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Ambac Financial, QAD: Early Volume Plays

NEW YORK ( TheStreet) -- QAD Inc. (QADI) was among several stocks trading near $5 poised to move on above-average volume Tuesday after the enterprise software company disappointed with its view on the fiscal first quarter.

QAD offered preliminary financial results for the first quarter of 2011, saying it expects a loss of 4 cents to 5 cents on revenue of $50 million to $51 million, which is below the Thomson Reuters consensus estimate for a profit of 6 cents a share on revenue of $52.5 million. Previously, QAD had forecasted a quarterly profit of 3 cents a share on revenue of $54 million.

"Although we did not meet our revenue expectations during our first quarter, we are seeing increased activity at our manufacturing customers, although capacity utilization is still below pre-recession levels," CEO Karl Lopker said in a statement. "This is leading to a corresponding increase in our near term pipeline. As a result, we believe that our existing business model and plans are appropriate for the current environment."

QAD shares were falling by 47 cents, or 8.2%, to $5.24 in the premarket session. The 50-day average daily volume for QAD is 43,000, according to the Nasdaq.

AP Pharma (APPA) also traded lower, sliding by 8 cents, or 8.7%, to 82 cents in Monday's after-hours session after the company reported a first-quarter loss of a penny a share. That compares to a year-ago loss of 10 cents a share, although the company said that is due to royalty milestone payments totaling $2.5 million. The 50-day average daily volume for AP Pharma is 1.35 million.

Ambac Financial (ABK) dropped by 16 cents, or 11%, to $1.30 in the premarket session after the bond insurer posted a first-quarter net loss of $690 million, or $2.39 a share, widening from a year-ago loss of $392 million, or $1.36 a share.

Ambac said its first-quarter results reflected a large positive change in fair value of credit derivatives offset by loss and loss adjustment expenses primarily related to residential mortgage-backed securities (RMBS) exposure, other than temporary impairment write downs of RMBS securities in the investment portfolios, and a $600 million increase in the deferred tax asset valuation allowance

The three-month average daily volume for Ambac is 51.8 million, according to Yahoo! Finance.

Resource Capital (RSO - Get Report) slumped by 57 cents, or 8.5%, to $6.15 in the premarket session after the company said late Monday it plans to offer about $80 million in a public offering. The three-month average daily volume for Resource Capital is 708,000.

-- Written by Robert Holmes in Boston.

Check out all of Tuesday's high-volume, under-$5 stocks at the Dollar Store. View the Dollar Store portfolio on StockPickr.

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