Starbucks Drops on Lowered Outlook

AMR averts bankruptcy with new pact; R.J. Reynolds tumbles on a warning; plus more of today's stocks in the news

Starbucks (SBUX ) fell. The coffee chain giant posted 13 cents vs. 8 cents second quarter earnings per share on a 22% revenue rise. Starbucks targets 66 cents to 67 cents fiscal 2003 earnings per share, down from the previous 67 cents to 68 cents target. Smith Barney and J.P. Morgan downgraded. S&P reiterates sell.

AMR Corp.'s (AMR ) American Airlines flight attendants agreed to a new contract proposal, helping AMR to avert bankruptcy again. The struggling airline had already reached pacts with two employee unions, but without a deal from the flight attendants' union, AMR said it would have filed for Chapter 11 protection today. Earlier, Don Carty resigned as CEO and chairman of AMR, amid criticism that he failed to disclose executive bonuses as the company negotiated for huge employee pay cuts. The board named Edward Brennan, former chairman and CEO of Sears, as executive chairman, and chose current COO Gerard Arpey as CEO. S&P keeps avoid on the shares.

R.J. Reynolds (RJR ) posted 84 cents first quarter earnings per share vs. a $3.58 loss (GAAP) despite a 20% sales drop. The tobacco manufacturer noted the first quarter included a non-cash trademark impairment charge. R.J. Reynolds cut the $400 million to $465 million 2003 net income guidance to $250 million. S&P downgraded to avoid.

UBS Warburg downgraded Ford Motor (F ) to reduce from neutral.

Bear Stearns upgraded Equifax (EFX ) to outperform. The credit card reporting agency posted 33 cents vs. 31 cents first quarter EPS from continuing operations on a 16% operating revenue rise. S&P reiterates hold.

Smith Barney downgraded Agere Systems (AGR.A ) to underperform, and cut the semiconductor industry to underweight.

Emulex (ELX ) posted breakeven third quarter vs. a 20 cent loss (GAAP) on a 14% revenue rise. Its sees 14% to 17% fourth quarter revenue growth, up to 22 cents earnings per share. RBC Capital downgraded to underperform from sector perform.

Columbia Sportswear (COLM ) posted 37 cents vs. 22 cents first quarter earnings per share on an 18% revenue rise. It sees 18% to 20% second quarter revenue growth, and says 12% to 14% 2003 consolidated revenue growth achievable. (AMZN ) shares soared after it posted a 3 cent first quarter loss vs. a 6 cent loss on a 28% sales rise -- beating analysts' average estimates for another 6 cent loss. The online bookseller sees second quarter sales growth of 24%-30%, and 2003 sales growth of over 19%. CS First Boston raised estimates.

Applied Micro Circuits (AMCC ) reported a fourth quarter loss of 5 cents per share, in line with analysts' average expectations. Revenues fell 33.2% year over year, to $20.1 million.

Nortel Networks (NT ), a maker of telecom equipment, posted 1 cent earnings per share for the first quarter, vs. a loss of 26 cents, including gains. Excluding discontinued operations, Nortel posted a loss of 3 cents -- meeting expectations. Revenue fell 18%, to $2.4 billion. Looking ahead, Nortel expects the telecom equipment market to decline "modestly" this year.

Bank One (ONE ) reportedly hired Goldman Sachs to sell its corporate trust uinit for as much as $1 billion.

Mentor Graphics (MENT ) posted 5 cents vs. 3 cents first quarter earnings per share (GAAP) on a 25% revenue rise.

Reader's Digest (RDA ) posted 3 cents vs. 16 cents third quarter adjusted earnings per share despite a 3.9% revenue rise. It posted a 5 cent third quarter loss (including a restructuring charge). The magazine publisher will reduce global overhead by $70 million. It sees 5 cents to 10 cents fourth quarter adjusted earnings per share.

Flextronics (FLEX ) posted 4 cents vs. 1 cent fourth quarter earnings per share despite 7% lower revenues.

T. Rowe Price (TROW ) posted 31 cents vs. 41 cents first quarter earnings per share on a 9.6% net revenue decline.

Kronos (KRON ) posted 35 cents vs. 28 cents second quarter earnings per share on a 21% revenue rise. It sees 36 cents to 42 cents third quarter earnings per share on $381 million to $387 million revenues.

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