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Stocks to watch Thursday
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November 10, 1999: 6:56 p.m. ET
Bank One warns again while Hutchinson Tech. cuts 160 jobs, takes $2M charge
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NEW YORK (CNNfn) - Bank One Corp. issued its second earnings warning in three months after the markets closed Wednesday, while JC Penney reaffirmed its commitment to launching a tracking stock for it drug-store chain.
Bank One Corp.
Bank One Corp. (ONE) said its 1999 operating earnings would fall as much as 14 cents per share below analysts' estimates because of softer-than-expected results from its First USA credit card subsidiary.
The banking company also postponed a Nov. 15 investor update because it has not yet completed an ongoing internal strategic review of its operations.
"We have simply underestimated the time it is going to take us to complete our work," said John McCoy, Bank One's chairman and chief executive officer, in a recorded statement.
The Chicago-based bank said it now expects to earn between $3.45-to-$3.55 per share for the full year. The consensus analyst estimate, as compiled by First Call Corp., called for the company to earn $3.59 per share.
The warning follows a similar announcement in August, when company officials lowered their expectations to $3.60-to-$3.65 per share.
Company officials did not identify specific problems at First USA, but previously blamed the earnings shortfall on higher-than-expected attrition rates and increased competition in the credit card industry.
Bank One shares fell 2-1/2 from its closing price Wednesday in after-hours trading to 32-1/2.
JC Penney Co. Inc.
Department store chain JC Penney Inc. (JCP) reaffirmed its commitment to move forward with an initial public offering of a tracking stock covering its Eckerd Drugstore business.
Company officials said they still intend to sell a 20 percent interest in the Eckerd chain sometime during the first half of 2000, subject to performance and market conditions.
The company said it is also on track to close the previously announced $4 billion sale of its credit card business to GE Capital, first announced last May.
Hutchinson Technology Inc.
Hutchinson Technology Inc. (HTCH) said Wednesday it has cut about 160 jobs, effective immediately, and expects to take a fiscal first-quarter charge of about $2 million to cover severance and other costs.
Through the job cuts and other actions, Hutchinson, which makes suspension assemblies for computer disk drives, said it expects to save about $10 million in its fiscal 2000 year ending September.
After the cuts, Hutchinson will have 7,284 employees, down from 7,701 at the end of fiscal 1999. Employment levels peaked in March at 8,586.
Hutchinson said the weaker demand is due to rapid increases in data storage density, which reduces the number of suspension assemblies required per disk drive produced.
Johnson & Johnson
The Food and Drug Administration Wednesday approved the use of Remicade, a new drug used to treat rheumatoid arthritis that will be co-promoted by Centocor Inc. and Ortho-McNeil Pharmaceutical Inc., both Johnson & Johnson (JNJ) affiliates.
The FDA approved the use of Remicade in combination with methotrexate, the current standard treatment, for those patients who do not respond to methotrexate alone.
Company officials said Remicade is the first monoclonal antibody proven to reduce signs and symptoms of the crippling disease. The drug, which is administered intravenously, is now available to wholesales at an average price of $611.33 per vial.
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Thursday's outlook
Investors will be inundated with dozens of earnings reports one last time Thursday as earnings reporting season winds to a close.
Scheduled to report Thursday are computer maker Dell Computer Corp. (DELL), expected to earn 18 cents per share; apparel retailer Gap Inc. (GPS), expected to earn 34 cents per share; and department store Nordstrom Inc. (JWN), expected to earn 27 cents per share.
There are no major economic announcements due out Thursday.
Sun Microsystems (SUNW) and Advanced Micro Devices (AMD) will both hold analysts meetings Thursday to discuss their recent financial results.
-- from staff and wire reports
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