The Night Watch: Investors Shrug Off PMC-Sierra's Warning, Push It and Other Chip Stocks Higher

Communications chip-maker now expects loss between 7 cents and 9 cents a share; consensus estimates were for loss of 2 cents.
By Chris Frankie ,

Despite

warning after the bell that its earnings and revenue for the second quarter would be lower than expected, shares of communications chip-maker

PMC-Sierra

(PMCS)

rose Thursday night after an initial drop on the news. PMC was lately up 4.7% to $30.52 on Instinet and up 4.4% to $30.44 on Island.

PMC-Sierra said after the closing bell that it now expects to lose between 7 cents a share and 9 cents a share, excluding amortization of goodwill and other charges. The Street was expecting a loss of 2 cents a share, which is dramatically lower then the 23 cents it earned in the year-earlier period. The company blamed the lowered guidance on weak customer demand in the quarter, and said revenue should be between $93 million and $95 million.

Fellow communication chipmaker

Broadcom

(BRCM)

initially fell on PMC-Sierra's warning, but followed the wave higher as it gained 1.8% to $39.60 on Instinet, and 2.0% to $39.65 on Island.

Applied Micro Circuits

(AMCC)

was up 1.1% to $16.51 on Instinet, and 2.5% higher to $16.73 on Island.

Shares of

Microsoft

(MSFT) - Get Report

were essentially flat in after-hours trading, unchanged at $72.74 on Instinet and down 2 cents on Island. Shares gained $1.60, or 2.25% during the regular session after the U.S. Court of Appeals

set aside a lower court's decision to break up Microsoft as a solution to the antitrust suit brought against the company by the government.

Yahoo!

(YHOO)

, which

agreed to acquire music and editorial content company

Launch Media

(LAUN)

earlier in the day, slipped in the after-hours, falling 0.4%, to $19.30 on Instinet. Yahoo! closed up 65 cents, or 3.5% during the regular session after it agreed to pay about $12 million for Launch.

The usual tech names also accounted for a significant number of the companies moving in the after-hours. Cisco was the most heavily-traded issue on Instinet, rising 0.4% to $18.65, and was up 0.5% to $18.67 on Island. PC maker

Dell

(DELL) - Get Report

was unchanged at $26.42 on volume of about 200,000 shares on Instinet.

Sun Microsystems

(SUNW) - Get Report

was also unchanged at $15.60 on Instinet.

Juniper Networks

(JNPR) - Get Report

was lately up 0.9% to $30.52 on Island, while

JDS Uniphase

(JDSU)

rose 1.6% to $12.69.

Island ECN offers trading, mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EST.

Confused?

TheStreet.com

explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.

After the Close Thursday

Alcoa

(AA) - Get Report

said Thursday it is cutting aluminum production in its San Luis, Brazil plant in compliance with a government request to reduce electricity use in the area.

Align Technology

(ALGN) - Get Report

announced that it will trim its workforce by 6%, which the company says will enable it to reach gross margin profitability sooner than expected.

Campbell Soup

(CPB) - Get Report

named George Sherman chairman.

Covance

(CVD)

announced that it expects 2Q EPS of 14 cents a share and 2001 EPS between 52 cents and 56 cents a share. Analysts polled by research firm

Thomson Financial/First Call

were expecting second-quarter earnings of 12 cents a share and '01 EPS of 52 cents a share.

Edison International

(EIX) - Get Report

announced that it has agreed to sell its

Edison Select

subsidiary to

Tyco

(TYC)

. However, the terms of the deal were not disclosed.

Helix

(HELX)

said it expects 2Q EPS to fall well short of Wall Street expectations, citing the overall weakness throughout the semiconductor sector. The company expects to to report a loss between 15 cents and 18 cents a share on revenues of $26 million to $28 million. Analysts, on average, were expecting a profit of 11 cents a share.

Ingersoll-Rand

(IR) - Get Report

said it expects 2Q EPS to come in 25% to 30% below analysts' expectations citing lower volume and weaker demand for its products. The company sees 2001 EPS between $2.25 and $2.50 a share. Analysts were expecting the firm to post second-quarter earnings of 77 cents a share and $2.93 for the year.

Millennium Chemicals

(MCH)

said it will trim its global workforce by 10% and take a second-quarter charge of $30 million.

Northwest Bancorp

(NWSB)

named William Wagner president and chief executive, replacing John Hanna, who will leave to spend time with his family but will remain chairman. The changing of the guard will take place July 1.

Scotts Company

(SMG) - Get Report

lowered Q3 and full-year EPS estimates citing poor weather conditions and disappointing sales both at home and abroad. The company expects third-quarter earnings, before charges, of $1.88 to $1.98 a share, up from $1.78 a share in the year-ago quarter. For fiscal 2001, it expects to earn $2.33 to $2.63 a share, excluding charges. Wall Street analysts were expecting the firm to earn $2.00 a share in the current quarter and a $2.79 for the year.

Tomorrow's Earnings:

  • There are no major earnings releases scheduled for tomorrow.

Tomorrow's Economic Data:

  • At 8:30 a.m., final gross domestic product numbers for the first quarter will be released by the Commerce Department. All in all, the numbers shouldn't surprise anyone, since this is the third version of the GDP number to be released. Economists polled by Reuters expect 1.3% growth, the same as the first-quarter preliminary number released a few weeks ago and slightly higher than the 1.1% growth in the fourth quarter. The next big GDP release will be the advance second-quarter numbers due in about a month.
  • At 10 a.m., the final Consumer Sentiment Index, a barometer of how all-important consumers are feeling, will be released for the month of June by the University of Michigan. Economists expect the figure to come in at 91.5, slightly lower than the preliminary June numbers and last month's 92.6. Lower numbers mean consumers feel worse about the state of things.
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