UPS AND DOWNS
Volvo, FARO Technologies, American Home Products, Sterling Commerce, drkoop.com and other movers... August 6, 1999
UPSSweden's Volvo AB (Nasdaq: VOLVY) will acquire Investor AB's 49% stake in rival bus and truck maker Scania AB (NYSE: SCV.A) for 60.7 billion kronor ($7.4 billion) in cash and stock, creating the world's second-largest maker of heavy trucks and buses. The deal will give Volvo 69.6% of the votes in Scania. At the same time, Investor AB will become Volvo's largest single shareholder. Scania stock drove up $7 3/16 to $37 3/8 today, while Volvo issues lost $2 1/2 to $27 1/2.
Computer-aided manufacturing measurement hardware and software maker FARO Technologies (Nasdaq: FARO) moved up $1 19/32 to $5 3/32 after announcing the availability of AnthroCAM SPC Graph 2.0, its computer-aided-design-based graphical reporting software.
Enterprise learning software company Asymetrix Learning Systems (Nasdaq: ASYM) recorded a gain of $1 5/16 to $5 7/8 on the news from late yesterday afternoon that it bought privately held Pixelmedia Visual Communications, a multimedia company specializing in educational software and creative development services. Terms of the deal weren't reported.
Global air freight services firm Kitty Hawk (Nasdaq: KTTY) ascended $1 1/8 to $7 7/8 after the company said last night that Q2 EPS was $0.23, down from $0.26 last year but $0.02 better than First Call's four-analyst consensus estimate. Flight expense for the quarter fell to 42% from 46% last year.
Insurance and reinsurance holding company Terra Nova Holdings (NYSE: TNA) added $4 5/16 to $27 5/16 today after the company reported an unsolicited merger proposal. Terra Nova signed up Donaldson, Lufkin & Jenrette to help it think things through. Q2 pre-charge operating profits were $0.68 per share, missing First Call's six-analyst per-share profit estimate of $0.71.
Shares of energy exploration and production firm Enron Oil & Gas (NYSE: EOG), which is reportedly considering buying stakes in Indian oil and gas fields, bubbled up $1 7/8 to $24 15/16 today. The company is in talks with Tata Petrodyne Ltd. to buy stakes in oil fields in southern and western India, an Enron official told Reuters.
DOWNSPharmaceuticals, consumer health products, and agricultural compounds company American Home Products (NYSE: AHP) slid $6 1/16 to $44 7/8 after a Texas jury ruled that the company was fully liable for health problems a Lone Star State woman claimed were the fault of the diet-drug combination fen-phen, awarding her $23 million. The company said it will appeal.
E-commerce software developer Sterling Commerce (NYSE: SE), which said fiscal Q3 EPS was in line with market estimates at $0.38, moved back $2 5/16 to $21 15/16. The company announced a restructuring that will cut 200 jobs and carry with it a one-time fourth-quarter charge of between $25 and $30 million, dragging EPS to between $0.40 and $0.42. Wall Street was looking for EPS of $0.45. Sterling intends to sell its XcelleNet division, which has disappointed.
Online health information site drkoop.com (Nasdaq: KOOP) fell $1 7/16 to $15 3/4 after competitor adam.com (Nasdaq: ADAM) sued the company, alleging that drkoop.com infringed on adam.com's copyright and trademark rights by relicensing, repackaging, reselling, and distributing adam.com's content to third parties. adam.com wants its material removed from the sites of drkoop.com and its affiliates.
Full-motion "video libraries" producer Visual Data Corp. (Nasdaq: VDAT) let go $1 5/16 to $9 5/8 after selling 1.4 million shares of company stock to the public for $10 each in a secondary offering. The offer price was a discount to last night's close of $10 15/16 per share.
Small business investment company Winfield Capital Corp. (Nasdaq: WCAP) retreated $2 1/8 to $12 3/4 on news that fiscal Q1 losses were $1.23 per share. A year ago, the company posted a $1.95 per share profit. Investment income for Q1 decreased 11% to $204,597 from $230,925.
Guitar and musical equipment retailer Guitar Center (Nasdaq: GTRC) plunged $1 5/16 to $9 3/4 on news that Q2 losses were $0.01 per share. Wall Street expected a dime per share profit. The company blamed softness in the market for high-technology products, competition and cannibalization in certain markets, and a previous change in its direct mail strategy that is being reversed.