Nordstrom Advances

Applied Molecular soars on Lilly deal; FedEx slips; plus more of today's stocks in the news

Nordstrom (JWN ) posted 33 cents, vs. 14 cents third-quarter earnings per share on 5% higher same-store sales. The department-store chain sees 54 cents to 58 cents fourth-quarter earnings per share on 2% to 4% higher same-store sales, and $1.55 to $1.59 fiscal 2004 earnings per share on 1% to 3% higher same-store sales. S&P and J.P. Morgan upgraded.

Applied Molecular (AMEV ) agreed to be acquired by Eli Lilly (LLY ) in a $400 million deal. The terms are $18 in cash or Lilly stock for each Applied Molecular share.

CS First Boston downgraded package-delivery company FedEx (FDX ) to neutral from outperform on valuation and changes in the overall marketplace, which the broker says may slow the company's growth rate.

Krispy Kreme Doughnuts (KKD ) posted 23 cents, vs. 17 cents third-quarter earnings per share on a 31% revenue rise, meeting analysts' average estimates. Krispy Kreme sees 92 to 97 store openings in fiscal 2004, vs. the previous guidance of 87 stores. The doughnut chain sees 26 cents fourth-quarter earnings per share, and 92 cents in fiscal 2004, including a 1 cent positive impact of an arbitration settlement. S&P says hold.

Wachovia says Medicare cuts are worse than expected, and could significantly hurt Apria Healthcare's (AHG ) earnings per share. Wachovia rates the shares as market perform. The broker also downgraded Lincare Holdings (LNCR ) to underperform from market perform. S&P keeps hold on both of the stocks.

Telecommunications-equipment maker Ditech Communications (DITC ) posted 9 cents second-quarter earnings per share from continuing operations, vs. a 6 cents loss on a 74% revenue rise. Ditech expects third-quarter revenues to break the $20 million mark.

Thomas Weisel upgraded medical-testing products maker Gen-Probe (GPRO ) to outperform from peer perform. On Thursday the company said it and DiagnoCure will develop and market a urine test to detect a new, specific genetic marker for prostate cancer.

Affiliated Computer Services (ACS ) won a contract from the U.S. Dept. of Education. The company says the five-year base contract is estimated at more than $1 billion. S&P keeps buy. CIBC World reiterates sector outpreform.

Biovail (BVF ) received a letter from the SEC advising the company that the agency has initiated an informal inquiry pertaining to Biovail's accounting and financial reporting practices for fiscal 2002 and quarterly periods to date for fiscal 2003. Merrill Lynch and J.P. Morgan each downgraded the shares. S&P keeps hold.

Merck & Co. (MRK ) says it is halting trials for its diabetes treatment, MK-767, due to recent findings in a long-term safety assessment program that identified a rare form of malignant tumors in mice. Morgan Stanley downgraded to equal-weight. J.P. Morgan also downgraded. S&P keeps hold.

Autodesk (ADSK ) reported 20 cents third-quarter earnings per share (GAAP), vs. a 3-cent loss, on a 24% revenue rise. The software concern sees fourth-quarter EPS of 27 cents to 32 cents on $245 million to $255 million in revenues, and fiscal 2005 EPS of 90 cents to $1.10 on $940 million to $975 million in revenues. Merrill Lynch upgraded the shares to buy from neutral.

Walt Disney (DIS ) posted 20 cents, vs. 9 cents fourth-quarter earnings per share on a 7% sales rise, partly from the success of the Pirates of the Caribbean movie. Earnings topped Wall Street's estimates for 15 cents per share. J.P. Morgan said a rebound in earnings is already priced into the shares, and is keeping the neutral rating.

InterMune (ITMN ) says a New Drug Application for oritavancin, which previously was projected to be submitted in the first half of 2004, cannot be submitted before the end of 2004.

Brocade Communications (BRCD ) posted 6 cents, vs. 7 cents fourth-quarter earnings per share on a 10% revenue decline. S&P reiterates avoid, and has a $3 target. CE Unterberg says the pricing environment is tough.

TiVo (TIVO ) posted an 11 cents third-quarter loss, vs. a 23 cents loss on a 73% revenue rise. Due to higher-than-expected demand, TiVo says it now expects to add 325,000 to 375,000 net new subscribers in the fourth quarter. The company expects to grow the fiscal 2005 subscriber base by one million or more.

Novell (NOVL ) posted a 29 cents fourth-quarter loss, vs. a 25 cents loss on a 4.3% revenue decline and $130 million in non-recurring charges, principally to increase the valuation allowance for net deferred tax assets.

Freddie Mac (FRE ) released the restatement/revision of its 2000, 2001, and 2002 financial statements. The net cumulative effect is an increase to net income of $5 billion, but the 2001 net income decreases by $1 billion due to unrealized losses on derivatives not in hedge accounting relationships.

Boston Scientific (BSX ) says the FDA's Circulatory System Devices panel has unanimously recommended approval for its Taxus Express2 paclitaxel-eluting coronary stent system.

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