SBC Communications, PeopleSoft Gain on Positive Earnings Reports
The Wall Street Journal, 07/26/01
Senators Offer Bill To Improve US Power Market Disclosure
Dow Jones International News, 07/26/01

Resolve the Enron crisis
The Financial Express, 07/26/01
UK: ANALYSIS-More work needed for Europe gas market opening.
Reuters English News Service, 07/26/01
India's Karnataka State Ready To Buy Dabhol Pwr - Report
Dow Jones International News, 07/26/01

Tech Soundings: The security market will consolidate like crazy over the next 
few years. However, the companies doing the buying might surprise you.
Redherring.com, 07/26/01

FERC Spurns California's $9 Billion claim, but big refunds still possible
Houston Chronicle, 07/26/01



Abreast of the Market
SBC Communications, PeopleSoft Gain on Positive Earnings Reports
By Robert O'Brien
Dow Jones Newswires

07/26/2001
The Wall Street Journal
C2
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -- Volume increased and market averages rallied, as a little 
improvement in the tenor of earnings reports proved to make a big difference 
in the way investors viewed Wall Street. 
SBC Communications gained $2.58, or 6.3%, to $43.38 after the 
telecommunications-service provider reported second-quarter earnings that 
beat Wall Street's forecasts, and chose to keep its forecasts for the balance 
of the year intact.
PeopleSoft rose 4.16, or 12%, to 38.40 in Nasdaq Stock Market trading, after 
the Pleasanton, Calif., maker of enterprise software came through late 
Tuesday with better-than-expected second-quarter results. 
To be sure, any improvement in the earnings tone would be characterized as 
marginal, rather than material. After all, even SBC acknowledged 
weaker-than-expected revenue growth, owing to the weakness of the economy. 
And the technology sector included several prominent earnings disappointments 
as well as triumphs. 
Shares of storage-products maker QLogic lost 6.3, or 15%, to 34.44, after 
posting its quarterly results. Semiconductor device maker Microsemi, Santa 
Ana, Calif., shrank 10.46, or 16%, to 56.54, in Nasdaq trading. 
Still, after several weeks of dispiriting earnings performances and 
forecasts, Wall Street was primed to celebrate any improvement, no matter how 
marginal. 
"Investors have been sitting on their hands so long that any hint of positive 
visibility was going to be a spark for the buyers, and we saw that today with 
the way some institutional customers behaved," said Patrick Boyle, head of 
financial trading at Credit Suisse First Boston. 
But Mr. Boyle acknowledged that the market remains vulnerable to additional 
shortfalls in profits or economic data. 
Yet, yesterday, volume picked up, with 1.25 billion shares changing hands on 
the New York Stock Exchange, compared with 1.19 billion Tuesday. 
The Nasdaq Composite Index, which came into yesterday's trading off a string 
of three losses, posted a gain of 25.08 points, or 1.28%, to 1984.32. 
The Dow Jones Industrial Average rose 164.55 points, or 1.61%, to 10405.67. 
The Standard & Poor's 500 Stock Index advanced 1.6%, effectively erasing 
Tuesday's 1.63% setback. Two of the biggest contributors to that day's losses 
proved to be the engines of improvement yesterday, with power suppliers and 
oil stocks rallying impressively. 
Dominion Resources, a Richmond, Va., utility, climbed 2.50 to 59.75; Enron, 
Houston, advanced 1.72 to 44.96; and Public Service Enterprise, Newark, N.J., 
rose 2.38, or 5.6%, to 45.24. 
Some of the independent power producers that faded badly Tuesday on some 
pessimistic comments from Salomon Smith Barney perked up yesterday. The group 
got a lift from some comments from Credit Suisse First Boston, which jumped 
to its defense yesterday. 
Calpine, San Jose, Calif., recovered 1.91, or 5.6%, to 35.81, Kinder Morgan, 
Houston, rose 1.58 to 51.78, and El Paso, also of Houston, advanced 1.52 to 
49.16, after the company reported better-than-expected second-quarter results 
yesterday. 
Oil exploration and production concern Amerada Hess, New York, a 3% decliner 
Tuesday, snapped back, adding 3.60, or 5.1%, to 74.40. The company recorded 
better-than-expected second-quarter earnings. 
Likewise, Oklahoma City exploration concern Kerr-McGee, which lost 3.1% 
Tuesday, advanced 1.80 to 59.87 after issuing better-than-expected results. 
Texaco added 3.13, or 5%, to 67.55, on better-than-expected second-quarter 
results. 
Meanwhile, Schlumberger, New York, part of an oil-services sector that has 
been in steady decline recently, improved 2.78, or 5.2%, to 56.48, after the 
company recorded second-quarter results. 
Amdocs advanced 4.31, or 11%, to 42.01. The St. Louis provider of billing 
systems and services for cable television and Internet-service providers 
recorded stronger-than-expected fiscal third-quarter results late Tuesday. 
Emulex fell 50 cents to 22.31 on Nasdaq. Salomon Smith Barney reduced its 
rating on the Costa Mesa, Calif., data-storage products maker, following the 
weaker-than-expected results turned in by QLogic. 
Ticketmaster advanced 1.84, or 14%, to 14.80 on Nasdaq. The Los Angeles 
Internet-site operator reported second-quarter results late Tuesday that 
proved to be stronger than Wall Street expected, drawing kudos from Thomas 
Weisel Partners. The firm said the stock remained one of its favorite names 
in the media sector. 
Leap Wireless shed 6.32, or 20%, to 25.04 on Nasdaq. The San Diego 
wireless-communications-services provider reported second-quarter results 
that missed Wall Street's forecasts. 
Qualcomm added 1.84 to 59.59 on Nasdaq. The San Diego 
wireless-communications-systems developer said it canceled the planned 
spinoff of its semiconductor business. 
Xerox fell 40 cents, or 5%, to 7.59. The Stamford, Conn., copier and printer 
maker lived up to Wall Street's projections for its second quarter, but 
warned that its return to profitability won't come in the third quarter, as 
the company previously forecast, but in the fourth quarter this year. 
Linear Technology declined 1.93, or 5%, to 37.79 on Nasdaq. The Milpitas, 
Calif., semiconductor manufacturer reported as-expected fiscal fourth-quarter 
earnings, though the company cautioned that its current-quarter sales will 
show a decline from the level of the quarter it reported. 
Aflac slid 3.35, or 11%, to 28.20, after the Columbus, Ga., supplemental and 
life-insurance provider reported its second-quarter results. The company said 
it found the sales totals from its Japanese unit disappointing. 
Chris-Craft Industries declined 55 cents, or 0.8%, to 69.30. The Federal 
Communications Commission approved the $5 billion purchase of the New York 
television station owner by Fox Television Stations, a unit of News Corp. 
The American depositary receipts of News declined 56 cents, or 1.6%, to 
35.50. 
Furniture Brands declined 67 cents, or 2.4%, to 26.93. UBS Warburg said it 
turned cautious about the earnings outlook for the St. Louis furniture maker, 
after several other names in related businesses warned of profit shortfalls. 
Rail carriers ended mixed, with some names, such as CSX, Richmond, Va., 
recovering 1.70, or 5%, to 36.95, after losing 6% Tuesday. Credit Suisse 
First Boston called Tuesday's selloff in the sector overdone, and urged 
investors to take advantage of depressed prices in the group. 
However, CSFB said it remained cautious about Burlington Northern, whose 
earnings performance sparked Tuesday's slide. The stock, which lost 8% 
Tuesday, eased another 69 cents, or 2.5%, to 26.55. 
Ivax gained 77 cents, or 2.1%, to end at 38.02. The Miami pharmaceuticals 
concern posted stronger-than-expected second-quarter earnings, affirming a 
call from UBS Warburg, which said in a report Tuesday it expected to see 
better-than-expected results from the company. 
McKesson HBOC added 55 cents, or 1.5%, to 38.40. The San Francisco pharmacy 
benefits group and health-care information technology provider reported 
better-than-expected fiscal first-quarter results. The company also said it 
plans to change its name, and other corporate identification characteristics, 
such as its logo, to McKesson. 
Teva Pharmaceuticals improved 3.35, or 5.1%, to 68.79 on Nasdaq. The Israeli 
drug maker reported stronger-than-anticipated second-quarter earnings, which 
realized the expectations that CIBC World Markets advanced in a research note 
earlier this week.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

Senators Offer Bill To Improve US Power Market Disclosure

07/25/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

WASHINGTON -(Dow Jones)- Senators Ron Wyden, D-Ore., and Conrad Burns, 
R-Mont., introduced legislation Wednesday that would require increased 
disclosure from operators of wholesale electric transmission systems and 
power markets. 
The bill would require system operators to provide information to all users 
about available capacity of transmission lines, electricity supply and demand 
and other basic pieces of information that would be updated hourly.
"Providing market participants with more timely access to information will 
allow them to make better-informed decisions, which in the end benefits 
consumers," Burns said in a prepared statement. 
Wyden and Burns claim support for their bill, dubbed the Electricity 
Information, Disclosure, Efficiency and Accountability Act, from the National 
Association of Regulatory Commissioners and Enron Corp. (ENE). 
The bill is likely to be referred to the Senate Energy and Natural Resources 
Committee, which is holding hearings on electricity issues this week. 

-By Campion Walsh, Dow Jones Newswires; 202-862-9291; 
Campion.Walsh@dowjones.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 


Resolve the Enron crisis
Or say goodbye to foreign direct investments 
THE FINANCIAL EXPRESS
Thursday, July 26, 2001, http://www.financialexpress.com/fe20010726/ed2.html

It is finally official. The US government has openly voiced its anguish over 
the Dabhol impasse and without mincing any words, has warned that this would 
impede foreign direct investments (FDI) into India. The US assistant 
secretary of state, Christina Rocca,s description of the investment sentiment 
summed up in the five letter word +Enron, cannot be ignored by the Indian 
government. It is close to nine months since Enron,s Dabhol Power Company 
(DPC) and Maharashtra state electricity board first started fighting over the 
high cost of power with still no solution in sight. The end result is that 
assets on the ground are idling and there has been no generation of power 
from the project site for close to two months. How can this be explained to 
international investors? Though critics can argue that the DPC deal was 
one-sided, the rate of return was too high and so on, but frankly, no 
investor has the time and patience to understand such problems for making an 
investment decision. Investors carry out an assessment of potential 
opportunities and pick out those which are hassle-free and offer an adequate 
return. In India, investors face hurdles and their returns are determined by 
many factors besides market conditions. 

It is imperative that the central government makes out its case in right 
earnest and ensures that the country is not sending out negative signals to 
other investors. For instance, the Union government should take some positive 
steps in settling the problem before the US Trade Representative Robert 
Zoellick visits India and probably set a deadline for settling the problem 
before the Indian Prime Minister Atal Bihari Vajpayee goes to the US. Both 
the Centre and state governments should own up the responsibility of having 
created a problem and should stop putting the blame squarely at the doorstep 
of Enron. The Centre should open a parallel discussion with other suitors for 
DPC like AES, which is also US based and is also open to changes in the terms 
of the project. It is no doubt true that there is no quick fix for the Enron 
imbroglio, but the government has to appear to be doing something to resolve 
the dispute. By choosing to do nothing about it, the government is only 
damaging itself.


UK: ANALYSIS-More work needed for Europe gas market opening.
By Dominique Magada

07/26/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, July 26 (Reuters) - The opening of the European gas market is being 
held back by technical and legal hurdles and more work is needed to ensure 
fair competition for new entrants. 
A year after the European gas directive was enforced, progress has been slow 
and industrial gas consumers have seen little benefit of the introduction of 
competition, experts say.
"The implementation of the gas directive so far has not brought the degree of 
competition that industrial gas users expect from a liberalized market," 
Francesco Balocco, chairman of the International Federation of Industrial 
Energy Consumers (IFIEC) Europe, said at a gas regulatory forum held in 
Madrid earlier this month. 
Under the directive, member states agreed to open their gas market to a 
minimum of 20 percent of consumers by August 2000, rising to 28 percent by 
2003 and 33 percent by 2008. 
but so far, the level of switching to new suppliers has been minimal and only 
a handful of companies have been able to secure new gas supply contracts. 
"There hasn't been a big indent in the market, only a few suppliers, mainly 
UK producers with gas to sell have made inroads, and usually in areas that 
were not supplied before," said Nick White, gas market expert with PA 
Consulting. 
He cited trading company Enron , which signed gas supply contracts in Germany 
and Italy, and Centrica Plc , which took a 50 percent stake in Belgian energy 
supply joint-venture, Luminus. 
European gas markets were traditionally dominated by large integrated 
monopoly companies, such as French Gaz de France (GdF), German Ruhrgas, 
Italy's SNAM, Dutch Gasunie and Spanish Gas Natural, with the exception of 
the UK where the gas market fully liberalised in the 1990s ahead of the EU 
directive. 
ACCESS TO PIPELINE NETWORKS BIGGEST HURDLE 
Complicated rules and discriminatory tariffs to use the pipeline networks, as 
well as difficulties in accessing meters are often blamed for the lack of 
progress in liberalisation. 
"The progress is still very patchy. The grid operators have published their 
access tariffs, but more work is needed on the technical details," said 
White. 
He cited in particular access to meter reading which needed to be facilitated 
to help consumers switch supplier. 
Access to national pipeline networks, opened to third parties under the 
directive, is a key element of market opening but was left to member-states 
to decide on access conditions, resulting in different systems across Europe. 
Some countries such as France and Italy have opted for regulated access 
whereas in Germany and the Netherlands access is negotiated between parties. 
So far, most network operators have made their access tariffs public, but the 
tariffs chosen have raised criticism. 
In France, where the gas law has yet to be passed, the point to point 
distance tariff put in place by network operator Gaz de France Transport, a 
GdF subsidiary, is said to be discriminatory against new entrants, a French 
experts' study pointed out. 
In Germany, where the market is fully opened in theory, critics say the 
system is too complicated. 
"The German system is extremely complicated: there are 700 transmission and 
distribution companies which apply three different tariffs systems," said 
IFIEC's Francesco Balocco. 
Also gas prices, which were expected to decline with the introduction of 
competition, have instead risen because of their link to oil prices, which 
still rules gas supply contracts. 
NOT ALL OBSTACLES 
But, other participants are more positive, arguing that, although slow, 
competition has started in many countries. 
"It's not all obstacles, there has been some progress and the European 
Commission has recognised that the market can be opened faster," said Doug 
Wood, senior director in government and regulatory affairs for Enron Europe 
Ltd. 
The EU Commission has tabled a new energy directive to open gas and 
electricity markets to all consumers by 2005, but the directive was rejected 
by the French government in March. 
Market participants now ask for harmonized, fair and stable tariffs for 
access to the network and storage services. 
They also want regulated third party access in all countries and legal 
unbundling of large integrated companies. 
"What needs to be done is the separation of supply and transmission 
businesses and the adoption of regulated third party access everywhere," said 
Enron's Wood.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

India's Karnataka State Ready To Buy Dabhol Pwr - Report

07/26/2001
Dow Jones International News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW DELHI -(Dow Jones)- India's Karnataka state government said Thursday that 
it is ready to buy power from Dabhol Power Co.'s 1,444 megawatt second phase 
but only at a certain tariff, the Press Trust of India reported Thursday. 
"DPC's tariff should be competitive to the variable charges of independent 
power producers' in Karnataka," PTI quoted the chairman and managing director 
of Karnataka Power Transmission Corp. V.P. Baligar as saying, adding that the 
tariff should range between 2.50 rupees ($1=INR47.1525) and INR2.60 a unit.
The U.S. energy major Enron Corp. (ENE) has a controlling 65% stake in the 
Dabhol project, in the western Indian state of Maharashtra. DPC phase I has a 
capacity to generate 740 MW of electricity. Work on the 85% completed Dabhol 
phase II was stopped mid-June because of financial difficulties. 
-By Himendra Kumar; Dow Jones Newswires; 91-11-461-9426; 
himendra.kumar@dowjones.com -0- 26/07/01 10-03G

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

Postcard from the Future: Consolidation or dissolution? 
Tech Soundings: The security market will consolidate like crazy over the next 
few years. However, the companies doing the buying might surprise you.
Michael Fitzgerald

07/26/2001
Redherring.com
(c)2001. Red Herring Communications. All rights reserved.

Markets usually evolve in the way that I always envisioned complex molecular 
compounds forming: lots of seething, whizzing protons and neutrons bang into 
each other and ultimately a few large nuclei form (the market leaders), with 
much smaller electrons zipping around outside them. The security business, 
however, looks like it's going to form a different sort of compound. 
The market is badly splintered right now. According to Updata Capital, a 
mergers-and-acquisitions advisor, more than 500 companies are fighting for 
mindshare. The research firm International Data Corporation (IDC) tracks 46 
categories and subcategories in the security space.
This complexity shall pass. Some of the consolidating deals will be big ones, 
like last year's Symantec (Nasdaq: SYMC)/Axent Technologies deal or the 
Internet Security Systems (Nasdaq: ISSX) buy of Network ICE. A lot won't. 
"The business will aggregate around a few players, and we want to be an 
aggregator," says John W. Thompson, Symantec's CEO. Mr. Thompson believes the 
market will evolve as systems management did. Where there were once hundreds 
of companies in that field, now only three matter: Computer Associates's 
(NYSE: CA) Unicenter, Hewlett-Packard's (NYSE: HWP) OpenView, and IBM's 
(NYSE: IBM) Tivoli Systems. 
FEATURE PRESENTATION 
Mr. Thompson says any deals Symantec makes must fit with its strategic 
perspective, and that's where things get interesting. Broadly speaking, most 
security products fall into three categories: interface technologies, war 
technologies, and back-end transaction technologies. For instance, most of 
Symantec's revenue involves warfare: antivirus software, firewalls, and 
intrusion detection software. But Symantec also sells PCAnywhere, which falls 
into the back-end category. 
So would it make sense for Symantec to add interface technologies like access 
management or collaborative computing? Maybe. Mr. Thompson isn't saying. 
But there's a very real possibility that many of the non-war functions will 
get sucked into the features set for front-end application makers or for 
transaction-oriented companies like Oracle (Nasdaq: ORCL) and Siebel Systems 
(Nasdaq: SEBL). In other words, security is ultimately just a feature. 
Updata's Don More likes my theory, saying that non-security companies will 
buy security companies "because they need the feature set. It makes sense for 
a BEA to add on a security element to their [enterprise application 
integration]." 
FOLLOW THE MONEY 
Others disagree. Chuck Jones of Salomon Smith Barney thinks that security 
companies need to be neutral by nature, and thus are less likely to get 
absorbed into larger companies. Chris Christiansen, an IDC analyst, finds my 
premise logical, but notes that "market dynamics are not always logical." 
Neither analyst, though, thinks any clear winners in the security market will 
emerge in the next five years. That means a continuation of today's chaotic 
swirl. 
Gordon Eubanks, Mr. Thompson's predecessor at Symantec and now CEO of Oblix, 
which plays in the access management space, also thinks it's too early to 
tell just what might happen. "If you look at history, in productivity 
applications, the worst judges were the people who thought that word 
processors and spreadsheets and databases were going to be three different 
market segments and three different winners," he says. 
Mr. Eubanks predicts the winners will come from tech companies with big stock 
market capitalizations. "The people with the high market caps can decide how 
they want to consolidate," he says. And the highest market capitalizations in 
the technology business do not belong to security vendors. In fact, if you 
look out five years, the companies doing the buying in the security industry 
could be massive, transaction-driven businesses like Wal-Mart, General 
Electric, and Enron. 
There is no one-stop shop for security, and I think it unlikely that one will 
appear. 
To get Tech Soundings sent to your inbox, subscribe to the e-newsletter.

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

July 26, 2001
Houston Chronicle
FERC spurns California's $9 billion claim, but big refunds still possible 
By DAVID IVANOVICH 
Copyright 2001 Houston Chronicle Washington Bureau 
WASHINGTON -- Federal regulators Wednesday largely rejected California's 
claims that power companies owe nearly $9 billion in refunds from 
California's electricity crisis. 
The battle over California's power debacle appears to be on a trajectory 
toward an appeal in federal court. 
The Federal Energy Regulatory Commission endorsed an administrative law 
judge's recommendation that a group of power companies -- including 
Houston-based Reliant Energy, Enron Corp., Duke Energy North America, Dynegy 
and El Paso Corp. -- pay sizable refunds for overcharging for electricity at 
a time when California was scrambling to avoid rolling blackouts. 
The five-member commission ordered the power producers to participate in a 
hearing to determine within two months how much refunds should be. The 
commission's order also applies to city-owned utilities in California. 
The commission's chairman, Curt Hebert Jr., insisted that with the order, 
"the cloud of refund uncertainty will lift soon." 
But by adopting a methodology proposed by Judge Curtis Wagner Jr. for 
calculating refunds, the commission all but ensured the totals will be far 
short of the $8.9 billion California Gov. Gray Davis insists his state is 
owed. 
Wagner estimated his approach would lead to refunds amounting to "hundreds of 
millions of dollars, probably more than a billion dollars." Wagner pointed 
out that while large sums are due for overcharges, even greater amounts in 
unpaid bills are owed to the generators. 
California officials have threatened to sue if they do not recoup the full 
$8.9 billion. 
They insist their state is owed for alleged overcharges that occurred between 
May 2000 through May of this year. The commission's order, however, covers 
electricity sales between Oct. 2, 2000, and June 20, 2001. Regulators argue 
they don't have the legal authority to order refunds for the months prior to 
that. 
Davis said Wednesday the commission's action "validates California's claim 
that significant refunds are due" and moves the state closer toward its goal 
of receiving $8.9 billion in refunds. 
"As for the energy profiteers and pirates, let me make clear that I will not 
rest until every dollar gouged from California businesses and residents 
returns to California," Davis said. "If the FERC does not make California 
whole, we will see you in court." 
The commission's order covers city-owned utilities such as the Los Angeles 
Department of Water and Power, which also profited from power sales into 
California's electricity grid. 
California officials say $3 billion of their $8.9 billion in claims stem from 
transactions with these municipal-owned utilities. 
But many of those utilities, as well as Commissioner William Massey, question 
whether the federal agency has the authority to include those city-owned 
generators in its order. 
Because commission members fully expect the case to move to federal court, 
they decided to test the legal waters, arguing that it would not be fair to 
rein in the behavior of the private power producers while allowing the 
municipal-owned utilities to continue unchallenged. 
Los Angeles Department of Water and Power officials could not be reached for 
comment. 
Steve Kean, executive vice president and chief of staff at Enron, argued that 
instead of crafting a formula to decide rebates, the commission should have 
examined the companies individually to see if they owe anything. 
The commission's action Wednesday "was about political pressure," Kean said. 
"There's been way too much of that." 
Steve Stengel, a spokesman for Dynegy, said the commission "confirmed what we 
already knew; I think we need to go through the hearing process and see what 
comes out of that." 
The Federal Energy Regulatory Commission took action Wednesday after 
negotiations between the power companies and California officials failed to 
resolve the dispute. 
The power generators had offered to pay California $716.1 million in refunds, 
light-years away from the state's demands. 
Also Wednesday, the commission ordered natural gas pipeline companies, gas 
supplies and local distribution companies to provide regulators with more 
data. Regulators are trying to learn why natural gas prices have been so much 
higher in California than elsewhere.