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Stocks to watch Thursday
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December 27, 2000: 6:48 p.m. ET
J&J to take $55M charge; Union Pacific to cut 2,000 jobs; NetZero sues Juno
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NEW YORK (CNNfn) - After the bell Wednesday, drug maker Johnson & Johnson disclosed it would take a one-time $55 million charge in fourth quarter, while National Steel warned it would see lower fourth-quarter revenue.
Also Wednesday, Free Internet service provider NetZero Inc. announced it is suing rival Juno Online for alleged patent infringement. And Union Pacific Corp. plans to cut about 2,000 jobs and take an after tax charge of $70 million that will lower fourth quarter estimates.
Johnson & Johnson
New Brunswick, N.J.-based Johnson & Johnson (JNJ: Research, Estimates) completed Wednesday its $62.8 million cash purchase of Atronix, which develops a system to treat atrial fibrillation. Johnson's Cordis unit, which makes heart and blood management products, bought Palo Alto, Calif.-based Atronix.
The drug maker said it would take a one-time charge of $55 million, or 4 cents a share, associated with the acquisition in fourth quarter 2000.
Earnings tracker First Call expects Johnson & Johnson to earn 64 cents a share in fourth quarter.
Union Pacific cutting 2,000 jobs
Omaha, Neb.-based Union Pacific Corp. disclosed Wednesday that it plans to cut about 2,000 jobs while warning that fourth quarter earnings would come in at 87-to-90 cents a share range, below Wall Street estimates of 93 cents.
Union Pacific (UNP: Research, Estimates) had produced 95 cents a share in fourth quarter 1999.
Union Pacific will also take an after-tax charge of about $70 million, or 26 cents a share, in fourth-quarter 2000. The railroad company attributed high fuel prices and an economic downturn for the reduced earnings outlook.
The 2,000 job cuts will come from the company's railroad unit during the first half of 2000. Union Pacific expects attrition to generate half of the cuts.
National Steel
National Steel Corp. warned Wednesday that fourth-quarter revenue and earnings will come in below Wall Street expectations due to continued lower demand for steel.
Mishawaka, Ind.-based National Steel (NS: Research, Estimates) expects to post losses of $2.20 to $2.30 a share. Last year, National Steel posted losses of 17 cents a share. Earnings tracker First Call had expected the company to produce losses of $1.53 a share.
National Steel Corp., one of the nation's leading producers of carbon flat-rolled steel products, plans to release fourth-quarter earnings on Jan. 24.
NetZero retaliates
NetZero Inc. is suing rival Internet service provider, Juno Online Services Inc., alleging that Juno's use of an ad window, The Juno Guide, is nearly the same as NetZero's patented ad window.
NetZero offers free Internet service to consumers in exchange for receiving ads. Westlake Village, Calif.-based NetZero (NZRO: Research, Estimates) filed the lawsuit Tuesday in U.S. District Court in Los Angeles.
New York-based Juno (JWEB: Research, Estimates) denied any infringement and pointed to its own lawsuit again NetZero filed six months ago alleging the same violation against NetZero. "We look forward to seeing both our suit against NetZero and this new suit brought by NetZero resolved through the appropriate legal process," said Juno's CEO, Charles Ardai.
Amazon.com's merry Christmas
Online retailing leader, Amazon.com (AMZN: Research, Estimates), said Wednesday that it is happy with its holiday shopping season this year.
The company said it took more than 31 million orders through its Web sites between Nov. 2 and Dec. 23, the vast majority of which were shipped in time for the holidays.
Amazon.com's experience contrasts with traditional brick-and-mortar companies that were suffering from a slowing U.S. economy. Federated (FD: Research, Estimates), the parent of Macy's and Bloomingdale's; and No. 1 retailer Wal-Mart Stores Inc. (WMT: Research, Estimates) have told investors to expect fourth-quarter sales to be below their previous expectations.
Citadel reaffirms
Las Vegas-based Citadel Communications Corp. (CITC: Research, Estimates) and its principal operating unit, Citadel Broadcast Co., reaffirmed Wednesday that they expect to produce $92 million in fourth-quarter 2000 revenue. Broadcast cash flow for the company and the unit will also hit 38 percent.
Citadel Communications had issued guidance in November that they expected to earn $92 million in fourth quarter 2000. Earnings tracker First Call expects Citadel to post earnings of 47 cents a share in fourth-quarter 2000.
Citadel also expects to earn about $79 million in first quarter 2001 and achieve a margin of about 30 percent for the quarter.
America West
Phoenix-American West Holdings Corp. (AWA: Research, Estimates) bought 158.9 million shares of Class A common stock held by Continental Airlines Inc. (CAL: Research, Estimates) for $10.8 million. Continental also assigned its rights held under a related deal with TPG Partners LP and certain TPG affiliates.
The $10.8 million payment will be accounted for as a cut in America West shareholder equity.
Continental bought the shares during a 1994 reorganization of America West Airlines Inc.
Sierra's 2001 guidance
Vancouver-based Sierra Wireless (SWIR: Research, Estimates) issued guidance Wednesday for each quarter in fiscal 2001 as well as the year. Sierra expects to earn $4.2 million or 24 cents a diluted share for all of 2001, below Wall Street estimates of 26 cents a share.
For the year, Sierra, which makes mobile modems, plans to earn $120 million in revenue on operating expenses of $48 million. The company also plans to produce margins of 45 percent for the year and each individual quarter in fiscal 2001.
Sierra anticipates meeting Wall Street expectations for first quarter, earning $660,000 in profit, or 4 cents a share, on revenue of $22 million. First Call anticipates 4 cents a share for the quarter.
The mobile modem maker plans to surpass expectations in second quarter, generating $727,000, or 4 cents a share, above First Call's expectations of 2 cents a share. Revenue will come in at $28.4 million on operating expenses of $11.7 million.
Sierra forecast $1.1 million in third-quarter income, or 6 cents a share, below Wall Street's expectations of 7 cents a share. The company expects revenue of $31.6 million on operating expenses of $12.8 million.
For fourth quarter, Sierra predicted $1.8 million, or 10 cents a share, below Wall Street estimates of 15 cents a share. The company plans to earn $38 million in revenue on operating expenses of $14.7 million.
Digital Biometrics
Minnetonka, Minn.-based Digital Biometics (DBII: Research, Estimates) reported Wednesday that it will take a one-time, non-cash charge of $1.4 million or 9 cents a share, reflecting the company's change in accounting principle, for the year ended Sept. 30.
The company expects to post a loss of between break even to 2 cents a share for first quarter ended 2000. Digital Biometrics expects sales of $6.4 million to $6.6 million for first quarter. Once its merger with Visionics Corp. is approved, Digital Biometrics anticipates year over year revenue growth of 15-to-25 percent and a return to profitability in fiscal 2002. 
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