Nasdaq waffles, ARBA ($45to $35 lose) tanks after earnings
January 12, 2001 12:30 PM PT
by Robert Wang
RELATED STORIES
• Analysts support DoubleClick's bull run
• Ken Starr joins Microsoft opposition
• Ariba beats Street, but road ahead looks bumpy
• Gateway reports disappointing earnings, cuts 3,000 jobs
• Update: HP lowers Q1 guidance
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NEW YORK -- Even though investors appeared unfazed by disappointing earnings news from Hewlett-Packard and Gateway in early trading, the market dipped back below the line in the late afternoon.
The Nasdaq's most actively traded issue, Ariba, plummeted after anlaysts seemed to think there was too much spin in the company's rosy-sounding earnings report.
At 3:14 p.m. ET, the Nasdaq Composite had slid 19.62, or 0.74 percent, to 2,620.95.
The Dow Jones industrial average was down 104.51, or 0.99 percent, to 10,505.04.
The S&P 500 had dipped 11.79, or 0.89 percent, to 1,315.03.
You can't win
B-to-b software maker Ariba (ARBA: -7.88, 35.50) sank nearly 20 percent even though the company announced better than expected first-quarter results on Thursday.
Deutsche Banc Alex. Brown, SG Cowen and four other brokerages downgraded the stock. A Deutsche Banc analyst saw decelerating growth in Ariba's business. An ABN AMRO analyst was concerned the company’s accounting was hiding weakness.
Ariba reported a first-quarter profit of 5 cents a share, or $14 million on revenue of $170.2 million, excluding charges. Analysts had expected a 2 cents a share profit. Ariba increased its second-quarter guidance to 6 cents a share and its fiscal 2001 guidance to 25 or 26 cents a share. (See "Ariba beats Street, but road ahead looks bumpy.")
Microsoft foes hire Clinton nemesis
First Microsoft (MSFT: -1.38, 53.62) faced super-lawyer David Boies. Now it's facing former independent counsel Kenneth Starr, who investigated alleged wrongdoing by President Bill Clinton.
An industry trade group that includes AOL Time Warner (AOL: -1.10, 46.13), Sun Microsystems (SUNW: -1.50, 30.44) and Oracle (ORCL: -1.00, 32.31) has hired Starr to help it draft a brief to support the government's antitrust case against Microsoft.
Oracle (ORCL: -1.00, 32.31) lost some value.
HP: Mo' money blues
Shares of PC and printer maker Hewlett-Packard (HWP: -1.94, 30.44) fell nearly 6 percent. The company announced minutes after the closing bell Thursday that it would earn 35 cents a share to 40 cents a share for its first quarter. First Call/Thomson Financial said analysts had forecast a profit of 42 cents a share.
Less money, more job cuts at Gateway
Direct PC seller Gateway (GTW: -2.46, 20.44) fell nearly 10 percent after it said Thursday it will slash its workforce by more than 10 percent due to poor business conditions. Also Thursday, Gateway announced that it earned 12 cents a share, or $37.6 million, excluding a big charge. Analysts had expected profits of 37 cents a share.
Other hardware stocks Dell Computer (DELL: -0.50, 22.31), Compaq Computer (CPQ: -0.63, 18.48) and Apple Computer (AAPL: -0.69, 17.31) were fractionally lower.
Reuters reported that IBM (IBM: -0.25, 93.44) may be able to weather the IT spending slowdown without much damage with the help of mainframe computer sales.
Sun Microsystems (SUNW: -1.50, 30.44) was down about 5 percent. Salomon Smith Barney downgraded the issue to "neutral" from "buy," citing slowing business computer spending.
You may kiss the bride
The Federal Communications Commission (FCC) finally approved the merger between ISP giant America Online and media conglomerate Time Warner on Thursday. The companies closed their billion-dollar merger immediately and become AOL Time Warner (AOL: -1.10, 46.13), which began trading this morning on the NYSE.
The company begins its honeymoon with a small decline.
Rambus misses the bar
Chipmaker Rambus (RMBS: -4.20, 44.69) lost more than 8 percent and said its first-quarter pro forma net income came in at 12 cents a diluted share, or $13.2 million, on revenue of $34.7 million, excluding charges. Analysts had expected earnings of 13 cents a share.
Except for Vitesse (VTSS: +3.69, 58.12), chipmakers Intel (INTC: -0.88, 32.50), Advanced Micro Devices (AMD: -0.44, 17.75) and Xilinx (XLNX: -2.06, 50.06) dropped at least 2 percent.
Nothing to cry about
Network infrastructure companies Cisco Systems (CSCO: -0.50, 38.62), Juniper Networks (JNPR: -0.31, 132.00), 3Com (COMS: -0.12, 10.56) and Nortel Networks (NT: -0.69, 33.38) were slightly lower.
Cell phone maker and chipmaker Motorola (MOT: -0.44, 21.69) fell slightly after it said Thursday that sales will dip in the first quarter.
Telecommunication company AT&T (T: +1.06, 24.31) said it offered $2.9 billion in stock to cable companies Comcast (CMCSA: +1.38, 43.94) and Cox Communications (COX: +0.31, 48.62) in exchange for more stock of ISP At Home (ATHM: +0.47, 8.19). The deal raises its stake to 38 percent from 23 percent.
DoubleClick beats Street but warns
Online ad solutions company DoubleClick (DCLK: +2.88, 14.12) gained about 27 percent after it issued its fourth-quarter earnings report Thursday saying that it broke even on pro-forma net income of $216,000 and revenues of $132.3 million. Analysts had expected a loss of 2 cents a share.
Yahoo (YHOO: +0.38, 26.25) was up a day after a 15 percent drop caused by the company's poor 2001 outlook and a series of downgrades.
Except for eBay (EBAY: -1.56, 39.38) and EarthLink (ELNK: -0.16, 7.81), brand name Net stocks Amazon.com (AMZN: +0.50, 17.50), Priceline.com (PCLN: +0.38, 2.97) and Juno Online Services (JWEB: +0.34, 1.59) were trading in the black.
Robert Wang covers the stock markets for UpsideToday. Reach him at rwang@upside.com. If you would like to submit a letter to the editor regarding this story, email online@upside.com. |
