A slew of new earnings warnings kicked off the after-hours trading session Monday
Cabot, Stanford Micro warn
Engage beats downwardly revised estimates
By Nicole Maestri, CBS.MarketWatch.com
Last Update: 5:33 PM ET Mar 12, 2001
NEW YORK (CBS.MW) - A slew of new earnings warnings kicked off the after-hours trading session Monday, as technology shares extended declines that caused the Nasdaq to plunge 6 percent to its lowest level in more than two years.
Both Cabot Microelectronics Corp. and Stanford Microdevices lowered earnings estimates, citing a slowdown in customer orders.
Shares of Engage edged up after the company beat downwardly revised quarterly expectations, and shares of Peregrine Systems got a boost after the company said it would acquire privately held Extricity for approximately $168 million.
Cisco Systems was still in hot demand in evening trading, topping off a day in which 177 shares traded hands on the Nasdaq - a new volume record.
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Cabot Microelectronics
Shares of Cabot Microelectronics (CCMP) slid 20 percent coming off a halt after hours following a company announcement that it's lowering second-quarter revenue expectations as customer demand continues to soften.
The company now expects second quarter revenue to be down 15 percent to 20 percent from first quarter revenue of $68.6 million. Assuming that customers' chip inventory sells off and the economy improves, Cabot said it will be able to achieve fiscal 2001 revenue growth of more than 50 percent and earnings in the range of 16 percent to 18 percent of revenue.
Cabot shares finished down $1.31, or 2.1 percent, to $60. On Island, shares traded down $7.00, or nearly 12 percent, to $53.
Stanford Microdevices
After the closing bell, Stanford Microdevices said it was revising first quarter and 2001 expectations, due to softness in the telecommunications industry.
Shares of the communications equipment company finished Nasdaq trading down 13 percent to $9 and traded hands off 11 percent to $8 after hours.
Stanford Microdevices (SMDI) said it expects to report first-quarter revenue in a range of $7.6 million to $8 million. For first-quarter earnings, Stanford Micros forecast that it will break even, not earn a 5-cent profit.
The Sunnyvale, Calif.-based company said that weakness in the wireless infrastructure market brought on by a weakening U.S. economy has "impacted our entire segment," according to CEO Robert Van Buskirk in a statement.
Peregrine Systems
Peregrine Systems (PRGN) said it has signed an agreement to acquire privately held Extricity for approximately $168 million.
Under the agreement to be completed near the end of March, Peregrine will issue roughly 9.2 million shares of its common stock for all outstanding shares of Extricity. Peregrine, which produces infrastructure management software, will use Extricity's business application software to utilize the Internet for business management.
On Island, shares of Peregrine Systems rose 38 cents, or 2 percent, to $18.69. Peregrine Systems closed down $1.44, or 7.3 percent, at $18.31 ahead of the news.
Engage
CMGI's wholly-owned subsidiary Engage Inc. (ENGA) reported quarterly results that met analyst' downwardly revised estimates.
The Andover, Mass.-based company's net loss before items was $41.3 million, or 21 cents share, compared with analyst expectations of a loss of 26 cents per share, according to First Call.
The company posted revenue of $28.1 million in the second quarter vs. $31.4 million in the year-ago period.
Engage said it recorded a $521.8 million impairment charge in the second quarter as it slashes costs to survive the downturn in Internet ad spending.
Engage also said it expects to generate revenue between $24 million and $26 million for the third quarter, with a net loss before items of 12 cents to 15 cents per share. For the fourth quarter, Engage expects revenue between $25 million and $28 million and a net loss before items between 7 cents and 10 cents per share.
Engage shares closed down 9 cents to 97 cents, and traded at 99 cents on the Island ECN.
Cisco Systems
Cisco Systems (CSCO) was the regular session's most active issue, with approximately 177 million shares trading hands on the Nasdaq. The previous one-day volume record was 309 million shares of Intel that turned over on Sept. 22, when the chip giant's stock tumbled 22 percent. Late in Friday's trading session, Cisco said it would cut its workforce by 8,000 workers, and take a fiscal fourth-quarter charge of $300 million to $400 million.
Shares closed down 8.8 percent to $18.81. On Island, shares traded hands at $18.80.
MarchFirst
MarchFirst (MRCH) said Monday that Chairman and Chief Executive Officer Robert Bernard and Chief Operating Officer and President Thomas Mertz had both resigned, effective immediately.
The Chicago-based firm named Steve Pollema as president and also formed a three-member executive team to help in the transition. MarchFirst has hired an executive recruitment firm to find a new CEO, the company said in a statement.
The struggling company, which provides IT business services, has fired 2,000 employees since last fall.
MarchFirst shares sank nearly 13 percent, or 14 cents, to close regular-session trading at $98. In the evening session, shares traded hands up 1 cent, or 1.2 percent, to 99 cents.
Nicole Maestri is a reporter for CBS.MarketWatch.com
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