STOCKS TO WATCH: AMD, Dallas Semi, DoubleClick and Microchip
Expect the following technology stocks to be among Tuesday’s most actively traded issues: AMD, Dallas Semiconductor, DoubleClick and Microchip Technology.
AMD joined Intel and the seemingly the rest of the information technology universe Monday when it said its fourth-quarter sales and earnings will fall short of estimates.
It said its fourth-quarter sales will be flat to nominally higher than the prior quarter's $1.2 billion. The company also said it now anticipates fourth-quarter net income in the range of 50 to 60 cents a share, depending on the relative strength of PC processor sales in the closing weeks of the quarter.
First Call Corp. consensus expected it to earn 68 cents a share in the quarter.
AMD blamed weak demand for consumer PCs in the United States retail market and projected its unit shipments of AMD PC processors will be only nominally higher than the record 6.8 million units shipped in the third quarter.
It previously said it expected total fourth-quarter sales to grow sequentially in the high-single-digit-range, with unit shipments of PC processors between 8 million and 9 million units.
Its shares closed up $1.25 to $17.31 ahead of the warning.
Another chipmaker, another warning.
Dallas will be active Tuesday after it said it expects earnings to come in between 34 cents to 37 cents a share in its fourth quarter, well below the First Call Corp. consensus estimate of 44 cents a share.
Sales for the quarter will come in 5 percent to 7 percent less than the third quarter total of $139.5 million.
Company officials said overbuying primarily by the company's distribution and manufacturing customers in earlier quarters has resulted in lower turns orders, order cancellations and rescheduling during the fourth quarter.
Its shares closed up $2 to $34 ahead of the warning.
The online advertising firm will be hopping Tuesday after cutting its sales and earnings estimates for the next two quarters.
It will also take $2.5 million restructuring charge in the fourth quarter.
”Not only is online ad spending weak, but overall ad spending is coming under pressure in general,” CFO Stephen Collins said in a conference call with analysts and reporters. “We do not expect a rapid recovery in the first quarter of 2001.”
Collins said he expects fourth quarter results to be between break even and a 3 cent per share loss, down from analysts' estimates of a 2 cent per share profit. The company reported a loss of 3 cents a share in last year's fourth quarter, before charges.
After closing off 6 cents to $11.94 ahead of the warning, the stock rose to $13.25 in after-hours trading, a sure sign that investors had already factored in this bad news.
The company expects to post a first quarter 2001 loss of 5 to 7 cents a share, compared with a loss of 11 cents a share in the year earlier period. The First Call consensus was a loss of 2 cents.
And another.
Microchip warned that its third-quarter sales will miss analysts’ estimates.
Company officials said an inventory backup among its distributors will crimp sales and earnings at least until next spring.
Its shares fell $2.69 to $26.81 ahead of the news before falling to $24.63 in after-hours trading.
It now expects third-quarter sales to be flat with the $176.3 million it recorded last quarter.
In its release, Microchip said that while sales into the U.S., Europe, Asia and Japan channels are tracking to earlier guidance, November sales by distributors were lower than it expected. It added that half of all its sales come from distributors.
Microchip officials said it still expects to post gross profit margins of at least 55 percent in the quarter but did not offer any further guidance on third-quarter earnings.
First Call Corp. consensus expects it to earn 36 cents a share in the quarter.