Fool.com: Champion International, Diamond Offshore, Grand Toys... (Ups and Downs) August 4, 1999

UPS AND DOWNS

Champion International, Diamond Offshore, Grand Toys, Staples, Mentor Graphics, and other market movers...

August 4, 1999

UPS

Paper maker Champion International Corp. (NYSE: CHA) rolled up a $4 3/4 gain to $59 5/16 after ABN Amro started coverage of the firm with a "buy" rating and a 12-month price target of $65 per share. Fellow paper company Georgia-Pacific (NYSE: GP) rose $1 15/16 to $49 15/16 and Bowater (NYSE: BOW) tacked on $2 13/16 to $52 11/16.

Contract offshore oil and gas driller Diamond Offshore (NYSE: DO) advanced $2 3/16 to $33 13/16 after Merrill Lynch picked the company as a "focus 1 selection" and set a 6- to 12-month price target of $45 per share.

Montreal-based toy developer and distributor Grand Toys Ltd. (Nasdaq: GRIN) gave its shareholders something to smile about today, jumping $2 3/8 to $7 after announcing a licensing agreement with Nintendo Co. Ltd. to manufacture and distribute a line of products based on the Pokemon character in Canada.

Japanese Internet access and services provider Internet Initiative Japan Inc. (Nasdaq: IIJI) gained $8 5/16 to $31 5/16 in its first day of trading after selling 7.16 million American depositary shares at a price of $23 per share.

Breadman, Juiceman, and George Foreman Grill maker Salton Inc. (NYSE: SFP) served up a $1 15/16 gain to $24 5/8 after saying its fiscal 1999 earnings will top the First Call mean estimate of $2.17 per share thanks to strong customer demand for its products. The company also said that it will delay a planned common stock offering due to "current market conditions."

British staffing services company Select Appointments (Nasdaq: SELA) added $2 5/16 to $28 3/16 after posting Q2 EPS of $0.31, up from $0.23 a year ago and ahead of the First Call mean estimate of $0.28.

Chemical company Union Carbide (NYSE: UK) jumped $10 9/61 to $59 3/8 after agreeing to be acquired by Dow Chemical Co. (NYSE: DOW) in a deal valued at $11.6 billion in stock and assumed debt. For more details on the merger, see today's Breakfast With the Fool.

Disability insurer UnumProvident (NYSE: UNM) bounced back $1 13/16 to $38 after tumbling 30% yesterday after reporting Q2 operating earnings that missed the mean analysts' estimate by a dime. Donaldson, Lufkin & Jenrette raised its rating on the firm today to "top pick" from "buy."

DOWNS

Shares of several office supply retailers fell today after Donaldson, Lufkin & Jenrette cut its ratings on the shares to "market perform" from "buy." Staples (Nasdaq: SPLS) fell $3 1/16 to $23 5/16 and OfficeMax (NYSE: OMX) dropped $1 3/16 to $9; Office Depot (NYSE: ODP) was spared a big loss, moving back just $1/8 to $16 13/16.

Electronic hardware and software design tools maker Mentor Graphics (Nasdaq: MENT) lost $1 1/16 to $8 5/16 after last night reporting Q2 EPS of $0.09, $0.02 better than last year but flat with estimates. Revenues, essentially flat with year-ago levels, disappointed, but gross margins rose to 76% from 72%. Several brokerages downgraded the stock today.

Video store chain and movie website operator Hollywood Entertainment (Nasdaq: HLYW) was reeling after a loss of $2 5/8 to $14 3/8 today. The company said Q2 EPS was $0.20 excluding its Reel.com online operations, a nickel better than last year but a penny below First Call's six-analyst consensus estimate. Revenues rose 45% but general and administrative expense (excluding Reel.com) was 5% of revenue, higher than the year-ago 4.5%. Reel.com's revenues increased 35% from Q1.

E-business and e-commerce consultant Nextera Enterprises Inc. (Nasdaq: NXRA), which reported Q2 net income excluding stock compensation charges of $0.04, $0.02 off First Call's four-analyst consensus estimate, fell $1 13/16 to $5 3/16. "Two large engagements, totaling $16.8 million of new business, closed later than originally anticipated," said Chairman and CEO Gresh Brebach. "Further impacting the quarter was the decline in demand for ERP-related services, which resulted in a reduction in the use of contractors and a slight reduction in the utilization of mid-level technologists and consultants."

Internet portal designer Online Systems Services (Nasdaq: WEBB), which said Q2 losses were $0.52 as losses from operations fell to $2.8 million from $1.7 million last year and revenues moved back to $192,000 from about $300,000, gave up $2 9/16 to $9 1/2 in today's trading.

Hotel real estate investment trust FelCor Lodging Trust (NYSE: FCH) gave up $2 1/8 to $17 1/4 after turning in Q2 funds from operations of $1.06, a nickel better than last year but flat with Street expectations. The Fool's Boring Port sold FelCor in January.

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