AOL Cuts Guidance, Will Take Charge

Visteon threatened by Ford price demands; Lehman bullish on Coach; plus more of today's stocks on the move

Merrill Lynch cuts estimates for Citigroup (C ) and FleetBoston Financial (FBF ). Merrill keeps its strong buy rating on Citibank, and its near-term buy, long-term strong buy opinion on FleetBoston.

Lehman Brothers believes Coach Inc. (COH ) second-quarter estimates could prove conservative. The firm notes Coach reports holiday sales on Jan. 9, and reiterates its strong buy rating.

Ford (F )is requesting "price adjustments" for 2002 to 2003 that exceed Visteon Corp's (VC ) reserves. While negotiations continue, an outcome unfavorable to Visteon could have a material adverse effect on its operations.

Morgan Stanley upgrades AK Steel (AKS ) to strong buy from outperform.

Comarco Inc. (CMRO ) sees $0.15 to $0.20 fourth-quarter EPS from operations, $0.13 to $0.18 GAAP, on revenue of $12M to $13M. The company says new order flow hasn't been as robust as in previous years.

Nordstrom Inc (JWN ) maintains $0.27-$0.31 fourth-quarter EPS guidance. The company posts 2.3% lower December same-store sales, flat total sales. WF Van Kasper reiterates its strong buy.

AOL Time Warner (AOL ) sees about 18% 2001 EBITDA growth on 5% revenue growth. Assuming no recovery in the U.S. economy, the media giant sees 8%-12% 2002 EBITDA growth on 5% to 8% revenue growth. The company will take a $40B-$60B 1Q accounting charge. Merrill cuts its estimates.

Gateway (GTW ) sees fourth-quarter revenue of about $1.16B. S&P maintains its hold rating. USB Piper says the revenue guidance was a significant miss.

BMC Software (BMC ) sees $0.07 to $0.09 third-quarter EPS on revenue of $312M-$319M. S&P maintains hold and Merrill Lynch names BMC a Focus 1 stock.

Entergy (ETR ) expects fourth-quarter operating EPS to exceed current $0.13 First Call consensus by about 20%, inclucing the impact of weather. The company reaffirms $3.30-$3.50 2002 operating EPS guidance.

Hollywood Entertainment (HLYW ) posts 11% higher fourth-quarter same store sales vs. previous 6%-7% target. It sees fourth-quarter pro forma EPS meeting or exceeding high end of its previous estimate of $0.26-$0.28.

Tiffany (TIF ) expects fourth-quarter EPS to be in the upper end of previous $0.49-$0.56 range, $1.09-$1.16 for fiscal 2002. It believes fourth-quarter sales will finish about 3% lower than year ago.

Altera Corp. (ALTR ) now sees a fourth-quarter revenue decline of about 7% from the third quarter's $174.2M vs. previous range of 5%-10% decline. S&P upgrades the stock to accumulate.

IDEC Pharmaceutical (IDPH ) says FDA will delay granting marketing approval for Zevalin for non-Hodgkin's lymphoma at this time, pending resolution of certain manufacturing compliance issues at the company's fill/finish provider.

Viacom (VIA ) reportedly remains interested in acquiring Univision Communications, and is also interested in buying TV-programming business of Liberty Media. It sees double-digit 2002 cash flow growth.

First Consulting (FCGI ) sees $0.07 fourth-quarter EPS from operations on slightly less than expected revenue due to lower realized billing rates, lower headcount.

Newport Corp (NEWP ) sees breakeven fourth quarter on sales of $55M-$58M. Salomon Smith Barney reportedly upgrades the stock to buy from neutral. UBS Warburg maintains its buy rating.

CS First Boston downgrades Marriott Interntional (MAR ) and Hilton Hotels (HLT) to hold from buy on price.

Andrx Group (ADRX ) says fourth-quarter EPS will be significantly lower than the third quarter's $0.35. The company notes a decrease in net sales of its albuterol metered dose inhaler product.

Lehman downgrades Verisign (VRSN ) to buy from strong buy. On Monday the company announced an agreement to acquire H.O. Systems, a provider of billing & customer service solutions to wireless carriers, for about $340M in cash and stock.

Merrill upgrades Invitrogen Corp (IVGN ) to near-term strong buy from buy and maintains long-term strong buy. It raises its $80 12-month target to $85.

Aflac Inc (AFL ) sees fourth-quarter operating EPS of $0.34, in line with current consensus estimates.

Simplex Solutions (SPLX ) lowers its first-quarter forecast to breakeven (pro forma) on $11.1M in revnenues. Robertson Stephens downgrades the stock to market perform from buy.

HNC Software (HNCS ) sees $0.07-$0.08 fourth-quarter EPS on revenue of $54M-$55M. The forecast was a bit lower than expected. Goldman Sachs downgrades to market perform.

Openwave (OPWV ) sees $0.06-$0.09 second-quarter loss from operations (pro forma) on $92M-$97M revenues compared with previous $0.06-$0.19 loss guidance.

Documentum (DCTM ) anticipates it will substantially beat avgerate Street fourth-quarter EPS estimate of $0.14 loss. It plans to post $48-$50M fourth-quarter revenue, above expected $46.6M. It says it closed a number of transactions during the quarter.

ACE Ltd (ACE ) says fourth-quarter net operating income will fall below forecast due to increase of about $80M, after taxes, in property losses incurred in European Comm. Prop. portfolio. The company willl take a $50M charge to strengthen loss reserves in International Casualty operations.

Dollar Tree (DLTR ) posts 1.5% higher fourth-quarter same store sales, 19% higher total sales.

99 Cents Only (NDN ) posts 5.3% higher fourth-quarter same store sales, 32% higher retail sales. The company plans to continue to grow store base.

Robertson Stephens sees poetential for share price weakness over the next several days for KPMG Consulting (KCIN ) stock. It maintains its market underperform rating.

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