UnitedHealth to Buy Oxford

Aventis drops; OSI Pharmaceuticals and Genentech rise; plus more of today's stocks in the news

UnitedHealth (UNH ) will acquire health-insurance provider Oxford Health (OHP ), in a stock and cash deal valued at approximately $4.9 billion. The deal, expected to be completed during fourth-quarter 2004, follows severed merger talks between Oxford and WellChoice (WC ).

Franco-German drug maker Aventis (AVE ) accepted a sweetened bid from French drugmaker Sanofi-Synthelabo to acquire Aventis for $64 billion, say people familiar with the situation. Novartis (NVS ) says it will discontinue talks, and won't submit bid for a potential combination with Aventis. S&P keeps hold.

OSI Pharmaceuticals (OSI ), Genentech (DNA ), and Swiss health-care group Roche say a Phase III study of Tarceva, an investigational lung-cancer treatment they are working on showed positive results in a trial, and improved the overall survival rate in patients with advanced lung cancer. Shares of OSI and Genentech rose sharply. Merrill cut OSI to neutral from buy. First Albany upped its target. S&P cut Genentech to avoid from hold.

Health-benefits provider Humana (HUM ) posted 41 cents, vs. 19 cents first-quarter earnings per share on a 12% revenue rise. It sees 37 cents to 39 cents earnings per share, and $1.60 to $1.65 in 2004.

Abgenix (ABGX ) is higher with peers on OSI and Genentech's Tarceva news. S&P keeps hold.

TXU Corp. (TXU ) expects first-quarter operational earnings per share of at least 60 cents, vs. the previous guidance of 45 cents. TXU raised the 2004 operating earnings per share guidance to $2.45 to $2.55. It cited a series of deals totaling about $8 billion, including sales of TXU Australia, and the sale of TXU Fuel.

Goldman Sachs reportedly upgraded Xerox (XRX ) to outperform from in-line. On Friday the company posted 17 cents first-quarter earnings per share from continuing operations, vs. a 10 cents loss on a 2% revenue rise.

Tyson Foods (TSN ) posted 33 cents, vs. 20 cents second-quarter earnings per share on a 6.9% sales rise. The world's largest meat company sees $1.05 to $1.25 fiscal 2004 earnings per share. On Friday, a federal district judge overturned an Alabama jury's $1.28 billion verdict against Tyson in a cattle pricing case.

First Health Group (FHCC ) cut the first-quarter earnings per share guidance to 30 cents to 32 cents, and cut the revenue outlook to $215 million to $220 million. The company also trimmed its 2004 earnings per share forecast to $1.30 to $1.40, and trimmed the revenue forecast to $885 million to $905 million. S&P downgraded to sell from hold. Lehman cut its estimates and maintains the underweight rating.

JDA Software (JDAS ) and Microsoft (MSFT ) signed a multiyear alliance that will expand their existing relationship, and accelerate the development and marketing sales of JDA Portfolio suite based on Microsoft's platform and Microsoft.net technologies.

Schwab SoundView upgraded Corning (GLW ) to outperform from neutral. On Friday the fiber optics giant posted 4 cents first-quarter earnings per share (GAAP), vs. a 17 cents loss on a 13% sales rise. Corning forecast 7 cents to 9 cents second-quarter earnings per share (non-GAAP) on sales of $900 million to $950 million.

Pilgrim's Pride (PPC ) posted 50 cents, vs. 26 cents second-quarter earnings per share on a sharp revenue rise. The poultry processor cited the acquisition of ConAgra's (CAG ) chicken division, which was effective Nov. 23, 2003. Pilgrim's Pride says it will restructure its turkey division.

Morgan Stanley (MWD ) and CS First Boston are set to share in a pool of investment banking fees worth almost $100 million as lead underwriters for the initial public offering of Google, according to The Wall Street Journal.

Urban Outfitters (URBN ) says quarter-to-date, same-store sales continue to significantly exceed the plan, with first-quarter comparisons very likely to exceed fourth-quarter fiscal 2004's 21% gain. Urban Outfitters sees first-quarter earnings per share more than double first-quarter fiscal 2004's level.

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