From Briefing.com: Updated: 23-Jan-03 - General Commentary - Nasdaq failed to hold early gains and closed in negative territory for the fifth straight session. More notable is fact that tech heavy index just posted its third straight close below its 50-day moving average. In recent months more than two consecutive closes below this key moving average has been a relatively reliable warning of additional near-term price weakness. Next major support is the late December low of 1327. This floor needs to hold, or selling could get ugly.
On a more bullish note, much of the earnings news after the close was positive. Stocks such as Qualcomm (QCOM), Silicon Labs (SLAB), Texas Instruments (TXN) and Netscreen (NSCN) not only beat consensus estimates but guided future sales/earnings above consensus estimates.
It's been the lack of upbeat guidance which has been at the heart of the earnings-related pullback. As Briefing.com warned on this page heading into the earnings period, expectations didn't match reality - they were simply too optimistic. That's why we thought the sector was vulnerable to the type of pullback we've seen over the past several sessions.
However, in our report on Tuesday of this week, we noted that expectations are quickly being brought into line with reality - or at least the reality given current conditions. Consequently, we expect sector to stage a recovery try pretty soon. Given the encouraging news after Wednesday's close, rebound could come as early as today. Initial resistance is in the 1400-1410 area.
For all post-close/pre-open earnings news see Briefing.com's In Play and/or Earnings Calendar page(s).
Robert Walberg
6:48PM Wednesday After Hours price changes vs 4pm ET levels: As has been the norm of late, technology companies dominated the list of companies scheduled to report quarterly results after the close. Strikingly, Briefing.com's In Play page, which captures post-close developments, uses the phrases in-line and better than on a repeated basis. The batch of reassuring news, some of which came from widely-held companies, has given the futures market a lift as the S&P futures, at 881, are 3 points above fair value while the Nasdaq 100 futures, at 1019, are 11 points above fair value.
Qualcomm (QCOM 38.68 +1.99), arguably the most notable company to report tonight, has been a big driver of the positive bias as it checked in with better than expected top- and bottom-line results for fiscal Q1 (Dec) and provided a better than expected outlook for Q2 (Mar) and FY03. Specifically, QCOM said it expects Q2 EPS of $0.34-0.35 and FY03 EPS of $1.34-1.39. The current Multex consensus estimates for those periods stand at $0.30 and $1.24, respectively. Related stocks to watch include the likes of NOK, MOT, and ERICY.
Software company, PeopleSoft (PSFT 18.78 +1.31), is another highlight. For Q4 (Dec), PSFT reported a profit of $0.18 per share that was $0.04 ahead of estimates on revenues of $512.3 mln (consensus $482.3 mln). Although the company conceded on its call that IT budgets are anticipated to remain flat, and that short-term uncertainties are prompting it to delay issuing FY03 guidance until it reports its Q1 (Mar) results, it placated investors with a Q1 EPS forecast of $0.13-0.14 that encompassed the current Multex consensus estimate of $0.13. Related competitors include SAP, ORCL, and SEBL, the latter of which checked in tonight with better than expected Q4 EPS and revenue results.
Texas Instruments (00C 15.40 +1.15) is another well-known company that should draw its fair share of attention in tomorrow's session. On a pro forma basis, the semiconductor company topped the Q4 consensus EPS estimate of $0.03 by three cents, on better than expected revenues of $2.15 bln (consensus $2.09 bln). Looking ahead, TXN projected a Q1 profit of $0.06 per share, plus or minus a few cents, and total revenue to be about even with Q4 levels. The current Multex consensus estimates for Q1 are pegged at $0.03 and $2.06 bln.
The market's response to LSI Logic's (LSI 5.11 -0.79) earnings report has not been as favorable. Although the supplier of communications chips for broadband, data networking, wireless and set-top box applications matched the EPS estimate of $0.01 for Q4 (Dec), it disappointed with its outlook for Q2 (Mar). That outlook calls for a loss of $0.18-0.20 per share and for revenues to be in the range of $370-390 mln-- well below consensus estimates for a profit of $0.02 and revenue of $486.8 mln. Related competitors include companies such as TXN, PMCS, QLGC, BRCM, and CNXT.
Finally, in some earnings news outside the tech sector, appliance maker, Maytag (MYG 27.34), reported an in line Q4 profit of $0.62 per share. For Q1, MYG expects EPS of about $0.70 versus the Multex consensus of $0.73, but sees FY03 EPS of $3.10-3.20 (Multex consensus $3.07). Look for companies like WHR and ELUX to trade in sympathy with MYG. For more detail on these, and other after hours developments, be sure to visit Briefing.com's In Play, Earnings Calendar, and Guidance pages.-- Patrick J. O'Hare, Briefing.com
finance.yahoo.com |
