3M Set to Top Targets

Electronic Data reels amid accounting woes; Tripos warns of an earnings shorftall; plus more of today's stocks in the news

In its 10-K, Talx Corp. (TALX ) disclosed that the SEC is conducting an investigation into the company's August 2001 secondary offering, and its second quarter fiscal 2001 financial results.

Electronic Data Services (EDS ) reported an accounting complexity related to its big outsourcing deals, according to The Wall Street Journal. Also, the company ended talks with Proctor & Gamble related to a potential outsourcing pact. S&P keeps its accumulate ranking.

3M (MMM ) is higher. The company expects second quarter EPS from operations to be at least $1.33, above the current consensus of $1.25. 3M cited improved sales volumes, primarily in the Asia Pacific area.

Tripos (TRPS ) shares fell after the company said it sees a $0.20-$0.25 second quarter loss (basic) on revenue of $10.5M-$11M. S&P downgraded to hold from buy. Tripos noted lower revenue in Discovery Software licensing, Software Consulting Services, and higher costs.

Alkermes (ALKS ) shares fell sharply after Johnson & Johnson (JNJ ) received a non-approvable letter from the FDA related to its New Drug Application for Risperdal Consta, a schizophrenia drug. Alkermes was to manufacture the drug using its Medisorb drug-delivery technology. USB Piper downgraded.

Dianon Systems (DIAN ) says if the Department of Health & Human Services' proposed revisions to Medicare payment policies are adopted in their current form, the company expects a negative impact on 2003 EPS of about 10%. Wachovia says Dianon's 2003 EPS could fall by $0.40.

WorldCom (WCOME ) stock resumed trading after being halted on June 26 following the news of its discovery of $3.85 billion in transfers from line cost expenses to capital accts that violated GAAP.

Janney Montgomery upgraded Harbor Florida Bancshares (HARB ) to buy from hold on valuation.

Raytheon (RTN ) expects to widen its $813M 2002 loss estimate for Massachusetts projects by 400M-$450M due to declining productivity. Raytheon reaffirmed $2.10-$2.20 2002 EPS from operations guidance.

Netegrity (NETE ) sees a $0.24-$0.30 second quarter loss (pro forma) on $14.5M-$16.5M revenue, citing constrained IT spending.

JP Morgan downgraded Xilinx (XLNX ) and Altera (ALTR ) to market perform from long term buy.

Catapult Communication (CATT ) sees lower than expected $0.10 third quarter EPS on $8M revenue. CIBC downgraded to hold from strong buy. Pacific Growth also downgraded.

Merrill reportedly upgraded Comverse Technology (CMVT ) to long term buy from neutral and keeps near term neutral.

Cree (CREE ) announced that the Office of Naval Research has awarded Creee with two contracts for a total value of about $14.4 million.

McGrath Rentcorp (MGRC ) says it has exercised its right to terminate a merger agreement between it and Tyco International (TYC ).

TRW (TRW ) agreed to be acquired by Northrop Grumman (NOC ) in a stock deal valued at about $7.8 billion, or $60 per TRW share.

Vivendi Universal (V ) chairman and CEO Jean-Marie Messier agreed to resign from the beleagured company.

Digene (DIGE ) says on June 30, it delivered to Cytyc (CYTC ) a formal notice of its termination of the companies' Merger Agreement. Last week, the FTC informed the two companies of its intention to block the acquisition.

Idec Pharmaceutical (IDPH ) says the European launch of zevalin by its partner Schering AG will be delayed due to certain technical compliance issues at its fill/finish provider.

Ericsson (ERICY ) shares are trading sharply higher in Europe on rumors that the company is a takeover target. In response to the rumors, Ericsson's chairman says the company "has no negotiations regarding a takeover or other similar alliances, although no one can rule out such future scenarios."

GSI Commerce (GSIC ) sees a worse than expected second quarter EBITDA loss of $3M-$4M on revenue of $32M-$34M; and sees a third quarter EBITDA loss of $5M-$6M. GSI noted higher costs, and the decision to remove estimated results of potential new partners from projections.

France Telecom (FTE ) is sharply higher on rumors that the French government would be willing to renationalize the company. The government reportedly denied the rumors.

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