6:50PM Nvidia (NVDA) 62.16 +0.76: The number one graphic chipmaker is trading down $7 after the close, after being halted for an hour. The company reported another blowout quarter with EPS of $0.43, $0.09 better than consensus and revenue of $499.9 mln vs consensus of $444.6 mln. Not only did it smash consensus, but Nvidia guided fiscal 2003 (ending Jan) significantly higher. Management now expects revenue of $2.3-$2.5 bln and EPS of $1.70-$1.75 vs Multex consensus of $1.98 bln and $1.42, respectively. Anyone who even casually follows the company knows this is becoming old hat. However, the stock is getting slammed for three scary reasons: S E C....The company also announced that, in response to an inquiry from the Securities and Exchange Commission (SEC), it is conducting an internal review of the recording of certain reserves and the timing of recording of certain expenses relating to fiscal Q4 2000, and the first three quarters of fiscal 2001. It's interesting because it appears these new questions are being raised from materials generated in connection with the SEC's previously announced investigation of alleged insider trading by non-executive employees. Any hint of wrongdoing these days will blast a stock. It's unfortunate it happens to a company like Nvidia, which is among only a handful of chipmakers to shrug off the semiconductor downturn and blast full steam ahead. The SEC inquiry appears to be limited to cost recognition, so the company's phenomenal sales growth is not being questioned. -- Robert J. Reid, Briefing.com
6:26PM Thursday After Hours price changes vs 4pm ET levels: If NVIDIA (NVDA 55.57 -6.59) had simply reported its Q4 earnings results tonight, its stock might be doing markedly better since the graphics chip maker easily surpassed top- and bottom-line consensus estimates... As it turns out, NVDA is down sharply as investors are more concerned with the company's announcement that, in response to an SEC inquiry, it is conducting an internal review of the recording of certain reserves and the timing of recording certain expenses... Separately, Dell Computer (DELL 27.00 +0.19) is trading up modestly after reporting an in line Q4 profit of $0.17 per share on better than expected revenues of $8.06 bln (consensus $7.85 bln); DELL sees Q1 earnings of $0.16 per share (consensus $0.16), but enthusiasm has been held in check as DELL expects Q1 unit volume and shipments to be down 3-5% on a sequential basis; related stocks include HWP, CPQ, IBM, SUNW, INTC, AAPL and GTW... Like Dell, Analog Devices (ADI 40.30 +0.35) is also up modestly in the after hours trade. ADI posted an in line Q1 profit of $0.11 per share, said it expects to report a Q2 profit of $0.12-0.13 (consensus $0.13), and indicated that if the increased order rate it has seen since early Jan. continues, it expects to build backlog during Q2; related stocks include LLTC, MXIM, NSM, and TXN...
4:40PM NVIDIA details SEC concerns (NVDA) 62.16 +0.76 (halted): -- Update -- States that the SEC informed company in January 2002 of specific questions relating to 1) the recording of reserves in Q4 of fiscal 2000 and Q1 of fiscal 2001; and 2) the possibility that certain product costs of up to $3.6 mln should have been recorded in Q1 of fiscal 2001, but were recorded in Q2 and Q3 of the same year. The SEC inquiry followed a review of information provided by the co in connection with the SEC's previously announced investigation of alleged insider trading by certain non-executive employees.
3:10PM Computer Hardware : This is a sector in which the near-term catalysts are limited, yet conversely the downside from a fundamental perspective appears to be restricted. The group has undergone maturing pains of late which have been exacerbated by macroeconomic softness. In terms of the near-term outlook, Hewlett-Packard (HWP) has stated it expects overall market conditions to remain somewhat unpredictable. The company cites the fact that enterprise IT spending remains slow, as well as its uncertainty as to whether the strong consumer technology spending uptick witnessed in the first quarter can continue going forward. Management added that with corporate demand on the sluggish side, pricing continues to be very competitive. Yet on the positive side for the industry, overall PC channel inventories declined from December to January. In addition, the fundamental backdrop appears to be improving in the semiconductor space which may be a precursor to improvement in computer hardware. Demand for semiconductors appears to be driven from both original equipment manufacturers (OEM's) and the spot market, through increasing memory-per-box. From an investment perspective, expectations are on the low side for computer hardware companies which means it will be difficult to disappoint. In addition, the sector faces soft comparisons in upcoming quarters which suggests that a bottom from an earnings perspective is likely close at hand. Also note that the more recently mixed industry data is an improvement over two years of decidedly negative industry fundamentals. The issue at this point is assessing the relative valuation of the group -- which is attractive on a historic basis -- versus the more promising though somewhat uncertain outlook for recovery. After weighing both sides of the equation with an emphasis on the longer-term outlook, we are raising our rating on the group to Market Perform. -- Mike Ashbaugh, Briefing.com
4:45PM Kopin tops estimates (KOPN) 9.35 -0.35: Reports Q4 (Dec) loss of $0.10 per share, $0.02 better than the Multex consensus of ($0.12); revenues fell 38.4% year/year to $15.4 mln vs the $14.5 mln consensus; guidance: "seasonal weakness in the wireless handset industry will cause our III-V revenue to be roughly flat on a sequential basis in the first quarter, that should be offset by double-digit sequential growth in our CyberDisplay business as we continue to increase our rapid market penetration."
4:28PM Intel says it has not changed guidance, won't comment on preannouncement rumor (INTC) 33.34 -0.04: -- Update -- An INTC spokesman in a Reuters story said that the co has not changed the guidance it gave for Q2 when it reported last month. "We haven't changed our guidance when we announced earnings in January and we will have our regularly scheduled mid-quarter update on March 7," said Intel spokesman Tom Beermann. "Beyond that, we don't comment on rumors." As mentioned earlier today (see 14:21 comment), rumors had been circulating on the Street that INTC will preannounce.
4:21PM Dell Computer matches estimates; updates guidance (DELL) 26.81 -0.53: -- Update -- Company reports Q4 earnings of $0.17 per share, in line with consensus estimates; reports Q4 revenues of $8.06 bln versus the consensus estimate for revenues of $7.85 bln; sees Q1 earnings of $0.16 per share versus the current consensus estimate of $0.16 per share; sees Q1 unit volumes and shipments down 3-5% versus Q4; sees 10% sequential decline in industry shipments.
4:17PM Analog Devices matches EPS consensus (ADI) 39.96 -0.66: Posts Q1 net of $0.11 a share, in line with the Multex consensus, vs yr-ago EPS of $0.50. Co reported revenues of $393 mln (consensus $399.1 mln), down 49% yr/yr and off 7% sequentially. For Q2, co sees EPS of approx. $0.12-$0.13 (consensus $0.13), with revenues rising 3%-5%. Says if the increased order rate it has seen since early Jan continues, co expects to build backlog during Q2.
3:25PM Nasdaq Composite Intraday : -- Technical -- Index has rolled over to its worst levels of the session and is currently testing its 100-day simple moving average at 1842. On a break lower, look for subsequent support at 1836 followed by additional support at 1830. To the upside, look for initial resistance at 1850/1855.
3:11PM SOX Index changes : The Philadelphia Stock Exchange has determined to delete RMBS from the PHLX Semiconductor Index (SOX) and add BRCM and MXIM; this change will take effect before the open of business on Friday, Feb 22.
2:21PM Intel rumor (INTC) 33.95 +0.57: -- Update -- We are hearing from multiple sources that a rumor is flying around the Street that INTC's qtr is tracking below forecast due to pricing pressure on the P4. We have no confirmation of this rumor.
2:14PM Semi Equipment -- Technical -- : The group provided key leadership during yesterday's impressive SOX index gain with follow through noted today. While important resistances (KLAC 61-- May high, AMAT 48-- Jan high, NVLS 43.50-- 200 day simple) were breached this morning, have seen a retest or dip back below in recent action. Will watch these levels for an indication of the strength of the current advance. Failure to stabilize above allows for additional near term weakness.
11:29AM Gemstar-TV Guide rises on prospects of winning patent dispute (GMST) 19.34 +1.42: Stock surges on a NY Times article that reported that the Int'l Trade Commission has decided to eliminate closing arguments in a closely-watched patent dispute over GMST's interactive program guides. GMST brought lawsuits against DISH, SFA, SANM, and Pioneer for allegedly importing cable and satellite set-top boxes that violate GMST's patent portfolio. Closing arguments were scheduled for next Wednesday, and a ruling was expected by March 21.
10:41AM Cabot Micro (CCMP) 60.97 -1.14: -- Technical -- On the defensive for the third session in a row, dropping more than 9% during this period. However, it has thus far held above the now three week trading range floor near 60 with both intraday and daily technicals oversold. Ability to stabilize above today's low (60.50) and the range floor allows for at least a corrective bounce. Next resistances are at 61.86 and 63. Failure and a breakout would open the door to the 58/57 congestion area.
Close Dow +12.32 at 10001.99, S&P -2.03 at 1116.47, Nasdaq -15.79 at 1843.37: The market did its best to rally today, but ultimately, investor confidence was held in check by several items...
In particular, there were concerns regarding the banking sector's exposure to the Enron situation; there were concerns surrounding Hewlett-Packard's (HWP -0.10) cautious-sounding outlook for Q2 (Apr.); there were concerns surrounding Qwest's (Q -1.10) drawdown of its bank credit lines that stemmed from an inability to roll over $700-800 mln in commercial paper; and finally, there were concerns about trading floor rumors that Intel's (INTC -0.04) quarter is tracking below plan due to pricing pressure on the P4... To be fair, the market held its own in the face of all those concerns as losses were generally modest in scope... Nevertheless, the combined influence of those factors succeeded in taking some of the wind out of its sails.... Sellers, however, didn't really make their presence felt until the latter part of the afternoon session-- which was when S&P lowered its credit ratings on Qwest (Q -1.10) and Gap (GPS -0.55), respectively, and the rumors surrounding Intel surfaced...
Prior to that point, the indices had spent the majority of their time in positive territory, underpinned by a batch of economic data this morning that supported the idea the economy is on the road to recovery and leadership from the technology and financial sectors... When the latter two areas went on the defensive late in the session, though, the broader market pulled back in sympathy... The laggards of note today included the semiconductor, biotech, storage, PC, telecom equipment, telecom service, apparel, auto, and basic materials stocks...
Conversely, some of the better performers, on a relative basis, included the bank, brokerage, homebuilding, casino, and oil service issues... Within the Dow, 3M (MMM +1.09) and Eastman Kodak (EK +1.08) led the modest gain that pushed the Dow over 10,000 for the first time since Jan. 11... Nasdaq 100 -0.8%, SOX -0.8%, XOI +0.7%, NYSE Adv/Dec 1471/1629, Nasdaq Adv/Dec 1354/2127
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