By Debra McGarry and Michael Baron
Stocks to watch
After the market closed Friday, Advanced Micro Devices /zigman2/quotes/208144392/composite AMD +2.53% said it completed the sale of 90 percent of its Communication Products Division to Francisco Partners for about $375 million in cash. Advance Micro has retained a 10 percent ownership interest in the business and also has a warrant to acquire an additional 10 percent. The new entity will be named Legerity, Inc. Shares of Advanced Micro fell 3 1/8 to settle at 62 5/8 ahead of the news.
Late Friday, PDK Labs Inc. announced a merger agreement with PDK Acquisition, which is owned by the company’s chief executive, Reginald Spinello, it’s chief financial officer, Karine Hollander and Raveendra Nandigam. Spinello already owns about 22.3 percent of PDK Labs’ common stock, while Hollander and Nandigam together own 29 percent. Under the terms of the agreement, PDK Labs shareholders will get $5 for each outstanding common share and $8 for each outstanding share of preferred stock, excluding shares held by PDK Acquisition. Ahead of the news, shares of PDK Labs closed down 1/8 to 4 7/16.
Transworld Healthcare said it reached a civil settlement with the U.S. Department of Justice in regard to an investigation of two of its operating units, which began in July 1997 and a related qui tam civil whistleblower case Under the settlement, Transworld, which denies any wrongdoing, will pay the U.S. $10 million and in return, the government will release it and certain subsidiaries from any civil or administrative monetary claim for the allegations being settled in the case. Shares of the company closed flat at 2 ¼ ahead of the news.
U.S. advancers for Friday
Shares of Adept Technology ( ADTK : news , msgs ) rose to an intraday high at 31 Friday after the company posted better-than-expected fourth-quarter earnings. Excluding one-time items, the company reported a profit of $900,000, or 8 cents a share, compared with $700,000, or 7 cents a share, earned in the year-ago period. The one analyst polled by First Call had been expecting a flat profit of 7 cents a share. Shares closed down 1/2 to 25 5/8.
Allied Waste Industries shares gained 21.7 percent after the waste-services company posted second-quarter earnings of $43 million, or 23 cents a share, in line with Wall Street estimates. Deutsche Banc Alex. Brown followed by upgrading the stock to a "buy" from a "market perform." Larry Henk, the company's chief operating officer, will add the title of president, Allied Waste announced. Further, former Federal-Mogul executive Thomas Ryan was named its chief financial officer, effective immediately. Allied shares added 2 1/16 to close at 11 9/16.
Bank of America /zigman2/quotes/200894270/composite BAC -0.55% shares jumped 7 percent after Lehman Brothers upgraded the stock’s rating to “buy” from “outperform,” citing improving earnings quality. Bank of America shares added 3 3/8 to 52 7/16.
Capital Crossing Bank shares bounced up 7 percent after the company announced plans to buy back up to 1.2 million shares, or $12 million worth, of its outstanding stock. The Boston-based company had 6.15 million average diluted shares outstanding in the quarter ended June 30. Shares of Capital Crossing added 17/32 to 8 1/16.
Communications Systems /zigman2/quotes/204781833/composite CSII +0.24% shares rose 15 percent after the company said late Thursday that it’s involved in talks with a “substantially larger public company” about a possible merger. The communications infrastructure manufacturer also reported second-quarter earnings of $1.6 million, or 18 cents a share, off from last year’s profit of $1.7 million, or 20 cents a share. Analysts surveyed by First Call had projected a profit of 31 cents a share. Revenue rose to $32.1 million from $29.8 million in the same period a year earlier. Communications Systems’ shares advanced 2 1/16 to settle at 16.
Emulex shares soared 43 percent after the company posted earnings of $9.6 million, or 25 cents a share -- 4 cents ahead of the average analysts’ estimate for the company’s fiscal 2000 fourth quarter. In the same quarter a year earlier, the company made $3 million, or 10 cents a share. Almost as impressive, quarterly sales leaped 99 percent to $40.8 million from the prior year’s $20.5 million. Demand for Emulex’s fiber-channel products rose to 94 percent of quarterly revenue in the latest quarter. The supplier of fiber-channel adapters saw its shares rise 20 3/8 to close at 67 15/16.
J.D. Edwards & Co. shares surged 48 percent after the company said it expects fiscal third-quarter bottom-line results to come in between breakeven and a profit of 2 cents a share. Analysts surveyed by First Call have been projecting a loss of 5 cents a share. Revenue, in the same period, is expected to reach between $250 million and $260 million while license revenue is supposed to exceed year-ago levels. Quarterly results for the company, which develops software and supply-chain products, are slated for release Aug. 23. The stock rose 6 1/2 to 20.
Shares of the Knot improved 4 percent after the company reported a second-quarter loss of $3.8 million, or 26 cents a share. This was narrower than last year’s loss of $1.7 million, or 56 cents a share, and came in a penny lower than the average estimate of analysts polled by First Call. Revenue rose to $6.9 million from $500,000 in the same period a year earlier. The latest quarter includes $2.9 million in revenue from the recently acquired WeddingPages business. As its name implies, the company is online destination for wedding information and services. Knot shares added 1/8 to 3 5/8.
Amid a growing consensus that the U.S. interest-rate environment is improving, Lehman Bros. shares moved up 7.5 percent as the Amex Securities Broker/Dealer Index rose 3.8 percent. Lehman shares advanced 7 1/8 to 126 3/8.
Mercator Software shares climbed 32 percent after Tibco Software agreed to form a joint-marketing alliance for selling complementary products to their mutual customers. Tibco also agreed to acquire Extensibility Inc., an extensible mark-up language technology firm, for $100 million in stock. Tibco expects to record a charge related to the deal in the fourth quarter. Tibco shares added 2 9/16 to 104 11/16 while Mercator’s shares jumped 6 43/64 to 27 39/64.
Source Information Management Co. shares bounced up 7 percent on news that the company has named Jim Gillis chief operating officer, effective August 11. Gillis is also president of Source, a position he will retain. Gillis will replace Richard Jacobsen, who plans to resign. Source Management shares rose 17/32 to 8 3/8.
U.S. decliners for Friday
Optio Software shares sank 25 percent after the company said it expects second-quarter revenue to come in at $10 million, up from last year’s $8.2 million but below Wall Street expectations. The company attributed the shortfall to lower-than-anticipated sales of software licenses for its information customization and delivery products. Shares of Optio declined 1 1/32 to 3 3/32.
Nanogen shares dropped 22 percent after the company reported a second-quarter loss of $4.1 million, or 20 cents a share, narrower than last year’s loss of $7.8 million, or 40 cents a share. Analysts surveyed by First Call who follow the company were looking for a quarterly loss of 31 cents a share. The company said it reduced spending internally and externally with engineering and prototype design vendors due to prototype development completion. Nanogen’s initial commercial product, the NanoChip molecular biology workstation, will now be transitioned over to Japan’s Hitachi for further development. Nanogen stock lost 6 to 21 9/16.
Teledyne Technologies /zigman2/quotes/203527738/composite TDY +1.07% shares tumbled 16.4 percent after the electronics products provider warned of shortfalls in the third and fourth quarter of 2000, along with fiscal 2001. Teledyne said it expects to spend an additional $20 million in the second half of fiscal 2000 on capital expenditures and product development. The company said that this will "impact profitability in the third and fourth quarters." In addition, the company sees profit from operations for fiscal 2001 coming in 10 to 12 percent lower than the 1999's total of $90.6 million. Shares fell 3 to close at 15 1/4.