<TABLE cellSpacing=0 cellPadding=2 width="100%" bgColor=white border=0 xmlns:msxsl="urn:schemas-microsoft-com:xslt" xmlns:js="http://cbs.markewatch.com/xsl"><TBODY><TR><TD width="100%">Technology stocks were in focus after a couple of cautious outlooks from chipmakers emerged. TSMC (TSM: news, chart, profile) , the world's top contract chipmaker, overnight said it expects second-quarter shipments to rise on the March-ending quarter, but it also said it expects pressure on prices.
In Europe, Infineon Technologies (IFX: news, chart, profile) shares were last down 4% after the memory chipmaker swung to a wider-than-expected loss as sales slumped.
"As there are no near-term catalysts for growth in demand, especially in the memory and mobile phone businesses, in the third quarter we will continue to focus on cost-cutting measures," Infineon said. See story
The Dow industrials futures were down 37 points ahead of 8 a.m. Eastern at 10,219. The Nasdaq futures were also edging 7.5 points lower at 1,434. Dealers in London said activity in the underlying stocks was thin; semiconductor bellwether Intel Corp. (INTC: news, chart, profile) was down 0.5% in the speculative pre-open at $23.28.
In deals, Nortel Networks Corp. (NT: news, chart, profile) said it has an agreement to acquire IT services firm PEC Solutions, Inc. (PECS: news, chart, profile) for about $448 million in cash, or $15.50 for each PEC share. The offer represents a 37% premium on PEC's close on Friday.
Focus stocks
DuPont (DD: news, chart, profile) said first-quarter earnings were $967 million, up from $668 million in the same period a year ago. Revenue fell to $7.83 billion from last year's $8.21 billion, but topped analyst forecasts of $7.71 billion. The chemical company reaffirmed its 2005 earnings forecast of $2.65 to $2.85 a share, but said it expects raw material costs to be significantly more than previously expected given current energy cost trends.
In the oil patch, U.K. major BP (BP: news, chart, profile) posted a 29% surge in profits for the March quarter. Refining margins "increased sharply towards the end of March and that strength has been maintained into April," BP said. "Second-quarter margins-to-date are currently above last year's second-quarter levels, supported by demand growth and concerns about U.S. gasoline supplies in the driving season."
Omnicom Group (OMC: news, chart, profile) , the advertising and marketing group, said first quarter net income rose14% on a per-share basis to 82 cents. Analysts polled by First Call/Thomson had projected earnings of 80 cents a share in the quarter. Omnicom said worldwide revenue increased 8% to $2.40 billion. Analysts had projected sales of $2.46 billion.
The Chicago Mercantile Exchange Holdings Inc. (CME: news, chart, profile) posted a 51 percent surge in earnings per share in the first quarter to $2.04 as revenue rose 29 percent to $214 million. "We are off to a great start in the second quarter, averaging 5 million contracts per day," the CME said in a filing with the Securities and Exchange Commission.
Lockheed Martin (LMT: news, chart, profile) now expects 2005 earnings of $3.35 to $3.55 a share, vs. analyst projections of $3.34 a share, and revenue of $36.5 billion to $38 billion, vs. analyst forecasts of $37.16 billion.
Biotech company ImClone Systems, Inc. (IMCL: news, chart, profile) said first-quarter net income fell to $28.8 million, or 33 cents a share, from $62.7 million, or 76 cents a share, in the year-earlier quarter. Revenue for the period declined to $85.7 million from $110.2 million a year ago, partly due to lower license fees.
Genentech Inc. (DNA: news, chart, profile) said after Monday's closing bell that two Phase III trials of Herceptin were stopped early after a preliminary joint interim analysis demonstrated an improvement in the primary endpoint of disease-free survival and in the secondary endpoint of overall survival. Shares were up 7.3% on Instinet at $74.50.
French software developer Dassault Systemes SA (DASTY: news, chart, profile) jumped 4.7% on better-than-expected first-quarter results and after raising its profits target for the year to between 1.47 euros and1.49 euros a share, representing growth of 8% to 10%. See Europe Markets
Broker calls
UBS upgraded chipmaker Altera Corp. (ALTR: news, chart, profile) to buy from hold, citing solid underlying fundamentals and valuation. The broker told clients it believes that with the recent pullback in the broader markets, Altera is a good buying opportunity with 30% upside potential to its target price of $25.
Bear Stearns upgraded Marathon Oil Corp. (MRO: news, chart, profile) to outperform from market perform, citing the higher value of the company's refining assets implied by the terms of the Valero Energy Corp. /Premcor, Inc. merger.
Piper Jaffray cut fast-food chain Wendy's International (WEN: news, chart, profile) to market perform from outperform, saying it views the likelihood of an acquisition as minimal. In addition, the broker told clients that given lackluster at the core of Wendy's format, its confidence in the magnitude of its same-store sales recovery in the second-half of 2005 has diminished
Bear also upgraded Stone Energy Corp. (SGY: news, chart, profile) to market perform from underperform, saying the CEO is taking the right steps to move the company out of its past dependence on the Gulf of Mexico shelf. The broker also cited the successful development of two Rocky Mountain plays as a factor for its upgrade.
Deutsche Bank upgraded business software provider MicroStrategy (MSTR: news, chart, profile) to hold from sell despite deteriorating fundamentals. The broker told clients it is upgrading the stock on "dramatically lowered street expectations."
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Emily Church is London bureau chief of MarketWatch</TD></TR></TBODY></TABLE>
In Europe, Infineon Technologies (IFX: news, chart, profile) shares were last down 4% after the memory chipmaker swung to a wider-than-expected loss as sales slumped.
"As there are no near-term catalysts for growth in demand, especially in the memory and mobile phone businesses, in the third quarter we will continue to focus on cost-cutting measures," Infineon said. See story
The Dow industrials futures were down 37 points ahead of 8 a.m. Eastern at 10,219. The Nasdaq futures were also edging 7.5 points lower at 1,434. Dealers in London said activity in the underlying stocks was thin; semiconductor bellwether Intel Corp. (INTC: news, chart, profile) was down 0.5% in the speculative pre-open at $23.28.
In deals, Nortel Networks Corp. (NT: news, chart, profile) said it has an agreement to acquire IT services firm PEC Solutions, Inc. (PECS: news, chart, profile) for about $448 million in cash, or $15.50 for each PEC share. The offer represents a 37% premium on PEC's close on Friday.
Focus stocks
DuPont (DD: news, chart, profile) said first-quarter earnings were $967 million, up from $668 million in the same period a year ago. Revenue fell to $7.83 billion from last year's $8.21 billion, but topped analyst forecasts of $7.71 billion. The chemical company reaffirmed its 2005 earnings forecast of $2.65 to $2.85 a share, but said it expects raw material costs to be significantly more than previously expected given current energy cost trends.
In the oil patch, U.K. major BP (BP: news, chart, profile) posted a 29% surge in profits for the March quarter. Refining margins "increased sharply towards the end of March and that strength has been maintained into April," BP said. "Second-quarter margins-to-date are currently above last year's second-quarter levels, supported by demand growth and concerns about U.S. gasoline supplies in the driving season."
Omnicom Group (OMC: news, chart, profile) , the advertising and marketing group, said first quarter net income rose14% on a per-share basis to 82 cents. Analysts polled by First Call/Thomson had projected earnings of 80 cents a share in the quarter. Omnicom said worldwide revenue increased 8% to $2.40 billion. Analysts had projected sales of $2.46 billion.
The Chicago Mercantile Exchange Holdings Inc. (CME: news, chart, profile) posted a 51 percent surge in earnings per share in the first quarter to $2.04 as revenue rose 29 percent to $214 million. "We are off to a great start in the second quarter, averaging 5 million contracts per day," the CME said in a filing with the Securities and Exchange Commission.
Lockheed Martin (LMT: news, chart, profile) now expects 2005 earnings of $3.35 to $3.55 a share, vs. analyst projections of $3.34 a share, and revenue of $36.5 billion to $38 billion, vs. analyst forecasts of $37.16 billion.
Biotech company ImClone Systems, Inc. (IMCL: news, chart, profile) said first-quarter net income fell to $28.8 million, or 33 cents a share, from $62.7 million, or 76 cents a share, in the year-earlier quarter. Revenue for the period declined to $85.7 million from $110.2 million a year ago, partly due to lower license fees.
Genentech Inc. (DNA: news, chart, profile) said after Monday's closing bell that two Phase III trials of Herceptin were stopped early after a preliminary joint interim analysis demonstrated an improvement in the primary endpoint of disease-free survival and in the secondary endpoint of overall survival. Shares were up 7.3% on Instinet at $74.50.
French software developer Dassault Systemes SA (DASTY: news, chart, profile) jumped 4.7% on better-than-expected first-quarter results and after raising its profits target for the year to between 1.47 euros and1.49 euros a share, representing growth of 8% to 10%. See Europe Markets
Broker calls
UBS upgraded chipmaker Altera Corp. (ALTR: news, chart, profile) to buy from hold, citing solid underlying fundamentals and valuation. The broker told clients it believes that with the recent pullback in the broader markets, Altera is a good buying opportunity with 30% upside potential to its target price of $25.
Bear Stearns upgraded Marathon Oil Corp. (MRO: news, chart, profile) to outperform from market perform, citing the higher value of the company's refining assets implied by the terms of the Valero Energy Corp. /Premcor, Inc. merger.
Piper Jaffray cut fast-food chain Wendy's International (WEN: news, chart, profile) to market perform from outperform, saying it views the likelihood of an acquisition as minimal. In addition, the broker told clients that given lackluster at the core of Wendy's format, its confidence in the magnitude of its same-store sales recovery in the second-half of 2005 has diminished
Bear also upgraded Stone Energy Corp. (SGY: news, chart, profile) to market perform from underperform, saying the CEO is taking the right steps to move the company out of its past dependence on the Gulf of Mexico shelf. The broker also cited the successful development of two Rocky Mountain plays as a factor for its upgrade.
Deutsche Bank upgraded business software provider MicroStrategy (MSTR: news, chart, profile) to hold from sell despite deteriorating fundamentals. The broker told clients it is upgrading the stock on "dramatically lowered street expectations."
</TD></TR><TR><TD>
Emily Church is London bureau chief of MarketWatch</TD></TR></TBODY></TABLE>
