimates. PetSmart raised the fiscal 2003 earnings per share forecast to 72 cents to 73 cents, and sees 87 cents to 89 cents in fiscal 2004.

Hain-Celestial (HAIN ) says it acquired privately-held Imagine Foods, a non-dairy beverage company. Hain expects the deal to be accretive by two cents to three cents in fiscal 2003, and eight cents to 11 cents in fiscal 2004.

Citrix Systems (CTXS ) sees 12 cents to 17 cents fourth quarter earnings per share (as adjusted) on $120 million to $130 million in revenue. CS First Boston upgraded to outperform. First Albany raised its estimates.

Texas Instruments (TXN ) sees three cents fourth quarter earnings per share (pro forma), and a penny per share on GAAP basis, on a total revenue decline of about 7% (instead of 10%). The company cited stronger demand for wireless and high-performance analog products.

May Department Stores (MAY ) posted 7.9% lower November same store sales, and 5.8% lower total sales.

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