The Night Watch: Palm Rallies but Few Other Tech Stocks Follow
Tech stocks were largely weaker in the extended hours, as the line-up for earnings announcements and confessions stretched far and wide.
Attracting much attention was
Palm
(PALM)
, which posted a sharp loss in its latest quarter, as softening demand, excess supply and discounted prices for its products hurt its latest results. Still, the stock rallied strongly tonight as its results
trounced the Street's expectations for its fourth quarter. Shares of the company were recently the most heavily traded stock on both
Island
and
Instinet
, where they surged 16.8% to $6.06, up from their close of $5.19 on the
Nasdaq.
The maker of handheld devices racked up $165 million in revenue and a 16-cent loss in earnings in its fiscal fourth quarter, beating analysts' consensus expectations of a 19-cent loss and $145.5 million, according to
Thomson Financial/First Call
.
Meanwhile, rival
Handspring
(HAND)
was recently enjoying the momentum, gaining 7.0% to $5.79 on Island.
Software giant
Oracle
(ORCL) - Get Report
was also in positive territory after the company's CEO and founder Larry Ellison said during a press conference that the current quarter "looks a lot stronger," according to
Reuters
. "We're seeing some of the big deals coming back," Ellison reportedly said. Oracle, which recently met analysts' expectations for its fourth-quarter earnings, much to the delight of the investing community, lately was up 0.4% to $18.52 on Instinet and 0.3% to $18.50 on Island.
But the color of the night wasn't limited to green, as other tech stocks were hurt by more poor profit forecasts. Communications chip makers, which have had their fair share of woes amid the slowdown in equipment spending, were dragged lower tonight after
Xilinx
(XLNX) - Get Report
confessed to lower first-quarter revenue due to a sluggish June. Its shares recently fell 5.2% to $41.58 on Instinet after being halted on its late-night revenue warning. Xilinx's customers include telecom outfits like
Alcatel
(ALA)
and
Nokia
(NOK) - Get Report
, as well as equipment maker
Cisco
(CSCO) - Get Report
and tech bellwether
IBM
(IBM) - Get Report
.
Shares of
Applied Micro Circuits
(AMCC)
were also down 0.2% to $14.70 on Instinet. Like Xilinx, the communications chipmaker warned last night of sharply lower sales in the June quarter and was punished for it.
In the same vein,
Photronics
(PLAB) - Get Report
tumbled 13.0% to $21 after it cautioned that third and fourth-quarter earnings would be well below expectations because of the ongoing softness in the chip sector. Photronics produces high-precision quartz photomasks, which are a key component in the making of semiconductors.
And
3Com
(COMS)
, the networking equipment maker, gave up 3.1% to $4.69 on Island after reporting a wider loss of $518 million, or $1.52 a share, in its fourth quarter, compared with a loss of $147 million, or 42 cents a share, in the year-ago period. Analysts on average expected a loss of 57 cents a share for the period. After the close, the company reportedly affirmed its forecast for its ongoing business to be profitable at the end of the next fiscal year in a conference call.
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
Synplicity
(SYNP)
lowered guidance Tuesday for 2Q and the remainder of 2001, citing a decline in consumer spending. The company said it expects second-quarter earnings of a penny a share on $12.4 million in revenue. Analysts polled by research firm
Thomson Financial/First Call
were expecting earnings of 3 cents a share.
Penzoil-Quaker State
(PZL)
said its 2Q EPS will fall short of expectations due to the rise in gasoline prices which, in turn, weakens the demand for automotive products. The company now expects second-quarter earnings to fall between 13 and 15 cents a share. Analysts, on average, were expecting 30 cents a share.
CoorsTek
(CRTK)
reaffirmed its Q2 revenue outlook but said that Q3 revenue will decline 6% to 8%. Second-quarter sales are expected to come in between $102 million and $104 million. The company also said that it has trimmed its workforce by 22%, or 960 employees since the beginning of the year in an attempt to reduce overall expenditures.
Danaher
(DHR) - Get Report
said that it is comfortable with analysts' Q2 earnings estimates of 63 cents a share, but added that the second half of 2001 may fall short of expectations due to revenue weakness.
Economic Data
- 7 a.m.:
Mortgage Applications Survey for the week ended June 22- Refinancing index. Source:
Mortgage Bankers Association. Forecast: 1593.1. Previous: 324.1.
Purchase index: Forecast: n.a. Previous: 324.2.
9 a.m.:
Treasury buyback announcement. Source:
Bureau of the Public Debt. The Treasury buys securities specified yesterday from dealers.
10 a.m.: Treasury auction. Source:
Bureau of the Public Debt. The Treasury announces the results of its monthly two-year note auction, at which $11 billion of securities will be sold, with bids due at 1 p.m.
2:10 p.m.:
Federal Open Market Committee announcement. The Federal Reserve announces any change in monetary policy.
6:30 p.m.:
Consumer Comfort Index for the week ended June 23. Source:
Money Magazine and ABC News Forecast: n.a. Previous: 4.