Dour news from Cisco and a warning from National Semiconductor may sink techs Wednesday. The Dow is set to open sharply lower.
With no economic news on deck, investors will focus on the latest batch of earnings. Though Cisco managed to power the Nasdaq into positive territory Tuesday, its big net loss and inventory charge could reverse that trend.
Stocks to Watch
Cisco lost 37 cents a share, or $2.69 billion in the fiscal third quarter on restructuring charges. The loss compared with net income of $641 million, or 8 cents, a year earlier. Excluding the charges and acquisition costs, profit would have been $230 million, or 3 cents a share, for the period ended April 28. The company saw sales fall to $4.73 billion, the first such drop since Cisco went public in 1990.
National Semi said sales in the fourth quarter ending May 27 will be $390 million to $400 million, lower than the $431 million average estimate of three analysts surveyed by IBES International Inc. The maker of chips for cellular phones and personal computers also said it will eliminate 1,100 jobs, or 10 percent of its workforce, to reduce costs as orders slump.
The company said it earned $103.9 million or 33 cents per share in the quarter, in line with First Call's estimates, and better than the profit of $74.7 million or 23 cents per share in the year-ago quarter.
At the Bell
The Dow Jones industrial average may open 72 points lower. The Standard & Poor's 500 index for June futures contracts was of 8.3 points to 1,255 at 7:15 a.m. EDT in 24-hour electronic trading.
Reuters contributed to this report.