Tech stocks pounded after hours
Nortel, Palm sink market
By Nicole Maestri, CBS.MarketWatch.com
Last Update: 5:28 PM ET Mar 27, 2001
NEW YORK (CBS.MW) - The tech rally ended quickly in after-hours action Tuesday as Nortel Networks warned that first-quarter results will fall below expectations and Palm said it expects a fourth-quarter loss and will cut 250 jobs.
Coming off a halt, Palm shares plunged 30 percent. Competitors Handspring and Research in Motion didn't fare any better, with Handspring (HAND: news, msgs, alerts) down 20 percent and Research in Motion (RIMM: news, msgs, alerts) off 16 percent.
Issues in the fiber optic space sank after Nortel's news, with Cisco (CSCO: news, msgs, alerts) down 2.4 percent, JDS Uniphase (JDSU: news, msgs, alerts) down nearly 4 percent, Ciena (CIEN: news, msgs, alerts) off 2.9 percent and Juniper Networks (JNPR: news, msgs, alerts) sliding 1.7 percent.
Shares of Biogen also retreated. The company said it's comfortable with its earlier earnings targets, but those numbers fall slightly below analyst expectations.
Nortel Networks
Nortel Networks (NT: news, msgs, alerts) warned that its revenue will fall short of previously lowered estimates in the first quarter, handing the Canadian networking giant and fiber-optics gear maker a wider-than-expected loss.
Nortel also said it will cut 15,000 jobs by mid-year 2001.
Nortel said it anticipates first-quarter sales of $6.1 billion to $6.2 billion, down from a previous estimate of $6.3 billion. The company sees a loss in the range of 10 cents a share to 12 cents a share, compared with an earlier forecast loss of 4 cents a share.
Shares slipped 16 cents, or 0.9 percent, to $16.76 at the close of regular trading and were halted after hours.
Palm
Palm shares plunged 30 percent to $10.81 coming off a halt after the company reported third-quarter results that beat expectations but said it's cutting jobs and predicting a fourth-quarter loss.
Palm said it would cut its staff by about 250 employees and contract workers. The maker of the popular Palm hand-held device also anticipates reporting a net loss of 8 cents in the fourth quarter, along with sales in the range of $300 million to $315 million.
For its third quarter, Palm reported pro forma income of $9.3 million, or 2 cents a share. That's a penny better than what analysts surveyed by First Call/Thomson Financial had been anticipating.
Sales in the third period reached, $470.8 million, a 73 percent increase from the $272.3 million reported at the same time last year.
Ahead of the news, shares of Palm closed up $1.06 to $15.50.
Biogen
Biogen (BGEN: news, msgs, alerts) confirmed its earlier earnings targets, saying it expects first-quarter earnings per share to fall between 45 cents and 46 cents. The company also sees full year earnings per share in the low $1.90s.
Biogen had been expected to earn 47 cents per share for its first quarter and $1.93 for the year, according to analysts surveyed by First Call.
After the news, shares traded down 3 percent to $63.13 on Island.
The company said product revenue continues to be robust.
Shares closed up 1.2 percent to $65.06 on the Nasdaq.
Psi Technologies
Psi Technologies (PSIT: news, msgs, alerts) said its first-quarter revenue will come in lower than previously expected, citing continued weakness of demand in the broader semiconductor market.
The company expects revenue between $16.5 million and $16.9 million, down from the previous target of $17.3 million to $18 million. Analysts polled by First Call had been expecting $18 million in revenue.
"We are adjusting our operating structure and costs in order to match the lower level of business activity," said President and CEO Arthur J. Young Jr., in a statement
Shares closed down 2.5 percent to $4.94. On Island, shares moved up 1.3 percent to $5.
Nicole Maestri is a reporter for CBS.MarketWatch.com |
