Tech Report: Earnings Watch Continues

Only two major Internet names -- AOL and eBay -- yet to report.
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Earnings for the just-finished quarter were not expected to topple the entire high-tech sector off its high wire, but earnings disappointments are picking their spots.

Shares of

Inktomi

(INKT)

are little changed after opening lower despite the company's beating first-quarter estimates. Inktomi lost 24 cents a share in the quarter compared with the 29-cent loss analysts expected, according to

First Call

. The stock was trading as high as 189 on Tuesday. Midday Friday it was trading at 156 3/4, down 3 1/8.

After missing earnings estimates by a penny, shares of

Microchip Technology

(MCHP) - Get Report

are down 4 3/16 points to 35 7/16 early today. Microchip makes memory chips and microcontrollers. Despite the disappointment,

Credit Suisse First Boston

maintained a strong buy on the stock, according to its daily tech report, saying January orders are running at all-time levels, and it maintains a 12-month target price of 45.

An earnings warning from

Rambus

(RMBS) - Get Report

has its shares down 9 points to 89. The company said earnings over the next two or three quarters will be flat for two reasons: a seasonal decline in royalties from chips used in the Nintendo 64 game system and discontinued development of PC multimedia applications that use Rambus technology. Rambus reported earnings of 8 cents for the quarter, below the 9-cent estimate of First Call.

Platinum Technology

(PLAT) - Get Report

is down a sharp 5 3/4, or 30%, after it announced that fourth-quarter earnings will not meet estimates due to slow sales in its consulting unit.

Benjamin Report

In his Weekly Web Report,

BancBoston Robertson Stephens

analyst Keith Benjamin indicates there are only two major Internet names left to report,

America Online

(AOL)

and

eBay

(EBAY) - Get Report

. He expects record results for AOL, while eBay's earnings will be compared with smaller numbers from the previous year and should not disappoint. AOL will report earnings on Jan. 27 and eBay will report on Jan. 26.

"We continue to suggest building and holding a portfolio of the biggest and best, focusing on AOL and Amazon and a select number of emerging franchises, with a more opportunistic trading approach." Some of those types of stocks include

E*Trade

(EGRP)

,

Preview Travel

(PTVL)

,

Excite

(XCIT)

and

Ticketmaster/Citysearch

(TMCS)

. BancBoston Robertson Stephens has had underwriting relationships with eBay, E*Trade, Excite and Ticketmaster.

Can It Live Up to the Hype?

After much anticipation over the

Marketwatch.com

(MKWT:Nasdaq) IPO, investors were still left wondering where it was trading early today.

Thursday, 2.8 million shares of Marketwatch were priced at $17 a share, but trading was delayed today.

In anticipation of the IPO, shares of

Data Broadcasting

(DBCC)

, which owns half of Marketwatch.com and has a 38% stake after the offering (

CBS

(CBS) - Get Report

owns an equal amount), had soared from 9 3/4 Dec. 17 to 50 5/8 on Tuesday before sliding all the way back to 30 on Thursday. Data Broadcasting was down 2 3/8 points at 28 13/16 early.

Marketwatch has benefited -- thus far -- from going public at a time when the Internet sector remains hot and there have been few new offerings. If it continues to blossom, those offerings may well pick up.

Warburg Dillon Read

started covering e-commerce stocks this morning, but tempered the move with a measure of caution. Analyst Sara Zeilstra initiated coverage on five of the better-known names in Internet e-tailing, but put a hold on each: Amazon.com, eBay,

Onsale

(ONSL)

, Preview Travel and

Beyond.com

(BYND) - Get Report

. Warburg Dillon Read has no underwriting relationships with any of the companies.

"I think that there's a great amount of opportunity, but I think the stocks have gotten ahead of themselves," Zeilstra says. "But right now the trading momentum is enough to keep them going."

Zeilstra works alongside Warburg analyst Mike Wallace, who covers Internet consumer content and services.

-- George Mannes