Stocks in Motion: Merix Hammered on Outlook

BEA and Nortel are also punished.
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Updated from 1:11 p.m. EDT

BEA Systems

(BEAS)

headed to the top of the volume-leader board on Friday after the company posted disappointing first-quarter results.

BEA posted

operating earnings of 8 cents a share on revenue of $262.6 million. Analysts polled by Thomson First Call were looking for 8 cents a share on revenue of $266.3 million. License revenue, an all-important business segment, dipped to $120.2 million from $122.3 million a year ago.

BEA chief Alfred Chang said that although the company signed a good number of million-dollar deals in the quarter, the effort wasn't enough to get BEA over the top: "We signed 17 license deals over $1 million dollars in the first quarter. While this is the most we've ever signed in a first quarter, we are disappointed that we did not meet our license revenue plans, especially in the Americas," Chang said in a press release. Shares of BEA traded down $2.43, or 22.5%, to $8.35, on volume of 73.5 million shares.

Shares of

Merix

(MERX)

traded heavily after the circuit-board maker lowered its fourth-quarter earnings and sales forecast. Instead of delivering revenue of $46 million to $48 million, as it had previously forecast, it now expects to report revenue of $44.5 million to $45 million.

Earnings that were expected to be 19 cents to 22 cents a share are now expected to turn into a loss of 3 cents to 6 cents a share. Analysts were looking for the company to deliver 13 cents a share in earnings on $47.4 million in revenue.

"The change in expectations is caused by a lower level of premium services business attributed to reduced demand by customers for expedited volume orders and reduced orders from a major customer -- which the company understands results from decreased demand for certain of the customer's products and increased inventory levels in their supply chain," the company said in a press release.

Shares of Merix traded down $4.64, or 30.3%, to $10.68, on volume of 16.3 million shares.

Nortel

(NT)

traded briskly on Friday after the network gear giant announced it had been

served with a grand jury subpoena in connection with a criminal investigation being conducted by federal prosecutors in Texas.

In a press release, the company said it "has been advised that the materials sought are pertinent to an ongoing criminal investigation being conducted by the U.S. Attorney's Office for the Northern District of Texas, Dallas Division.

The company will fully cooperate with the authorities in this matter. The grand jury has asked Nortel to produce documents from 2000 to the present. The subpoena comes just one month after the Toronto, Canada-based company fired its chief executive officer amid an accounting probe conducted by the company. Shares of Nortel traded down 23 cents, or 6.1%, to $3.57, on volume of 54.7 million shares.

In addition to Nortel,

NYSE

high-volume leaders included

Lucent

(LU)

,

EMC

(EMC)

,

General Electric

(GE) - Get Report

and

Advanced Micro Devices

(AMD) - Get Report

.

Nasdaq

companies on the high-volume list, in addition to BEA Systems, included

Cisco

(CSCO) - Get Report

,

Intel

(INTC) - Get Report

and

Microsoft

(MSFT) - Get Report

.

Looking at Nasdaq price movers,

Astea International

(ATEA)

soared for a second straight day after it swung to a first-quarter profit. On Wednesday, the Horsham, Pa.-based company announced earnings of 51 cents a share on revenue of $5.9 million.

That compared with a loss of 16 cents a share in the year-ago period on revenue of $4 million. The service management solutions company also announced that it had concluded its search for a new chief financial officer. George Rapp joined Astea at the beginning of the second quarter. Shares of Astea traded up $3.21, or 47.6%, to $9.95.

Arel Communications

(ARLC)

leaped after the company's largest shareholder said he will raise his stake in the firm. Clayton Mathile, who already owns 22.5% in Arel stock, disclosed plans to buy as much as 12% more of the company's stock. He'll purchase 842,619 shares for $4.75 a share from Arel's co-founder, Itzhak Gross, who is retiring from the company's board. Additionally, Mathile is set to offer to purchase up to an additional 5% of Gross' stock in a tender offer. Shares of Arel traded up 72 cents, or 33.6%, to $2.86.

International Speedway

(ISCA) - Get Report

raced ahead after it issued quarterly and full-year financial guidance. Second-quarter earnings are expected to be 31 cents to 33 cents (excluding items) and revenue is expected to come in at $125 million to $130 million.

Analysts polled by Thomson First Call were expecting earnings of 32 cents a share and revenue of $129.1 million. Third-quarter earnings are expected to be 58 cents to 60 cents a share (excluding a one-time gain) on revenue of $145 million to $150 million. Analysts were looking for 59 cents a share in earnings on revenue of $148 million. Fourth-quarter earnings are expected to be in the range of 98 cents to $1 a share on revenue of $220 million to $225 million.

For the full year, International Speedway expects earnings of $2.39 to $2.45 a share on revenue of $620 million to $635 million. Analysts were looking for the company to earn $2.36 a share on revenue of $629 million. Separately, the company announced it would buy Martinsville Speedway for about $192 million. Shares of International Speedway traded up $2.75, or 6.7%, to $43.84.

Shares of

IMPAC Medical Systems

(IMPC)

fell after it delivered weak second-quarter earnings results. The Mountain View, Calif.-based company earned 2 cents a share on revenue of $15.4 million.

Earnings and revenue were well below analysts' forecasts of 26 cents a share and $19.4 million, respectively. "The impact of recent booking trends is expected to cause the invoicing for oncology software licenses to be relatively flat for fiscal 2004, as compared to fiscal 2003, and is expected to affect the related operating cash flows over the next several quarters. If the softness in new orders experienced in the last two quarters continues, we believe that our software licensing revenue will be roughly comparable to fiscal 2003," the company said in its earnings press release. Shares of IMPAC traded down $10.23, or 41.2%, to $14.62.

Sounding an Alarm

Integrated Alarm Services

(IASG)

got drilled after it delivered poor first-quarter earnings. Integrated Alarm lost 4 cents a share on revenue of $18.2 million. Analysts were looking for a profit of 2 cents during the quarter. "While disappointed with the loss, we absolutely will not compromise our standards by pursuing short-term opportunities with questionable long-term return," the company said in a press release. Shares of Integrated traded down $2.95, or 37.6%, to $4.90.

On the Big Board,

Salton

(SFP)

snapped a nine-day losing streak. On Tuesday, Salton got hammered after the company announced poor third-quarter results and a loan-covenant violation.

After reporting a loss of $5.14 a share on revenue of $191.4 million, the company said it "failed to comply with the consolidated fixed-charge ratio contained in its senior secured revolving credit facility for the month ended March 27, 2004, and anticipates future near-term noncompliance with certain financial covenants."

It added that senior lenders "have agreed to a forbearance of their rights, until June 10, 2004." During its nine-day skid, over a two-week period, Salton lost almost 70% of its value, trading from $9.05 to $2.77. On Friday, the company traded up 63 cents, or 22.7%, to $3.40.

Genesco

(GCO) - Get Report

climbed after the shoe retailer reported preliminary first-quarter sales results and raised its outlook for first-quarter earnings. Genesco reported sales of $226 million during the first quarter and said that it would deliver earnings of between 21 cents and 24 cents a share when it announces its results on May 26. Previously, it had forecast earnings of 12 cents to 13 cents a share. Shares of Genesco traded up $3.14, or 15.1%, to $24.

Redwood Trust's

(RWT) - Get Report

shares jumped after it said it planned to raise $47 million through a stock offering. The company is selling a little over 1 million shares at $45.20 a share. JMP Securities is underwriting the offering. Redwood said that it plans to use the proceeds for continued growth of its credit-enhancing residential and commercial real estate loans and securities business. Shares of Redwood traded up $2.15, or 4.8%, to $47.35.

Shares of

Select Medical

(SEM) - Get Report

rebounded Friday, two days after the company warned of Medicare changes that could torpedo its acute-care operations. Earlier in the week, the Centers for Medicare and Medicaid Services outlined proposals that, if adopted, could lower the rate at which Select's long-term acute-care centers receive government reimbursement.

The rules apply to centers that are run inside of hospitals and would cut payments to facilities that receive more than 25% of their admissions from their host. Shares of Select traded up 64 cents, or 5.3%, to $12.64. Shares of Select lost 19% of their value on Wednesday.

Natural gas company

NUI

(NUI)

fell after the company suspended its dividend. As a condition to amending its financial agreements with creditors, NUI was forced to suspend the dividend. It said that it is prohibited from paying cash dividends during any quarter in which the company's debt represents more than 60% of its total capitalization.

As a result, the company said it doesn't expect to pay any dividends in the foreseeable future. Shares of NUI traded down $2.85, or 18.2%, to $12.80.

Shares of

Fedders

(FJC)

fell after Standard & Poor's cut its debt rating to negative from stable. "The outlook revision follows Fedders' reporting of significantly weaker-than-expected 2004 first-quarter operating results.

Standard & Poor's had expected the company's financial performance to stabilize and expected credit measures and liquidity to remain at December 2003 levels as a result of Fedders' past efforts to restructure its business. Shares of the company traded down 51 cents, or 10.4%, to $4.39.