STOCKS TO WATCH: Barnesandnoble.com, Microsoft and Solectron
Expect the following technology stocks to be among Monday's most actively traded issues: Barnesandnoble.com, Microsoft and Solectron.
The online bookseller should be interesting to watch ahead of its quarterly earnings report Monday.
Analysts are expecting a loss of 19 cents a share in the quarter.
Last quarter, it lost $38.4 million, or 27 cents a share, on sales of $82.1 million.
Its shares closed up 1 1/16 to 10 15/16 Friday.
Obvious, yes. But what will investors decide to do about this latest chapter in its ongoing saga with the Justice Department.
On Friday, Microsoft found out what everyone knew all along: the government wants it broken up. If and when it happens, there's good reason to believe shareholders will benefit.
The 17-page proposal from the U.S. Justice Department, joined by 19 states, asked that the software giant be split into two companies: one to produce the Windows operating system and another to handle other software applications, like spreadsheets and databases.
It also asked that the companies be barred from reuniting for 10 years.
"Potentially, (a break-up) could be very beneficial to investors because it would give different business divisions with higher growth rates an opportunity to get a better market valuation," said Jim Ragan, an analyst at Crowell Weedon. "Right now, we've got a "buy" on it mainly because we'd be surprised to see this stock go much lower. Microsoft is still growing, it has great new products like Windows 2000 and it has tremendous cash flow."
Its shares closed off 1/16 to 69 3/4 ahead of the announcement.
Solecton figures to slide Monday after sneaking in a profit warning Friday afternoon.
It said that its third-quarter sales and earnings will be slightly lower than analysts had expected.
The stock closed up 7/8 to 46 13/16 ahead of the announcement.
Company officials now say it expects total sales of between $3.4 billion to $3.5 billion and earnings of between 20 cents to 22 cents a share.
A survey of analysts by First Call Corp. predicted Solectron would earn 22 cents a share in the quarter.
"Market demand continues to be strong from almost every market segment served by the company," said CFO Susan Wang in a prepared release. "However, third quarter sales have been impacted by the delay of the closing of the transaction with Nortel Networks. Further, third quarter results may be impacted by supply disruptions resulting from certain component shortages and changes in product configuration requirements by certain OEM customers." Wang said despite the bump in the road in the third quarter, it expects to meet the consensus estimate of 85 cents a share in the fiscal year.