Schering-Plough Reaches Deal with FDA

Network Associates restates results; Autodesk warns of weaker earnings; Dell gives upbeat outlook; plus more stocks in the news

Schering-Plough (SGP ) reached a deal with the FDA to resolve issues at the company's manufacturing units in New Jersey and Puerto Rico. The drug maker will pay $500 million to the U.S. government. As a result, the company cut its low double-digit 2002 EPS percentage increase forecast to the mid-single-digits. S&P kept its sell recommendation on the news.

Network Associates (NET ) shares rose after the company completes internal accounting investigation. The security software maker will restate its 1998-2000 statement of operations and balance sheet. It reduces reported 1998 EPS; narrows 1999 loss; and widens 2000 loss. S&P kept a hold recommendation on the stock.

Autodesk (ADSK ) shares fell after the company posted first quarter EPS (pro forma) of $0.16 on a 6.9% revenue decline amid weak customer purchases. The software maker warned that it sees $0.08-$0.13 second quarter EPS (pro forma), lower than previously expected. In addition, the company says CFO Steve Cakebread will leave the company at the end of the month to become CFO at S&P and CS First Boston cut estimates, while Merrill Lynch downgraded the stock.

Dell Computer (DELL ) reported first quarter earnings of $0.17 per share, a penny higher than the consensus estimate. Revenues rose 0.5% from a year ago to $8.07 billion, above expectations. The PC maker sees second quarter EPS of $0.18, vs. the current consensus estimate of $0.17. Bear Stearns and CS First Boston reiterate buy rating, while S&P keeps hold.

Kulicke & Soffa (KLIC ) says on a conference call that it should hit the low-end of $130 million to $140 million third quarter revenue guidance. S&P says there was some slowing in orders and that the shift to the Maxum product was slower than expected. S&P keeps buy recommendation.

UBS Warburg reiterates strong buy on Tyco International (TYC ). Yesterday, the company held a conference call for analysts and investors

S&P says Qwest Communications (Q ) wants the winning bidder of its directory business to pay a $1 billion down payment once the deal is struck. S&P calls this request "strange" and says it adds to liquidity concerns. S&P keeps sell recommendation on the stock.

Gap Inc. (GPS ) reported first quarter EPS of $0.04, vs. $0.13 a year ago and above the consensus forecast. Comp-store sales fell 17%.

MIM Corp. (MIMS ) shares fell on news late yesterday that it will release EPS guidance for 2002 on May 20, after the market close.

PacifiCare Health (PHSY ) prices a private placement of $500 million of 10 3/4% senior notes. Goldman Sachs says the near-term refinancing and equity dilution risk is eliminated. S&P maintains hold.

Asyst (ASYT ) posted a $0.37 Q4 loss per share vs. a $0.48 loss despite a 67% decline in revenues. It sees $50-$55 million in Q1 sales, with gross margin improving to the 28%-30% range. Merrill raises estimates.

PacifiCare (PHSY ) announced the pricing of a private placement of $500 million of its 10 3/4% senior notes, increased from a $200 million placement announced on May 14. Goldman says near-term refinancing and equity dilution risk have been eliminated.

USB Piper upgrades Qualcomm (QCOM ) to outperform from market perform.

Goldman downgrades Sprint Fon Group (FON ) to market perform from market outperform.

Kohl's Corp. (KSS ) posted first quarter EPS of $0.31, vs. $0.22, on a 26% sales rise. S&P maintains accumulate.

Sharper Image (SHRP ) raised fiscal year 2003 EPS forecast to $0.88-$0.92 from the current $0.85 consensus. Yesterday, the company posted $0.02 first quarter loss per share vs. $0.23 loss on 12% same store sales rise.

Factual Data (FDCC ) agrees to be acquired by Fidelity National Information Solutions (FNIS ) for $13.75 per FDCC share in all cash, or 50% cash AND 50% FNIS stock.

Adelphia Communications (ADLAE ) has not traded since May 14. The company says it had a hearing on possible delisting of its shares from Nasdaq. The company missed interest preferred dividend payments. It says grand juries in New York and Pennsylvania are investigating matters related to the company.

ImClone Systems (IMCL ) and Germany's Merck KGaA reiterate Merck KGaA's commitment to sharing clinical data with partner IMCL in support of a U.S. resubmission of Biologics License Application for Erbitux for treatment of colorectal cancer.

Analog Devices (ADI ) reported second quarter EPS of $0.13 vs. $0.31 on 31% revenue decline. The chipmaker sees 8% third quarter sequential revenue rise. S&P keeps accumulate.

Agilent Technologies (A ) posted second quarter loss from operations of $0.24 per share on a 39% revenue decline. It sees $0.10-$0.20 third quarter loss from operations per share. It says visibility beyond the third quarter remains very poor.

Boston Scientific (BSX ) reportedly says it is the target of a federal criminal investigation into a recall of one of its major coronary-stent products in 1998. Two senior officials are also under investigation: WSJ.

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