From Briefing.com: General Commentary - Tech shares slipped 0.8% as decliners outnumbered advancers 1.9:1. Advancers gained 3.3% and decliners lost 3.1%. Investors found relief in the SEMI Capital Equipment Consensus Forecast which called for double digit growth in 2004 and 2005 but little that would cheer shares up in the realization that the industry's growth expectations fall far short of investor expectations. With few exceptions, semiconductor equipment shares, which opened the session modestly higher, closed the day lower by as much as 6%.
This devaluation/revaluation process is taking place across tech as investors assess company prospects against the latest industry growth forecasts and company market valuation. Investors will be taking a hard look at Synopsys (SNPS 31.25 +0.25) which reported Q4 EPS above consensus but lowered guidance for Q1 and F04. Management guided for F04 revenue of $1.2-1.25B (+2-6% Y/Y). As noted in the Q4 preview, SNPS will need to deliver revenue growth in the high-teens and achieve fairly substantial margin expansion for investors to justify owning shares at current valuation. Also under scrutiny are National Semiconductor (NSM 43.50 -0.80), reporting Q2 results, and Intel (INTC 33.34 -0.51), hosting a mid-quarter business update.--Ping Yu, Briefing.com
Erratum: Please note the correct ticker for Comtech Telecommunications is CMTL. It was incorrectly listed on Tuesday's General Commentary page as CTCO.
Names that have dropped below their lower volatility bands and may rebound:
Company (Ticker) Close Lower Band Upper Band
Nasdaq Composite 1960.25 1974.83 2020.90
AudioCodes (AUDC) 9.60 10.59 12.08
Bell Microproducts (BELM) 7.26 7.72 8.79
Cubic Corp (CUB) 24.50 27.52 29.76
Finisar (FNSR) 3.30 3.63 4.04
Neoware Systems (NWRE) 14.34 15.73 16.81
PalmSource (PSRC) 23.31 24.68 26.77
Peerless Systems (PRLS) 2.81 3.02 3.40
QuickLogic (QUIK) 5.66 5.89 6.57
T-Netix (TNTX) 3.57 3.66 4.15
Names that have risen above their upper volatility bands and may consolidate:
Company (Ticker) Close Lower Band Upper Band
Ditech Communications (DITC) 19.50 16.21 18.31
I-Sector Corp (ISEC) 11.43 9.23 11.42
Jinpan International (JST) 13.65 10.93 12.50
Mechanical Technology (MKTY) 5.60 4.50 5.21
Netsmart Technologies (NTST) 14.60 10.14 12.43
6:02PM Wednesday After Hours prices levels vs. 4 pm ET: The after hours trade has possessed a relatively neutral tone that has been in keeping with the market's swift pullback off its session highs at the close. Presently, the S&P futures are at 1065, 1 point above fair value, and the Nasdaq 100 futures are at 1419, 1 point below fair value. Tonight's session has featured a smattering of earnings, sales, and product announcements from tech, biotech, and retail companies alike.
Shares of Synopsys (SNPS 30.71 -0.54) have declined following the supplier of electronic design automation software's 1Q04 (Jan) warning. After topping the Reuters Research consensus EPS estimate by $0.03 in its 4Q03 (Oct), Synopsys announced that Q1 revenues would be $275-290 mln and EPS would be $0.28-0.32. Wall Street's consensus forecasts called for revenues of $291 mln and EPS of $0.35. In our preview of Synopsys's Q4 report, Briefing.com noted that SNPS stock was 'fairly valued' and advised investors to 'hold off on owning shares.'
Comverse Technology (CMVT 17.55 -0.56) stock has also weakened in response to the company's Q3 (Oct) report. Comverse showed a net loss of $0.01 (a penny better than the Reuters Research estimate) on revenues that increased 16% to $193.8 mln. Management noted the 'carrier capital spending environment continues to be challenging' and that - along with the fact that shares trade at a whopping 139x estimated FY05 (Jan) earnigs - has pressured the stock. Competitors of CMVT include the likes of ERICY, IBM, LU, MOT, NOV, OPWV, and UIS.
Shares of Mandalay Resort (00C 40.50 -2.22) have taken a hit following the company's Q3 (Oct) report. The casino operator reported EPS of $0.66, which was $0.04 ahead of the Street's estimate. Revenues rose 5% to $625.6 mln, and the company also announced that it raised the quarterly dividend by $0.02, to $0.27. That move brings the annual dividend yield to 2.7%.
SkillSoft (SKIL 9.00 +1.01), however, has found investors more receptive to its earnings news. The provider of e-learning content and software products flew past the market's expectation that called for breakeven in Q3 (Oct), and reported net income of $0.10 per share. Sales spiked 71% from the prior year period, or 11% sequentially, to $50 mln. SkillSoft also guided its Q4 (Jan) EPS and revenue outlook in line with consensus estimates.
Shares of Allos Therapeutics (ALTH 3.99 +1.14) have spiked - up 40% - after presenting its positive Phase III results for its investigational radiation sensitizer RSR13 (efaproxiral) at the 26th Annual San Antonio Breast Cancer Symposium. The study demonstrated a significant survival benefit for women with breast cancer and brain metastases who received RSR13 plus whole brain radiation therapy (WBRT) versus WBRT alone. The company announced that it would be presenting its Phase III results on November 24, but did not provide details at that time.
Finally, a number of retailers have released their November same store sales results in the extended session. Aeropostale (ARO 31.27 +0.79) and Hot Topic (HOTT 30.16 +0.13) all topped the Briefing.com consensus estimate - with the latter raising its Q4 (Jan) EPS guidance by a penny to $0.42 (consensus of $0.42). American Eagle (AEOS 17.35 +0.38), in contrast, continued to experience difficulty in spurring sales, and reported a decrease of 6.2% as compared to the Briefing.com consensus of -5.5%.
For complete coverage on these, and other developments, be sure to visit Briefing.com's Stock Market Update and Daily Sector Wrap pages. -- Heather Smith, Briefing.com
5:05PM ON Semiconductor to quit Rhode Island plant, cut 330 jobs (ONNN) 7.00 -0.05: Co. announces it will be closing manufacturing operations at its facility in East Greenwich, Rhode Island, by the end of 2004 and cut about 330 jobs as part of a cost-cutting effort. Co. would transfer those operations to lower cost manufacturing facilities outside of North America. As a result, the company plans to record restructuring charges of $15- $20 mln in Q4 of Y03.
4:09PM PMC-Sierra commences tender offer for $150 mln in convertibles (PMCS) 19.71 -0.67:
12:02PM KLA-Tencor raises orders target -- Reuters (KLAC) 59.54 +0.71: Reuters reports that co's CFO, speaking at a CSFB technology conference in Arizona, said on Wednesday the company now expects order growth of at least 20% from the previous quarter. The company had previously targeted 5 percent growth... see 11:53 update for related commentary.
10:21AM Disk drive group under pressure following MXO downgrade at Needham, and more talk of inventory/pricing concerns : Movers of note include MXO -7.2%, STX -3.2%, WDC -2.5%
9:59AM Lam Research C.E.O. sells 215,000 shares 33.12 +0.17: Disclosed in an SEC filing that the C.E.O of Lam Research (LRCX) has sold 215,000 shares at a price of $32.33, exercising option at a strike price of $14.08.
9:55AM NVIDIA added to Focus List at Wedbush Morgan; tgt $28 (NVDA) 21.77 +0.33:
9:43AM Intel: Removing from Focus List; less likely to beat upwardly revised expectations -- Wedbush (INTC) 34.15 +0.30:
9:38AM ATI Tech edges above Oct/previous 52-wk high of 16.41 (ATYT) 16.49 +0.60: -- Technical --
9:16AM Intel estimates, target raised at BofA 34.09: Banc of America Securities is raising its Intel (INTC) target price to $39 from $34. The firm is also raising its Q4 revenue estimate to $8.7B (high end of Q4 revenue guidance of $8.1-8.7B) from $8.4B and its Q4:03 EPS estimate increases to $0.31 from $0.29. BofA's revised estimates reflect new Q4 PC growth assumptions based on its proprietary Taiwan Motherboard and Notebook shipment data. The firm's data indicates Q403 is on track for 14% Q-Q growth. The firm notes the price target fairly reflects the intrinsic value of Intel based upon the current recovery cycle.
8:11AM ASML receives first industry order for lithography system from TSMC (ASML) 19.20: ASML announced it has received the industry's first order for an immersion lithography system from TSMC. Delivery is slated for Q3 2004 with no financial details of the sale being disclosed. The new tool is ASML's TWINSCAN XT:1250i, which is a high productivity, immersion scanner for production applications.
8:03AM Nanogen issued key nanotechnology patent (NGEN) 3.79: Co announces that it has been issued U.S. Patent No. 6,652,808, "Methods for the Electronic Assembly and Fabrication of Devices," ("the '808 patent") by the U.S. Patent and Trademark Office. This patent is the parent of a series of pending patent applications that significantly broaden Nanogen's proprietary position in the nanotechnology and nanomanufacturing areas. "One of the challenges in producing new electronic and photonic devices using nanoscale components is the integration of these components into viable higher order devices. The new Nanogen patent describes a unique electric field 'pick and place' process that facilitates the bringing together or integration of diverse DNA nanocomponents, thereby helping solve difficult scaling issues."
finance.yahoo.com |
