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by 1/24/2001 2:49 PM
Stocks quoted in this article:
Fast-food titan McDonald's (MCD – 30-9/16) is among the most-active names trading on the New York Stock Exchange today. This morning, the company announced fourth-quarter earnings of 34 cents per share, missing analysts' estimates by a penny. MCD officials also expressed concern as to how the recent fear of mad cow disease in Europe will affect the company's bottom line for the first quarter.

MCD shares gapped one point lower at the opening bell and is now trading seven percent in the red. This action has dropped the equity back below its 10-week and 20-week moving averages after five weeks above these trendlines.

On the options front, speculators are actively trading the February 35 call. More than 2,500 contracts have changed hands on this strike which was previously home to 2,700 contracts in open interest. On the put side, the most-active strike is the January 2002 25, where around 1,200 contracts have traded. Prior to today, this put LEAPS was the site of 361 open contracts. <
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by 1/24/2001 1:12 PM
Stocks quoted in this article:
Chewing-gum king William Wrigley Jr. (WWY – 87-1/2) announced fourth-quarter earnings of 70 cents per share just before the close last night, matching estimates. The firm also declared a two-for-one stock split. The split will be paid around February 28 for those shareholders of record by February 6. Also, the company boosted its dividend to 19 cents per share from 17-1/2 cents.

After reaching an annual peak of 96-7/8 on January 2, the shares embarked on a decline that has carried them nearly 10 percent lower over the last three weeks. The stock is now trading back below its 10- and 20-day, and its 10-week moving averages. The equity is trading marginally lower today following its earnings report. WWY is an optionable stock, but its options are very thinly traded. <
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by 1/24/2001 10:42 AM
Stocks quoted in this article:
Shares of Cadence Design Systems (CDN – 30-9/16), creator of electronic design automation software, have been steadily gaining altitude since last spring. Last night, the company released fourth-quarter results. Revenue was up 46 percent. Earnings of 24-cents per share beat analysts' estimates of 22 cents per share, versus breaking even the same quarter last year. CDN forecasts revenue growth of 20 percent for 2001, although the company will experience a typical seasonal decline of about 10 percent during the first quarter.

CDN shares had spurted up the past few trading days in anticipation of the earnings release. They rose to within two points of their high of 34-1/8 from exactly a year ago, but have turned back today after the news release. Credit Suisse First Boston has downgraded the shares from a "buy" to a "hold" rating today.

There has been some activity in CDN options this morning, mostly centered on assorted out of the money calls and puts. <
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by 1/24/2001 10:39 AM
Stocks quoted in this article:
Power One (PWER - 51) makes power conversion devices for telecommunications products. The company reported earnings this morning for its fourth quarter and fiscal year. Sales for the quarter were up 13 percent over the previous quarter and 130 percent over the fourth quarter of the previous year. Pre-item income of 27cents per share beat Street estimates by a penny. Last year earnings for the quarter totaled 12 cents per share. Cash earnings per diluted share for the year totaled 83 cents versus 32 cents last year.

Besides record sales the company now has a record backlog. PWER expects sales to increase 55-60 percent for 2001 and earnings to meet current estimates. Since the release of earnings, the shares have traded slightly up from yesterday's closing price. Options are trading lightly for this issue.
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by 1/24/2001 9:23 AM
Stocks quoted in this article:
Lucent Technologies (LU – 18-13/16), the world's largest producer of telecommunications equipment, has announced a 30-cent-per-share loss for their first fiscal quarter. Wall Street was already expecting a loss, versus profit of 33 cents for the same quarter of last year, but this figure exceeded estimates by three cents per share. Revenue fell 26 percent for the period.

The brighter side of the coin is that LU has made plans for extensive restructuring. There will be about 10,000 layoffs, which amounts to about 10 percent of their workforce. The company will also take a charge related to the restructuring of one billion to 1.6 billion dollars.

The initial reaction in pre-market trading was a slightly positive move in the LU share price. Investors may be relieved that the company is making drastic changes to cope with current market conditions.

Two items mentioned in the LU news could affect other companies that do business with LU. The firm will be reducing capital spending significantly and they will also be increasing the amount of work outsourced to contract manufacturers. <
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