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Tech Industry

STOCKS TO WATCH: AOL, Intel, Siebel, RealNetworks, TI

Expect the following technology stocks to be among Wednesday's most actively traded issues: AOL Time Warner, Intel, ONI Systems, RealNetworks and Texas Instruments.

  • AOL Time Warner (NYSE: AOL)

    Media giant AOL Time Warner Wednesday reported first quarter earnings that beat Wall Street estimates, boosted by strong revenues and considerable growth in its online and cable businesses.

    The company reported revenues of $9.1 billion compared to $8.3 billion from the same period a year ago. Net income per share before charges reached 23 cents a share, which beat Wall Street's consensus 20 estimate of 20 cents a share.

    EBITDA (earnings before interest depreciation taxes and amortization) jumped 20 percent to $2.1 billion from the previous quarter. Free cash flow reached $651 million, a 409 percent increase from the $128 million during the same period last year.

  • Intel (Nasdaq: INTC)

    The chipmaker will be worth watching Wednesday after it topped analysts' reduced estimates in its first quarter and forecast a "seasonally strong" second half.

    In the quarter, Intel earned $1.1 billion, or 16 cents a share, on sales of $6.7 billion.

    Following the company's profit warning earlier in the quarter, First Call consensus pegged Intel for a profit of only 15 cents a share in the quarter.

    While Intel did top the lowered estimates, first-quarter profits fell more than 64 percent from the year-ago quarter when it pocketed $3 billion, or 43 cents a share, on sales of $8 billion.

    "Our microprocessor business appears to have stabilized and we expect to see normal seasonal patterns going forward from our current business level," CEO Craig Barrett said in a prepared release. "In our communications businesses, we are experiencing continued softness."

    Intel said its second-quarter sales will check in between $6.2 billion to $6.8 billion. Gross margins for the period are projected to be 49 percent, plus or minus a couple of points, but lower than the 51.7 percent margin seen in the first quarter.

    Its shares fell 26 cents to $26.04 ahead of the earnings report before moving up to $29 in after-hours trading.

  • ONI Systems (Nasdaq: ONIS)

    ONI Systems shares figure to move higher Wednesday after the a maker of optical networking products for telecom companies posted a smaller-than-expected loss in its first quarter and predicted it would reach break-even status by the end of this year.

    In the quarter, ONI Systems lost $9.3 million, or 7 cents a share, on sales of $45.1 million, up dramatically from the year-ago quarter when it lost 62 cents a share on sales of $3.6 million.

    First Call consensus pegged it for a loss of 8 cents a share in the quarter.

    ONI Systems shares closed up $1.03 to $32.32 before moving up to $36 in after-hours trading.

  • Siebel (Nasdaq: SEBL

    Siebel Systems will have a lot to say Wednesday when it reports its first-quarter results and finally confirms the extent of widely rumored layoffs due this month in an effort to cut costs, according to sources.

    The developer of customer relationship management (CRM) software has thus far been mute on the topic of layoffs or the fact that it will almost certainly miss analysts' estimates this quarter.

    But sources close to and within the company said Siebel managers began notifying employees of their fate Monday. The exact number of employees to receive pink slips will likely be divulged during the company's conference call Wednesday afternoon.

    First Call consensus expects Siebel to earn 14 cents a share on sales of $572.6 million.

  • RealNetworks (Nasdaq: RNWK)

    The provider of streaming media software met analysts' estimates in its first quarter even though profits fell 60 percent from the year-ago quarter.

    RealNetworks earned $3.5 million, or 2 cents a share, on sales of $50.4 million in the quarter, in line with most analysts' estimates.

    Its shares closed off 16 cents to $8.59 ahead of the earnings report before jumping to $9.34 in after-hours trading.

    The $50.4 million in sales marks a 6 percent decline from the year-ago quarter when it posted sales of $53.5 million. The $3.5 million profit marked a 60 percent decline from the $8.8 million, or 5 cents a share, it pocketed in the year-ago period.

    CFO Paul Bialek told analysts to expect sales and earnings in the second quarter in line with the first-quarter results.

  • Texas Instruments (NYSE: TXN)

    TI will be on the move Wednesday after topping analysts' in its first quarter and announcing it will cut 6 percent of its staff in a cost-cutting move.

    The chipmaker posted a profit of $317 million, or 18 cents a share, on sales of $2.53 billion in the quarter.

    Analysts were expecting a profit of 16 cents a share this time around.

    TI shares gained 99 cents to $34 ahead of the earnings report before hustling up to $35 in after-hours trading.

    In the year-ago quarter, TI earned $494 million, or 28 cents a share, on sales of $2.76 billion.

    "This is the sharpest deceleration that the semiconductor industry has ever experienced," Chief Financial Officer Bill Aylesworth told Reuters.

    Aylesworth added that it was unclear when demand would pick up again and forecast another decline of about 20 percent in second quarter sales compared to the first quarter.