Shares of Workstream ( WSTM) were among technology's losers Friday, falling 52.4% after the company posted third-quarter results that were well below Wall Street expectations. The software provider posted a loss of $3.6 million, or 8 cents a share, on sales of $6.9 million. Analysts polled by Thomson First Call were expecting a profit of 2 cents a share on sales of $9.6 million. A year ago, the company posted a loss of $1.8 million, or 7 cents a share, on sales of $4.2 million. Workstream said that an improving unemployment environment hurt its outplacement services business. Shares traded down $2.09 to $1.90. Extreme Networks ( EXTR) fell 11.2% after the company posted third-quarter results that fell below expectations and warned that fourth-quarter sales would fall below expectations. Excluding items, the networking gearmaker earned $743,000, or 1 cent a share, on sales of $91.9 million. Analysts were expecting earnings of 5 cents a share on sales of $102.5 million. Results were hurt by continued weakness in the company's Japanese business and longer-than-expected sales cycles across its businesses. Looking ahead, Extreme forecast fourth-quarter sales of $93 million to $98 million, which is below the $106 million that analysts had been expecting. Shares traded down 56 cents to $4.44. Shares of Merix ( MERX) fell 23.2% after the maker of printed circuit boards agreed to acquire Hong Kong-based Eastern Pacific Circuits for about $120 million in cash plus earn-out consideration of up to $8 million, which is tied to 2005 adjusted earnings before interest, taxes, depreciation and amortization. The transaction, which is being financed with a combination of cash and debt, is expected to close in June. In response to the acquisition, Credit Suisse First Boston downgraded Merix to underperform from neutral and lowered its price target on the company. CSFB cut its rating on the stock because of the dilutive nature of the acquisition and because of risks associated with the acquisition. Shares traded down $2.55 to $8.40.
Avid Technology ( AVID) fell 2.7% after the company reaffirmed its first-quarter financial results. The digital-editing equipment maker expects pro forma earnings of 58 cents a share on sales of about $165 million, which is in line with analysts' expectations of 58 cents a share on sales of $165.3 million. "We are taking this unusual step of pre-announcing an estimate of our first-quarter results in light of Pinnacle Systems' ( PCLE) announcement on Wednesday of a lower-than-expected sales outlook for its quarter ended March 31, 2005," Avid said. On Wednesday, Pinnacle warned that its third-quarter sales would be $64 million to $66 million, down from previous guidance of $70 million to $73 million, which excludes the Team Sports unit that it sold in February. Shares of Avid traded down $1.38 to $49.22. Shares of Magal Security Systems ( MAGS) fell 4.1% after the company announced the sale of 1.7 million shares of stock. The stock was sold to a group of affiliated investors and to a group of unaffiliated investors at prices of $9.92 and $9.50 a share, respectively. The direct equity placement is expected to result in gross proceeds of about $16.3 million. Shares traded down 41 cents to $9.51. Other technology movers included Microsoft ( MSFT), down 38 cents to $24.46; Intel ( INTC), down 37 cents to $22.12; Cisco ( CSCO), down 61 cents to $17.20; Sun Microsystems ( SUNW), down 30 cents to $3.66; Applied Materials ( AMAT), down 76 cents to $14.50; Apple Computer ( AAPL), down $1.91 to $35.35; Oracle ( ORCL), down 39 cents to $11.70; and Lucent Technologies ( LU), down 11 cents to $2.40.