AOL's Pittman Quits in Shake-Up
AOL Time Warner's (AOL ) chief operating executive Robert Pittman resigned Thursday, and two top executives from the Time Warner side of the company were promoted to senior positions.
Don Logan will become chairman of a new media and communications group made up of America Online, Time Inc. and Time Warner Cable, as well as other groups. Jeff Bewkes will chair a new entertainment and networks group, consisting of the company's cable and broadcasting assets including HBO and Warner Bros. The two chairmen will report to CEO Richard Parsons.
Pittman had been under pressure this year to steer the struggling media and entertainment giant away from its problems, namely heavy debt and investors' concerns about sluggish cable-TV stocks.
Earlier Thursday, S&P downgraded AOL to avoid from accumulate after an article in the Washington Post said the company's AOL unit may have boosted revenue via unconventional deals from 2000 to 2002. Robert O'Connor, AOL's vice president of finance for its advertising unit, said he outlined his concerns in a series of meetings with top executives in 2001 and this year.
After the close of the bell Thursday, Microsoft (MSFT ) posted fourth quarter 2002 earnings per share of $0.28 vs. $0.01 a year ago, led by demand for enterprise products. Revenues jumped 10% to $7.25 billion from $6.58 billion a year ago -- beating Wall Street's expectations. Microsoft's earnings per share included a one-time investment impairment charge of $806 million; the company also warned that the "current environment remains challenging."
After the close of the bell Thursday, Sun Microsystems (SUNW ) posted fourth quarter earnings per share of $0.01 vs. a loss of $0.03 a year ago, marking a return to profitability for the maker of servers for networks. However, Sun's revenue fell 14% to $3.4 billion amid the tough environment for information technology spending.
Automatic Data (ADP ) posted $0.46 vs. $0.42 fourth quarter earnings per share on a 1.6% revenue rise. However, the company sees fiscal 2003 earnings per share and revenue growth in the mid-single digits -- which would break a streak of more than 40 years of double-digit earnings growth. Salomon Smith Barney downgraded to neutral from outperform; Prudential downgraded to sell from hold.
Medical products and equipment maker Baxter International (BAX ) posted $0.32 vs. $0.42 second quarter earnings per share as $0.16 in acquisition-related impairment charges offset an 8.1% sales rise. Goldman downgraded to market outperform; Merrill downgraded to near-term buy from strong buy; S&P is keeping its accumulate rating pending more guidance. UBS Warburg upgraded to strong buy from hold.
Computer seller and e-commerce outsourcing firm Insight Enterprises (NSIT ) sees lower than expected $0.26-$0.29 second quarter earnings per share on sales of about $737 million, citing weakness at the company's U.K. operations.
The Federal Reserve ordered PNC Financial (PNC ) to conduct a comprehensive review of its books and fix internal controls. In related action, PNC consented to a SEC cease and desist order early Thursday, in which the company neither admits nor denies SEC's findings of disclosure and accounting violations. Separately, PNC posted second quarter results of $1.12 vs. $1 earnings per share despite 1.9% lower net income. S&P keeps its accumulate rating.
Eli Lilly (LLY ) posted $0.61 vs. $0.76 second quarter earnings per share on an 8.5% sales drop. The pharmaceutical giant noted lower Prozac sales due to generic competition. Lilly sees $0.67-$0.69 third quarter operating earnings per share, and narrowed its $2.60-$2.65 2002 guidance to $2.60-$2.62.
IBM Corp. (IBM ) posted $0.84 vs. $1.15 second quarter earnings per share from operations on a 7% revenue decline. S&P keeps its attractive recommendation, adding that the information technology firm confirmed the Street's 2002 estimate of $4, before charges. Bear Stearns downgraded to neutral from attractive.
Nokia (NOK ) posted EUR 0.19 vs. EUR 0.17 second quarter earnings per ADS despite a 6% sales drop. But the company reduced its full-year outlook, and now sees 2002 handset market volume at about 400 million units -- down from earlier estimates of 420 to 400 million units.
Siebel Systems (SEBL ) posted $0.06 vs. $0.15 second quarter earnings per share on a 28% revenue decline. CIBC World downgraded to hold from strong buy. Goldman Sachs downgraded to market perform. CS First Boston and WR Hambrecht cut estimates.
Advanced Micro (AMD ) posted a $0.54 second quarter loss vs. $0.05 earnings per share on a 39% revenue decline, and sees a third quarter loss. S&P maintains avoid. UBS Warburg downgraded to reduce from hold.
DaimlerChrysler (DCX ) posted $1.19 vs. $0.52 second quarter earnings per share from operations despite a 5.1% revenue drop, and sees 2002 operating profit substantially more than three times 2001's level.
Cooper Tire (CTB ) posted $0.52 vs. $0.25 second quarter earnings per share on flat sales, and says it is comfortable with 2002 consensus views.
Mattel (MAT ) posted better than expected $0.07 vs. $0.04 second quarter earnings per share from operations despite a 3.8% sales drop. Mattel maintains its long-term guidance of mid-single digit revenue growth, and low double-digit to mid-teens earnings per share growth.
UnitedHealth (UNH ) posted $1.01 vs. $0.68 second quarter earnings per share on a 4.6% revenue rise, and sees $4 to $4.05 2002 earnings per share. The company also sees 2003 earnings per share growth above 15%. S&P reiterates buy.
Celestica (CLS ) posted $0.28 vs. $0.41 second quarter earnings per share (adjusted) on a 15% sales drop. The company will reduce manufacturing capacity, and says it sees $0.26-$0.33 third quarter earnings per share on sales of $2.1 billion to $2.4 billion. S&P cut its estimate.