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Tech Industry

STOCKS TO WATCH: Adobe Systems, Apple, Cabletron, 3Com and GST

Expect the following technology stocks to be among Tuesday's most actively traded issues: Adobe Systems, Apple, Cabletron, 3Com and GST.

  • Adobe Systems Inc. (Nasdaq: ADBE)

    The desktop-publishing software developer figures to gain even more ground especially after J.P. Morgan upgraded the stock late Monday from a "long-term buy" recommendation to "buy" and bumped its 12-month price target from $95 a share to $130.

    Adobe shares closed up 3 15/32 to a 52-week high of 108 15/32.

    Last week, Adobe beat Street estimates in its third quarter, earning $72 million, or 80 cents a share, on sales of $261 million.

    It also announced a 2-for-1 stock split.

  • Apple Computer Inc. (Nasdaq: AAPL)

    Apple's string of spectacular earnings report is over.

    Its shares plunged more than $11 a share in after-hours trading Monday after warning that it will miss analysts' sales and earnings estimates in its fourth quarter.

    The Cupertino, Calif. company said it now expects to report net income of between $75 million to $85 million in its fourth quarter, well below most analysts' estimates of $120 million.

    Company officials said the delay of planned deliveries of its G4 processor chips from Motorola is mainly responsible for the fourth-quarter shortfall.

    The revised earnings estimate puts Apple closer to 45 cents to 50 cents a share in the quarter, well below the First Call estimates of 76 cents a share.

    Apple will announce its fourth-quarter earnings Oct. 13.

    "We are very disappointed that this quarter's deliveries of G4 processors will be lower than planned," said CFO Fred Anderson in a prepared release. "Orders for the Power Mac G4 have been strong and we anticipate ending the September quarter with a substantial order backlog."

    Apple says it has received orders for more than 150,000 Power Mac G4s since the product was rolled out three weeks ago.

    Interim CEO Steve Jobs called the shipping delays "a temporary issue" and said "we hope to catch up early in the coming quarter."

    Prior to Monday's late sell-off, Apple shares hit a 52-week high of 79 1/8 earlier this month after trading at a 52-week low of 28 1/2 in October.

  • Cabletron Systems Inc. (NYSE: CS)

    Network-equipment maker Cabletron Systems tiptoed past analysts' estimates in its second quarter Monday, earning $12.5 million, or 7 cents a share, on sales of $356.6 million.

    Its shares closed off 3/4 to 19 ahead of the earnings report.

    First Call consensus expected the Rochester, N.H. company to earn 6 cents a share in the quarter.

    In the year-ago quarter, Cabletron earned $10.5 million, or 6 cents a share, on slightly higher sales of $270.6 million.

    Last quarter, Cabletron topped Street estimates, earning $7.3 million, or 4 cents a share, on sales of $349.5 million.

    The stock surged to a 52-week high of 19 15/16 earlier this month as speculators continue to view it as a potential takeover target. Its shares hit a low of 7 3/16 in April.

    Fourteen of the 20 analysts following the stock maintain either a "hold" or "sell" recommendation.

    First Call consensus expects Cabletron to earn 33 cents a share in the fiscal year.

  • 3Com Corp. (Nasdaq: COMS)

    3Com shares should be rather active Tuesday ahead of its second-quarter earnings report.

    First Call consensus expects the network-equipment maker to earn 24 cents a share in the quarter.

    Last quarter, it made $87.5 million, or 24 cents a share, on sales of $1.41 billion.

    Its shares closed up 3/16 to 27 3/4 Monday.

  • GST Telecommunications Inc. (Nasdaq: GSTX)

    The western U.S. telecommunications service provider said its third-quarter loss will be about 90 cents a share to $1 excluding a $30 million gain from a lawsuit settlement. First Call had predicted an average $1.02 loss After the settlement, the company expects a loss of 10 cents to 12 cents a share. GST rose 1/16 to 10 15/16.