From Briefing.com: Tech shares opened lower on Monday following market sell-offs in Asia and Europe. The selling, which accelerated from the open and bottomed around 1:30pm ET was driven by investors protecting profits and tax selling. The trading, as captured by the averages, belies the selling pressure building among tech shares. While indices, including the SOXX, narrowed losses to close about 0.6%-1% below Friday's close, tech shares closed down, on average, 2.1%. Within the indices, decliners outnumbered advancers almost 2.3:1 while tech decliners overwhelmed advancers almost 4.5:1. Tech laggards dropped, on average, 3.0% while gainers rose 2.1%.
Investors have little impetus to buy or sell given the latest earnings reports generally support a modestly bullish outlook for equities. As a result, short-term profit taking and tax selling are likely to be the primary forces driving trading through December. Sentiment remains cautious as investors contemplate whether to head for the exits; expect more downside volatility. Lock in profits as opportunities avail.--Ping Yu, Briefing.com
5:33PM Monday After Hours prices levels vs. 4 pm ET: The after hours trade has been relatively quiet, and has lacked the negative feel that marked the regular session. A respectable number of earnings announcements have been digested by traders, and for the most part, they have been positive, rather than negative, surprises. Presently, the S&P futures, 1042, are 1 point below fair value, and the Nasdaq 100 futures, at 1395, are flat with fair value.
Agilent Technologies (A 28.51 +1.76) exceeded the Q4 (Oct) Reuters Resarch consensus estimate by $0.10 - coming in at $0.15 - on revenues that declined 4% to $1.68 bln. The company noted that orders also checked in ahead of expectations, and said that it generated positive free cash flow. As for Q1 (Jan), Agilent guided EPS - at $0.05-0.15 - and revenues - at $1.55-1.65 bln - in line with Wall Street's consensus forecast.
Shares of ATI Tech (ATYT 15.38 +1.53) have received a tremendous boost in the after hours trade after the company raised its Q1 (Nov) outlook. The designer of 3D graphics and digital media silicon solutions said that sales should be $440-470 mln and net income should be $0.16-0.20 per share, as compared to the consensus estimates of $425 mln and $0.13, respectively. ATI added that it expects to see continued strength in Q2 (Feb), that, combined with the typical seasonal pattern, should result in a slightly weaker revenue and profit profile.
Marvel Enterprises (MVL 30.09 +0.19) stock has also traded higher following the character-based entertainment company's earnings pronouncement ahead of its analyst meeting tomorrow. Citing increased retailer promotional support for Marvel-branded licensed products and higher expectations for growth in international licensing, Marvel went on to increase its FY04 guidance to $415-435 mln for revenues (consensus of $373 mln) and $1.31-1.48 for EPS (consensus of $1.31)
Shares of Angiotech Pharmaceuticals (0NPI 46.22 -1.58) have taken a hit after the medical device company's Q4 (Sept) miss. Angiotech reported EPS of C$0.23 per share (actual is in Canadian dollars), which were a penny shy of the Street's consensus. Revenues were also short of the consensus expectation, coming in at $5.9 mln. On a separate note, Angiotech is Boston Scientific's (BSX 34.58 -0.06) corporate partner for the development of the Taxus drug-eluting stent.
Finally, Merck (MRK 46.06 -0.02) and its marketing partner Schering-Plough (SGP 15.87 unch) announced that they submitted to the FDA a New Drug Application for the approval of an experimental drug that combines the cholesterol-lowering medicines Zetia and Zocor in a single tablet. The companies said that they submitted the application on September 24. If approved, Wall Street expects the combination tablet to achieve peak sales estimates of roughly $6 bln.
For complete coverage on these, and other developments, be sure to visit Briefing.com's In Play, Earnings Calendar, and Guidance pages. -- Heather Smith, Briefing.com
2:21PM New High Profile -- NeoMagic (NMGC) 3.40 +0.26: Making a new high today on 10x avg daily volume is NeoMagic, a chipmaker for mobile phones, PDAs and handheld entertainment devices. For a company that posted only $2.2 mln in sales over the last year, the move in the stock seems odd. However, NMGC has been reinventing itself. In April 2000, the co began to exit the notebook computer market and focus on wireless applications. The company's latest product (MiMagic 6) is generating some excitement. The MiMagic 6 enables very sophisticated multimedia features on battery-operated hand-held systems. Its APA engine provides superior MPEG-4 and 3D applications at a fraction of the power of other solutions. The new device is being well received by customers who are testing it... With a $100 mln market cap on $2.2 mln ttm sales the valuation seems rich to say the least. However the MiMagic 6 is getting people excited. Also helping to buoy the stock is the co's $48.6 mln in cash/inv, or about $1.60 per share, with no long term debt.
12:49PM Brocade: Expect solid Q4 results, but may already be in the stock -- Unterberg (BRCD) 7.30 -0.33: C.E. Unterberg believes that the near-term demand environment for Brocade's low and mid range products has been solid, and, therefore, that the co is likely to report revenues ahead of firm's estimate of $136.5 mln and at the high end of its Q4 guidance of $134- $139 mln. On the bottom line, firm looks for Brocade to report non-GAAP earnings of $0.02. (The Reuters Research EPS consensus for the qtr is $0.02 with mean revenue est at $137.66 mln). However, with a near 20% increase in Brocade's stock price in recent weeks, firm recommends investors take some profits at this stage.
12:30PM ThinkEquity comments on Cree (CREE) 17.50 -0.49: ThinkEquigy believes concerns over increasing LED production capabilities out of Taiwan have put pressure on CREE's share price in recent months. Firm's checks with local LED vendors indicate that capacity, especially for blue LEDs are ramping significantly and any erosion in demand, especially from handsets, could result in further ASP declines. White LED pricing remains stable with only four major vendors producing these LEDs, allowing for some price protection. However, despite increasing demand for LEDs, the introduction of white LEDs from Taiwanese vendors licensing technology from Osram could put long-term pressure on CREE, in firm's view. ThinkEquity rates the stock Overweight.
Advanced Micro (AMD) 17.36 -0.50 : Co and Sun Microsystems (SUNW) announce an alliance that could have a major impact on both companies' battles against larger competitors, reports the Wall Street Journal. Sun, struggling to compete more effectively with computers that use Intel's (INTC) microprocessors, plans to make server systems using a new AMD chip called Opteron. For AMD, the arrangement stands to help the company make inroads against industry leader Intel in corporate computer rooms, where Sun has a major presence. For Sun, AMD's chips provide a new weapon to counterattack against competitors such as computer titan Dell Inc. -- WSJ
Marvell's (MRVL) 42.62 -1.37 : Stock gapped down following USB Piper Jaffray comment indicating that it believes execution on GbE switches has been dismal; believes co has encountered major architectural problems that have caused more than a years slippage and have resulted in a key design loss at Dell. With growth dependent on the volatile HDD industry and rich valuation (40x C04 EPS), firm believes the risk/reward remains unattractive. (Piper rates the stock an Underperform with a $23 tgt.)
Anadigics (ANAD) 6.66 -0.44 : Announced $75 mln universal shelf.
Cypress Semi (CY) 21.59 +0.12 : Lehman Brothers upgraded Equal-weight to OVERWEIGHT. Target $24 to $27. Believes the co's earnings leverage may be the greatest of any stock they cover over the next year.
PMC-Sierra (PMCS) 19.91 -1.39 : CIBC downgraded PMC-Sierra to Underperform from Sector Perform based on relative valuation, as the stock's valuation premium has expanded significantly since mid-Oct and is now well above its peers.
QLogic (QLGC) 56.00 +0.70 : CE Unterberg upgraded QLogic to Near-Term Buy from Mkt Perform based on their view that business trends are strengthening at the co; firm believes that low- and mid-range products in particular continue to grow at the fastest rate, as these mkts remain under-penetrated, and thinks that gross margins are likely to remain at impressive levels. Target is $65.
Silicon Image (SIMG) 6.40 -2.45 : Co announced that its 10-Q will not be filed on a timely basis because an ongoing examination is being conducted by its Audit Committee. Silicon Image's Audit Committee. The examination is principally of the co's recognition of revenue associated with certain licensing transactions in 2003 and 2002.
ASML Holding (ASML) 17.52 -0.16 : Deutsche Securities upgraded ASML Holding to Buy from Hold, as recent checks continue to point to strong equipment bookings momentum; firm expects ASML to disproportionately benefit from the likely strength of 2004 capital spending in Asia as well as in the foundry segment, while gaining further mkt share at Intel; in addition, ASML's early start on Immmersion could also provide further momentum, notably in Japan.
ThinkEquity (CREE) 17.75 -0.24 : ThinkEquigy believes concerns over increasing LED production capabilities out of Taiwan have put pressure on CREE's share price in recent months. Firm's checks with local LED vendors indicate that capacity, especially for blue LEDs are ramping significantly and any erosion in demand, especially from handsets, could result in further ASP declines. White LED pricing remains stable with only four major vendors producing these LEDs, allowing for some price protection. However, despite increasing demand for LEDs, the introduction of white LEDs from Taiwanese vendors licensing technology from Osram could put long-term pressure on CREE, in firm's view. ThinkEquity rates the stock Overweight.
Kulicke & Soffa (KLIC) 16.90 +0.96 : Before the open, reported Q4 (Sep) loss of $0.57 per share, which includes multiple charges and is not comparable to the Reuters Research consensus of ($0.11); revenues rose 5.8% year/year to $129.3 mln vs the $131.3 mln consensus. In touch with Reuters for comparable EPS actual. Company issued upside preannouncement for Q1 (Dec), on conference call, KLIC guides Q1 revs to $150 mln, Reuters Research consensus is $135.7 mln
Varian Semi (VSEA) 45.86 -2.58 : UBS downgraded Varian Semi to Neutral from Buy based on valuation, as the stock is near their $50 target; however, firm acknowledges that the stock could continue to trade up with the group, driven by momentum. |
