Expect the following technology stocks to be among Tuesday's most actively traded issues: Cisco Systems, Computer Associates and Vitesse Semiconductor.
It's could get ugly for Cisco Tuesday after the network-equipment giant warned it would fall short of already reduced estimates in its third quarter and lay off 8,500 employees.
Cisco expects third-quarter earnings per share to be in the low single-digit range, and for revenue to fall 30 percent from the second quarter.
"The business environment that our segment of the IT industry is facing has never been more challenging," Cisco Chief Executive John Chambers said in a statement. "In fact, this may be the fastest any industry our size has ever decelerated."
Cisco expects the fourth-quarter revenue will range from flat to down 10 percent sequentially.
Wall Street analysts had previously predicted earnings of 8 cents per share and revenue of $5.95 billion, according to a poll of analysts by First Call.
In regular trading, Cisco's shares closed at $17.20. In after-hours trading, the stock slipped to $15.30.
Cisco executives said the company expects to take a restructuring charge of $800 million to $1.2 billion as part of a company-wide reorganization that includes previously announced layoffs of about 8,500 employees and the restructuring of certain businesses. The company will take an additional $2.5 billion charge based on excess inventory.
The software developer surprised Wall Street after the bell Monday when it told analysts' to expect stronger-than-expected sales and earnings in its fourth quarter.
Company executives said it now expects to earn 47 cents a share in the quarter on sales of $1.44 billion.
First Call consensus expected Computer Associates to earn 43 cents a share on sales of $1.425 billion.
Its shares closed off 23 cents to $29.59 ahead of the good news before moving up to $30.60 in after-hours trading.
It said it expects fourth-quarter product sales to grow to about $1.34 billion compared to $1.21 billion a year earlier, but it sees professional services revenue to fall to $102 million in the quarter compared with $181 million a year earlier.
Vitesse Semiconductor will be active Tuesday after it met analysts' reduced estimates in its second quarter, posting a profit of $18.8 million, or 10 cents a share, on sales of $121.8 million. It also cut estimates for the third quarter.
After the company twice lowered estimates earlier this quarter, the First Call consensus estimate fell to 10 cents a share from an original target of 21 cents a share.
Vitesse (Nasdaq: VTSS) shares closed off $1.65 to $24.05 ahead of the earnings report before falling to $22.14 in after-hours trading.
As the first communications chipmaker to report earnings for the quarter, Vitesse's lackluster performance combined with Cisco Systems' (Nasdaq: CSCO) latest profit warning offer conclusive proof that the worst is not yet behind the network-equipment sector.
Vitesse executives told analysts to expect earnings of between 3 cents and 7 cents a share in the third quarter on sales of between $90 million and $110 million.
Analysts were expecting a profit of 8 cents a share on sales of $108.6 million.