Intel fuelled tech bounce still ticking
TI rallies; H-P gains despite warning; AOL advances
By Emily Church & Tomi Kilgore, CBS.MarketWatch.com
Last Update: 9:14 AM ET Apr 18, 2001
NEW YORK (CBS.MW) - Shares of Intel bounded 12 percent higher in pre-open trading Wednesday, after the chip giant topped first-quarter earnings expectations and gave a stabilizing outlook for PC chip sales.
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Intel beats revised EPS estimate
The stock (INTC: news, msgs, alerts) surged $3.16, or 12 percent, to $29.20. Intel reported EPS for the period of 16 cents a share, down from 43 cents in the year-earlier period, but a penny better than the average analyst EPS estimate compiled by First Call/Thomson Financial. Revenue fell 16 percent from last year to $6.7 billion.
In comments accompanying its March quarter result, the chip giant's CEO Craig Barrett said, "Our microprocessor business appears to have stabilized and we expect to see normal seasonal patterns going forward from our current business level." Intel said overall sales fell to $6.7 billion, or 16 percent, from $8 billion last year. See full Intel earnings story.
The news prompted Prudential, Banc of America, ABN-Amro and CIBC World Markets to upgrade the stock. Meanwhile, Morgan Stanley cut its estimates to reflect margin pressures and Lehman Bros. thinks a sustainable rally in the stock is unlikely given current valuation.
Fellow chip maker Texas Instruments (TXN: news, msgs, alerts) tallied gains of $1.50 to $35 in Instinet. The company said late Tuesday that it earned 18 cents a share in the first quarter, down from EPS of 28 cents last year, but 2 cents ahead of analyst estimates. Separately, the company said it will lay off 2,500 employees, or 6 percent of its global workforce. Revenue for the quarter fell 17 percent sequentially to $2.5 billion, and is expected to decline by 20 percent in the second quarter. See full story.
In other chip stocks, Applied Materials (AMAT: news, msgs, alerts) jumped $3.28 to $50.88 in the pre-open, and Advanced Micro Devices (AMD: news, msgs, alerts) added $2.25 to $23 and Motorola (MOT: news, msgs, alerts) was up 56 cents to $14.56 over Redibook.
The Intel effect even helped lift the shares of Hewlett-Packard (HWP: news, msgs, alerts) , which warned of a fiscal second-quarter shortfall, blaming a "rapid deterioration in consumer information technology spending around the world." The stock tacked on $1.63 to $30.88 over Redibook. The company said it was eyeing earnings of 13 to 17 cents per share, well below the forecast for earnings of 35 cents per share in a survey of analysts. The company also said it plans to eliminate up to 3,000 management positions, but set no timetable.
Fellow tech bellwether and Dow Industrials component, IBM (IBM: news, msgs, alerts) , rose $2.40 to $102.10 in Instinet.
In other PC makers, Apple Computer (AAPL: news, msgs, alerts) stepped up $1 to $21.40 and Dell Computer (DELL: news, msgs, alerts) was boosted $1.60 to $27.95 in the pre-open, and Compaq Computer (CPQ: news, msgs, alerts) advanced $1.01 to $19.34 over Redibook.
AOL Time Warner (AOL: news, msgs, alerts) advanced $1.80 to $45.70 over Redibook. The Internet and media giant said revenue for the first quarter rose 9.2 percent over the same period last year to $9.08 billion. Total earnings before interest, taxes, depreciation and amortization rose 20 percent over last year to $2.15 billion.
Shares of Veritas Software (VRTS: news, msgs, alerts) fell after the company warned of a profit shortfall in the next quarter and for the year after the bell on Tuesday. See full story. Shares were trading around $55.10 in Instinet, down $2.43.
Among other stocks seeing early activity, Sun Microsystems (SUNW: news, msgs, alerts) gained $1.12 to $17.16, Cisco Systems (CSCO: news, msgs, alerts) was up $1.28 at $17.94 and Microsoft (MSFT: news, msgs, alerts) advanced $1.90 to $63.38 in the pre-open.
Looking at the Internets, shares of portal Yahoo (YHOO: news, msgs, alerts) climbed $1.05 to $18.36, Amazon (AMZN: news, msgs, alerts) hiked 86 cents higher, to $15.60 and Ebay (EBAY: news, msgs, alerts) moved 95 cents higher to $44.
Stock futures indicated that U.S. share markets would open firmly higher. June S&P futures charged 18.60 higher to 1,214.10, which was about 15 1/2-points above fair value, according to figures provided by HL Camp & Company. Nasdaq 100 futures were limit-up 42.00 points at 1,714.50.
The "triple Qs," a tracking stock for the Nasdaq 100 Index ($NDX: news, msgs, alerts) , surged $2.30, or 5.6 percent, to $43.55 in Instinet.
Emily Church is London bureau chief of CBS.MarketWatch.com.
Tomi Kilgore is a reporter for CBS.MarketWatch.com. |
