From Briefing.com: 5:40PM After Hours Wednesday Changes vs the 4 pm close: Mixed bias noted in after hours trade amid relatively limited action. A well received earnings report from Brocade (BRCD +7.2%) as company report in line for Q3 with revenue slightly above the consensus; maintained guidance for Q4. BRCD (+6.2%) and storage group (QLGC, VRTS, ADPT, MCDT, ELX) were up aggressively during the day session after NTAP earnings last night.
5:13PM Brocade saw growth in OEM business (BRCD) 15.05 +0.88: -- Update -- On call, says it experienced growth across all OEMS qtr/qtr and that the quarter was not back-end loaded... also notes that the pricing environment has remained incredibly stable... BRCD +0.75 at 15.80
5:06PM Brocade maintains Q4 guidance (BRCD) 15.05 +0.88: -- Update -- On call, says it is comfortable with its current guidance for Q4 revenues of $160-165 mln (Multex consensus $162.8 mln), gross margins in the 60% range, and EPS of $0.10 (consensus $0.10)... separately, expects revenue from Advanced Fabric Services and Software to exceed the 15% target it set last quarter... BRCD +0.57 at 15.62
5:08PM Photronics beats by a penny (PLAB) 10.35 +0.15: Reports Q3 (Jul) earnings of $0.01 per share, $0.01 better than the Multex consensus of $0.00; revenues rose 15.4% year/year to $98.1 mln vs the $96.1 mln consensus.
3:50PM Applied Materials (AMAT) 14.20 +0.74: As expected, co turned in a respectable Q3 (beat by $0.02 at $0.07) but assumed a more cautious tone towards the remainder of 2002; analysts remain on the sidelines near-term (citing weaker than expected orders at 5% seq growth vs guidance of 10-15%) although optimistic on AMAT's positioning pending a semi recovery. JP Morgan cuts their ests for CY02/03 but remains long term bullish on both AMAT and the sector. Salomon Smith Barney maintains their Buy rating, but writes "at these low levels we are loathe to downgrade, but note that downside risk to exists to $11-$12. Goldman Sachs maintains their Trading Buy rating as long-term risk/reward trumps weak fundamentals with 12-18 month upside of 70% vs. 15% downside.
3:33PM General Electric (GE) 31.91 +0.96: Salomon Smith Barney trims their 2002 est by a penny to $1.65 and their 2003 est by $0.04 to $1.78 to reflect recent events that are likely to put pressure on earnings; cites the U bankruptcy, AMR fleet reductions, soft pricing and capital constraints on the power producers, and GE's decision to expense options ... firm maintains their Buy rating on stock's reasonable valuation, above avg yield, strong ROIC, and strong global franchises.
2:58PM IBM (IBM) 74.45 +2.55: Following yesterday's news co would make more than 15,000 job cuts, Soundview cuts their 2003 EPS est by $0.28 to $4.77 and 2004 EPS est by $0.15 to $5.55 to reflect a likely 100 bp reduction in IBM's pension return assumption ... firm remains bullish on the stock's recovery and maintains their Outperform rating; emphasizes that IBM's exposure to pension and stock option issues appears to be less than that of most large-cap IT stocks, with all of these issues already reflected in the stock.
2:55PM Aeroflex (ARXX) 3.33 -0.74: Despite delivering in-line results for Q402 on 8/12, shares are nearly 60% down on Q103 warning. Adding fuel to fire are downgrades by Roth Capital to BUY from Strong Buy yesterday and USB Piper Jaffray to MARKET PERFORM from Outperform this morning. USB Piper's change in opinion is based on expectations for breakeven results near-term with little visibility regarding fundamental recovery into Y03 and lowered EPS ests of $0.19 from $0.35. Needham believes co. faces risks including potential integration challenges associated with recent IFR acquisition and stagnating margin improvement should product mix not improve, but maintains Buy rating.
2:02PM Nokia (NOK) 12.44 +0.39: Analysts disagree over the health of the handset mkt and its impact to NOK: SG Cowen sees a lack of growth in the global handset mkt and downgrades NOK to NEUTRAL from Buy (see In-Play for details) while Bear Stearns believes co's July business tracked strongly on the back of positive handset sales in Europe. Firm believes NOK is experiencing positive demand for the recently introduced 7650 camera phone in Europe and expects co should have a 1x handset available at PCS by the end of 2002. Bear remains comfortable with their Q3 est of $0.17 and maintains their Attractive rating.
1:55PM Fairchild Semi (FCS) 14.10 +1.11: After falling to a new 52-week low yesterday (at $13.50), analysts defend co's fundamentals and shares rebound 8.5% higher. Bear Stearns believes FCS began the Sept quarter 80% booked and has booked an additional 5-8% in the QTD; firm adds that they are seeing early signs of a seasonal uptick from PC component suppliers in July and Aug; remains bullish on FCS with a Buy rating and $40 price target. Lehman Brothers rates current valuation as "interesting" and maintains their Overweight rating.
1:53PM Network Appliance (NTAP) 8.44 +1.39: Co turned in a solid qtr (beat consensus by a penny at $0.05) and analysts ease their cautious stance towards stock. Soundview writes "with co's most difficult qtr now behind it, we believe the directional bias to changes to numbers now points up, not down:" believes growth metrics should improve as a result of NTAP's repaired backlog. UBS Warburg expects NTAP to continue seeing success in its focus verticals and rates the product roadmap as on track. Salomon Smith Barney upgrades to BUY from Neutral (see In-Play).
11:43AM 3Com (COMS) 4.28 +0.15: Stock trading up 3.6% today on Needham & Co's before open initiation of coverage with a Strong Buy rating and price target of $8. Firm notes that this network interface card vendor has migrated its business to an attractive niche in network equipment market; despite dismal performance during the networking and telecom collapse, 3Com still has very good balance sheet and excellent channel position; in addition to extensive competitive pressures, risks arise from potentially adverse macroeconomic effects on corporate spending and necessity of ongoing replenishment of product portfolio.
11:26AM Extreme Networks (EXTR) 9.05 -0.30: Stock trading down 3.2% following lackluster pre-open comments from Deutsche Securities which initiated with a Market Perform rating and price target of $10, citing current uncertain macro environment for IT spending and valuation which limits upside potential.
10:24AM Technical Levels : So yesterday, the Fed came through with essentially what the markets were expecting. It left interest rates unchanged, and issued a policy statement suggesting risks are weighted mainly towards further economic weakness. That latter portion was tantamount to an easing bias, and was probably about as favorable a statement as the realistic trader could have expected. At this point, the true technician is asking why we even care about the Fed -- the title here is 'Technical Levels' right? Well, in our last review, we remarked that 'if anything unusual would come out of that meeting, the technicals are likely to take a back seat for a day or two.' In retrospect, we got it partly correct -- nothing unusual resulted from the meeting, but the technicals did indeed take a back seat to close out yesterday's session. This somewhat random 'whipsawing' of the markets is the reason many traders prefer a sideline approach on the day of an FOMC policy announcement. At any rate, the more pressing issue now is whether the Fed-induced sell off alters the immediate market outlook. The short answer is, not really. The near-term bias should remain higher so long as any sell pressure is orderly and no significant technical damage is done. So what do we mean by 'near-term bias'? Well, looking out over the next week or two the technical picture favors additional upside. The Nasdaq, as well as each of the other two major indices, is working from a well-defined double bottom formation, which is a favorable foundation for additional upside. Yet this matter of a well-defined double bottom could use some additional explanation. Since the pattern has yet to follow through with a break higher, it is not yet technically a double bottom. Of course, this gets at the crux of where technical analysis is useful -- for providing an edge on the forward market outlook. So do we wait for confirmation of the double bottom, or do we anticipate that the key elements are in place for what may in retrospect manifest itself as a double bottom? Decide for yourself. Outside of this nitpicking over pattern formation, there is the matter of the straight technical levels. On the Nasdaq, look for notable support at 1260 which approximates a 62% retracement of the prior leg higher and also matches with modest congestion -- that's followed by additional support at 1245. To the upside, look for initial overhead at 1278 to 1280 which approximates a 50% retracement of the prior leg higher, followed by more significant resistance at 1300 to 1305 which approximates the index' 20-day exponential moving average.-- Mike Ashbaugh, Briefing.com
9:12AM Stocks to Watch : The futures are pointing to a slightly higher open with few notable movers in the pre-market... Semi equipment giant Applied Materials (AMAT 13.46) reported last night. The quarter came in at $0.07 per share, $0.02 better than the Multex consensus and the backlog at the end of fiscal Q3 increased to $3.30 bln, from $3.11 bln last qtr. However, orders should be down 5-15% sequentially and the company said customers have taken a more conservative stance in the three weeks since Semicon West. The report is weighing on the semi equipment makers. AMAT -0.34... Network Appliance (NTAP 7.05) is up 14% as it beat by a penny and names a new CFO; storage sector getting a boost from report... Nokia (NOK 12.05) gets downgraded at SG Cowen to Neutral from Buy due to concerns over lack of growth in global handset mkt. Growth in the mobile mkt should not return until 2004..
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Thanks for the BP updates and the great charts Gottfried!
RtS |
