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The Night Watch: Bullish Stampede on Applied Materials Loses Steam

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(Updated from 7:38 p.m. EST)

In early after-hours trading and on the heels of a solid earnings report, bulls stampeded the shares of

Applied Materials

(AMAT) - Get Applied Materials, Inc. Report

. But the euphoria waned as the company gave guidance about its future in a conference call with analysts.

Despite concerns about a slowdown in semiconductor demand, the chipmaker posted fourth-quarter earnings that beat Wall Street's forecasts by a penny, as new orders more than doubled from the same period last year. The company's stock surged $4.38, or 10.2%, to $47.13 in early extended trading on

Island

ECN.

Applied Materials, which supplies wafer fabrication systems to the semiconductor industry, reported a profit of 77 cents a share, topping the

First Call/Thomson Financial

estimate by one cent and improving upon the year-ago 37-cent result. Additionally, the company announced that sales for the quarter rose 81% to $2.92 billion from $1.61 billion last year.

The chipmaker's results seemed to banish the slowdown specter, but the bogeyman reappeared during the company's conference call, and the stock began selling off as a result. Looking ahead, AMAT chief financial officer Joe Bronon said he expects first-quarter earnings per share of 75 cents to 78 cents, which falls short of Street estimates of an 80 cent-per-share profit. The stock lately traded ahead only 69 cents, or 1.6%, to $43.44.

In reaction to Applied Materials' eagerly anticipated earnings release, fellow chip stocks have attracted investor attention tonight.

Novellus

(NVLS)

gained 0.18% and

TheStreet Recommends

Atmel

(ATML)

improved 1.26% on Island.

In other news, shares of

AT&T

(T) - Get AT&T Inc. Report

edged up 12 cents to $20.75 tonight on

Instinet

after the telecommunications giant said that it would spin off the

Liberty Media Group

(LMGA)

.

Ma Bell expects to convert the Liberty Media tracking stock into an asset-based security and set it free as a publicly traded company in the second quarter of 2001. AT&T acquired Liberty when it purchased

Tele-Communications Inc

.

Back in October, AT&T announced plans to split into four separately traded companies. The telecommunications firm feels that this spinoff is consistent with that proposal and believes that the spinoff could help it comply with

Federal Communications Commission

regulations in its recent $50 billion acquisition of

MediaOne Group

. (

TheStreet.com

wrote a separate story about AT&T's voluntary

breakup.)

Some of last night's volume movers returned to the spotlight.

One of these, online music seller

MP3.com

(MPPP)

, which skyrocketed 54.7% during the regular session, added 31 cents, or 5.1% to $6.50 on Island.

Yesterday, a federal judge ordered MP3.com to pay $53.4 million to

Universal Music Group

, the only record company that refused to settle its copyright suit out of court. Separately, Universal granted MP3.com licensing rights to its entire catalog for use in the company's

my.mp3.com

service, which it will restart by the end of November with a fee for the service.

Another featured attraction from last night that returned to the most-active charts tonight:

Network Appliance

(NTAP) - Get NetApp, Inc. Report

. The company's stock edged up 31 cents, or 0.41%, to $76.44 on Island after tanking 20.9% during the day. Last night, the computer network storage provider posted earnings that beat Wall Street's expectations but warned of slower sales growth ahead.

Finally, shares of large-cap technology stocks

Cisco Systems

(CSCO) - Get Cisco Systems, Inc. Report

and

Oracle

(ORCL) - Get Oracle Corporation Report

lost ground in extended trading. Cisco, which advanced 0.82% by day, fell 25 cents, or 0.47%, to $53.31 on Island and decreased 31 cents, or 0.6%, to $53.25 on Instinet. Oracle, which increased 1.76% during the regular session, lowered 25 cents, or 0.87%, to $28.63 on Island and shed 19 cents, or 0.6%, to $28.69 on Instinet.

This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY) . For further information, please contact Instinet at www.instinet.com.

Island ECN, owned by Datek Online, 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.