Lilly: Still Cautious on 2003 Expectations

Semtech sinks; UnitedHealth affirms earnings outlook; plus more of today's stocks in the news

Eli Lilly (LLY ) says the FDA approved Forteo treatment for osteoporosis. The drug giant reiterated its $2.55-$2.57 2002 earnings per share guidance, and is still cautious about 2003 financial assumptions. Earlier Tuesday Friedman downgraded on valuation and the potential for drug launch delays and manufacturing issues, almong other risks.

Semtech (SMTC ) posted 17 cents vs. 12 cents third quarter earnings per share on an 8% sales rise. Semtech says visibility remains low. The company sees nine cents to 11 cents fourth quarter earnings per share on sales of $43 million to $45 million. First Albany reportedly downgraded. S&P reiterates avoid.

UnitedHealth (UNH ) reiterated its forecast for $5.05 2003 earnings per share on about $29 billion revenues -- above current Wall Street expectations. The health care services company says it anticipates adding at least 1.3 million new consumers to its health benefit offerings and expects an increase in margins.

First Albany downgraded Bebe Stores (BEBE ) to neutral from buy. Pacific Growth reiterates equal-weight. Both cite possible sales and earning shortfalls.

Wachovia reiterates sell on Ericsson (ERICY ), saying the stock is overvalued. On Monday the company held an analyst meeting in New York.

Roxio (ROXI ) says its new VideoWave Movie Creator software has been chosen by Dell to ship on Dell PCs and notebooks. Adams Harkness says the news is pulling the stock out of a recent slump and maintains its market perform rating.

IDEXX Labs (IDXX ) says as a result of further comments expected from the FDA, it expects a additional delay in its introduction of nitazoxanide. IDEXX says the extent of the delay depends upon the nature of the FDA's comments and the effort that is required by the company to respond.

Moody's downgraded El Paso 's (EP ) senior unsecured debt to Ba2 from Baa3.

McDonald Investments downgraded Applied Industries Technologies (AIT ) to hold from buy.

Biosphere Medical (BSMD ) says the FDA has cleared Embosphere Microspheres for use in treating symptomatic uterine fibroids. Adams Harkness reiterates buy.

Vision care products company Cole National (CNJ ) will restate its financial statement due to a change in accounting for revenue recognition; the company estimates that the new accounting treatment would have reduced earnings for the 26 weeks ended Aug. 3, 2002 by five cents to 10 cents. Cole also delayed its third quarter 10-Q filing.

Canadian National Railway (CNI ) announced 1,146 permanent job reductions, and sees a fourth quarter after-tax workforce adjustment charge of approximately $79 million Canadian dollars.

Veridian (VNX ) received a contract for engineering, technical and industrial services from the U.S. Navy's Naval Sea Systems Command and Shipbuilding Support Office. Veridan says the multiple award contract has a value of $166.9 million.

Merrill downgraded Biogen (BGEN ) to sell from neutral.

Deutsche Bank downgraded Vodafone (VOD ) to hold from buy on valuation.

Morgan Stanley raised estimates on Intel (INTC ). The company said Monday it planned to raise the price of its flash chips by as much as 40%.

Generation Y media company Alloy (ALOY ) posted 19 cents vs. eight cents third quarter earnings per share on a sharp revenue rise, and sees fourth quarter merchandise revenue of $60 million to $62 million; sponsorship and other revenue of $34 million to $36 million; and earnings per share before taxes and amortization of 34 cents to 36 cents. CIBC World keeps sector outperform.

CS First Boston upgraded Halliburton (HAL ) to neutral from underperform, saying the odds of a favorable resolution to the company's ongoing asbestos litigation have improved.

CS First Boston downgraded Quebecor World (IQW ) to neutral from outperform. On Monday the company said its president and CEO Charles Cavell plans to retire in April, and that its CFO also is leaving.

UBS Warburg upgraded Barr Labs (BRL ) to buy from hold.

Merrill downgraded IDEC Pharmaceuticals (IDPH ) to neutral from buy, citing weak near term growth prospects for its Zevalin drug, and slowing growth of Rituxan sales.

Tech Data (TECD ) posted 57 cents third quarter earnings per share on a 9.6% sales decline. The company says it will exit operations in Argentina. Tech Data sees 53 cents to 58 cents fourth quarter earnings per share from operations on $3.8 billion to $3.95 billion in sales. First Albany cut its rating on the shares to neutral from buy. S&P reiterates hold.

Deutsche Bank reportedly downgraded Emulex (ELX ) to hold from buy.

Merrill downgraded Biogen (BGEN ) to sell from neutral.

Prudential downgraded Morgan Stanley (MWD ) to hold from buy.

France Telecom (FTE ) is trading lower in Europe on speculation that the company could be launching rights issues, and was mulling the sale of its mobile phone unit to Orange.

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