Stock Market Chumps..........10-18-06

Apollo Group Inc. (APOL)

Last Trade:	38.01
Trade Time:	1:38PM ET
Change:	10.67 (21.92%)

For-profit education company Apollo Group Inc. on Wednesday reported profit that missed Wall Street's expectations and said an investigation into stock option grants had found deficiencies, sending its shares to their lowest level in more than three years.

Apollo also said it might have to restate past financial statements, depending on the investigation's findings.

Net income for the fourth quarter ended on Aug. 31 fell to $93.5 million, or 54 cents per share, from $106.2 million, or 58 cents per share, a year earlier.

Analysts polled by Reuters estimates had forecast 66 cents per share.

Revenue rose 5.5 percent to $624.2 million. Analysts had expected $635.9 million.

"This is a terrible quarter and likely raises many questions about the health of the business model," wrote Prudential Equity Group LLC analyst Steven Barlow, in a note to clients. Prudential rates the stock "neutral."

The results exclude the possible impact of accounting changes from the Phoenix-based company's ongoing review of its stock option grant practices. Apollo said in June that it had received a subpoena from the U.S. Attorney's office in connection with the issue.

At least 125 companies have launched internal investigations or are the subject of probes by the U.S. Securities and Exchange Commission to determine if the dates of stock options were manipulated.

At issue is the practice of setting the date of options grants retroactively to a period before a big rise in a company's stock, making it more likely executives will collect a bigger payout when they exercise the options.

Apollo shares fell 18 percent, or $8.78, to $39.90 on the Nasdaq. That left them down 44 percent for the year. They haven't traded in that range since January 2003.


Cognex Corp. (CGNX)

Last Trade:	22.46
Trade Time:	1:39PM ET
Change:	4.25 (15.91%)

Bear Stearns said the downgrade on the machine vision systems maker's stock was based on a slower-than-expected recovery in the factory automation business.

--The brokerage also said there were uncertainties surrounding some of Cognex's end-markets and the effectiveness of its sales organization.

--Shares of the company fell 15.57 percent to $22.55 in afternoon trade on the Nasdaq.