STOCKS TO WATCH: Altera, Brocade, Gateway and Tech Data
Expect the following technology stocks to be among Thursday's most actively traded issues: Altera, Brocade, Gateway and Tech Data.
The PLD maker will be in for a beating Thursday after warning that its fourth-quarter sales will be lower than expected.
Company officials announced after the bell that sales will be flat with the year-ago quarter, roughly $395 million.
Altera said November resales were weak in all regions -- especially North America -- and December should be soft as well, as customers participating in the digital subscriber line, or DSL, business cut back on orders after overbuying in the first nine months of the year.
It also said that as inventory has accumulated among contract manufacturers, they have taken the opportunity to reduce the stock on hand, hurting Altera's resales. However, Altera expects this problem to affect only one quarter.
First Call Corp. consensus expects it to earn 32 cents a share in the quarter.
The stock added 3 cents to $25.94 ahead of the warning before tumbling $7.31 to $18.63 in after-hours trading.
Brocade will be active after it beat analysts' estimates in its fourth quarter, set a 2-for-1 stock split and projected sales growth of 150 percent in fiscal 2001.
The computer storage network parts maker checked in with a profit of $27.2 million, or 22 cents a share, on sales of $132.1 million.
Analysts were expecting a profit of 20 cents a share.
CFO Mike Byrd told analysts to expect sales of $830 million in fiscal 2001, up 150 percent from the year-ago quarter.
It also expects to achieve gross profit margins of around 60 percent next year.
The stock closed off $7.25 to $153.75 ahead of the earnings report before falling below $148 a share in after-hours trading.
Where do you start with this one?
Gateway delivered the worst possible news after the bell Wednesday, saying that its fourth-quarter sales will come in around $2.55 billion, about half a billion dollars below analysts' estimates.
It said it will post operating earnings of 37 cents a share, woefully shy of the First Call Corp. consensus estimate of 62 cents a share.
Its shares closed off $1.50 to $29.50 ahead of the profit warning before plunging to around $20 a share in after-hours trading.
Gateway officials said it will take a $200 million write-down charge for its investments in other technology stocks, meaning it will post a net loss of 2 cents a share in the quarter.
It also lowered its fiscal 2001 earnings estimate to $1.89 a share from the current First Call Corp. estimates of $2.28 a share and said it expects sluggish PC sales for "the next 12 to 18 months."
Tech Data easily topped analysts' estimates in its third quarter Wednesday, a rare bit of bright news in an otherwise dark day for technology companies.
The computer-equipment distributor posted a profit of $47.2 million, or 82 cents a share, on sales of $5.2 billion, beating First Call Corp. consensus estimates by 7 cents a share.
More impressive, company officials raised their sales and earnings estimates for the rest of the fiscal year.
Ahead of the earnings report, Tech Data (Nasdaq: TECD) shares closed off 38 cents to $28.63.
The $5.2 billion in sales represents a 20 percent improvement from the year-ago quarter when it made $33 million, or 60 cents a share, on sales of $4.3 billion.
Company officials said it expects to earn between $173 million and $176 million, or between $3.06 and $3.10 a share, in fiscal 2001, slightly better than the $3.01 a share most analysts were expecting.