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Tech Industry

STOCKS TO WATCH: Cisco Systems, Teligent, 24/7 Media and UPS

Expect the following technology stocks to be among Wednesday's most actively traded issues: Cisco Systems, Teligent, 24/7 Media and UPS.

  • Cisco Systems Inc. (Nasdaq: CSCO)

    All those worrywarts that actually considered the possibility that Cisco Systems would miss analysts' estimates in its first quarter will be the first back on the bandwagon Wednesday.

    On Tuesday, Cisco cruised past analysts' estimates in its first quarter Tuesday, pocketing $837 million, or 24 cents a share, on sales of $3.88 billion.

    First Call consensus expected the world's largest network-equipment provider to earn 23 cents a share.

    Its shares closed off 1 1/16 to 74 1/4 ahead of the earnings report but quickly scampered up to 76 5/8 in after-hours trading.

    The $3.88 billion in sales represents a remarkable 49 percent improvement compared to the year-ago quarter when it earned $561 million, or 17 cents a share, on sales of $2.6 billion.

    "Cisco continues to lead this industry and will for the foreseeable future," said George Hunt, an analyst at Wachovia Securities. "I've got a "strong buy" rating on the stock and a 12-month price target of $90 a share."

    Last quarter, Cisco hurdled analysts' estimates, earning $727 million, or 21 cents a share, on sales of $3.55 billion.

    First Call consensus predicts it will earn 98 cents a share in fiscal 2000.

  • Teligent Inc. (Nasdaq: TGNT)

    Teligent should get a boost Wednesday after it topped analysts' estimates in its third quarter, losing $143.6 million, or $2.66 a share, on sales of $10.3 million.

    First Call consensus expected the telecommunications company to lose $2.69 a share in the quarter.

    In the year-ago period, it lost $78.5 million, or $1.49 a share, on sales of $240,000.

    Its shares closed up 3/4 to 61 5/8 ahead of the earnings report.

    In the quarter, Teligent completed the installation of 76,000 customer lines, beating its year-end target of 75,000 lines by more than three months.

    Teligent ended the third quarter with more than 7,500 customers, up more than 110 percent from the customer base at the end of the second quarter.

    Teligent shares moved up to a 52-week high of 75 5/8 in July after falling to a low of 27 1/8 in December.

    First Call consensus expects Teligent to lose $9.98 a share in the fiscal year.

  • 24/7 Media Inc. (Nasdaq: TFSM)

    24/7 Media posted a smaller-than-expected loss in its third quarter Tuesday, but it still lost $11.7 million, or 55 cents a share, on sales of $24.3 million.

    First Call consensus expected the Internet advertising and marketing company to lose 61 cents a share.

    Its shares closed off 3/8 to 52 11/16 ahead of the earnings report.

    The $24.3 million in sales represents an impressive 319 percent improvement from the year-ago quarter when it lost $6 million, or 49 cents a share, on sales of $5.8 million.

    In the quarter, 24/7's mail division reported sales of $2.5 million, a 297 percent jump from the third quarter.

    24/7 Media delivered an aggregate of approximately 2.5 billion ad impressions in the month of September. According to Media Metrix, the 24/7 Media networks reached 55.5 percent of all U.S. Internet users, and 35 million unique users visited one or more of 24/7 Media's Web sites in September.

    Its shares moved up to an all-time high of 69 5/8 in April after trading at 15 ? last November.

    All nine analysts following the stock rate it either a "buy" or "strong buy."

  • United Parcel Service (NYSE: UPS)

    The package delivery company is offering a whopping 109.4 million shares at $50 each -- above the proposed price range of $47 to $49 -- a share in what should be the largest U.S. IPO ever. Morgan Stanley Dean Witter is the lead underwriter with an assist from Goldman Sachs and a host of other firms.

    For the nine months ending June 30, UPS reported revenue of $19.6 billion and net income of $222 million including charges. For 1998, UPS reported sales of $24.8 billion and net income of $1.7 billion.

    Though the vast majority of UPS revenue comes from deliveries not related to the Internet, some observers view the offering as something of a Web play. Zona Research estimated that UPS delivered 55 percent of the goods purchased over the Internet in 1998.

    "At the end of the day UPS is the only way we're seeing anything on our door from the Internet," said William Schaff, fund manager for the Information Technology 100 Fund. "It will be everybody's safe proxy for e-commerce."

    In its regulatory filings UPS makes its e-commerce intentions clear: "We seek to position ourselves as an indispensable branded component of e-commerce and to focus on the movement of goods, information and funds," said UPS. "E-commerce is an important part of our future growth because we believe that it will drive smaller and more frequent shipments and provide a strong complement to our core delivery service."

    UPS plans to leverage tech partnerships for enterprise resource planning, electronic procurement and systems integration. UPS also wants to work with various e-commerce sites to help operate just-in-time or manufacturer-direct distribution business models.