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CNNfn after the bell
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March 4, 1999: 7:13 p.m. ET
Intel makes $2.2 billion acquisition; CompUSA issues profit warning
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NEW YORK (CNNfn) - Several major companies reported news after Thursday's closing bell, with Intel announcing a $2.2 billion acquisition, CompUSA issuing an earnings warning, and former Harvey Entertainment chief executive officer Jeffrey Montgomery offering to buy the company he once helmed.
Shortly after the close Thursday, chip giant Intel (INTC) announced it would acquire Level One Communications (LEVL) in a stock deal valued at $2.2 billion. Under the terms of the agreement, each share of Level One stock would be exchanged for 0.43 share of Intel stock.
Computer retailer CompUSA (CPU) said based on lower-than-expected sales for the third quarter ending March 27, it expects to post earnings per share of zero, excluding a charge, well below analyst expectations of 21 cents a share. CompUSA also said it expects to report an unspecified loss in its upcoming fourth quarter. The company's stock tumbled 1-7/16 to 8-1/8 on the New York Stock Exchange ahead of the news.
In other retail news, discount chain Wal-Mart (WMT) announced a stock split, a 29 percent dividend increase, and an expanded share repurchase program. The 2-for-1 stock split will be issued in the form of a stock dividend to be distributed on April 19, to holders of record on March 19. The company also approved a 29 percent increase in its annual dividend to 40 cents a share, and has increased its stock buyback program by roughly $1.2 billion to $2 billion.
Elsewhere in the news, former Harvey Entertainment (HRVY) Chief Executive Officer Jeffrey Montgomery offered to acquire all outstanding shares of the company's stock.
Under the terms of the merger-style deal, Montgomery would offer shareholders secured notes and common-stock purchase warrants of Harvey Acquisition Corp. in exchange for shares of Harvey Entertainment, which owns a library of classic cartoon characters.
A Food and Drug Administration panel Thursday rejected the first topical treatment for infected foot ulcers that afflict millions of diabetics worldwide. The drug Locilex, an antibiotic cream made by biotechnology firm Magainin Pharmaceuticals (MAGN), was rejected because panel members were not convinced it worked better than other drugs, surgery or simply doing nothing.
The FDA was kinder to drug company Perrigo (PRGO), approving the company's Sudafed extended release equivalent.
Perot Systems (PER), owned and operated by the perennial presidential candidate of the same name, reported a fourth-quarter profit of 13 cents a share. The company's earnings were a penny above Wall Street expectations, according to First Call.
In other earnings news, Winstar Communications (WCII) posted a fourth-quarter loss of $3.80 per share, 6 cents worse than analysts' expectations.
- from staff and wire reports
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