KB Home Drops

PG&E advances; Solectron sinks; plus more of today's stocks in the news

KB Home (KBH ) posted $1.94 vs. $1.42 second-quarter earnings per share on a 26% revenue rise. It raised the fiscal 2003 estimate to $8.20. Homebuilding stocks are seen lower amid concerns over interest rates, and conservative guidance from KB Home.

PG&E (PCG ) says if a proposed settlement of a Chapter 11 proceeding is acceptable, the company could emerge as investment grade utility, and pay all valid creditor claims in full, with interest, without raising customers' rates.

Solectron (SLR ) posted a $3.74 third-quarter GAAP loss vs. a 35-cent loss on a 7.2% sales drop; it posted a 10-cent third-quarter pro forma loss. Solectron will not be in compliance with one of the covenants of its undrawn, $450 million credit facility. The contract manufacturer sees a 2-cent to to 6-cent fourth-quarter pro forma loss. CIBC World downgraded. S&P cut its estimates.

Bed Bath & Beyond (BBBY ) agreed to acquire Christmas Tree Shops, a private giftware and household item retailer, for $200 million cash. S&P reiterates accumulate.

First Albany upgraded J2 Global Communications (JCOM ) to buy from underperform. On Thursday the company held an investors' conference.

Men's retailer Nautica (NAUT ) says it's committed to exploring opportunities to enhance shareholder value, and is engaged in talks with respect to the possible acquisition of the company.

WebMD (HLTH ) plans to offer $300 million of convertible subordinated notes due 2003. It expects to grant initial purchasers an additional $50 million aggregate principal amount of notes.

Columbia Laboratories (COB ) says the FDA approved Striant, the first-ever transbuccal treatment for testosterone replacement therapy in men for conditions associated with the deficiency or absence of endogenous testosterone.

Amgen (AMGN ) and a Wyeth (WYE ) unit announced the results of a new study of a combination treatment with Enbrel and methotrexate in rhumatoid arthritis patients; 80% of the patients treated with the combination therapy experienced no radiographic progression through 1-year.

PeopleSoft's (PSFT ) board recommended that shareholders reject Oracle's increased, $6.3 billion takeover bid, saying the offer was too low and that a merger would violate antitrust laws. S&P keeps hold on PeopleSoft.

Express Scripts (ESRX ) reportedly received a subpoena from the New York State Attorney General seeking information regarding its compliance with state and federal antitrust and consumer protection laws.

General Electric (GE ) reaffirmed the 37 cents to 39 cents second-quarter earnings per share forecast, and is keeping the $1.55-$1.70 2003 earnings per share.

Morgan Stanley downgraded Research In Motion (RIMM ) to underweight from equal-weight.

Halliburton (HAL ) will take an additional operating loss on its Barracuda-Caratinga project of about 24 cents per share. Separately, as a result of an increase in the estimated number of asbestos claims, Halliburton says it may need "modestly" more than the previously announced $2.775 billion to pay for the settlement.

General Motors (GM ) and GM Hughes will offer about $10 billion in debt securities and convertible debt to accelerate its balance sheet and allow for more financial flexibility; GM now expects to accelerate efforts to fund its U.S. pension plans, which were underfunded at the end of 2002.

CarMax (KMX ) posted 34 cents vs. 28 cents first-quarter earnings per share on a 17% total sales rise -- meeting analysts' average estimates. The used-car retailer sees 33 cents to 35 cents second-quarter earnings per share, vs. the consensus forecasts of 33 cents.

Merrill Lynch downgraded Business Objects (BOBJ ) to neutral from buy.

American Healthways (AMHC ) posted 28 cents vs. 16 cents third-quarter earnings per share on a 33% revenue rise. It raised the $1.04-$1.08 fiscal 2003 earnings per share guidance to $1.08-$1.10.

Cubist Pharmaceuticals (CBST ) says the FDA notified the company that it now sees completing its priority review of Cidecin New Drug Application on or before Sep. 20, 2003, a three-month extension of the original action date.

Darden Restaurants (DRI ) posted 35 cents vs. 40 cents fourth-quarter earnings per share on flat sales. Darden sees 1%-3% fiscal 2004 same store-sales growth from Red Lobster and Olive Garden, and 8%-12% earnings per share growth. Citigroup downgraded. S&P reiterates accumulate.

King Pharmaceuticals (KG ) says the FDA approved a supplemental new drug application covering pediatric and adult formulations of its nerve gas antidote AtroPen.

Georgia Gulf (GGC ) continues to expect 20 cents to 25 cents second-quarter earnings per share. It says higher sales prices are expected to more than offset higher materials costs.

Bunge (BG ) will acquire Hindustan Lever's edible oils and fats business. Terms of the deal were undisclosed.

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