Xerox Shares Lower after Downgrade

Express Scripts says it received a subpoena; Level 3 Communications to buy Software Spectrum; plus more of today's stocks in the news

S&P, Merrill, Banc of America and Bear Stearns downgraded Tesoro Petroleum (TSO ). On Wednesday the company posted a $1.15 Q1 loss vs. $0.52 EPS.

Advisory Board (ABCO ) posted $0.18 vs. $0.05 Q4 EPS (pro forma) on a 26% revenue rise and sees $0.17 Q1 fiscal 2003 EPS on $22.5M revs. Deutsche Bank reiterates buy.

Express Scripts (ESRX ) In an 8-K the company disclosed a receipt of a subpoena from a U.S. Attorney in Boston related to dealings with TAP Pharmaceuticals, and TAP's 2 principal drugs, Lupron and Prevacid. S&P downgraded. Software Spectrum (SSPE ) agreed to be acquired by Level 3 Communications in a $122M deal. Terms: $37 cash per Software Spectrum share.

Cigna (CI ) posted $1.92 vs. $1.76 Q1 EPS from operations on a 2% revenue rise and sees $7.85-$8.15 2002 operating EPS.

Micron Technology (MU ) says it has withdrawn from talks with Hynix Semiconductor for purchase of its semiconductor memory operations and assets.

Moody's lowered Xerox (XRX ) unsecured long term ratings to B1 from Ba1. Xerox called the downgrade "inconsistent with the company's progress and momentum."

Protein Design (PDLI ) co-founder Laurence Jay Korn resigned as CEO. Lazard reportedly downgraded to hold from buy.

A federal court judge reportedly threw a out suit alleging Philip Morris (MO ) used anticompetitive practices to monopolize prime retail space.

Calpine (CPN ) posted $0.10 vs. $0.37 Q1 recurring EPS on 23% lower revenue and says it has raised nearly $4B of capital, retired about $953M of debt, which will reduce 2002 and 2003 capital spending by more than $3B.

Merrill downgraded Host Marriott (HMT ) to near term buy from strong buy. On Wednesday the company posted $0.25 vs. $0.41 Q1 FFO on 9.5% lower revenues.

Corning (GLW ) will supply its optical fiber to Alcoa's AFL Telecommunication business through a multi-year agreement valued at $100 million.

Elan (ELN ) posted $0.22 vs. $0.41 Q1 EPS from operations as higher selling, general and administrative costs and investment losses offset a 3.3% revenue rise.

H&R Block (HRB ) says a "strong finish" to the recently concluded tax season boosted results to record highs and will lead to earnings ahead of current expectations. H&R expects fiscal 2002 EPS to be at the high end of previous $2.20- $2.30 guidance. H&R sees $2.60-$2.75 fiscal 2003 EPS, adding that the company increased its share of both the overall tax services market and the market for paid preparation.

PacifiCare Health (PHSY ) posted $0.87 vs. $0.79 Q1 EPS (pro forma) as pricing strength, improved health-care cost controls, and the culling of unprofitable business offset a 6% revenue decline.

Priceline.com (PCLN ) posted $0.02 Q1 EPS vs. $0.03 loss (pro forma) despite a 3% revenue decline. S&P puts estimates under review, and keeps hold. Merrill reportedly downgraded.

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