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Wednesday, October 14, 1998
"Don't follow the crowd." -- Philip Fisher
Cendant, American Bankers Part Ways
Cendant (NYSE: CD), the consumer services giant that has been battered by ugly charges of accounting irregularities and other misdeeds for the past six months, just can't seem to get its name out of the business news headlines. Today will be no different. Last night, Cendant ended its $67 per share stock and cash bid for specialty insurer American Bankers Insurance Group (NYSE: ABI) in what both companies termed a "mutual decision."
The move is not too surprising, as rumors of the deal's demise have circulated since Cendant's shares started on the road to Lowerville shortly after Cendant agreed to buy ABI in March for an original $3.1 billion price tag. Since part of the merger consideration for ABI included stock, completing the merger now would have ended up diluting Cendant's earnings in a big way thanks to the greater amount of shares the firm would have been required to hand over. Speculation that the merger was dead in the water intensified late last month, when ABI CEO Gerald Gaston pretty much named his price by saying he'd walk away from the deal for $400 million. Cendant has agreed to pay that breakup charge, which ABI will use to get on with its niche business of insuring its customers' credit card balances and other debts in the event of death, disability, or unemployment.
ABI said it is now officially off the selling block for the first time in almost a year, considering American International Group (NYSE: AIG) floated its original $47 per share buyout offer for ABI last December. However, there is little indication that AIG would be willing to submit another bid. After ABI accepted Cendant's rival bid, AIG moved on and agreed to acquire financial services firm SunAmerica (NYSE: SAI) in a giant $18 billion stock swap in August.
News to Go
Now, on to a Foolish rundown of last night's and today's earnings announcements...
This Morning's Earnings Announcements:
Adtran Inc. (Nasdaq: ADTN) -- Q3 EPS: $0.29 vs. $0.28 last year; Estimate: $0.28
BankAmerica Corp. (NYSE: BAC) -- Q3 EPS: $0.50 (excluding merger charges) vs. $0.99 (pro forma) last year; Estimate: $0.90
Black & Decker (NYSE: BDK) -- Q3 EPS: $0.70 (excluding charges) vs. $0.60 last year; Estimate: $0.68
Compaq Computer (NYSE: CPQ) -- Q3 EPS: $0.07 vs. $0.34 (pro forma) last year; Estimate: $0.06
Ford Motor Co. (NYSE: F) -- Q3 EPS: $0.80 vs. $0.73 last year (adjusted); Estimate: $0.80
Seagate Technology (NYSE: SEG) -- Q1 EPS: $0.19 (excluding charges) vs. $0.08 (excluding charges) last year; Estimate: $0.17
Time Warner (NYSE: TWX) -- Q3 EPS: $0.06 loss vs. $0.20 loss last year; Estimate: $0.06 loss
Last Night's Earnings Announcements:
Advanced Fibre Communications (Nasdaq: AFCI) -- Q3 EPS: $0.03 vs. $0.14 last year; Estimate: $0.04
At Home Corp. (Nasdaq: ATHM) -- Q3 EPS: $0.08 loss vs. $0.11 loss last year; Estimate: $0.08 loss
Intel Corp. (Nasdaq: INTC) -- Q3 EPS: $0.89 vs. $0.88 last year; Estimate: $0.80
(For more details on Intel's earnings, click here)
Kent Electronics Corp. (NYSE: KNT) -- Q2 EPS: $0.13 loss vs. $0.34 profit last year; Estimate: $0.02 loss
Linear Technology Corp. (Nasdaq: LLTC) -- Q1 EPS: $0.56 vs. $0.51; Estimate: $0.54
Microchip Technology (Nasdaq: MCHP) -- Q2 EPS: $0.33 vs. $0.34 last year; Estimate: $0.33
PepsiCo (NYSE: PEP) -- Q3 EPS: $0.37 (excluding gain) vs. $0.35 last year; Estimate: $0.40
Pfizer (NYSE: PFE) -- Q3 EPS: $0.51 vs. $0.45 last year; Estimate: $0.57
Plantronics Inc. (NYSE: PLT) -- Q2 EPS: $0.74 vs. $0.51 last year; Estimate: $0.69
Provident Financial Group (Nasdaq: PFGI) -- Q3 EPS: $0.72 vs. $0.67 last year; Estimate: $0.73
Providian Financial Corp. (NYSE: PVN) -- Q3 EPS: $0.85 vs. $0.50 last year; Estimate: $0.81
Splash Technology Holdings (Nasdaq: SPLH) -- Q3 EPS: $0.32 vs. $0.40 last year; Estimate: $0.30
Teradyne (NYSE: TER) -- Q3 EPS: $0.20 (before charges) vs. $0.45 last year; Estimate: $0.20
What the heck is "insouciance," anyway? Find out in the Fool Port report... Toys R Us has fallen down on the stock market playground, earning it a place as a Daily Trouble... Check out what people are saying about their companies during earnings season on the Fool's message boards... Continue your interactive investing education in the Fool's School...
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