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CNNfn after the bell
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March 2, 1999: 7:37 p.m. ET
3Com issues profit warning, Intuit pays $200M for CRI, Walgreen expands
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NEW YORK (CNNfn) - Tuesday's close brought with it a slew of company news, including a grim outlook from networking equipment maker 3Com, an acquisition by software developer Intuit, a new supplier or car batteries for Sears and expansion plans from retail pharmacy group Walgreen.
Shares of Santa Clara, Calif.-based 3Com Corp. (COMS) were halted ahead of an announcement by the company that its third quarter profits and sales will fall short of Wall Street expectations.
The news comes on the heels of weaker PC sales and an overall computer industry slowdown in the United States and Latin America.
The company said it expects to post an operating profit of 23 cents a share, fully 13 shares lower than the consensus analyst estimate as tallied by First Call.
Elsewhere in the high-tech sector, software maker Intuit announced the purchase of privately held Computing Resources Inc. Under the terms of the deals, Intuit (INTU) will acquire the Reno, Nev.-based provider of payroll services for roughly $200 million, consisting of cash and $25 million in stock.
In other news, Sears Roebuck and Co. changed battery suppliers, giving the contract to Johnson Controls Inc. (JCI). Johnson Controls did not disclose the size of the new business, but the company said it was the same contract Sears had with Exide Corp. (EX). Johnson Controls has been making the more expensive DieHard Gold batteries for Sears since 1997.
In a statement, Exide said it will continue supplying Sears with DieHard and other batteries for a transition period.
Exide said it does not expect the change to have a material adverse effect on the company and no plant closures are expected as a result of this decision.
"We are highly confident of our ability to bring in additional, profitable sales to absorb capacity freed up by the loss of the Sears account," the company said.
Exide (EX) shares were off 1-5/16 to 12-15/16 while Johnson Controls (JCI) was off 5/8 to 60-3/8.
Walgreen Co. (WAG), the largest U.S. pharmacy group, announced plans to expand aggressively by building 400 new stores in 1999.
The company said it will not become involved in takeovers, but plans on building new outlets in Los Angeles, Atlanta and San Diego, Calif. Director of Finance John Palizza said he wants 3,000 outlets in place by 2000, up from its current total of 2,500.
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