Sun Micro Will Slash Workforce, Take a Charge

Micromuse expects to meet estimates; Capital Bank will buy First Communications Financial; plus more of today's stocks in the news

Micromuse (MUSE ) expects to meet $0.04 (pro forma) Q3 EPS guidance on $40M-$41M revenues. Micromuse sees $0.38 (pro forma) fiscal 2001 (Sept.) EPS on $212M. CS First Boston reiterates buy.

Sun Microsystem (SUNW ) sees a $0.05-$0.07 Q1 loss from operations on $2.7B-$2.9B. Sun will cut its workforce by about 9%; consolidate excess facilities; and expects a Q2 charge of about $500M. S&P maintains hold.

US Bancorp. (USB ) says Q3 will include incremental provision for loan losses, beyond expected levels, of about $655M, $1.025B pre-tax. The company Sees $0.41 Q3 EPS from opertions vs. $0.44 consensus.

USB Piper cut estimates on Qualcomm (QCOM ) on concerns that declining interest rates may apply further pressure on interest income for Qualcomm.

Cablevision (CVC ) cut its 11%-13% cable, high-speed data, L.I. Lightpath pro forma CF growth forecast to 10%-12%, and cut the 7%-9% telecomm forecast to 6%-8%. The company canceled its $1B convertile preferred stock offering. S&P downgraded.

First Communications Financial (FCFN ) agreed to be acquired by Capital Bank Corp. in a $54M deal. Terms: $31.12 in cash, stock for each First Communications share.

Advanced Micro Devices (AMD ) says Q3 sales declined 22% from Q2 vs. its expectation for a 15% decline, and sees a $0.26-$0.31 Q3 loss (pro forma) from operations, noting the average processor selling price decline was larger than expected.

Gateway (GTW ) sees a $0.14-$0.17 Q3 loss from operations, citing a drop in demand across all customer segments in the weeks following September 11. S&P maintains hold.

BMC Software (BMC ) sees lower than expected $0.01-$0.04 Q2 EPS from operations on revenue of $288M-$300M. S&P maintains hold.

GSI Lumonics (GSLI ) sees a $0.17-$0.21 Q3 loss from operations on sales of about $41M, saying gross margins are expected to be considerably lower than previously expected due to a decline in the company's plant manufacturing activity.

McData Corp. (MCDTA ) sees $0.01-$0.03 Q3 EPS (pro forma) vs. previous guidance of $0.03-$0.05, citing a shift in the expected product/channel mix.

Tommy Hilfiger (TOM ) says it's concerned that the current economic climate may adversely affect the overall holiday season and results for the second half of 2002.

Starbucks Corp. (SBUX ) posted slightly higher September same store sales, and 18% higher total revenue.

Genentech Inc. (DNA ) and Xoma Ltd.(XOM ) announced that an additional pharmacokinetics study, to be included in a potential Biologics License Application submission to the FDA for Xanelim, will delay the estimated filing date to summer 2002.

XL Capital (XL ) confrimed losses from September 11 terrorist attacks at the upper range of previous $600M-$700M estimate, but says it would take additional $100M in charges related to other losses and an acquisition.

Crown Castle (CCI ) says it is not in talks to purchase NLI's (NTL ) aerials or transmission busness, nor does it plan to participate in bidding for NTL's tower assets as published in recent news reports.

Teco Energy (TE ) will be added to S&P 500 Index after close of trading on October 19.

Philip Morris (MO ) will be added to S&P 100 Index after close of trading on October 9, replacing Global Crossing.

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