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Tech Industry

STOCKS TO WATCH: Brooktrout, eToys, Next Level and Sapient

Expect the following technology stocks to be among Friday’s most actively traded issues: Brooktrout, eToys, Next Level and Sapient.

  • Brooktrout (Nasdaq: BRKT)

    Brooktrout’s going to take its lumps Friday after warning its fourth-quarter sales and earnings will miss analysts’ estimates.

    The communications hardware and software firm said it now expects to post a profit of between 3 cents to 5 cents a share in the quarter on sales of $33 million.

    First Call Corp. consensus pegged it for a profit of 31 cents a share in the quarter on sales of $41.2 million.

    Its shares closed up $1, or 10 percent, to $10.88 ahead of the warning but fell to $6 in after-hours trading.

    Brooktrout expects sales for the first quarter of fiscal 2001 to come in between $28 million to $30 million with net earnings at around 3 cents to 5 cents a share, barring any further declines in growth of the telecommunications equipment market, it said.

    For fiscal 2001, Brooktrout expects sales of $150 million with net income per share between 35 cents and 45 cents.

  • eToys (Nasdaq: ETYS)

    Not that there’s much more room for decline, but eToys will be entertaining Friday after announcing it was laying off 700 of its 950 employees and shuttering a pair of warehouse operations. It also said it no longer expects to reach profitability in fiscal 2003.

    The news came as no surprise to analysts following last month’s warning not only of a wider-than-expected loss but that its third-quarter sales would come in between $120 million to $130 million, roughly half of what it had previously expected.

    Its shares closed off 6 cents to 16 cents a share ahead of the news.

    On Thursday, 380 employees were given pink slips. Another 320 will be axed by March 31.

    eToys said it planned to shut down warehouse operations in the City of Commerce, Calif., and Greensboro, N.C., in the next 30 to 60 days, consolidating those operations within eToys' existing distribution centers in Ontario, Calif., and Blairs, Va.

    As a result of a revenue shortfall, eToys said, it will run out of cash around the end of March. It has begun exploring options to sell the company or its assets.

  • Next Level Communications (Nasdaq: NXTV)


    Next Level Communications warned Thursday that it will post a wider-than-expected loss in its fourth quarter and cut its expectations for fiscal 2001 because of lower sales to Qwest Communications and sluggish customer development in Korea.

    Its shares closed off 13 cents to $10.81 ahead of the warning but fell to $6.44 in after-hours trading.

    Company officials said it now expects to post a loss of 22 cents a share in its fourth quarter on sales of $31 million. That doesn’t include a $9 million to $10 million inventory charge it will take in the quarter.

    First Call Corp. consensus expected Next Level to lose only 12 cents a share in the quarter on sales of $54.5 million.

    The pain doesn’t end there.

    The maker of equipment that turns traditional telephone lines into high-speed pipes able to transmit television, data and voice services will record a loss of about 72 cents a share in fiscal 2000 on sales of only $150 million.

    Analysts were expecting a loss of only 63 cents a share.

    Company officials said it still expects sequential quarterly sales growth in 2001 but total sales will fall below analysts’ estimates.

  • Sapient (Nasdaq: SAPE)

    The e-services consultancy said its unaudited fourth-quarter earnings per share was 16 percent short of Wall Street consensus forecast.

    It blamed slower spending on the part of large, global clients and continued reduction in the proportion of its revenues derived from clients.

    It said unaudited revenue and earnings per dilluted share for the quarter, which excludes one-time charges, are $139 million and 10 cents, compared with the consensus estimates of $143 million and 12 cents, respectively.

    Compared with the year-ago period, estimated revenue and earnings rose 70 percent and 25 percent, respectively. Estimated 2000 revenue increases 81 percent and earnings per share rose 48 percent from a year ago, it said.

    The company expected that results of the first quarter would be equal to that of the fourth quarter 2000 and 2001 revenue growth would be about 25 percent over 2000.