Legg Mason Gains on Acquisition News

Guidant drops on product warning; A.O. Smith falls on lowered cuts guidance; plus more of Friday's stocks in the news

Legg Mason (LM ) shares gained Friday on news the company is to acquire Citigroup's (C ) asset management operations in exchange for Legg Mason's privte client and brokerage business, in a deal valued at $3.7 billion. S&P reiterates its buy opinion on Legg Mason.

Shares of medical device maker Guidant Corp. (GDT ) were sharply lower after the company voluntarily advised physicians they should discontinue implants of certain devices pending further notice: Contak Renewal 3 and 4, Renewal 3 and 4 AVT, and Renewal RF. The FDA may classify this action as a recall.

A.O. Smith (AOS ) shares were lower after the company cuts $1.45 to $1.65 2005 earnings per share guidance range to $1.25 to $1.45. The electric motor manufacturer sees 15 cents to 20 cents second-quarter earnings per share. It cites falling shipments in the water heater industry.

Heart device company Abiomed, Inc. (ABMD ) says the Circulatory System Devices Panel of FDA requested additional information on Abiomed's AbioCor total artificial heart.

Chipmaker Micron Technologies (MU ) posted a 20-cent third-quarter loss, vs. 13 cents earnings per share on a 5.6% sales decline. The company says ASP for memory products decreased about 30% vs. year ago.

Tektronix Inc. (TEK ) posted 25 cents, vs. 31 cents fourth-quarter earnings per share from continuing operations despite 1.2% sales rise. The company sees 20 cents to 26 cents first-quarter earnings per share from continuing operations on $230 million to $240 million in sales.

Software company Cognos Inc. (COGN ) posted 25 cents, vs. 22 cents first-quarter earnings per share on a 15% revenue rise. The company sees 28 cents to 31 cents second-quarter earnings per share on $207 million to $215 million in revenue, and $1.52 to $1.58 fiscal 2006 earnings per share on $915 million to $930 million in reveue. Results and guidance are lower than the Street view. S&P keeps a strong buy.

Inkine Pharmaceutical (INKP ) agrees to be acquired by Salix Pharmaceutical (SLXP ) in a stock deal valued at about $190 million, or $3.55 per Inkine share.

Maverick Tube (MVK ) sees lower-than-expected 58 cents to 62 cents second-quarter earnings per share, excluding any impact from the previously announced sale of its industrial HSS (hollow structural sections) business. The company sees weakness in industrial products.

Eon Labs (ELAB ) receives final approval for Bupropion HCl, ER 200mg tablets, the generic equivalent of Wellbutrin SR 200mg tablets. The company will begin shipping immediately.

Gilead Sciences (GILD ) seeks to terminate its 1996 Development and License Agreement with F. Hoffmann-La Roche for Tamiflu, an antiviral pill for treatment and prevention of influenza. The termination could result in rights to Tamiflu held by Roche reverting to Gilead.

Telecommunications circuit manufacturer PMC-Sierra Inc. (PMCS ) sees second-quarter revenue in the high end of its $70 million to $72 million guidance range. The company sees book-to-bill ratio over 1.1. It will eliminate 63 positions in addition to 26 previously reported and expects restructuring to save ongoing $10 million to $12 million per year.

Alcoa Inc. (AA ) to record second-quarter after-tax profit of $219 million on the sale of its shares in Norwegian metals company Elkem. The company sees $100 million to $120 million in net tax benefit and after-tax charges of $220 million to $250 million as part of a plan to streamline operations.

Tibco Software (TIBX ) posted 10 cents, vs. 5 cents second-quarter earnings per share (GAAP) on a 25% revenue rise.

Omnivision Technologies (OVTI ) posted 30 cents, vs. 34 cents earnings per share despite a 3.3% revenue rise. The company sees $90 million to $100 million in first-quarter revenue and 22 cents to 27 cents earnings per share.

A.G. Edwards (AGE ) says its poison pill will expire by its own terms on June 25. It has determined not to renew the plan, but reserved the right to adopt a stockholder rights plan without prior stockholder approval.

Medtronic (MDT ) raises its quarterly dividend 15%.

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