Earnings Reports & Warnings
Updated from 7:57 a.m. EDT)
Software companies could be much softer today after a slate of early-morning warnings hit the market below the belt.
In the most positive press release,
CheckPoint Software (CHKP) - Get Check Point Software Technologies Ltd. Report told investors that it will post second-quarter earnings per share of 32 cents a share, inline with analyst estimates. The only catch: the network securer's revenues will come in between $140 million and $142 million, lower than the $149.5 million revenue estimate.
i2 Technologies( ITWO) warned that second-quarter revenues would come in between $235 million and $240 million, lower than the $282 million expected by analysts. The company blamed difficult market conditions for the lower-than-expected results.
BroadVision (BVSN) - Get BroadVision, Inc. Report warned that second-quarter revenues would be between $52 million and $58 million, much lower than the $84.2 million expected by analysts. That translates into a pro forma loss of 17 cents to 20 cents a share, also lower than the 11-cent loss currently expected by analysts. BroadVision also announced that CFO Randall Bolten resigned. Terry Davis, its current treasurer, will take over as interim CFO.
- Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report and Korea Telecom were discussing a possible alliance, South Korean information and communication minister Yang Seung-taik said. According to Yang, when Korea's talks to form a strategic alliance with SingTel fell through, the government looked for someone other than the Singaporean telecommunications company for a possible alliance.
NTT DoCoMo( NTDMY) said that it would push ahead with plans to launch a third-generation, or 3G, wireless network on Oct. 1. Currently, DoCoMo is testing the network and getting the kinks out before the commercial rollout, which was originally scheduled for May 30 but was scaled back in order to troubleshoot the system. Other telecommunications companies are watching this quite closely, since this is the very first deployment of the 3G system expected to revolutionize the business.
On the Analyst Front:
- Art Technology Group( ARTG), BroadVision,
Blue Martini Software (BLUE) - Get bluebird bio, Inc. Report,
Calico Commerce( CLIC) and Pivotal Software were all downgraded from market outperform to market perform by
Cabletron Systems (CS) - Get Credit Suisse Group AG Sponsored ADR Report was started at buy at
Lehman Brothers, which set a price target of $27 on the stock.
- There are no major earnings releases scheduled for today.
On the Economic Lookout:
- At 9 a.m. the
BTM-UBSW Weekly Chain Store Sales Index and the
Redbook Retail Average showed that U.S. retail sales at chain, discount and department stores fell during the first four weeks of June, with the Redbook average sliding 1.3%. That was worse than the expected 1.2% fall.
At 10 a.m., the
Census Bureau releases the factory orders report for May. The data measure shipments, inventories and orders at the manufacturing level. Economists consider the report to be "old news" since
durable goods, which make up 57% of factory orders, are released a week earlier.
In Overnight Activity...
Internet Security Systems( ISSX) fell 33.8% after warning that second-quarter earnings would come in with a 2-cent loss due to slumping sales of its Internet security software. This is way short of the 15-cent profit expected by Wall Street. Expect more details when the company reports on July 18. Rivals
CheckPoint Software (CHKP) - Get Check Point Software Technologies Ltd. Report and
Symantec (SYMC) - Get Symantec Corporation Report also slumped on the news.
Rational Software( RATL) warned that first-quarter EPS would come in between 7 and 8 cents vs. the year-ago 13 cents. But revised revenue targets were the real story. Rational now expects to book between $172 million and $175 million in the first quarter, much lower than the $185.5 million expected by analysts. The company's stock slid 12.6% on the news.
ePiphany( EPNY) dropped 14.5% after warning that second-quarter losses would be steeper than the 27-cent per share loss expected by Wall Street. Now the second quarter is expected to come in with per share losses between 29 cents and 30 cents.
For an extended take on late-night action, be sure to take a gander at
The Night Watch.
Sources & Definitions:
All analyst EPS estimates are from Thomson Financial/First Call, unless otherwise noted. All economic forecasts are from
, unless otherwise noted. All times are Eastern, always. After-hours quotes courtesy of Instinet, unless otherwise noted.