RECAP & STOCKS TO WATCH FOR THURSDAY, 1-18-01
Technology stocks were the name of the game today as traders reacted favorably to the steady stream of earnings news that will dominate the week. All sectors moved sharply higher, led by the chip sector. Sellers surfaced late in the afternoon to lock in profits, taking the Nasdaq Composite well off its highs. The Semiconductor Index (SOX) tacked on 6.3%, but followed the broader market off its highs on a pullback in shares of Intel (INTC).
Providing a positive foundation to the market Wednesday was the CPI report, which rose by an expected 0.2%, while the core rate, which excludes the volatile food and energy components, rose 0.1%, less than the expected 0.2%.
The Nasdaq Composite added 64 points to close at 2,682.78. Volume was a strong 2.8 billion shares, with 127 new highs compared to 18 new lows. Blue chips diverged from the Nasdaq as the Dow lost 68 points to finish at 10,584. Volume on the Big Board was 1.3 billion shares with 188 stocks making new highs compared to 14 new lows.
Although near-term volatility will remain the market’s main theme, the market has reached a point where bad earnings news is good news (traders are relieved that the outcome wasn't any worse than expected) When this occurs, it becomes safe to assume that the bottom is in. The activity over the past week has confirmed that we’ve reached that point, and that traders have begun operating under the assumption that the lows are in for the Nasdaq.
From a technical standpoint, the Nasdaq Composite broke through the downtrend line that was started on 9-1-00. The close today has wedged the index between that downtrend line now as support, and the index’s 50 day Moving Average. Support on the Semiconductor Index (SOX) stands at 630, with resistance in the 730-750 area. Solid support on the Nasdaq Composite stands at 2,500, with resistance at 2,800.
The Nasdaq Composite on a daily basis: tradewindsonline.net
Earnings Spotlight: This week is a HUGE week for earnings with the following companies reporting for Q4: ADPT, AVCI, CHKP, EFNT, ALTR, BMCS, BBSW, CLRN, CMRC, CNXT, CPTH, EMLX, FLEX, DNA, INKT, IDTI, IOM, JDAS, MUSE, MSFT, NTIQ, SCNT, SFA, SONS, SSUNW, SYBS, SYMM, TMTA, and TXCC on Thursday; LSCC on Friday.
IBM (IBM): Reports Q4 earnings of $1.48 a share, $0.02 better than the First Call consensus of $1.46, vs year-ago earnings of $1.12.
Extreme Networks (EXTR): Reports Q2 earnings of $0.11 a share, in line with the First Call consensus of $0.11, vs year-ago earnings of $0.05. Revenue increased 163% to $144.7 million, compared to $55.0 million in the second quarter of fiscal 2000. Though EPS was in line with expectations, $144.7 mln revenue figure was at the low end of the Street range. The conference call was fairly positive. Though revenues were a bit light, this is not that surprising given huge misses by Foundry (FDRY) and f5 (FFIV). EXTR has left FY01 and FY02 guidance intact for both revenue and margins. Also, company reduced inventory levels in Dec quarter after what some saw as a worrisome increase in prior quarter. EXTR acknowledges weakness in domestic IT spending, but still sees good demand for its products here and is experiencing strong growth in Europe and Asia. Overall, a good quarter considering the troubles in the industry.
i2 Technologies (ITWO): Reports Q4 earnings of $0.09 a share, $0.01 better than the First Call consensus of $0.08, vs year-ago earnings of $0.05. Revenues rose 115.6% to $377.90 mln from a year-ago of $175.27 mln. On conference call, company provided guidance for MarQ and 2001; Mar Q revs expected at $361 mln and EPS of $0.06 (in-line with consensus). Full year 2001 revs of $1.64 bln, EPS of $0.37 vs. First Call consensus of $0.34. Company downplayed the recent talk of competitors Oracle (ORCL), SAP (SAP) and Manugistics (MANU) moving in i2's turf.
Citrix Systems (CTXS): Reports Q4 earnings of $0.16 a share, $0.01 better than the First Call consensus of $0.15, vs year-ago earnings of $0.19. Revenues rose 4.5% to $123.35 mln from a year-ago of $118.05 mln.
Biogen (BGEN): Reports Q4 earnings of $0.47 a share, $0.01 better than the First Call consensus of $0.46, vs year-ago earnings of $0.44. Revenues of $245 million were up from $225 million for the same quarter last year.
Xilinx (XLNX): Reports Q3 earnings of $0.31 a share, $0.01 worse than the First Call consensus of $0.32, vs year-ago earnings of $0.20. Revenues rose 70.3% to $450.10 mln from a year-ago of $264.30 mln.
Apple Computer (AAPL): Reports Q1 loss of $0.73 a share, $0.08 worse than the First Call consensus of ($0.65), vs year-ago earnings of $0.50. Revenues for the quarter were $1 billion, down 57 percent from the year ago quarter, and gross margins were -2.1 %, compared to 25.9 % in the year ago quarter
KLA-Tencor (KLAC): Reports Q2 earnings of $0.57 a share, $0.02 better than the First Call consensus of $0.55, vs year-ago earnings of $0.26. Revenues rose 73.3% to $573.06 mln from a year-ago of $330.76 mln.
Entrust Tech (ENTU): Reports Q4 earnings of $0.03 a share, in line with the First Call consensus of $0.03, vs year-ago earnings of $0.05. Revenues rose 83.8% to $47.81 mln from a year-ago of $26.01 mln.
Advanced Micro (AMD): Reports Q4 earnings of $0.53 a share, $0.02 worse than the First Call consensus of $0.55, vs year-ago earnings of $0.21. Revenues rose 21.3% to $1.18 bln from a year-ago of $0.97 bln.
Analog Devices (ADI): Company warns for Q1; sees about $0.50; current EPS estimate is $0.58. Sees revenues for Q1 of approximately $775 million, up approximately 58% from the same period last year and down 4% from Q4 of 2000. Cites significant slow down in new order activity and increased order cancellations and backlog adjustments.
Redback Ntwrks (RBAK): Reports Q4 earnings of $0.05 a share, $0.01 better than the First Call consensus of $0.04, vs year-ago earnings of $0.02. Revenues rose 339.3% to $114.56 mln from a year-ago of $26.08 mln. |
